1

CONTENT
Executive Summary
Introduction
SOSTAC Situation Analysis

1
1
2
2-3

PESTEL

Porters Five Forces

Threat of new entry

Bargaining power of suppliers

Bargaining power of buyers

Rivalry among existing competitors

Treat of substitution

5-6

SWOT/TOWS

Product life cycle

Industry life cycle

VRIO Framework

STP
Segmentation
Target Market
Position
Objective and Strategic/Tactic
Societal
Financial
7Ps Analysis
Objective and Evaluation
Conclusion
Reference

8
9
9-10
10
10
11
12-13
13
14
15-17

1
Executive Summary
AT&T is known as a giant telecommunications carrier in US, providing high quality
products, and outstanding services. The company is currently in a competitive environment,
this marketing plan shows the company current status and direction. AT&T has an aim to
keep people connected, so the company consistently develop new products and services with
new innovation to give customers best experiences on communications network. The most
dominant product of the company is wireless network which makes the majority of
companys revenue. AT&T claims that it has the fastest and most reliable 4G LTE covering
99% of US. For AT&T to sustain its market position as a leader in this competitive market,
the company has to keep the existing customers as well as obtain new customers, introducing
new products and services, and always be pioneer.

Introduction
AT&T is an American multinational telecommunications cooperation, and it is one of the
world largest communication companies providing innovative, reliable, high-quality products
and services. Products of the company include wireless communications, local exchange
services, long-distance services, data/broadband and Internet services, video services,
telecommunications equipment, managed networking, wholesale services and directory
advertising and publishing (New York Times 2015). Mission of the company is to keep
people connect by creating new solutions for consumers, with a motto imagine a world
where your life is always connected to people, information and experiences wherever you
are, wherever you are going. A place where life if just plain better. Welcome to your world
mobilized (AT&T INC. 2014: 13). AT&T is dedicated to make the world better through
corporate social responsibility, the company committed to improve the community in which
they live and work, from supporting the troops to empowering employees to volunteer their
time, and to engage in companys sustainability and disaster relief efforts, this commitment is
evident across all aspects of their business (AT&T INC. 2015).

SOSTAC

2
Situation Analysis
The situation analysis of AT&T is examine by macro and micro environment of the company,
showing strength and weakness from internal factors, and threat and opportunity thought
external aspects. To understand the overall performance, as well as to be able to predict the
future choices and direction of the company.

PESTEL
Political

In telecommunication industry, political play an important role which can

directly effect the companies. Therefore, a stable political situation in US has
a positive impact on the company.

Economy

Economy is another external factor that has an impact on the industry, The
GDP of US faced a slowdown in the fourth quarter of 2014 (The Guardian
2015) , the slowdown recovery affected AT&T Inc as customers purchased
less and are more price sensitive (AT&T INC. 2015b).

Social

The change in lifestyle, people relying more on technology and increased in

usage (AT&T INC. 2015b: 38) benefits AT&T as it is the second biggest
telecommunication network provider in US.

Technology

An increase in smartphone market directly bring advantage to

telecommunication industry. In 2014, the sale of smartphone was
significantly rose by 26.3% in annual (Agomuoh 2014) which in turn a
growth in customers signed up for service, "we had strong subscriber growth
in wireless and U-verse, and our strategic business services revenues
continued to post double-digit growth," said AT&T chairman and CEO
Randall Stephenson
(Yu 2014).

3
PESTEL
Environment

AT&T has built a strong energy efficiency program, which in turn an increase
in company saving of $191 million from 2010-2013. Furthermore, AT&T
invest in alternative-fuel vehicles (AFVs) which allow the company to avoid
purchasing nearly 6 million gallons of unleaded gasoline in 2014 and each
following year (AT&T INC. 2014: 13). Additionally, the energy efficiency
program turns out to be success as it 4.5 million cell phones were
reused/recycled, 487,000 pounds of cell phone batteries and accessories were
recycled, saved $40 million from energy saving, and water was saved by 42
million gallons in 2013 (AT&T INC. 2014: 8).

