AT&T: Twenty Years of Change
AT&T once dominated virtually all U.S. telecommunications sectors. In 1984 AT&T was broken up into a new AT&T and seven operating companies, known as RBOCs (regional Bell operating companies) or Baby Bells. This case focuses on the period from 1984 to 2000, during which time AT&T went through a series of tumultuous changes. AT&T acquired, and then divested, the computer company NCR. AT&T bought McCaw Cellular Communications Inc. for almost $12 billion. AT&T spun off its equipment division into a new company called Lucent. AT&T invested more than $100 billion to acquire various cable television assets. Finally, in 2000, AT&T announced a sweeping restructuring plan that would break the company up into separates wireless, broadband, business long distance, and consumer long distance companies.
The primary teaching objective is to examine AT&T from a historical perspective as the basis for dealing with fundamental strategy issues such as strategy formulation, competitive advantage, diversification, and the power of brands. The case also provides the basis for a more in-depth examination of industry dynamics and how shifting dynamics can overwhelm industry leaders.