AT&T: A Case Analysis

The purpose of this research is to perform a case analysis on the American Telephone and Telegraph (AT&T) Company. The primary emphasis in this analysis is on the company's private branch exchange (PBX) operations.

PAST STRATEGIES

AT&T's past strategies are considered within the framework of the "fourPs" of marketing. Product, price, place, and promotion are considered separately.

A product is defined as "anything offered for exchange to another person including physical objects, services, places, organizations, and ideas" (DeLozier, & Woodside, 1986, pp. 191192). Consumers typically recognize five distinctive product characteristicsquality level, features, styling, brand name, and packaging. Depending upon the type of product involvedphysical, service, and so forth, not all of these characteristics will be applicable in each instance. Quality level, features, and brand name have been emphasized by AT&T in the marketing of PBX equipment.

Another factor involved in the development of product strategy is that of the product life cycle. Four stages of

the product life cycle are recognized by most marketing analystsintroduction, growth, maturity, and decline (Kotler, 1985). The PBX product concept is in the late stages of maturity. AT&T has been following a strategy of product improvement, as a means of holding decline at bay (Schultz, 1988).

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cations of the inventories which are maintained; and (3) the means by which products will be transported through channels of distribution. For the most part, AT&T markets its PBX systems directly to users. The company's PBX products are not marketed separately from its other telecommunications products. Promotion Strategies AT&T markets its PBX products largely through personal selling. When the company performs a communications audit for a potential customer, or acts as a telecommunications consultant for a potential customer, PBX systems are introduced as appropriate. FINANCIAL ANALYSIS The financial analysis of AT&T was performed in the context of financial ratios. The required data were obtained from the Value Line Investment Survey (1988). The results of the ratio analyses were as follows: 1. Profitability: a. Gross profit margin: 9.2 percent. b. Net profit margin: 4.5 percent. c. Return on capital: 7.6 percent. d. Return on equity: 9.7 percent. 2. Liquidity: Current ratio: 1.5 times. 3. Leverage: Longterm debtto equity ratio: 32.4 percent. 4. Activity: Fixedasset turnover: 1.6 times. COMPANY AN
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Approximate Word count = 1564
Approximate Pages = 6 (250 words per page)

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