Legal

A change in government regulations can effect the company, for example, net
neutrality issue, or the principle that all online data should be treated equally
without paid priority system, has become a widely debate topic in US over
the past year (BCC 2014). In early 2015, net neutrality rule passed by US
regulator (Wakefield 2015), this legalization could have a huge impact on
AT&T revenue in the near future.

PESTEL

Porters Five Forces

Threat of new entry
Entering telecommunication industry require huge investment, thus economy scale become a
barrier for the new entries. It is not easy to compete in this competitive industry because only
AT&T itself already hold one third of all shares in the market (Statista 2015), therefore the
threat of new entry is low.
Bargaining power of suppliers
There are only four major network providers in US, Verizon, Sprint, T-Mobile, and AT&T
whereas the only supplier is Federal Communications Commission who has primary
authority for communications law, regulation and technological innovation (FCC 2015). That
make bargaining power of supplier high.

4
Bargaining power of buyers
As there are various choices of telecom providers in US, the customers tend to have more
bargaining power. AT&T, however, is one of the largest and fastest mobile broadband
network in US (AT&T INC. 2015b), which make the bargaining power of buyers moderate,
owning to strong brand performance in telecommunication industry.
Rivalry among existing competitors
Telecommunication industry is rapidly grow, and becoming very competitive in the past
years. AT&T faces substantial and increasing competition in wireless business, namely
Verizon Wireless, Sprint, T-Mobile/Metro PCS, a larger number of regional providers of
cellular, PCS and other wireless communications services and resellers of those services
(AT&T INC. 2015b: 23), which provide similar products with different communication
technologies and services, so the company has high rivalry with its competitors.
Treat of substitution
In the competitive telecommunication industry, the treat of substitution is relatively high.
Customers can easily shift to alternative providers who provide better services or promotions.
Even though AT&T claims to be the fastest network provide, it can not underestimate its key
competitor like Verizon. Verizon states in their site that their 4G LTE cover 98% of
Americans (Verizon 2015) which benefit customers in rural areas.

SWOT/TOWS

5
STRENGTH

WEAKNESS

The network provide cover

all major metropolitan areas
in the United States
Premier network experience
Strongest LTE signal
Strong brand image

Price war (2nd most

expensive carrier)

OPPORTUNITY

SO Strategic options

WO Strategic options

Economy predicted to
grow in 2015
The development of
new technologies
Companys acquisitions
An increase in wireless
demand

New customers
Business expansion from
acquisition
Company will benefit from
wireless market growth
Postpaid draw more
customers

When economy grow, people

spend more
Acquisition in Mexico allow
AT&Ts price to be more
reasonable

THREAT

ST Strategic options

WT Strategic options

New legislation of net

neutrality
Rapid change in
telecommunication
industry
Multiple competitors

Provide premier network

experiences to its customers
to differentiate from
competitors
Use its strength to get
advantage from the rapid
change in the industry
Customers shift to AT&T
from net neutrality regulation

Company should consider

pricing issue as there is a new
legislation on net neutrality

Thesignificantchangeanddevelopmentintechnologyanddramaticriseinusage
(AT&TINC.2015b:38)giveAT&Tanopportunitytoexpandtheirbusinesstoall
majorcitiesinUStograspnewcustomersineacharea.Aswellastheincreasing
demandofwirelessdatausage(AT&TINC.2015b:21)DespitetheslowdowninUS
economyin2014whereAT&Twaseffectedascustomerspurchasedless,economy
predictedtogrowby3.5%on2015(TheGuardian2015)whichmayleadtotheriseof
companysrevenue.AnacquisitionofGSFTelecominMexicoallowsAT&Ts
customerstousewirelessserviceswithoutroaming,thisseamlessaccesswillbring

morecustomertothecompanyaswellasmakethepriceofservicesseemtobemore
reasonable.Economygrowthrelyonpeoplespending(Whitney2013),asthe
economyforecastedtogrowin2015,thepurchasepowerofpeoplewillalsorise,
whichmayinturnmorespendingoncompanysproductsorservices.Withanequal
priceforthewirelessservicefromnetneutrality,thereisapotentialthatmore
customerswillshifttoAT&Tasitisoneofthebiggestcarriersthatprovidefastest
andstrongestsignal.Nevertheless,thecompanyshouldfindasolutiontoneutralizeits
expensivecostonitsproductsandserviceinordertokeepexistingcustomersandto
getnewcustomers.

