A SWOT Analysis of AT&T Inc. 2016
This is a SWOT analysis of the Telecommunications giant AT&T.
Introduction: AT&T’s business continues to see ups and downs. Competition has affected its profits and customer base. Continued assaults from the rival brands during the last few years have led to a loss of customers. As a result, AT&T decided to take some bold risks. It is itself unsure if its gamble will pay off. The company spent $50 billion on acquiring DirecTV. In combination with Uverse, its cable television offering, this deal could prove beneficial. This move changed its status as a TV subscription provider. It is now one of the largest in the world. 26 million of its customers are in US and 19 million overseas. The company also acquired a few other businesses, increasing the size of its infrastructure. Currently, it is tied with Verizon at the top. The following SWOT presents a deeper analysis of its business strategy and market position. Its current CEO is Randall L. Stephenson. The company employs 281, 450 people.
AT & T Strengths:
- One of the largest tele-communication operators in US.
- Strong Infrastructure
- One of the largest television subscription providers
- Variety of wired and wireless capabilities
- Excellent solutions for businesses; business customers range from large multinationals to small businesses.
- Expanding international business
AT &T is tied with Verizon at the very top. One of its major strengths is its infrastructure. The brand provides enormous scope through its global network. It delivers International voice solutions in 240 countries linking more than 400 carriers globally. Moreover, it has a wide range of wireless voice and data capabilities to offer to its customers. Its industry leading network provides superior spectrum availability, fully digital GSM/GPRS infrastructure, Edge wireless broadband and UMTS broadband. AT&T also provides access to more than 18000 WIFI-hot spots and comprehensive wireless LAN/WAN solutions.
With AT&T, comes more agility, control and security. Its variety of wired and wireless services are another key strength. With its acquisition of DirecTV, it became the world’s biggest television service provider. In Mexico, it acquired Nextel Mexico and Iusacell, for less than $5 billion. This investment can provide potential benefits. Fast and continued growth of Latin America can profit AT&T. However, increased flow of trade and communication with Mexico is also beneficial for it.
AT & T Weaknesses:
- Risky investments
- Eroding customer base
- Innovative but inflexible
- Defenceless against competition
- Weak position against major global telecommunication brands
Its investment in Television business could be risky. Increased cord cutting among the Gen Y means television is losing popularity. So, television business is not a profitable choice. The rise of the internet video is taking people away from the television. Apart from it, AT&T’s rivals are taking its customers away. Any competitor offering lower prices gets the upper hand in the industry. AT&T has continued to lose its customers to T-mobile and others. The company is innovative in terms of its products and services but not so flexible. It does not have the kind of flexibility required to win in a highly competitive environment. This leaves it weak against competition. Seen on a global level too, the position of the American telecommunications brands is weak. A recent survey showed that the top US brands including AT&T and Verizon were missing from the global top ten. Instead it is the China Mobile and Vodafone that hold the top position globally.
AT & T Threats:
- Intensifying competition
- Increased costs
Competition in telecommunications has continued to intensify. Last year, a small move by T-mobile took away millions of AT&T’s customers. At least, 2 million of its monthly subscribers switched to T-mobile. T-mobile is now ahead of Sprint after having reached the third position in US market. Not just this, the costs of maintaining a heavy infrastructure have also increased. It means AT&T would need to spend heavily on infrastructure and employees. Both competitive pressures and increased costs are going to trouble the brand.
AT & T Opportunities:
- New acquisitions
AT&T’s Leap Wireless was successful to some extent and helped it gain market share. However, still AT&T has lost customers. It can do better if it tries to maintain its hold on the lower end of the market. Most crucial thing is to take the right steps. Price competition especially requires attention. It has invested a huge amount in television business. That’s not a very intelligent move when online video is growing popular. Current trends show that television will not remain a profitable business for long. It should try to diverse into new and profitable areas. Television is an outgoing trend. People now love Netflix and Youtube. AT&T should rather invest in rising businesses. Diversification can provide it with healthy opportunities, but it should first check for profitability before investing.
AT&T should try to flex its approach. While its overall position is good, rival brands are still a significant threat. Competition offers a major challenge. Given these conditions, inflexibility can be dangerous. However, AT&T should try to mindfully invest in new businesses. Especially, it must remain futuristic in its approach. With its excellent infrastructure, it holds great potential. Only if it adopted some flexibility, its threats would be minimized. It should not try to jump onto every bandwagon. It has so many options for diversification. However, the important thing is profitability. AT & T has got all the strength it needs to win except that it does not have the readiness and flexibility. Its excellent capabilities could take it to the global top ten. It just needs to create more excitement among its customers. Apart from that, it should not lose focus of its core business.
[ what is a swot? – A SWOT analysis shows the strengths, and weaknesses of a business. It also helps find the opportunities and threats of a business brand. It is also called internal external analysis. Brands can play upon their strengths, but not without addressing their weaknesses. Similarly, while opportunities are to be exploited, the threats must be mitigated. A SWOT analysis is conducted to know how the business’ position can be improved. By knowing its current position, a business can decide its future direction as well.] Other SWOTs, you can check, COSTCO, Apple, Nike, Walmart, Microsoft, Coca Cola, Toyota.