Sprint Nextel Corporation SWOT Analysis Edgardo L. Cartagena Luna Management 521 University of Phoenix February 14, 2013 Sprint Nextel Corporation SWOT Analysis Background Sprint Nextel Corporation (Sprint) is a communications company. The company provides a range of wireless and wireline communications products and services to individual consumers, businesses, government subscribers and resellers. It provides wireless services on a postpaid and prepaid basis to retail subscribers and also on a wholesale and affiliate basis.
The company markets its postpaid services under the Sprint and Nextel brands, and prepaid services under the Boost Mobile, Virgin Mobile, and Assurance Wireless brands. The company offers its services through wireless networks, an all-digital global long distance network and a Tier 1 Internet backbone. (www. alacrastore. com, 2013) Mission Sprint’s mission is to be number one in providing a simple, instant, enriching and productive customer experience. (Sprint Nextel Corporation, 2013). Vision
Sprint’s vision is to be a world class company, with standards by which others are measured, including a commitment to developing a world class supplier base that is reflective of the communities we serve. (Sprint Nextel Corporation, 2013). History Sprint’s red diamond logo represented the combined achievements of many legendary predecessors, including United Telecommunications, US Sprint and Centel. Each embraced the same bold approach that Sprint’s founder Cleyson Brown showed in 1899, when the Brown Telephone Company successfully went toe-to-toe with the Bell monopoly in Abilene, Kansas.
By the mid-1970s, the company’s aggressive growth strategies had firmly established it as the nation’s largest independent local telephone provider. (Sprint Nextel Corporation, 2013). During the 1980s Sprint led all U. S. telecom companies by completing the first nationwide, 100% digital, fiber-optic network. It was The Company that gave America pin-drop clarity and also became a global leader in voice and data services during the early 90s. Sprint took its wireless strategy a big step further in the late ’90s by building the only nationwide PCS network in the U. S.
Meanwhile, a visionary entrepreneur named Morgan O’Brien founded a company called Fleet Net in 1987. This company was renamed Nextel in 1993 and rapidly established itself as a nationwide force in the burgeoning world of wireless communications. In September 1996, the company introduced Motorola’s breakthrough iDEN technology. This marked the first combination of enhanced digital cellular, two-way radio and text/numeric paging in one phone – the famed Nextel phone. (Sprint Nextel Corporation, 2013). By 2005 the company was launched as Sprint Nextel Corporation after a merge done between the two, Sprint Corporation and Nextel Corporation.
Both companies with proven records of successful achievements were brought together to continue opening new doors for customers and the industry. (Sprint Nextel Corporation, 2013). Stakeholders A stakeholder is defined as a party that has an interest in an enterprise or project. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers. However, modern theory goes beyond this conventional notion to embrace additional stakeholders such as the community, government and trade associations. (www. investopidia. com, 2013).
Going forward in the discussion let’s take a look on Sprints Internal and External stakeholders. External Stakeholders Sprint engages a broad range of Non Government Organizations (NGOs) that have experience on specific issues such as green electronics, paper certification, e-waste, human rights and scope 3-emissions measurement. Each Corporate Responsibility working committee seeks to establish relationships with one to three NGOs and/or investor stakeholders for dialog on the related issue as well as strategy, proposed policy, measurement and reporting.
These relationships have been invaluable and have resulted in more knowledgeable team members on the working committees and stronger, more comprehensive policies that incorporate the perspective of stakeholder partners. (Sprint Nextel Corporation, 2013). Internal Stakeholders Sprint uses a multi-tier Corporate Responsibility (CR) Governance Model that effectively incorporates all levels of the employees, ensures tight linkage with their operations and strategy, and drives accountability for performance against their CR operating priorities and long-term goals.
The structure includes the CR Steering Committee, chaired by CEO Dan Hesse; the CR Leadership Committee, chaired by Ralph Reid, vice president of Corporate Responsibility; an External CR Stakeholder Panel; CR working committees; and a CR scorecard. The CR Steering Committee provides periodic updates to the Sprint Board of Directors about Sprint’s ongoing efforts in the area of social responsibility and environmental sustainability. (Sprint Nextel Corporation, 2013). SWOT Analysis Strength One of Sprint strengths is their Average Revenue Per Unit (ARPU).
The company has the higher ARPU within the three largest telecommunication companies in the U. S. An advantage of 2. 6% and 2. 1% increase over AT and Verizon’s ARPUs respectively, from 2010 to 2011, put Sprint finishing the 2011 fiscal year with a $57. 3 ARPU. These results came with new strategic plans implemented to acquire the rights to offer the Apple’s iconic models of smart phones the well known Iphones. Also in the postpaid, by the second quarter of 2012 ARPU increased to $63. 4 thanks to a $10 premium data add on charge established to all smart phones.
