Global Communications: Analysis

Situation Analysis and Problem Statement: Global Communications Corporation

Situation Analysis and Problem Statement

Global Communications is concerned about operating profits and the strain placed on the company as a result of increasing levels of competition. In response to the challenges facing Global Communication, senior management has developed an aggressive plan. The first part of this plan involves offering new services targeted toward small businesses and consumer accounts. The second part of Global Communications' new business plan is more controversial. It involves specific cost cutting measures intended to improve company profitability. Part of this cost cutting plan involves moving some of the company's technical call centers to India and Ireland where labor costs are significantly lower.

Global Communication is in serious trouble. The company's stock was trading at $28 per share three years ago and is now trading at around $11 suggesting that investor confidence in the telecommunications industry is waning. Global Communications management is committed to turning this situation around.

Orchestrating a turn around will not be easy. This industry is highly competitive. Local and long distance companies are competing for the same customers with products and services that are largely undifferentiated from one another. The telecom