Internal Environmental Analysis: AT&T (Essay)

free essayAT&T is an American-based multinational telecommunications provider. The company is among the biggest enterprises in the telecommunications industry. It meets the needs of approximately 3.5 million business customers in 200 countries globally (“4Q 2016 AT&T by the numbers,” 2016). Its success is attributable to various internal dynamics that serve as the company’s strengths. Most importantly, being the largest broadband provider in the U.S., the firm is well-known as a pacesetter.

AT&T Strengths and Weaknesses

Strengths

Being a key player in the industry, AT&T has massive physical, financial, natural, and human resources. Presumably, the company had approximately 280,000 employees worldwide by 2016 (“4Q 2016 AT&T by the numbers,” 2016). On the one hand, it invests in its workforce by organizing various training programs and policies to ensure that its employees acquire and update their skills. On the other hand, AT&T received aggregate revenue of $163.79 billion in 2016, which is an increment from $146.8 billion obtained in the preceding fiscal year (“AT&T balance sheet,” 2017). AT&T also registered an aggregate debt of approximately $120 billion by the end of the 2016 trading period (“4Q 2016 AT&T by the numbers,” 2016). The company’s primary sources of capital are stock and bonds. As at December 31, 2016, its stock traded at 42.83 per unit share.

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In addition, AT&T has vast physical resources. According to Forbes magazine, the firm is estimated to own assets worth $402.67 billion (“AT&T market cap,” 2016). Moreover, the company provides approximately 1,088,638 route miles of fiber cables globally (“4Q 2016 AT&T by the numbers,” 2016). Nevertheless, the organization owns various intellectual properties too. It is estimated to acquire an average of four patents every day (“4Q 2016 AT&T by the numbers,” 2016). Furthermore, it owns various copyrights and trademarks as well. As a matter of fact, the mother company is affiliated to AT&T Intellectual Property, a conglomerate established specifically to manage AT&T’s main intellectual resources.

Weaknesses

Regrettably, AT&T experiences major setbacks in its defense. The company faces stiff competition from low-cost internet providers such as Sprint and Verizon. Furthermore, it lacks flexibility due to its massive size. Thus, this is disadvantageous for the fact that the company cannot quickly adapt to the new trends in the industry. What is more, AT&T is leveraged more than other corresponding companies due to its massive debt crisis. Consequently, its balance sheet is weaker than those of its counterparts.

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Primary Internal Environmental Factors

One of the most significant internal factors that influences AT&T as a corporate facility is the strength of its employees. It is obvious that employees are a crucial driving force behind the performance of any organization. Therefore, they must be properly motivated to function productively. In spite of its strong management, AT&T has exemplified the art of employee inspiration. First, the management is progressive; the company operates under a famous mantra called Do One Thing (DOT). The slogan gives employees the power to do what they will rather than to receive explicit instructions. Second, the company has enhanced transparency with its workers through DOT technique. The company informs the employees of every situation that it faces, thereby obliging them to work even harder. Third, employees’ opinions are accepted and considered via The Innovation Platform (TIP), which has so far engaged more than 130,000 employees. Through the platform, the management has established a team collective impact by assembling employees into small groups. Finally, the company gives hardworking employees the privilege of being aired on their news site, and they are also appropriately rewarded.

Similarly, AT&T’s competitors seem to be steadfast in implementing employee motivation strategies. For instance, Sprint has emphasized on awarding hardworking employees. The CEO, Marcelo Claure, often grants Adidas Yeezy shoes to employees to show gratitude and spark motivation. On the other hand, Verizon attempts to motivate staff with the sales force compensation package. The essence of this strategy is to motivate salespersons to sell more so as to receive a better compensation. However, AT&T still appears to be the best employer among the three. In essence, it has received numerous accolades including its recent ranking by Fortune as the 93rd best working place globally.

