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Porter Five Forces Analysis of AT&T

<p align&equals;"justify">AT&amp&semi;T Inc&period; is known to be a wireless telecommunication service provider&period; It is ranked as the biggest telecommunication Company in United States in terms of revenue&period; The company was founded in 1876&comma; by the Alexander Graham Bell- primary inventor of telephones&period; AT&amp&semi;T worked hard to be the market leader in optical communication and innovation&period; It continuously is on the forefront in delivering the optimal services in market and successfully adapt the ever-changing landscape of business&period; It had a merger with the Bellsouth Corporation&comma; which make it the biggest telecommunication Company across the United States&period; AT&amp&semi;T has divided its operation among four main segments&semi; Wireless division which include internet services and cell phones&period; Advertising solution division which deals in printing directory marketing&comma; wireless division which deals in voice products lines for international and local services for consumers&comma; government and businesses&comma; and other subsidiaries segment like payphones&comma; operating services&comma; and other businesses &lpar;AT&amp&semi;T&comma; 2019&rpar;&period; AT&amp&semi;T is operating in the intense competitive industry&comma; where competitors like Verizon&comma; T-Mobile etc&period; are present&period; It is necessary for the company to analyze the industry and Porter five forces elements help it in evaluating the situation of the market&period; Here is the Porter’s five forces analysis of AT&amp&semi;T&semi; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Bargaining Power of Buyers<&sol;h2>&NewLine;<p align&equals;"justify">Consumers are always demanding and demands for high quality in the lowest possible prices&period; This pressurizes companies to revise their pricing strategies and so to AT&amp&semi;T&comma; as the prices reduction effects the profitability level in long run&period; The powerful and smaller the consumer base AT&amp&semi;T has&comma; the dominant will be the consumers in terms of bargaining power&comma; and will require offers&comma; and discounts for new products&period; AT&amp&semi;T focuses on building and maintaining the large consumer base in order to reduce their bargaining power&period; It focuses on introducing new innovative products&comma; so that customers will not switch to other brands and this will also reduce the defection of the existing consumers &lpar;Fernfort&comma; 2019&rpar;&period; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Bargaining Power of Suppliers<&sol;h2>&NewLine;<p align&equals;"justify">For the landline or wirelines businesses&comma; the constructors of transmission lines are very important and for this&comma; they require copper wires&comma; and for the wireless businesses&comma; suppliers are needed to build the network towers&period; The AT&amp&semi;T employs two main networks and the equipment suppliers&semi; Ericson and Alcatel-Lucent&comma; and the strategic alliance with them provided the benefits of economies of scales to AT&amp&semi;T&period; These suppliers have the great leverage and power over AT&amp&semi;T&comma; as they need quality raw materials in building networks&period; Hence&comma; the supplier’s bargaining power in AT&amp&semi;T case is relatively moderate &lpar;Rebeccali&comma; 2014&rpar;&period;&nbsp&semi; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Threats of New Entrants<&sol;h2>&NewLine;<p align&equals;"justify">During the early days of AT&amp&semi;T&comma; there were many challenges and competition from the rivals&comma; as they had patents and threats from the new entrants were higher&period; But later&comma; over the period of time&comma; those patents got expired&comma; and influx of new rivals was there&comma; around 6000 entered in the industry&period; The requirement of capital for start-up are also very high&comma; as building network towers are quite expensive&period; Currently&comma; wireless network industry is also