Product life cycle

Even though its wireline segments revenue is decreasing, the wireless segment will cover
these losses as the segment account for 56% of companys operating avenue in 2014 (AT&T
INC. 2015b: 13). Wireless service of AT&T is a key driver in companys revenue, thereby, the
wireless service is in maturity stage of the product life cycle.

Industry life cycle

With 34% share of the market, AT&T currently has the largest marketshare as well as its key
competitor, Verizon who hold the same percentage of marketshare of 34% in the last quarter
of 2014 (Speculations 2014). Therefore, companys industry life is in maturity stage where
weaker competitors withdrawn (Metro PCS, and Leap wireless closed down in 2013, and
2014, respectively (Statista 2015)), the sale slowdown creates overcapacity in the industry
which intensifies competitors (Kotler and Keller 2014: 335).

VRIO Framework

Products/Services
quality

Valuable

Rarity

Inimitabil
ity

Organize
d
properly

Yes

Yes

No

Yes

Temporary
competitive
advantage

Innovation

Competitive
implication

Yes

Yes

Yes

Yes

Sustained
competitive
advantage

Yes

Yes

No

Yes

Temporary
competitive
advantage

Employee diversity

Product and Servicess quality

AT&T delivering great value to customers by providing premium services through new
innovations, responding to customers wants. The company has maintained a constant
commitment on research and development in order to offer best-in-class services and best
network. Companys products and services comprise of mobility services, network services,
network security, cloud services, hosting services, voice services, unified communications,
and application services. The biggest portion of companys revenue was on wireless&wireline
which made up 54.3% of AT&T 2014 total revenue (AT&T INC. 2015b). The quality of
AT&Ts high is high which makes it standout from its competitors, the company network
covers more than 99% of Americans which is 1% higher than Verizon, with USs most
reliable 4G LTE network covering more than 300 million people, and they own and operate
more than 34,000 Wi-Fi hotspots across the nation.
Innovation
According to AT&T inc, the company has a technology innovation team made up of
approximately 1,300 of the worlds best scientists, and engineers including advanced data
networking experts, software engineering, systems integration, and speech technology known
as AT&T Labs. Its inventors pioneered new technologies and developing new products and
services, namely the transistor, the creation of the field of Information Theory, the solar cell,
and the communications satellite ever since 1901(AT&T INC. 2015). This sustain AT&Ts

8
competitive advantage by delivering great value to customers by providing a new generation
of network and communications services that enable seamless, user friendly, high quality, and
affordable. Moreover, the rarity and inimitability can be seen from AT&Ts existing history
image and position of the brand in the telecommunications industry. Therefore, the
innovations of the company is a sustained competitive advantage.
Employee diversity
According to AT&T, AT&T's 137-year history of innovation is a story about people from all
walks of life and all kinds of backgrounds coming together to connect people to their world,
anywhere, anytime and on any device (AT&T INC. 2015d). The company valued in
employee diversity, they believe that talented and dedicated individuals are critical to
maintain their position in this rapidly evolving communications industry. This diversity
differentiate AT&T from its competitors, the company give opportunities to all those with
talents even those with communications challenges or medical disabilities. The company
overlook the issue of gender and race inequality, hence, AT&Ts 50-state workforce is 36%
female and 40% people of color. A simple philosophy of the company reflects how diversify
is a competitive advantage, we serve our customers better when we build diversity into all
we do, and that positively impacts our customers and share owners (AT&T INC. 2015d).
This is a temporary competitive advantage because this capability is imitable.

