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Strategy Sets of the US Cellular Phone Services

Introduction

The modern market of goods and services is a rather complicated matter of study because the competitiveness in it is huge, and only the best equipped and properly-structured companies can stand this competition. One of the major roles in becoming a competitive player in the market today is the successful strategic planning of a company. The modern market of cellular telephone services is especially sensitive to any changes that the conditions might bring; therefore strategic planning acquires doubled importance in it. Technologies are developing rather fast nowadays, and every company has to monitor the recent market trends, technological innovations, etc. to be ready to compete (Strategy Analytics, 2009). The analysis of the 30-year strategic development of such a giant of the US cellular phone services as Verizon Wireless in comparison to its four major competitors, Sprint Nextel, T-Mobile, and AT&T will allow seeing a comprehensive picture of the role of strategy in the industry development, and the stock charts will show the comparative positions of the companies mentioned in the market over different periods of time.

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Verizon Wireless

To begin with, Verizon Wireless is one of the largest cell phone operators in the US market (Verizon Wireless, 2009). Its nationwide coverage and the huge customer base are the results of the successful strategic policies carried out by the company’s management almost over the latest 30 years of its development (Bartash, 2006). Drawing from the data presented, it can be observed that the practice of mergers and acquisitions implemented widely by Verizon Wireless and its predecessors has proved to be rather efficient in the strategic sense (Verizon Wireless, 2009). For example, the divestiture of Bell Systems damaged the organizational structure of the company and consequently reduced its market share and productive capacity (Bartash, 2006).

New unions of companies were needed to raise new funds and compete with the ever-developing other market players, including US Cellular, T-Mobile, etc. Therefore, Verizon Wireless (then, Bell Atlantic Corp. and GTE Corp) merged to create Verizon’s predecessor, Verizon Communications, Inc (Verizon Wireless, 2009). It was a successful strategic step as it provided the company with the necessary funding and development capital for a decade ahead and allowed its further merger-and-acquisition policies. Verizon Wireless became the product of the merger of Bell Atlantic Mobile, AirTouch Cellular, AirTouch Paging, and PrimeCo Personal Communications LP, and Vodafone (Verizon Wireless, 2009). After it, the company obtained $8 billion in local investment capacity and turned its attention to the retail market development, which proved to be more profitable than the wholesale and the large-scale ones (Verizon Wireless, 2009).

After the merger of Bell Atlantic Corp and GTE Corp in 1998, Verizon Wireless was introduced as a brand in 2000 (Verizon Wireless, 2009). The same year saw the plan of upgrading every second cell phone among the subscribers of Verizon. The investment program brought $100 million to the company for the purpose of employee training, facilities expansion, etc (Verizon Wireless, 2009). In 2003, Verizon reported putting $8 billion into expanding its wireless network and building new wireless towers around the country. The merger of the company with MCI added $8.66 billion more to the company’s assets and provided it with wider opportunities. 2008 saw the focus of the company on the development of its retail network rather than the detailed work with corporate customers (Verizon Wireless, 2009). Launched the same year, Verizon Blackberry turned out to be one of the most effective strategic steps of the company. In 2009, Verizon merged with Alcatel concluding another $6 billion deal to strengthen its market positions again. This year the budget of Verizon is planned to be over $30 billion (Verizon Wireless, 2009).

Sprint Nextel

Another example of a successful and properly structured company is Sprint Nextel which can easily be compared to Verizon Wireless in the amounts of subscribers and the participation in the wide variety of the US cellular phone markets (Sprint Nextel, 2009). Strategy plays a paramount role in the success of this firm as far as its policy of mergers and acquisitions can be viewed as the initial, and major, strategic step that allowed Sprint Nextel to raise new funding and invest it to the development of the services and promotion of the trademark in mass media, etc (Sprint Nextel, 2009). In 2000, Nextel becomes the largest global wireless cell phone operator with its branches in over 70 countries around the globe. In 2004, Sprint and Nextel merge to create the global largest network dominating the American and European markets (Sprint Nextel, 2009). 3G Network started its development in 2007, while 2008 saw the introduction of 4G technology which brought 100 million more customers to the company. The budget of Sprint Nextel equals $40 billion (Sprint Nextel, 2009).

Sprint Nextel is the third market player in the sphere of cell phone services in the United States after Verizon Wireless and the further discussed AT&T (Sprint Nextel, 2009). One of the most notable strategic steps of this company was its initial sale of the surplus time at lower prices to its loyal customers. This step allowed attracting a new customer base and made the spread of Sprint Nextel (in the early 1990s, Sprint) to 18 states possible. The deals of the company with the mass media, including Radio Shack, as well as the opening of Sprint Nextel’s own store, popularized the company further (Sprint Nextel, 2009). At the same time, the introduction of the most updated 3G and, further, 4G technologies allowed the company not only to improve its market position and increase market share but also to increase the gap between it and its competitors in the aspect of technology, which even Verizon Wireless failed to launch (Sprint Nextel, 2009).

T-Mobile

T-Mobile is another company famous for its original and advanced strategic steps. The first initiative the company ever took into the market was the introduction of wireless internet technology which put it for many stages ahead of its competitors in the Information Technology (IT) area (T- Mobile, 2009). Having developed from a local German company dealing with cell phone services among its other activities, T-Mobile owes greatly to its strategic management and the properly developed strategic planning for the international success of its services and for becoming one of the leaders of the American cell phone market (Woyke, 2008). Voice Stream was the predecessor of T-Mobile in the market of cell phone products and services.

