Essay on Strategy Formulation

1.0 Introduction

Ranked 12th in the Fortune 500, 2015, AT&T Inc. is an American multinational telecommunications conglomerate, headquartered in Dallas, Texas (Peres, 2016). If there is a way to communicate, there is a good chance AT&T provides it. It is the second largest provider of mobile telephone services and the largest provider of fixed telephone services in the United States, and also provides broadband subscription television services. In 2014, AT&T was acclaimed the world’s largest telecommunications company by revenue. As of 2016, it became the 17th-largest mobile telecom operator in the world, with a customer base of 130.4 million (Peres, 2016). The history of AT&T is in large measure the history of the telephone in US. Its roots go back to 1875 when founder Alexander Graham Bell's introduced the telephone. AT&T became the parent company of the Bell System - US telephone monopoly. In the 1990’s, it acquired many small telecommunications firms while maintaining the steady momentum of its services. This led to the inclusion of the company in the Fortune 500 list. Today, AT&T is a global networking leader, focused on delivering IP-based solutions to enterprise and government customers (The New York Times, 2016). At the end of the first quarter 2016, it acquired 34% of the overall US subscriber market. This was a consequence of its acquisition of prepaid wireless service provider, with 4.54 million subscribers. One of AT&T’s most laudable developments is the introduction of sound to Hollywood in the 1920s with the invention of Sound Motion Pictures. The debut of television stretches back to 1929 with AT&T’s creation of the Broadband Coaxial Cable. Furthermore, the company is currently working on its 5G roadmap to bring customers the next-generation of super-fast, flexible wireless connectivity at low cost using power lines (Frank, 2016). The purpose of this essay is to determine whether AT&T should pursue its expansion strategy in Mauritius.

2.0 The leading strategic models

        2.1 Institution based theory

                2.1.1 Political risk

Political risks are potential disturbances owing to internal or external events or regulations resulting from political action of governments or societal unrest (Christy, 2014).  Mauritius has a long history of political and social stability and is internationally recognized for its well established democracy. This is the consequence of a stable political environment and effective government policies to promote its economic development. Indeed, it was ranked as the best politically stable African country by the World Bank and it has received the second highest rank after South Africa for government effectiveness and control of corruption (AMB, 2014). A “zero tolerance” policy has been implemented to eradicate fraud and corruption (L’Express.mu, 2014). This primarily arises because Mauritius is ranked 52 out of 177 countries according to the Corruption Perception Index (Transparency International, 2014). In 2012, the US government declared a lawsuit against AT&T, claiming that the company violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and wanted to use it fraudulently (The United States Department of Justice, 2012). Hence, AT&T should consider the strict regulations in Mauritius and its political environment.