Analysis of Strategy Choice: AT & T and Sprint Nextel
In choosing a strategy, management must ensure that all the factors in the immediate internal and external environment are considered (Gilberto & Alberto, 2010). AT & T is a telecommunications company based in Texas, now in its third decade of existence and the second largest cooperation in mobile telephony within the United States. Nextel communications, on the other hand, is a multinational mobile communications company in Virginia operating as a subsidiary of Sprint Corporation. Considering the heavy capital needs within the telecommunications sector, the companies ought to focus on a firm strategy in order to maneuver the markets efficiently.
AT & T has shown stable growth over the last few years since its development and evolution from the Bell Telephone Company. The company has been following a defensive strategy over the course of time. In fact, as a former monopoly during the Bell Systems era, there was limited competition and the company found it extremely easy to continue making profits without much innovations. However, with the changes in technology in the modern market of telecommunications there has been more demand for innovations. Customers are shifting from ordinary communication packages to more attractive service packages especially in wireless data services (Gilberto & Alberto, 2010). Moreover, regulatory changes after the new millennium allowing free entry and exit of competitors mean that AT & T will need to adopt new methods to earn the loyalty of the modern customers. In order to do this, AT & T must become a prospector and adopt the first-to –market approach. As it focuses on creating new customers and expanding its markets, AT & T must embark on a creative approach to stabilizing its presence as a leader in telecommunications. As the competition grows, the markets will become more saturated with the products being offered currently and the first to the market with newer products will have the best avenue to make stable growth in the future. As a prospector, the company will have to be concerned with making innovations and meeting new customers’ needs. It will need to focus on a high level of research and development to reach new levels of production within the business. (Mintzberg & Quinn, 1991).
Nextel communication has in the past been the typical prospector with its products as evident in its first unlimited calling plans to extensive customer catchment. It has followed the first-to-market strategy as a prospector. However, Nextel has faced difficulties in sustaining its innovations and protecting itself from its competitors. While innovations have provided a suitable foundation for the development of the company in the past, the continuous lack of a framework for sustaining customers has led to a gradual decline of the customer base with time. Therefore, the company must now redirect to an analyzer. Being second to the market will reduce risks and uncertainties of investments (Thompson & Strickland, 1995). For sustainability and growth, it is imperative that Nextel communications should adopt these aspects of an analyzer within the market by focusing on ways to retain its customer share while also making innovations compete with its rivals. By so doing, it will be able to create a stable environment for growth through customer loyalty and suitable production conditions.
Being in a situation of scarce resource and stiff competition AT & T and Nextel communications just like any other companies must strive to deliver their products and services through a policy of allocation of resources that ensure parity and equilibrium for optimum profits and returns on capital. In order to do this, the companies must adopt effective strategies that are suitable for their unique situations. They must focus on new strategies as they grow over time and space.
References
Gilberto Montibeller and Alberto, Franco. (2010). Handbook of multi-criteria analysis: Multi. Criteria Decision Analysis for Strategy management. IL: Springer
Mintzberg, H. & Quinn, J. B. (1991). The Strategy Process. Concepts, Contexts, Cases. Second Edition. Englewood Cliffs, NJ: Prentice Hall.
S.D. Bond, K.A. Carlson, and R.L. Keeney (2008). Generating objectives: Can decision makers articulate what they want? Management Science.
Thompson, A. A. & Strickland, A. J. (1995). Strategic Management – Concepts and cases. Eighth edition. Chicago: Irwin.
