Describes the factors AT&T Consumer Products managers considered in deciding whether to locate a new plant for telephone answering machines in the United States, Asia, or Mexico. Describes in depth the restructuring of AT&T during the 1980s, the competition facing its consumer products division, the division's overseas manufacturing strategy, the Mexican economy, and the country's macquilodora program. Encourages students to analyze where a company's and an executive's responsibilities lie in making a complex plant-siting decision involving overseas operations, and in making decisions about pay, benefits, bribery, gender-based hiring, waste disposal, and so forth in operating in developing countries.
Authors :: Joseph L. Badaracco Jr., Wilda L. White
Swot Analysis of "AT&T Consumer Products" written by Joseph L. Badaracco Jr., Wilda L. White includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Macquilodora Overseas facing as an external strategic factors. Some of the topics covered in AT&T Consumer Products case study are - Strategic Management Strategies, Competitive strategy, Economy, Ethics, Executive compensation, International business, Operations management, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the AT&T Consumer Products casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing energy prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of AT&T Consumer Products
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AT&T Consumer Products case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Macquilodora Overseas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Macquilodora Overseas operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of AT&T Consumer Products can be done for the following purposes –
1. Strategic planning using facts provided in AT&T Consumer Products case study
2. Improving business portfolio management of Macquilodora Overseas
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Macquilodora Overseas
Strengths AT&T Consumer Products | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Macquilodora Overseas in AT&T Consumer Products Harvard Business Review case study are -
Ability to recruit top talent
– Macquilodora Overseas is one of the leading recruiters in the industry. Managers in the AT&T Consumer Products are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Macquilodora Overseas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AT&T Consumer Products Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Macquilodora Overseas is one of the most innovative firm in sector. Manager in AT&T Consumer Products Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Macquilodora Overseas has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study AT&T Consumer Products - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Macquilodora Overseas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Macquilodora Overseas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Macquilodora Overseas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Macquilodora Overseas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Macquilodora Overseas in the sector have low bargaining power. AT&T Consumer Products has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Macquilodora Overseas to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Macquilodora Overseas is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Macquilodora Overseas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AT&T Consumer Products Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Macquilodora Overseas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Technology & Operations field
– Macquilodora Overseas is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Macquilodora Overseas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– AT&T Consumer Products firm has clearly differentiated products in the market place. This has enabled Macquilodora Overseas to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Macquilodora Overseas to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Macquilodora Overseas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Macquilodora Overseas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses AT&T Consumer Products | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AT&T Consumer Products are -
Low market penetration in new markets
– Outside its home market of Macquilodora Overseas, firm in the HBR case study AT&T Consumer Products needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As AT&T Consumer Products HBR case study mentions - Macquilodora Overseas takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Macquilodora Overseas has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - AT&T Consumer Products should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study AT&T Consumer Products has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Macquilodora Overseas 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AT&T Consumer Products HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Macquilodora Overseas has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Joseph L. Badaracco Jr., Wilda L. White suggests that, Macquilodora Overseas is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Macquilodora Overseas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Macquilodora Overseas even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Macquilodora Overseas supply chain. Even after few cautionary changes mentioned in the HBR case study - AT&T Consumer Products, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Macquilodora Overseas vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Macquilodora Overseas is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Macquilodora Overseas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Macquilodora Overseas to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AT&T Consumer Products, in the dynamic environment Macquilodora Overseas has struggled to respond to the nimble upstart competition. Macquilodora Overseas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Macquilodora Overseas products
– To increase the profitability and margins on the products, Macquilodora Overseas needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities AT&T Consumer Products | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study AT&T Consumer Products are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Macquilodora Overseas can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, AT&T Consumer Products, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Macquilodora Overseas can use these opportunities to build new business models that can help the communities that Macquilodora Overseas operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Macquilodora Overseas can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Macquilodora Overseas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Macquilodora Overseas to increase its market reach. Macquilodora Overseas will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Macquilodora Overseas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Macquilodora Overseas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Macquilodora Overseas in the consumer business. Now Macquilodora Overseas can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Macquilodora Overseas to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Macquilodora Overseas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Macquilodora Overseas can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Macquilodora Overseas has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Macquilodora Overseas has opened avenues for new revenue streams for the organization in the industry. This can help Macquilodora Overseas to build a more holistic ecosystem as suggested in the AT&T Consumer Products case study. Macquilodora Overseas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Macquilodora Overseas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Threats AT&T Consumer Products External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AT&T Consumer Products are -
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Macquilodora Overseas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Macquilodora Overseas
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Macquilodora Overseas.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Macquilodora Overseas can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study AT&T Consumer Products .
Technology acceleration in Forth Industrial Revolution
– Macquilodora Overseas has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Macquilodora Overseas needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Macquilodora Overseas needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Macquilodora Overseas can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Macquilodora Overseas in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Macquilodora Overseas.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Macquilodora Overseas business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Macquilodora Overseas needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Macquilodora Overseas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Macquilodora Overseas will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Macquilodora Overseas demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Macquilodora Overseas high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of AT&T Consumer Products Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study AT&T Consumer Products needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study AT&T Consumer Products is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study AT&T Consumer Products is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of AT&T Consumer Products is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Macquilodora Overseas needs to make to build a sustainable competitive advantage.