In 1876, Alexander Graham Bell invented the telephone. That was the foundation of the company that would become AT&T – a brand that has become synonymous with the best, most reliable telephone service in the world. In 1984, through an agreement between the former AT&T and the U. S. Department of Justice, AT&T agreed to divest itself of its local telephone operations but retain its long distance, R&D and manufacturing arms. From this arrangement, SBC Communications Inc. (formerly known as Southwestern Bell Corp. ) was born.
Twelve years later, the Telecommunications Act of 1996 triggered dramatic changes in the competitive landscape. SBC Communications Inc. established itself as a global communications provider by acquiring Pacific Telesis Group (1997), Southern New England Telecommunications (1998) and Ameritech Corp. (1999). In 2005, SBC Communications Inc. acquired AT&T Corp. , creating the new AT&T. With the acquisition of BellSouth in 2006, and the consolidated ownership of Cingular Wireless, AT&T led our industry in one of its most significant transformations since the invention of the telephone more than 130 years ago.
According to Brassington & Pettitt (2000), there are several different mode of foreign market entry: Direct export, Indirect export, Licensing, Franchising, Contracting, Sales subsidiaries, Manufacturing subsidiaries, Joint ventures and Strategic alliances. AT&T the choice of international market entry mode :Direct export, Indirect export, Manufacturing subsidiaries and Strategic alliances. AT&T took many actions to succeed in the changing environment.
The company invested over $35 billion in acquisitions and upgrades to its infrastructure both to manage ever-increasing volumes of internet protocol and other data traffic, and to establish direct local connections to business customers. AT&T acquired a leading provider of local telephone service to business customers (TCG. ) It acquired a leading provider of global data networking services (IBM Global Network. ) It merged with two large cable companies, (TCI and MediaOne. ) Operating as AT&T Broadband, the unit became the largest cable company in the United States.
The manufacturing operations too faced a transition from monopoly to competition. The largest manufacturing business, recast as AT&T Network Systems, had as its major customers the now independent local telephone companies (RBOCs). Other manufacturers competed for their business and the RBOCs cast an increasingly wary eye on AT&T Network Systems, at times seeing AT&T more as a real and potential competitor than a partner. Network Systems continued as the US market leader, selling both to its traditional customers and to new ones.
Network Systems also led the way as AT&T returned to the global arena for the first time in seventy years, establishing plants, subsidiaries, and joint ventures in countries as varied as the Netherlands, Japan, and China. Political Factors Primarily, the company started their strategy by making the brand more profitable. This is to build a strong financial foundation. The main changes that had happened are from the accounting practices of the company. During the said changes and process of restructure, there are different political factors that might be considered.
One of this is the environmental issues. As of now, more and more individuals and organizations are focusing on different issues regarding the environment. The fact that the company will be outsourcing from other countries, there are different international as well as local laws that must be considered in order to maintain the continuous process of the development. The trade restriction and tariffs are also another of the most important political factors that must be considered.
This is due to the fact that the company already followed the strategy of Adidas and Nike in outsourcing their production in Asia. The primary reason for outsourcing of production is because, most of Asian countries offer lower labor cost and other taxes compare to Europe and America. In terms of political stability, due to the fact that the company is a multinational company that produce as well as sell their products in different parts of the world, there different political issues and events in other local partners that can affect the overall performance of the company.
Economic Factors The said situation in the political factors, are somewhat connected with the different economic factors that might affect the development process of the company. Primarily is the situation of the home economy or the economic situation of Germany, in terms of monetary issues, stock exchange and the likes. The economy trends of happenings in the home economy are also important, so as the economic situations and trends of the partner countries. This is due to the fact that, this political factor has a great impact to the social mentality of the possible customers.
The different employment laws in different countries must also be considered, this is due to the fact that different countries has their different cultures that might affect their beliefs as well as regulations regarding the human resource aspect of any company. Social Factors There are more social factors that might affect the development process of the company more than any other factors. This is due to the fact that social factor has the most important impact or effect to the taste or demand of the customers regarding one product or service.
The fact that more and more people are into sports is a big chance or advantage for the company, because there will be a huge market for them. Another important thing is that sport is considered as one of the most important sector in the tourism industry, which considered as the most successful industry nowadays. On the other hand, sports are also considered as a form of exercise, for those who wants to have fit and healthy body. The behavior/attitudes as well as opinions of the customers are also important.
It is important for the company to know what went wrong during their first implemented strategy, where in they tried to produce low quality as well as low price of products that lead to low sales and failure of the brand itself. It is also important for the company to consider the change of customer behavior as of now. More and more customers are oriented towards different high-value and lifestyle-oriented products. It means that more and more people are availing luxury products. The main reason behind the said phenomenon is that customers believe that the higher the price a product, the higher its quality.
Another thing is that customers want to feel comfortable, and that is considered as one of the most important criteria of many customers in buying products and availing services. In the process planning and implementing specific business strategy it is important to use fashion and role models that will help the brand to spread and rise brand awareness to the possible customers. The image of the models of the brand is also important; this is due to the fact that those artist or individual can be considered as part of the brand itself.
Seeing famous individuals from different fields of sports wearing the products of the company can help them to reestablish the image of the brand. With connection to that, major events can also influence the behavior of the customers towards the products. Like sponsoring different famous individual, sponsoring major events can also improve the awareness of the customers regarding the brand. The destination’s brand image becomes linked and related to the event’s brand image, and the event’s brand image becomes linked to that of the destination brand (cited in Ritchie & Adair 2004, p.
239). The EIU conducted their online survey during October of 2004; using data from its respondents that is consist of 136 executives and 65 investors. The outcome shows that 85% of the respondents believe that CSR is considered as important part of their investment decision. The result doubled compared to the result of the study during 1999. In addition, 88% believe that CSR is vital in the decision-making process. The study also showed that the most important benefits of CSR is brand enhancement (61%) (Economist Intelligence Unit 2005, pp. 3 – 4). Technological Factors
In terms of the technological factors, it focuses on the series of R&D activities as well as applications of automation and new technologies, most especially those that are connected to the Internet. Another important thing that might affect the development is the maturity of the technology; this is due to the fact that technology is considered as restless in terms of development. Furthermore, the global communication is also another important aspect, this is important because the company is operating in different part of the globe. It is also important to consider the different laws like the intellectual property issues. View as multi-pages