Case Study: Analysis of the Apple and AT&T Alliance
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This case study analyzes the Apple and AT&T alliance and determines who got a better deal and why. It also discusses the benefits of the alliance for both companies.
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1CASE STUDY Answer to Question 1: Who got a better deal? The deal between the Apple Inc. and the AT& T was a very useful one which was beneficial to both the companies and assisted them in capturing a large share of the market along with ensuring a considerable growth rate for all the companies as present in the organization. Although AT& T was a popular company even before the particular alliance between the two companies took place, the experts believed that no telecommunications company would be able to benefit considerably perform well in the wireless domain (Andrew). However, in exchange of the millions of dollars as invested in the firm by AT& T and the development of the technology along with the authority being with Apple, AT & T enjoyed the exclusivity of being the only network related to Apple. There were approximately 53 million Iphone activations 2007 to 2011, a number which was not possible to achieve if AT & T had not gone into the deal with the Apple. The wireless phone subscribers of the telecommunications company also increased considerably which meant that the firm was benefitting at large. Hence, as per the particular analysis, it can be stated that it was AT & T who benefitted from the entire alliance because the phase of 2007-2011 was such that it witnessed considerable growth in the use of the iPhones and with respect to this, AT & T witnessed a similar growth irrespective of not being able to keep up with the pace of the growth and not being ableto provide with the adequate serviceswhich would have long term implications on the overall firm at large and not led to a downfall of the particular alliance (Jacci). Answer to Question 2: Why was it a better deal? The reason why AT & T benefitted more from the given deal is because:
2CASE STUDY Although they had to invest to invest millions of dollars into the development of the firm, it got the exclusivity of being the sole network provider of Apple for a period of Five years. It also got an access to around 10% of the iphone sales which was in large numbers at that time. The company`s market share increased significantly from 28% in 2007, during the beginning of the deal to 32% by the end of 2011. In addition to this, the alliance also assisted AT & T to uplift its image in the eyes of the different consumers who had a poor image of the firm prior to its association with Apple. Additionally, although the deal did not work out to be very well for the long term of AT&T, it possessed the ability to ensure that the firm paid positive dividends to the different subscribers. The brand image of the firm was able to improve considerably and moreover, the firm was successfully able to improvise on its operations and thereby improve the overall status of the firm (Doz, p. 240). Lastly, even though, its alliance came to an end, AT &T witnessed that its wireless segments operating margin improved 10 per cent. Hence, it can be clearly understood that AT & T got a better deal out of the particular alliance.
3CASE STUDY References and Bibliography Andrew Kupfer, “AT&T's $12 Billion Cellular Dream. . .,” CNN Money (December 12, 1994). Availableathttp://money.cnn.com/magazines/fortune/fortune_archive/1994/12/12/80051/, accessed December 24, 2013. Doz, Yves L. "Strategicmanagementin multinationalcompanies."InternationalBusiness. Routledge, 2017. 229-248. Hill, Charles WL, Gareth R. Jones, and Melissa A. Schilling.Strategic management: theory: an integrated approach. Cengage Learning, 2014. JacciHowardBear,“WhenWasDesktopPublishingInvented?”Availableat http://desktoppub.about.com/cs/beginners/f/when_dtp.htm, accessed December 24, 2013. Robson, Wendy.Strategic management and information systems. Pearson Higher Ed, 2015. Wheelen, Thomas L., et al.Strategic management and business policy. Pearson, 2017.