A Competitive Analysis of AT&T
San Francisco State University
BUS 690-08
Dr. Silvia Harris-Payne
Team Members:
Hia Kai Xuan
Tim Huang
Enkhchimeg Ganzorig
Julianna Ferrer
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Table of Contents
Competitive Market Analysis 3 External Environmental Analysis 4-5 Internal Analysis 6-8
Strategy Management Theories and Principles 9 Present Strategy 10
Works Cited 11 2
Competitive Market Analysis
AT&T is an American multinational conglomerate holding company that offers technology
services such as internet and phone connectivity. AT&T also represents the world’s largest
telecommunications company that is specialized in providing mobile telephone services,
co-founded by Alexander Graham Bell, Thomas Watson and Gardiner Greene Hubbard in 1876.
Originally known as Bell Telephone Company, the company eventually became the American
Bell Telephone company in 1881, and in 1885, one of American Bell Telephone company’s
subsidiaries, American Telephone and Telegraph Company (AT&T) was established. Eventually,
in 1899, AT&T became the new parent company after acquiring all the assets from the American
Bell Telephone company and began the longest phone service monopoly that ran through the
20th century. Within the years, however, AT&T was split into 7 different major companies:
Ameritech, Bell Atlantic, Bell South, NYNEX, Pacific Telesis, Southwestern Bell and US West.
Eventually, the companies merged back to become the largest telecom service in the world.
In 1983, AT&T officially became a public company and decided to provide communication and
entertainment services in the USA, Mexico and Latin America. As of 2022, AT&T still remains
as the world’s largest telecommunication business to this day with a revenue of $181.8 billion
USD. Although most of the company’s revenue comes from the communications segment, in
2015, AT&T had decided to purchase DIRECTV for $50 billion USD in hopes of taking over
the entertainment industry simultaneously. After acquiring the popular streaming service, AT&T
operates as the world’s largest telecom and TV streaming service in the world. Despite the fact
that most customers are shifting towards online shopping, AT&T has 5,344 physical locations
scattered across the US. The AT&T company has employed
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roughly more than 250,000 people to operate the many services that the company provides, as
well as maintain it’s well-established reputation.
As of 2022, institutional ownership of AT&T amounts to $32.4 million USD, 54.60% of
shares outstanding. This is split between 29.44% of Other institutional, 25.16% of Mutual fund
holders and 0.31% of Individual stakeholders. The company’s main principal nets of distribution
includes telecommunications, media and technology services. Recently, AT&T has been
stripping investment funds on its entertainment business to prioritize its telecommunications
segment. The reason is because “WarnerMedia has seen a recent decline of 37.9% year over year
to $1.6 billion in Q4 FY 2021, comprising nearly 20% of the total across all segments.”
(Johnston, 2022) By doing so, the company has decided to combine it’s WarnerMedia business
with Discovery to create a new global entertainment business. Since AT&T’s shift in the telecom
segment, the company’s major competitors include Verizon Communications, Sprint, T-Mobile
and Comcast.
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External Environmental Analysis
Pestel Framework (macro external forces):
Political- The government policies that impact on AT&T Inc. are taxation, pricing regulation,
trade regulations & tariffs related to technology, and wage legislation etc. Economic- AT&T Inc.
can use a country’s economic factors such as growth rate, inflation & industry’s economic
indicators such as Telecom Services – Domestic industry growth rate, consumer spending etc to
forecast the growth trajectory of not only the sector but also that of the organization.
Sociocultural- Social components that AT&T should examine are identifying emerging trends,
demographics and skill level of population, education level, factors could include changes in
digital or mobile technology, and automation.
Technological- Technological industry has been changing really fast and it’s important to keep
up with the latest trends in order to compete in the markets. AT&T should consider recent
technological developments by competitors and technology’s impact on product offering.
Ecological- Some of the ecological factors that AT&T should consider are waste management in
the technology sector, climate change, perspective of supporting renewable energy, laws
regulating environmental pollution and recycling.
Legal- Legal factors that AT&T should consider while operating and entering a new market are
copyrights, patents, data protection, anti trust law in telecom services, and employment law.
Company issue: Debt Issue
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At&t is sitting on more than 170 billion in debt. According to the article by NewYorkTimes.
At&t got into this debt situation in three key deals: A $39 billion bid to buy T-Mobile, The $67
billion acquisition of DirectTV. The $85 billion acquisition of Time Warner.
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Internal Analysis
SWOT
The telecommunications company AT&T provides technology services to users all over
America to help one another stay in touch through a handheld device. AT&T is today’s largest
telecommunications company.
Strengths:
AT&T is one of the oldest telecommunications services provided known to this day. Due
to their long lasting success, they have acquired great infrastructure and maintenance. AT&T
services provide reliable and strong connectivity globally due to their experience with these
softwares and consistent program updates. With great infrastructure comes strong connection
reliability. Their LTE, 4G, and 5G services allow AT&T users to experience fast wireless
connection no matter their location. Another strength AT&T possesses is acquiring and
sustaining a great work force. Their employers are highly skilled and knowledgeable on what the
company requires. The company also navigates its way through strategic partnerships.