STP
Segmentation
AT&T has undifferentiated or so-called mass marketing, providing the whole market with
same offer (Kotler and Keller 2014: 255). Products and services of AT&T can be sold to the
expansive number of buyer as they all expect the same service from the company, instead of
segmenting the market, the company provide variations in term of promotions or plans to
suite customers' needs.

Target Markets

9
There is no doubt that people in this era are relying on smartphone, 71% of all US population
own at least one device (Nielsen 2014). AT&T primary target audiences persona data is
shown in the table below.
TARGET MARKETS
Geographic

United State of America

Demographic

Age : Teenagers to Adults

Gender : Male and Female
Income : Middle to upper income
Lifestyle : Socialize, Business people, Trend followers,
Social class : Middle to upper class

Psychographic

People who are interested in using communications and

telecommunication network, those who want entertainments, or
want to stay connect.

Behavior

User status : New customer and Existing customer

Loyalty status : Client to Advocate

As the company provide wide range of products and services, the target market is huge. To be
more specific, for wireless and wireline segment, the target group is male or female, age from
18 to 64 (Pew Research Center 2014) with average to high income, those who want to stay
connected to the social world, which own technology devices like smartphones or PCs, and
will be able to develop loyalty to the brand.

10

Position
The position map shows that AT&T has a position of high quality service with high price.
AT&T is positioning as the second largest telecommunications provider in US after Verizon.
The reputation of AT&T in telecommunication industry is positively strong with 34% market
share, make AT&T a star player among telecommunication carriers (Statista 2015). In a
competitive environment, AT&T has a brand image as a giant telecommunications carriers
with reliable reputation, aside from that the company has some points of differentiate which
are innovative, pioneer, and high quality. Even though the company offering same products as
Verizon, Sprint, and T-Mobile, the quality of AT&T is far better than Sprint and T-Mobile.
Verizon and AT&T, however, are neck and neck in the industry to win over customers.

Objective and Strategic/Tactic

Societal
AT&T is trying to make a positive impact on the world. One of the societal objective is energy
management, due to the fact that most of the companys activities and service are depend on data
traffic which requires energy, for example mobile data traffic on AT&Ts wireless network increased
more than 50,000% in from 2007 to 2013 (AT&T 2014). AT&T have set goals for this objective by,
first, reducing direct emission (GHG emission from fleet vehicles, and Bloom Fuel Cells) by 20% by
2020 Bloom (AT&T 2014). Second, AT&T states that, by the end of 2015, a majority of spend with

11
strategic suppliers will be with those who track greenhouse gas (GHG) emissions and have specific
GHG goals. Lastly, reduce the consumption of electricity of the company which relate to data growth
network by 60% in 2020.
One way to achieve the goals is to have ability to measure and understand greenhouse gas (GHG)
emissions, and it will lead to illuminate associated threats and opportunities of the company. AT&T
focus on three areas of energy management known as three-pronged approach: company-wide energy
efficiency, collaboration with external groups, and alternative energy. The first area, company-wide
energy, in this area the company focus on three sub-areas, firstly, internal energy management
structure, where company creates energy policy for its people to follow to reduce the use of energy.
Secondly, energy team and champions, and lastly ATNO energy transformation strategy, AT&Ts
technology and network operations. Next, collaboration with external groups to help company shave
operating costs and reduce emissions. Lastly, alternative energy, AT&T use alternative energy sources,
namely Solar, Fuel cells, and Wind (AT&T INC. 2015). Be following company energy management
path form, AT&T will be able to achieve its goals.

