This company's reach extends across the vast properties of the two companies from which it originated. America Online brought its flagship online service, Netscape, and several interactive services to the merger. The threat of new competitors can be applied to the telecommunications industry in that new competitors will always emerge, as more companies are sure to be formed. The threat of substitutes can be applied to the medium of the Internet, because the cost of switching Internet providers and Internet service in general is very cheap. The presence of this type of substitute products can lower industry attractiveness and profitability because it can limit price levels. The bargaining power of buyers is greater in the telecommunications industry when there are few dominant buyers and products are standardized. Finally, the intensity of rivalry between competitors in the telecommunications industry is at an all-time high. This is a result of the structure of the telecommunications industry - since there are many equally sized competitors, as in the phone companies, the rivalry is more intense. It is in this instance where a company's success largely depends on its business plan, revenue models, core competencies, and competitive advantage.
Company Strengths and Weaknesses & Strategic Recommendations
Both Cingular-AT&T and Sprint have their own strengths and weaknesses. For example, a strength of Cingular AT&T lies in their marketing and ability to be flexible and adapt to what the customer wants and needs. An example of this is illustrated in the Cingular-AT&T's "Rollover" service, a service which allows customers to keep unused minutes from month to month on a twelve-month rolling cycle on its popular "Nation" nationwide plans. This was a service change that was implemented in response to customer's needs. However, Cingular-AT&T faces negative complaints from consumers, that make up its major challenge. For example, in 2005 Cingular-AT&T was removed from the New...
A strategic recommendation for the company is to restructure its customer care procedures, and respond immediately to all complaints. The most common complaints against Cingular-AT&T include number portability issues, over-billing, poor customer support and network reliability. Another strategic recommendation for this company would be for them to expand their customer service sector, and efficiently train individuals to lower the number of complaints and prevent future complaints.
Sprint has several strengths, including major sponsorships, that have increased the company's revenue greatly. Sprint is the major title sponsor of NASCAR's top racing series, called the Nextel Cup, is the official wireless sponsor of the United States National Football League, and is one of the corporate sponsors of the Las Vegas Monorail. Its weakness lies in the area of mobile phones; it cannot keep up with Cingular-AT&T, and does not have nearly as many customers. However, Sprint's Internet service is a Tier 1 service available everywhere, so a strategic recommendation for Sprint would be to increase its mobile phone sector to match that of its Internet reach, and increase the number of customers. Finally, an examination of both of these companies clearly illustrates the competitive challenges Cingular-AT&T and Sprint face, and their strategic strengths and weaknesses.
Bibliography
AT&T. (2006). Cingular Wireless Reports Fourth Quarter 2006 Results. Retrieved February 22, 2007 at http://cingular.mediaroom.com.
America Online. (2005). Retrieved February 22, 2007, at http://www.corp.aol.com/.
Sprint. (2007). Sprint Nextel: Aiming to be No. 1 in Customer Experience. Retrieved February 22, 2007 at http://www.sprint.com/companyinfo/history/.
Stiglitz, J. 2002, Globalization and its Discontents. New York: W.W. Norton & Company.
