At and T Case Study SWOT and PESTLE Analysis

AT&T Inc. is an American multinational conglomerate holding company which is also known by the name of American Telephone and Telegraph Company. It served as an American Corporation which provided long-distance telephone and other such telecommunication services. It is also identified as a descendent of the American Telephone and Telegraph Company. In 1996 this organization voluntarily split into three smaller companies amongst which one retained the original name of AT&T.

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The company has a very long history of existence and dates back to the era of 1876 when Alexander Graham Bell invented the telephone and made the first wire transmission of intelligible speech.  Since then the company has gone under severe transformation and technological innovation to emerge as a leader in the modern-day media market. The legacy of innovation has included the invention of the transistor which is the building block of today’s digital world along with the development in the field of solar cells and communication satellites and machine learning.  The primary focus of the organization is to give its customers the best service in three key areas, that is: as a broadband connectivity provider, in high-speed fiber needs, and in the field of wireless broadband networks.

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Organizational Culture at AT&T:

AT&T has a very open and cooperative work culture where the management always prioritises over the well being of the employees and ensures to bring the workforce together to work as a team. The organization also prioritises on following an established code of conduct which is considered as a guiding principle for the employees and the manager to abstain from unethical business operation.  However accordingly to employee reviews one of the challenging aspects in the organizational culture AT&T is the strong presence of “family owned business-style” where getting a promotion is still very difficult and not much encouraged. AT&T is also seen to invest approximately $200 million annually in AT&T University to help employees upgrade their skills. The company is also dedicated towards supporting the society and its developmental needs by preparing volunteers within the organization who look after bringing real differences in the society. The company also makes meaningful investments and contributions to support the growth of diverse companies and communities. The company also has practices diversity and inclusion as a part of its work culture and draws in people from all across the globe. The company has shown extensive support towards the LGBTQ community as well as providing crisis services like combating mental health issues in America and project management assignment help.

SWOT Analysis:

Strengths:

Some of the major strengths of AT&T include:

• It has a very significant global brand name along with a huge employee base with over 250,000 employees all across the globe.
• Along with this the company also follows product diversification strategy with multiple products and services. The company has a reach of over 200 countries and has a huge customer based which is approximately around 1 million.
• The marketing and promotion strategy is also quite effective of the brand which uses traditional platforms like print media and TVCs to online marketing channels.
• Along with this the infrastructure which AT&T has built in its business with world’s most advanced internet protocol backbones automatically gives them an edge over their competitors.

Weakness:

The company suffered a financial loss of $11.746 billion, a decrease of 65.9% over the last year. This shows a huge fall in financials and a problem for the company. Next is the growing popularity of video calling and the popularity of the voice calls going down. Voice connections of AT&T declined from approximately 18.6 million in FY2012 to 14 million in FY2014. This huge decline is no doubt damaging for the company profits

Opportunities:

The company is largely focusing on acquisition as a method of expanding its business growth. It acquired DIRECTV for pay television services. This would triple AT&T’s cable and TV customer base to more than 30 million customers. Nextel Mexico was acquired for $1.9 billion by them for spectrum licences, network assets, retail stores and subscribers. Moreover the company should now give greater focus on developing its cloud computing technology as there is an increasing demand in the field of wireless and digital technology. Along with this the organization also needs to focus on building its infrastructural capabilities. They should focus on cloud computing by improving mobile broadband capabilities, robust IP backbone, VPN capabilities and data centres. According to industry estimates, the IoT market is expected to reach $7.1 trillion by 2020 from $1.9 trillion in 2013, increasing at a CAGR of 21% during 2014-20. Further, it is estimated that 4.9 billion connected things will be in use in 2015 and is expected to reach 25 billion by 2020. AT&T offers a range of IoT solutions, including fleet management, cargo management, energy management, connected car services, M2X data services, M2M platform, Global SIM, SIM management, case study assignment help and collaboration solutions. IoT is a strong revenue producer for the company.

Threats:

The overall market penetration of the business in the wireless market has been extremely slow and saturated in the country which will only give rise to price wars and loss in revenues. Apart from this AT&T faces intense competition from Verizon Wireless, Sprint and T-mobile and some other regional players. More than 98% percent of the US population lives in areas with at least three mobile telephone operators, and 94% of the population lives in areas with at least four competing carriers. This makes the company’s environment highly competitive. Apart from this there are also legal complexities and laws and regulations that AT&T needs to follow for its international business operation.

PESTEL ANALYSIS:

Political Factors:

As AT&T is a global firm hence the brand or the business is largely exposed to the risks of political instability, as well as the growing restrictions of government regulations. The company has very significant presence in Latin America specifically in Mexico. However, South American regimes have been politically instable, especially Venezuela, which is in hyperinflation. Political instability in South American countries makes it difficult for the company to do business and may affect its ability to provide service. Also, the company faces risk of adverse change of ties between the US and foreign governments, protectionist trade measures like tariffs, inadequate legal protection of intellectual property laws. These political challenges or uncertainties can be very challenging for the smooth operation of the business

Economic Factors:

Being a global brand AT&T is largely dependent on the global economic condition followed by factors like interest rates, foreign exchange, credit requirements, and short-term debts like commercial papers. Apart from this there are certain financial institutions in US and UK where the rules to borrow credit has been strengthened that creates greater challenges for the business. Also, there has been lot of volatility in financial markets due to uncertainty driven by US-China trade war, Brexit, impact of Covid-19 on global economy, etc may again affect financial markets ability to lend. Along with this there is also an increasing risk of costs of providing video and other related services. The video programming services distributed by AT&T, are provided by other companies. The trends suggest that the rate of charging for these services is higher than inflation. This further puts pressure on company profits.

Social Factors:

Social factors always have a very strong impact on AT&T’s business. It is quite evident that with the changing taste and preferences of the people the US television industry is also evolving. In this aspect it is extremely important to understand the growing importance of OOT platforms and the popularity of companies like: Netflix, Amazon’s Prime services. there is a trend of decreasing subscriber base in case of advertising-based television. Instead, viewers increasingly prefer SVOD services. Both these factors are contributing to declining revenues and profits for the company. Although the company has launched a direct-to-consumer streaming channel called HBO Max, there is no guarantee that this measure can arrest the decline in revenues. Thus AT&T has to focus on growing its software-based technology to take advantage of the new trends. The company is also in the process of launching 5G wireless technology. These steps would help the company meet changing demand of consumers.

Technological Factor:

As in the recent times it is very well evident that there is a going demand of faster video usage and data consumption across various platforms. AT&T has to focus on increasing its investments to improve its wireless, video and broadband services. In order to provide these services, the company maintains and grows its network capacity and coverage for transport of video, data and voice.

Environmental Factor:

Global businesses are equally responsible towards the environment. Hence the company is tapping new opportunities to turn carbon neutral in the long term. For instance, the company has completed the largest US corporate solar energy deal with Invenergy’s Samson Solar Energy Center. AT& T is also aiming to turn completely carbon neutral by 2035. The company also plans to reduce its dependence on electricity by 60% relative to data traffic. There is measurable progress, too in this regard. It has reduced energy usage by 80%

Legal Factors:

The increasing proliferation of wireless technology and the mobile network has actually increased the risk of unauthorized, pirated content. Thus AT&T is facing strict legal regulations which are no doubt increasing business complexity. The company also faces legal cases related to the negative effect on the health of employees and customers, owing to the use of wireless technology. All these litigations may cause the company to incur substantial financial resources in case of losing cases in court. It may also have to separately pay amounts to the government related to the respective laws.