Financial
In 2015, AT&T expects their operating environment to be challenge as facing an intense
competition, especially in wireless segment, and the lowdown economy together with the
change in regulation which is unfriendly to invest in broad brand service. Furthermore, AT&T
expects to see an increase on consolidated operating revenue driven by their wireless data,
and IP-related wireline data services, including U-verse (AT&T INC. 2015b).
AT&T has a plan to expand their wireless, and other sections by investing in each section as
follow:
$21,199 in capital expenditures, excluding interest during construction.
$234 in interest during construction.
$3,141 for the acquisitions of wireless spectrum licenses (including a refundable deposit
with the FCC for the AWS-3 Auction), Leap and other operations.
$1,890 in short-term investments, consisting of time deposits greater than 90 days.
(AT&T INC. 2015b)

12
7Ps Analysis
People

AT&T invests in training and development programs to maximize

employees potential (AT&T INC. 2015a), namely Talent Development
Programs, Leadership Development Program (LDP), and Accelerated
Development Program (ADP) (AT&T INC. 2015d). Furthermore, AT&T
has diversify workforce, overlook gender, race, and disability, but
focusing on individuals talents.

Product

Products and services offer by AT&T are Internet, U-verse TV, direct TV,
wireless, home phone, mobile phone, and Wi-Fi, which cover most of
the services in telecommunications industry. The products and services
of the company enhanced customer experience in entertainment and
communications (AT&T INC 2015).

Price

AT&T offers various data plans with different charges to suit customers
usages. For example, wireless service, customers can get cheaper price
as they sign longer contrast (AT&T INC 2015). Moreover, AT&T
provides both postpaid and prepaid for phone users.

Place

AT&T has more than 16,000 retails, including company owned stores
and kiosks, authorized dealers and third party retail all over US to serve
customers. The store give customer opportunity to get hands-on interact
with fully function wireless handsets and service. Additionally, AT&T
launched the Online Experience Store where customers can experience
and purchase AT&T services and products via a digital storefront (AT&T
2015).

Promotion

To target customers, AT&T use promotion strategy through different

methods. The company use this strategy as one of the way to get new
customers, for instance, new customers will get $48 discount on monthly
base for 24 months contrast of AT&T U-verse TV plans, or Online-only
bonus giving new customer $100 reward card when purchasing online at
att,com. Nevertheless, this strategy al so apply to existing customers to
purchase more products, for example, AT&T wireless customer will get
$50 reward card when purchasing Internet. (AT&T 2015)

13
7Ps Analysis
Process

AT&T deliver it service through several methods start from innovation

new technology and service to delivering them. Staffs of AT&T are
trained to be experts in their area, by instructor-led classes, self-paced elearning courses and virtual conferences, to be able to deliver the best
service to customers (AT&T INC. 2015d).

Physical evidence

AT&T has tangible physical evidences, for example

Corporate branding (sign, symbols, artifacts)
Development goals, and plan
Store environment
Employees dress code

7Ps Analysis

Objective and Evaluation

OBJECTIVE

EVALUATION

Ability to measure and understand

Reducing the use of Energy in the

GHG

organization

Form energy team and create energy policy

Use alternative sources

Increasing in revenue as the economy is

Invest more on companys services and

slowing down

products, especially on mobile network

Conclusion
The performance of AT&T can be effected by both internal, and external factors. The change
in technologies and society give an advantage to the company as people rely more on
communications network. As a giant telecommunications provider, holding 34% of
marketshare, AT&T has a strong brand reputation as a leading carrier which can attract new
customers, and keep existing customers as the same time. Undoubtedly, wireless network
service of AT&T has the most potential to grow, as seen in companys revenue, which this
product has the biggest proportion of. This service will surely help increase the companys

14
revenue in 2015, when US economic is slowdown because the demand of wireless service is
slightly increasing. Nevertheless, new legislation of net neutrality from FCC is a big issue
AT&T has to consider as it may lead to the lose in companys revenue when the regulation is
releases. The company, however, is in a competitive market, where customers can easily shift
to other network provides who provide better service or give more reasonable promotions. In
order to sustain it position in the market, AT&T has to keep its strength of being innovative, a
fast developer, and consistently improve standard of its products and services.

15
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16
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