Porter’s Five Forces
AT&T is a company that has services available in different market segments; local and long distance telephone services, DSL and wireless.. The threat of new entrants is low because the initial startup costs are very high. A wireless company has to rent out or purchase its own reception towers and in some cases purchase satellite receptors. Telephony giants like AT&T have also created entry barriers; consolidated company that offers home and business telephone, wireless and internet access.Buyer power is high because there are several other competitors who are offering compatible services. AT&T as well as other cell phone service providers must use switching costs that include a two year contract. This is because the competition is so strong that prices must keep lowering and benefits must keep increasing in order to attract and keep a customer. In the case of the customers who want the iPhone their powers are low because it is a product offered specifically to AT&T users.
The bargaining power of suppliers is low to moderate. The AT&T Corporation outsources its services such as cost-management, customer service, product-performance, and the production of all of their cellular phones. AT&T is the largest provider of both local and long distance and wireless service. There are many suppliers that AT&T could work with, so the suppliers have low power. Employees have higher supplier power because of the other available competitors. Apple has a strong supplier power because they are an all inclusive company whose iPhones are in high demand, their cutting edge technology would benefit any service provider.
AT&T’s rivals include Qwest Communications International Inc., Sprint/Nextel and Verizon. The competitors are continuously trying to offer the most services for the least monthly amount. All the competitors have similar monthly plans for their cell phone services, so whoever has the lowest operating cost will have the largest profit margin.
There are threats of substitutes thanks to technology. Customers have the option of using internet based providers such as SKYPE. It is free and can be used to make international call. There are VoIP providers like Vonage, who don’t use telephone lines but instead are connected through the internet. Other substitutes include online chatting, video messaging, Cable modem, dial-up modem, or simply not using a telephone.
Business Initiatives
With a company that has been around for over a hundred years. It is not surprising that AT&T is utilizing all four of the major business initiatives.
The first major business initiative that is used by AT&T is the supply chain management. Supply chain management tracks inventory and information among business
processes and across various companies that do business together. The software that they used is provided by the largest in the industry, which is I2. With this software, AT&T has recently turned to real time wireless data solutions to help the company streamline the supply chain to sales reps with critical customer information that is needed to increase sales, give equip drivers and merchandisers real time data to improve the productivity within the company. This wireless solution means current inventory can be evaluated; orders are placed immediately and delivered in a timelier manor to retail outlets. Since AT&T has updated to real-time wireless to improve the supply chain management area, it has reached higher levels of satisfaction, lowered cost of workplace efficiency, with the possibility of increasing market value. This area would be top line because it focuses on reaching new customers, products, and the linking of services between several companies. It is also a bottom line because with the department it cuts the cost of services.
A customer relationship management service collects information about customers needs and wants in order to create a better service that fits all these areas to create customer satisfaction. At AT&T, CRM enables people within the company such as sales managers to gain insights in several areas in order to serve them better. With the wireless CRM that AT&T uses, the company has the ability to acquire more information about customers trends and patterns in sales, as well as desires in orders to create a more unified service for the customers. On top of that when customer have the need to call AT&T for any reason they are asked to voluntarily participate in a survey on the companies services and why they are calling giving the CRM more valuable information to go on. Would be Top-Line because it focuses on recent and future customer who could increase or decrease sales if the are not satisfied.In Business intelligence, the knowledge about your customers, your competitors, and environment is vital to the development of a company. AT&T uses Business Intelligence which is a number of tools and applications to gain and receive knowledge about their customers, competitors, and how they are operating internally. The software that the company uses is called “Attack Database”, which replaced their Microsoft SQL server. AT&T uses this data to receive real time data on competitors’ sales, tactics, and growing target markets. BI has also helped the company keep up with customer trends and links this information to all the departments within the company. This area would be Top-Line because it focuses on new customers and possible new products that competitors might or are going to sell.
E-collaboration is an area that uses technology tools to support several activities within the company, knowledge management systems, social networking. AT&T uses e-collaboration to create a social network so that they can communicate within the company and other companies to create meetings or post ideas that may be beneficial for the company in the future. This also cuts out any tedious paper work and gets information where it needs to go, which is provided by linked in. This is Bottom-Line because it could help minimize errors in how the company does business. Several individuals could link into this area a discuss issues or ideas that could harm or help the company in the future.
e-Commerce
AT&T uses the two perspectives of e-Commerce; Business to Business (B2B) and Business to Consumer (B2C). AT&T provides its consumers and its businesses with the same products and services. AT&T sells wireless, DSL internet and a home phone service. Exclusive to businesses are products such as a network transport, teleconferencing, and a secure email system.
Internet Business Model
AT&T.com internet business model is Business to Business (B2B) e-commerce and Business to Consumer (B2C) e-commerce. The AT&T website is broken down into three sections; personal, small business and enterprise. Consumers and businesses can order directly from the website, no matter if it is a cellular phone or order DSL service, and an enterprise can order wholesale products for resale or services which would make AT&T a B2B (MRO).
Marketing Mix
According to Affiliate Network Program
“The new AT&T Inc. (NYSE:T) today announced the launch of its Business Affiliate Network, an innovative program that enables businesses and professional organizations to earn commissions by promoting AT&T services on their Web sites, Joining the affiliate network is free, and AT&T companies make it easy for Web site owners to participate by providing a tag generator, a program that creates links to AT&T products from the affiliate Web site. Owners can simply copy and paste the tag generator code to their Web sites. Additional information on the network is available at http://www.b2baffiliate.sbc.com/.”
AT&T uses online ads at Yahoo.com during times when new phones or services are released. They do not use pop-ups and have instead worked with Yahoo to create the Yahoo toolbar pop-up blocker.Payment Systems
AT&T offers a variety of payment options with the flexibility of paying your bill by mail, by phone, online, or in person. They have an Electronic Bill Presentment and Payment system, where you can pay with a checking or savings account, credit card, electronic, check, or cash, or set up an Automatic Bill Payment.
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