AT&T vs Verizon
Communications
Alex Fraser- May 2011- Operations and Supply Chain
Jeff Horan-May 2011- Finance
Chase Pumerantz- May 2011- Marketing
Key Success Factor Table
Key Success
Factor
Equation to
Measure KSF
Economies of Scale
(Revenue-Operating
Income) /Total Assets
Network Service
Reliability
National Survey Data by
NovaRum Inc.
G*, G-star the Index of
Sustainable Growth
(1 - Dividend Payout
Ratio) * ROE
Customer Loyalty
Customers Lost/ Total
Customers
AT&T
Verizon
.36
0.42
=(($124,280$19,753)/$288,488)
=(($106,565$14,645)/$220,005)
68%
89.8%
.008895
-0.075354
=((1-0.5)*0.01779
=((1-2.14)*0.0661)
-1.15%
-1.02%
Key Success
Factor
(KSF)
Economies of
Scale
Network Service
Reliability
G*, G-star the
Index of
Sustainable
Growth
Customer Loyalty
AT&T
VZN
Strength Assessment on
a Scale of 1-5:
1=weakest, 3= the same,
5=Strongest
AT&T Score
VZN Score
.36
0.42
5
1
68%
89.8%
1
5
.008895
-0.075354
5
1
-1.15%
-1.02%
3
3
Average
Strength Score:
3.25
2.50
Superior Rival: AT&T
• Despite the fact that AT&T has a significantly lower Network
Service Reliability Rating and a comparable customer attrition
rate they are the superior rival.
• This is because AT&T is most likely to create and sustain
competitive advantage against Verizon Wireless because of:
• Superior Economies of Scale
• More readily available financial resources to support further
growth.
• This superiority was demonstrated in the First Quarter of 2011
when AT&T surpassed Verizon Wireless as the largest Wireless
Carrier in the industry.
Works Cited
• AT&T INC. Annual Report Persuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934. Form 10-K. Dallas:
Thomson Reuters, 2010.
• Rosenbluth, Todd. "AT&T, INC." S&P Focus Stock of the Week 7
February 2011.
• Shields, Mike. "Verizon's Strategy: Simple, Boring, Effective."
Adweek 7 June 2010: 26-27.
• Sullivan, Mark. "A Day in the Life of 3G." PCWorld Magazine 28
Jun 2009.
• Svensson, Peter. "AT&T to push Android phones more
vigorously." The Commercial Appeal 28 January 2011.
• Verizon Communications Inc. Annual Report Persuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
Form 10-K. New York: Verizon Communications Inc., 2010.