very saturated at almost 91&percnt;&comma; so its riskier for the new entrants to make profit in the industry &lpar;Rebeccali&comma; 2014&rpar;&period;&NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Threats from the Substitute Products<&sol;h2>&NewLine;<p align&equals;"justify">The major services provided by AT&amp&semi;T is of communication and people used multiple ways of communications&period; AT&amp&semi;T woks hard to be service oriented more as compare to product oriented because of the direct substitutes available for the wireless products&comma; which are landline or telephones&period; Due to the emergence of internet and technology&comma; voice services are available like Skype&comma; WhatsApp&comma; Viber&comma; etc&period; internet has become the alternative option for consumers of AT&amp&semi;T&period; Thus&comma; AT&amp&semi;T has to increase the switching cost for the consumers &lpar;Wikiwealth&comma; 2019&rpar;&period; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Rivalry of Existing Players<&sol;h2>&NewLine;<p align&equals;"justify">As the telecommunication industry is highly saturated&comma; and has many competitors&comma; the competition level is intense in the industry&period; There are big giants in the industry like Verizon&comma; T-Mobile&comma; Sprint&comma; etc&period; currently operating in the market&comma; AT&amp&semi;T needs to revise its strategies in order to retain the consumers and attract new customers so that the market position will be the same and hence will be the share&period; It needs to acquire small competitors to reduce the competition level from the industry &lpar;Alavi&comma; 2016&rpar;&period;&NewLine;<&sol;p>&NewLine;<h2 align&equals;"left">References<&sol;h2>&NewLine;<p align&equals;"left">Alavi&comma; E&period; 2016&period; AT&amp&semi;T Strategic Analysis&period; &lbrack;Online&rsqb;&comma; Available at&colon; <a href&equals;"https&colon;&sol;&sol;www&period;slideshare&period;net&sol;EbrahimAlavi1&sol;att-strategic-analysis-64605678">https&colon;&sol;&sol;www&period;slideshare&period;net&sol;EbrahimAlavi1&sol;att-strategic-analysis-64605678<&sol;a>&comma; &lbrack;Accessed on&colon; 16th April&comma; 2019&rsqb;&period;<br &sol;>&NewLine;AT&amp&semi;T&comma; 2019&period; About Us&period; &lbrack;Online&rsqb;&comma; Available at&colon; <a href&equals;"https&colon;&sol;&sol;about&period;att&period;com&sol;category&sol;all&lowbar;news&period;html">https&colon;&sol;&sol;about&period;att&period;com&sol;category&sol;all&lowbar;news&period;html<&sol;a>&comma; &lbrack;Accessed on&colon; 16th April&comma; 2019&rsqb;&period; <br &sol;>&NewLine;Fernfort university&comma; 2019&period; AT&amp&semi;T Inc&period; Porter Five Forces Analysis&period; &lbrack;Online&rsqb;&comma; Available at&colon; <a href&equals;"http&colon;&sol;&sol;fernfortuniversity&period;com&sol;term-papers&sol;porter5&sol;analysis&sol;3957-at-t-inc-&period;php">http&colon;&sol;&sol;fernfortuniversity&period;com&sol;term-papers&sol;porter5&sol;analysis&sol;3957-at-t-inc-&period;php<&sol;a>&comma; &lbrack;Accessed on&colon; 16th April&comma; 2019&rsqb;&period;<br &sol;>&NewLine;Rebeccali&comma; 2014&period; Porter&&num;8217&semi;s Five Forces Analysis&colon; AT&amp&semi;T Inc&period; &lbrack;Online&rsqb;&comma; Available at&colon; <a href&equals;"http&colon;&sol;&sol;inb410-rebeccali&period;blogspot&period;com&sol;2014&sol;11&sol;porters-five-forces-analysis-at-inc&period;html">http&colon;&sol;&sol;inb410-rebeccali&period;blogspot&period;com&sol;2014&sol;11&sol;porters-five-forces-analysis-at-inc&period;html<&sol;a>&comma; &lbrack;Accessed on&colon; 16th April&comma; 2019&rsqb;&period;<br &sol;>&NewLine;Wiki wealth&comma; 2019&period; ATT &&num;8211&semi; Five Forces Analysis&period; &lbrack;Online&rsqb;&comma; Available at&colon; <a href&equals;"http&colon;&sol;&sol;www&period;wikiwealth&period;com&sol;five-forces&colon;att">http&colon;&sol;&sol;www&period;wikiwealth&period;com&sol;five-forces&colon;att<&sol;a>&comma; &lbrack;Accessed on&colon; 16th April&comma; 2019&rsqb;&period; <&sol;p>&NewLine;

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