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The famous strategic step of the company was the invitation of Jamie Lee Curtis to promote their products worldwide. Another important initiative was the merger with Deutsche Telecom Company (T- Mobile, 2009). The year 2002 is officially considered to be the birth of the T-Mobile trademark as a brand mainly oriented at the young customers all over the world, especially in the USA market (T- Mobile, 2009). Drawing from this, it was not surprising that in 2003 T-Mobile introduced the first video messaging system ever in the American market. Moreover, in 2004 T- Mobile introduced the HiFi Ringer aimed at the youth again as it provided extended multimedia opportunities, for example, the usage of full audio and MP3 songs as ringtones for cell phone calls (T- Mobile, 2009). In 2009, expanding its 3G network T- Mobile introduces the G1, the smartphone created in cooperation with Google and equipped with a web browser and other IT opportunities. The current budget equals $62.5 billion (T- Mobile, 2009).

After the wireless Internet technologies had been introduced in Western Europe, the interest towards the company could be observed in the USA as well. The “Get More” program allowed T-Mobile to widen its customer base and attract new customers from other competing cell phone services operators (T- Mobile, 2009). The VoiceStream Wireless service introduction was the strategic marketing step that added to the positive image of the company under consideration both in domestic, i. e. German, markets and abroad, in the USA (T- Mobile, 2009). The following step, which opened the American markets for T-Mobile was signing the agreements with American Airlines, Delta Air Lines, and United Airlines. Finally, sponsorship of the sporting events in the USA and the Open Handset Alliance with Google established T-Mobile as one of the most reliable trademarks offering cell phone services in the United States (Woyke, 2008).

AT&T

AT & T is another major cell phone market player. Its way up started by acquiring MediaOne in 2000 and creating AT & T Broadband which proved to be the largest national network or cable connection. To ensure adequate funding for its programs, AT & T sold part of its stocks in 2000, by which it also drew the public attention and promoted itself (AT & T, 2009). In 2001, the already developed AT & T Broadband became part of Comcast, while AT & T introduced VOIP technology (Voice Over Internet Protocol) allowing the users to apply cell phone services via the Internet. The largest deal in AT & T’s history was the merger with SBC (Cingular Wireless) which amounted to $41 billion of investment and brought the company ahead of all its competitors in the American and European markets (AT & T, 2009). This year, AT & T plan the introduction of the new iPhone allowing its users to control their home DVR systems and equipped with QWERTY, autofocus camera, video sharing, etc. The current budget of the company amounts to $20.3 billion (AT & T, 2009).

AT&T is viewed by the experts as the company able to compete with such giants of the cell phone services industry as Verizon Wireless and Sprint Nextel. This fact is explained by the company’s strong strategy and the properly developed understanding of the most potentially beneficial areas of AT&T’s development (Moeder, 2009). Understanding the reality of the permanently changing market, AT&T focuses timely on the most promising areas of the latter in order to strengthen its position. It is evident that such a capacity would be impossible without the proper strategic planning, whose major aim is always to define the company’s long-term goals and ways of their achievement (AT & T, 2009). The above-presented chart is the reflection of the most important steps that AT&T has taken over the recent decades to achieve the status of the second-largest operator of cell phone services in the US market (Moeder, 2009).

Technological innovations in the initial stages of the company’s development have been changed by the affiliations with sports teams, organizations, and sporting events (AT & T, 2009). In combination with the merger of AT&T with McCaw Cellular and the international promotion of the company’s services, AT&T managed to gain strong positions not only in the US but also in the Western European markets (Strategy Analytics, 2009). Thus, compared to Verizon Wireless, AT&T is a rather fast-growing and successful company, in whose success the prominent role is played by strong strategic management. It is not surprising that name, these two companies are nowadays the leaders of the US cellular phone services market (AT & T, 2009).

Conclusions

To make the respective conclusion, the strategic sets that include strategic planning, strategic management, strategic marketing, etc. are crucial for the successful development of any modern company. Technologies are developing rather fast nowadays, and every company has to monitor the recent market trends, technological innovations, etc. to be ready to compete. The analysis of the 30-year strategic development of such a giant of the US cellular phone services as Verizon Wireless in comparison to its four major competitors, US Cellular, Sprint Nextel, T-Mobile, and AT&T allowed seeing a comprehensive picture of the role of strategy in the industry development, and the stock charts showed the comparative positions of competitors within the specified time-frame.

References

AT & T. (2009). Official Web site. Web.

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Bartash, J. (2006). Analysis: Puts heat on Cingular, Sprint in hotly competitive mobile market. Retrieved April 13, 2009, from Marketwatch. Web.

Moeder, A. (2009). Verizon Wireless History. Web.

Rooney, J. & Carlson, L. (2003). U.S. Cellular’s strategy of profitable growth through customer satisfaction drove numerous accomplishments in 2003. Web.

Sprint Nextel. (2009). Official Web site. Web.

Strategy Analytics. (2009). Verizon Wireless Award Sets Up Alcatel-Lucent, Ericsson for LTE Leadership. Web.

T-Mobile. (2009). Official Web site. Web.

Verizon Wireless. (2009). Official Web site. Web.

Woyke, E. (2008). Verizon’s Open Network Strategy. Web.

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StudyCorgi. (2021, November 18). Strategy Sets of the US Cellular Phone Services. Retrieved from https://studycorgi.com/strategy-sets-of-the-us-cellular-phone-services/

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