Who are their key competitors, their market share if available? How would you describe the intensity of competition and why?
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AT&T is an American based company in the business of providing fixed telephony services; as per reports in the communication industry, the company was the leading provider broadband, fixed telephony and subscription television services. The company’s main competitor is a local company by the name Verizon Wireless where in 2010, AT$T was marginally ahead of the company in customer care. Their combined customer base that in 2010 stood at 95.5 million and 94 million for AT& and Verizon Wireless, respect represented 98% of the country’s customer base (AT&T Official Website).
Verizon Communications Inc on the other hand has its main competitor being AT&T, the approach in the market is from a global perspective thus it has numerous branches across the world. Both AT&T and Verizon Wireless have other small companies competing with then, they include Sprint, T-Mobile, and Trachoma Wireless.
The industry competition is seen to be driven by AT&T and Verizon Wireless, they are the main players and serve over 98% of the customer base in the United States; other companies are small and lack the infrastructures to compete with the giant companies (VERIZON Official Website).
Who are their suppliers? It is not necessary to find out the specific names of their suppliers. Just describe them in high levels, e.g. chip manufacturers in Asia, or communication equipment manufacturers in U.S. Who has the bargaining power: the organization or the suppliers?
The industry has a number of suppliers however, AT&T and Verizon Wireless have a set of preferred suppliers; the suppliers can be classified into two areas, chip manufactures “intelligence gadgets” and communication equipment suppliers. They include LG InfoComm, Samsung Corporation, Qualcomm (CDMA-1XRTT and EV-DO chipsets), and Motorola Electronic company, RIM, Palm, HTC and PCD, there are some products that come from Nokia and Apple Inc.
The suppliers in the industry are quite a number and compared with the control of market as administered by, AT&T and Verizon Wireless, then, AT&T and Verizon Wireless have the bargaining power. They have been in the market and similar companies are minimal; as supplier power holder, the companies are able to dictate on quality and to some extent the prices for the materials.
Who are their targeted customers? Who has the bargaining power: the organization or the customers?
The companies have similar target markets and target customers; they employ similar marketing policies to meet the demands of their customers. To market the commodities, the companies have divided markets into two main areas they are:
- Low earning
- There are products that are relatively cheap and meant to meet the low-income people in the society.
- The middle-income people
- They are people who are keen on the market price and buy value for money; the company has its relatively expensive products for this sector.
- High earning people
- The companies have products with high technology adopted in them to target the well to do in the economy. They are sold relatively expensive but have more features.
Depending with the products, there are products for the young, middle class and the old; with time, the companies develop products for niche markets developed.
The customers have the bargaining power; their needs dictate the products to be manufactured (VERIZON Official Website).
Are there substitutes for their products or services? How competitive are these substitutes for their products or services and why?
A number of substitutes are in the market, they include Ericson products, landline services, Video Industry and the music gargets equipments. The substitutes are not strong especially in the United States however; the companies should constantly increase their products to compete with the challenge offered by the growing number of substitutes.
Who and what are the new threats. Are they serious and why?
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Currently, the world is recovering from global financial crisis, the crisis has hampered economic growth around the world thus the growth of markets have been reduced. On the other hand, the number of people who have mobile phones have increased and the market is thought to have stagnated; in the future, the companies are need to come with new methods and approached that can inspire business in their line of trade.
Another threat that the companies are facing is threat to substitutes and the growth of competitors, although they have taken the leading role, other companies in the sector are strengthening and reinforcing their strategies to take a higher share in the market.
The future is highly unpredictable, the companies’ customers are likely to develop their own services with their equipments; this is likely to be a cost management policy. When this occurs, then the companies are likely to lose business.
Another threat that the companies are likely to face is technology backwardness; technology is advancing at a fast rate that if the company fails to keep pace, it might find its products outdated.
The threats by the markets are substantial if the companies sit back and wait, however if they invest in continuous improvement of their products, the market is stable and expected to increase steadily in the near future.
AT&T Official Website. AT&T, 2011. Web.
VERIZON Official Website. VERIZON communications, 2011. Web.