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In addition, these three companies have set different objectives as perceived by their mission statements. According to AT&T, its primary purpose is to exemplify its service provision by connecting people around the world better than anyone else. On the other hand, Verizon’s mission statement advocates for diversity as the company’s primary objective. Moreover, Sprint is driven by its mission statement that purports to propel the company to achieving world class status and setting the standard for others. Through these forward-looking statements, organizations can provide directions to their employees to achieve success.

AT&T Competitor Analysis

Competition is an inevitable occurrence that factors in every industry. Similarly, AT&T faces fierce competition from Verizon and Sprint. Verizon was formed in 2000 after a merger between Bell Atlantic and GTE Corporation occurred. Currently, the company is one of the key players in the industry alongside AT&T. In the meanwhile, both hold an almost equal market share. By the end of 2016, Verizon registered 112.1 million subscribers together with 177,700 employees (“Statistics and facts about Verizon Communications,” 2017). Additionally, its Average Revenue Per Account (ARPA) stood at $152.63. Verizon primarily obtains its market from millennial viewers. In its turn, Sprint employs approximately 30,000 staff. By the end of 2016, the company registered annual revenue of $32 billion. The firm operates on a vast customer base of about 58.8 million subscribers. Its Average Revenue Per User (ARPU) equals to $51.68. Concerning a target market, the company seems intent on snatching its competitors’ customers. The assertion consists in the massive discounts of about 50% that the firm has been offering on its products and services since early 2016.

Company Organizational Structure and Its Influence on Performance

As mentioned above, AT&T provides a progressive management system. The company is currently led by Randal Stephenson – the CEO. Its organizational structure is hierarchical, since it is divided into various segments. Basically, the operations section in AT&T was recently reorganized to four segments, and namely: Business Solution (BS), Entertainment and Internet Segment (EIS), Consumer Mobility (CM), and International. Subdividing these operations into segments makes them more manageable. Apart from that, departmentalization enhances specialization of labor, which leads to professional competence and performance appraisal. Moreover, it makes the process of delegating duties convenient.

However, enhancement of teamwork by AT&T through DOT has improved coordination among employees. The company has developed a platform where employees can suggest ideas to help improve the business. Afterward, these ideas are voted upon to choose the one that favors implementation. Apparently, this has been one of the most vital structures that have motivated employees in AT&T. The underlying rationale is that involving employees in decision making makes them feel valued. It merits them as an integral part of the company and urges them to work smarter. In addition, written policies and rules regarding the objectives of the corporation have played a crucial role in the success of AT&T as a company.

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AT&T Competitive Position and its Inference

Owing to the growing intense competition between AT&T and Verizon, the former is employing various tactical approaches to carving its niche in the industry. Remarkably, AT&T has upgraded its offerings on data to an unlimited plan. The international data plan was marked by the International Day Pass where users were allowed to call, text, and browse without limits. However, it is worth noting that this plan is similar to Verizon’s Travel Pass. Thus, it will enable AT&T to win a significant share of the market and prevent more customers from leaving. Moreover, the company has diversified the plan according to the packages that fluctuate from high to low-end prices which traverse all economic niches. Therefore, it is speculated that the number of customers will also increase.

Additionally, AT&T’s lobby for Time Warner, a large media asset, could make it the biggest television networks, film, and TV provider. The company has shown interest in acquiring the conglomerate for more than $85 billion (Gunter, 2017). Although the petition is controversial, AT&T has retaliated with a fallback plan. The company intends to start providing 5G internet services in Austin and Indianapolis this year. If the strategy is successfully introduced, then AT&T will embrace the market as the largest internet provider in the U.S.

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In summary, an internal analysis is an underlying factor of the success of any organization. It is paramount in identifying the company’s strengths and weakness. Moreover, it enables the corporation to identify opportunities and threats and leverage from them wherever possible. It also endorses a functional organizational structure which is a key point to corporate success. Owing to this internal analysis, it is evident that AT&T will further prevail as a key player in the telecommunications industry.