The increase has been registered as the best ever Sprint platform postpaid ARPU as well as the best record for any major wireless company in the U. S. (“Company Profile Sprint Nextel Corporation,” 2012) Weakness Churn rates are one of the Sprint weaknesses. These rates are the percentage of subscribers to the services that discontinue their subscription in a given time period. (Investopedia, 2013). Sprint being a significant company in the U. S. wireless communications market ended in 2011 with 55 million wireless subscribers of which 33 million are postpaid and 14. million are prepaid subscribers and 7. 2 million are wholesale and affiliates subscribers. (“Company Profile Sprint Nextel Corporation,” 2012). During four straight years (2008-2011) Sprint lost about 8. 6 million postpaid subscribers while AT and Verizon took advantage and increased their respective subscriber based. Churn rates for Sprint where 0. 48% over AT and in comparison with Verizon came up to 0. 59% over by 2011 fiscal year. This represents to investors and public that there are some issues with services, devices or networks that make them difficult to retain customers. “Company Profile Sprint Nextel Corporation,” 2012) Oportunity In this industry there is always a need to improve coverage, data speeds, voice quality and to find the most efficient way of doing that. Sprint has a plan of implementing a network called Sprint Vision. This modern network will have the flexibility to manage multiple technologies in just one network. One of the primary causes for Sprints lack of growth is precisely the operation of two different networks, the formerly Sprints network and the Nextel’s IDEN network.
This plan will integrate this two network technologies into one low operating cost network with more efficient ways of delivering what customers expect. (“Company Profile Sprint Nextel Corporation,” 2012) Threat In the last couple of years we have seen smartphones are made with more technology and features. These technologies make them more expensive to companies and customers. Most telecommunications companies subsidies the cost of this devices in order to make them more affordable to consumers who subscribes to their services.
This is considerate a threat for Sprint because it could put at risk the balance of growth and profitability. For example, during 2011 Iphones penetration and other new devices helped Sprints revenue to increase 8% or $208 millions in comparison to 2010 fiscal year. In the mean time during the same time period equipment subsidies increased 16% or $1. 1 billion. (“Company Profile Sprint Nextel Corporation,” 2010) Conclusion After 114 years of history, Sprint has proven to be an innovative company and a leader in the telecommunications industry.
It is a company with corporate responsibility compromise that conducts businesses in a socially and environmentally responsible manner. It’s based on the premise that a company is much more than the products and services it sells. (Sprint Nextel Corporation, 2013). Sprint has great possibilities to succeed in today’s market environment and increase their profitability. By using what they have learned from his strengths, they can set the phase to reach their goals. When we looked at the Average Revenue Per Unit they have been making, it can be established that Sprint can be more profitable than its competitors.
If it can be done once it can be done every time. Even though, Churn rates weaknesses Sprint credibility to maintain its subscribers, during 2012, Sprint reported the lowest churn rates ever at 1. 7%. (Sprint Nextel Corporation, 2013). Customer service experience has increased also to best ever levels. Also the line of devices like the Iphone is helping to keep customers happy and loyal. (Sprint Nextel Corporation, 2013). Sprint Vision network will help to . reduce cost of operations of the company and will provide customers with better services.
Customers should be happier and more satisfied with Sprint products and services. Profitability will also be less affected by devices subsidies since network operations will be more cost efficient. After analyzing all the information gathered, it look that might be a bright future for Sprint Nextel Corporation. References Company Profile Sprint Nextel Corporation. (2012, August 10). MarketLine, 24-29. doi:8613378D-5CF0-49B7-93F8-346EE511D261 Sprint Nextel Corporation (2013). History. Retrieved from http://www. sprint. com/companyinfo/history/ Sprint Nextel Corporation. (2013). Corporate Responsibility Governance
Model. Retrieved from http://www. sprint. com/responsibility/approach/cr-governance. html www. alacrastore. com. (2013, January). Sprint Nextel Corporation (S) – Financial and Strategic SWOT Analysis Review. Retrieved from http://www. alacrastore. com/storecontent/GlobalData_Company_Reports-Sprint_Nextel_Corporation_S_Financial_and_Strategic_SWOT_Analysis_Review-2087-25542 Investopedia. (2013). Stakeholder. Retrieved from http://www. investopedia. com/terms/s/stakeholder Investopedia. (2013). Churn Rates. Retrieved from http://www. investopedia. com/terms/c/churnrate. asp#axzz2KsiBeGpW