AT&T: Twenty Years Of Change

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Case Report: AT&T: Twenty Years of Change

AT&T Case depicts the history of 130 years old giant company, which served its customers in telecommunications area. From its foundation by Graham Bell in 1875 to the restructuring decision in 2000, the company had many key events to be studied in terms of several strategic management point of views. This paper mainly focuses on external environment issues and corporate-level strategies.

Analysis with respect to Corporate-Level Strategy

After the foundation of the Bell Telephone Company in 1875, the company diversified its business via the acquisition of Western Electric Company. With this vertical integration BTC had the opportunity to create wealth while transferring its corporate skills. Additionally, acquisitions of many licences also provided BTC huge market power. These horizontal integration enabled BTC to create economies of scope and enabling of operational relatedness. Another significant driving force of the company was the Bell laboratories, which continiously generated know-how and technology. These generated know-how and technology were the key corporate skills to be transferred to other divisions of BTC (First satellite etc.)

However, the monopoly status of the company caused many filed law suits, which finally led to the divestiture of the firm. After the divestature AT&T and the regional Bell operating companies, AT&T lost most of its market share and customers, due to competition and loss of its competitive advantage, namely the ability to reach its wires and bills to every American house. Consequently, since the company was still a huge cash generating company, it decided to diversify into new sectors. Indeed it took over the computer maker NCR, McCaw, some other...

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...licated as AT&T expand globally and faced governmental structures quite different from those within the United States.

Industry environmental analysis

The industry environment has a more significant effect on the firm’s strategic actions. By five forces analysis including threat of entry, the power of suppliers, the power of buyers, product substitutes and the intensity of rivalry among competitors, AT&T is to find its position in the industry. Mentioned before the company acts as the first mover in lots of segments of the industry environment it is competing in. Having an intensive rivalry because of the speedly developing high tech requirements of the environment and the R&D forces of the leader companies, new entrants are discouraged. Late movers have commonly less chance to be able to compete and gain advantage over to companies such as AT&T and its competitors.

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