Task 1: Identify two key industry problems and/or challenges for AT&T to achieve and sustain competitive advantage. For each problem/challenge, (1) provide a one sentence summary, (2) describe it, and (3) justify why it is a key problem/challenge.

Task 2: State a vision for AT&T that would (1) enable the company to focus on their key strengths, and (2) to overcome the problems/challenges you have identified in Task 1.

You are part of a team from a young and aspiring consultancy, ESSolutions, which has just won an exciting project with AT&T communications, the US mobile telecommunications giant.

ESSolutions excellent reputation in the areas of strategy consultation, business process improvement and enterprise systems implementations have persuaded AT&T to ask for an initial proposal for an overhaul of their general strategic direction as well as their key business processes. Pending their satisfaction with this proposal, a significantly larger project may be awarded to your consultancy.

A senior consultant has provided you with a rough outline for the mentioned proposal, which is phrased in a number of Tasks listed on the following pages of this document. You are further required to consult the case background description supplied to you to inform your proposal. You are also encouraged to do your own background research using research databases and/or reliable sources from the World Wide Web.

Today, AT&T is hosting WarnerMedia Day. This is intended to give us more information about the upcoming HBO Max streaming service. The phone giant saw customer defections across its businesses, but millions signed up to its new streaming service. AT&T reported second-quarter results, and the numbers showed customer defections across the board, including in its wireless, broadband and satellite TV businesses. But arguably its most anticipated metric was how many people signed up for its new HBO Max streaming service. The platform, introduced in late May, attracted 4.1 million customers in its first month, the company reported; in comparison, the rival Disney signed up 10 million in the first 24 hours. AT&T said it hoped to have 50 million HBO Max and HBO customers by 2025. To get there, AT&T will need to convert more of its regular HBO customers to HBO Max customers. Over 23.5 million people who pay for regular HBO are able to switch to HBO Max. AT&T sells two versions of HBO: One is the premium cable network, and the other is the new streaming product. Both cost the same, but HBO Max has much more content. HBO Max costs as little as $9.99/month and HBO Max will be free for AT&T customers who also subscribe to HBO. AT&T offers discounts on HBO Max to some of its phone customers. According to AT&T, this offer will apply to 10 million AT&T customers. TV, Mobile, and Broadband bundles will be available for AT&T customers without an existing HBO subscription, allowing customers to sign in with their AT&T credentials. HBO Max will include the entire HBO service. HBO MAX will offer 10,000 hours of content and will be targeting females and a younger demographic with original content, while content libraries from Warner Media owned networks will span all demographics. To reach the Gen Z audience, HBO Max has made a deal with Crunchyroll and Studio Ghibli Studio Ghibli films are visually breath-taking, completely immersive experiences, said John Stankey AT&Ts chief executive. Adding that, The success of HBO MAX is dependent on delivering content that hasnt been available on other streaming platforms in the past. Regarding bringing classic shows such as Friends and the Big Bang Theory to the platform, John Stankey said Its not every day you get to extend the run of a cultural phenomenon that reaches nearly 35 million viewers alone every month. Through HBO Max, fans will have access to this beloved comedy and most others for generations to come.

AT&T wants people to buy HBO Max or convert their cable account to HBO Max. Because most people get HBO through their cable or satellite provider, AT&T has negotiated deals with most of these cable or satellite providers to allow their customers to make the switch. But that doesnt mean everyone has. Or can. Amazon, a big outlet for HBO, sells HBO through its Amazon Channels service, but it hasnt been able to strike a deal with AT&T to convert those people to HBO Max customers. AT&Ts chief executive, John Stankey, had some harsh words for Amazon on the earnings call after the report. Weve tried repeatedly to make HBO Max available on Amazon, he said. Which Amazon must realise is not just a good business move for AT&T, it is also good business for Amazon given the current downturn blamed on lower household spending across the board because of the COVID19 pandemic. Like most companies, Amazon included, revenues were down. AT&T HBO divisions revenue dropped 5.2 percent to $1.6 billion, a result of more people cancelling or cutting back their cable and satellite accounts.

Customers may also be confused about HBO versus HBO Max, or may not be aware they can even make the switch an ongoing marketing challenge for AT&T. Mr. Stankey called it a gauge of the customers brain power: Why wouldnt you want twice the content for the same price? he said at the time. But he acknowledged the confusion and said, We still have work to do to educate and motivate customers to adopt the newer service.

Factoring in resellers and other connected devices like tablets, AT&T now claims 171.4 million total wireless accounts, an 8 percent increase from last year. The phone giant still has plenty of cash coming in the door. But AT&T is spending more to invest in HBO Max. Content is expensive, which is the key challenge in the drive to keep costs down.