Partnerships and merging within companies allows AT&T more space to venture in the market
and grow as a technology service provider. AT&T spent billions when buying DirecTV, making
them the largest telecommunications and service provider globally.
Weaknesses:
Throughout the years, AT&T has accrued more and more debt while trying to increase its
incentives and infrastructures. Alongside this issue, AT&T’s lack in research and development
of evolving technology has prevailed as it shows that the company is spending more than
average.
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The company needs to invest the right amount of funds into learning about new and evolving
technological breakthroughs. Another weakness is the size of AT&T. Due to AT&T’s expansive
company and vast workforce, it is hard to keep employees happy. Some are valued more than
others, causing resignations and terminations. Thus, the company has to constantly hire workers
in order to keep the flow of labor consistent and business running. This leads to a higher attrition
rate and more funds going into extra learning resources for their employees. Poor demand
forecasting also runs within the company causing them to keep more inventory than planned,
thus leading to waste of product resources and investments.
Opportunities:
AT&T holds the opportunity to expand its products and services to other markets in
different regions. Being the world’s largest telecommunications provider, venturing out into
different markets globally can help expand services and increase revenue for both companies,
especially AT&T. More users these days are into instant messaging as opposed to talking on the
phone. Voice connectivity is of lower demand, and it would be in AT&T’s best interest to look
into cloud computing and more technological infrastructures. As people become more aware of
the global warming issues arising, they are turning to environmentally friendly solutions. AT&T
acquires the opportunity to venture into environmentally friendly solutions when it comes to
their products to help keep their consumers.
Threats:
With fast growing technological and telecommunication services comes increased
competition, and this is what AT&T currently faces. As telecommunications usage has
grown
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immensely, more service providers have come into the market causing growing competition.
More companies are offering faster services at a discounted rate, increasing competition between
emerging telecommunications service providers. The flexible plans provided by competing
services are incomparable when it comes to AT&T’s services, which has led to a decrease in
consumer usage for AT&T. In order to drive growth within a company, it is vital they provide
phenomenal services at an affordable and reasonable rate. Price wars within the
telecommunications market has reached an all time high as these companies are finding new
incentives to drive company growth.
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Strategy Management Theories and Principles
Strategic management theories and principles have had a significant role in the
organization’s current corporate and business strategy path. Strategy and performance have a
direct connection whereby the type of strategy an organization develops determines the
company’s performance. This assumption implies that the strategic management principles that a
firm takes on determine its corporate and business strategy path. The company’s broadband
connectivity wireless broadband networks and high-speed fiber work to connect the business to
its environment and structure elements.
Strategic management comprises strategy formulation, execution, assessment, and
control. Inside the different mechanisms, strategic management practices are manifested and
depicted as the essential administration course of action. For a business to succeed in the market,
it should record an exceptional presentation and identify performance drivers through and
through (Luoma, 2015). To do so, the organization has to ensure its strategic management
principles effectively guide its corporate path. Strategic plans and decisions are in this manner
subject to more significant vulnerability than either managerial or operational decisions. Thus,
strategy management theories and principles explain the company’s current corporate and
business strategy path by illuminating ways in which the company prepares for a change that
indicates that change is a requirement of continued success.
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AT&T’s present strategy
AT&T’s current strategy is impressive enough to improve the company’s profits and customer
satisfaction. Increasing its fiber footprint to other new customer locations and remaining
focused on growing its broadband connectivity increases the company’s ability to meet the
needs of its customers (About.att.com. 2022). Fiber is the foundation of the company. Deciding
to concentrate on it makes AT&T customers happy and content, increasing company profits
and customer satisfaction. Other strategies involve increasing the positioning and ability of
AT&T to meet its customers’ connectivity needs and increase the company’s performance.
The efforts put in indicate that the current strategy is working well for the organization.
That said, there is always room for improvement, and in AT&T’s case, it is vital to analyze how
the strategic management principles and theories impact the company’s current strategic path, the
implications of its current strategy, and new strategic management techniques that could improve
customer satisfaction and company profits.
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Works Cited
Hirsch, Lauren, and Michael J. De La Merced. “The Deals That Loaded AT&T with Debt.”
The New York Times, The New York Times, 18 May 2021,
https://www.nytimes.com/2021/05/18/business/ATT-WarnerMedia-Discovery.html#:~:text
=After%20all%20of%20that%20deal,than%20%24170%20billion%20in%20debt.
About.att.com. (2022). AT&T corporate profile.
https://about.att.com/pages/corporate_profile
Luoma, M. A. (2015). Revisiting the strategy-performance linkage: An application of an
empirically derived typology of strategy content areas. Management Decision, 53(5),
1083-1106. http://dx.doi.org/10.1108/MD-10-2014-0593
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