Miss
Group Exercise
AT&T Magicphone PFC1
Introduction The American Telephone and Telegraph Company (AT&T) was incorporated in 1885. For nearly a century, AT&T provided universal phone service throughout the United States. AT&T would describe its primary business as the moving and managing of information: providing quality products, systems, and services in the United States and internationally. AT&T’s Bell Laboratories (Bell Labs), dedicated to basic research, had been the source of many quality products throughout AT&T’s history. The Bell System was dissolved at the end of 1983 with AT&T’s divestiture of the Bell Telephone Companies. At that time, the Federal Communications Commission chairman, Charles D. Ferris, stated, “Today we have removed the barricades from the door to the information age. Government will no longer be a barrier that prevents or delays the introduction of innovations in technology.” Today, AT&T operates worldwide in competitive, hightechnology markets with, principally, only its long distance operation remaining under government regulation. This case examines the development and launch of a new product, the AT&T Magicphone PFC, aimed at the industrial market, and also investigates AT&T’s defensive behavior in the face of an attack by a competitor with a comparable product. In the first part of the case (development of the Magicphone), AT&T must carry out several forms of analysis: early, judgment-based demand forecasting; positioning analysis relative to competing products; selection of advertising, promotion, and distribution levels; and profit analysis. Each of these forms of analysis is supported by spreadsheets in the Toolbox. The last part of the case explores the effects of competitive attack on the Magicphone and assesses AT&T’s defense options.
The Magicphone PFC In 1995, AT&T announced the Magicphone PFC (Phone-Fax-Copier) as a complement to its Magicphone Plus and System 25 communications systems. The Magicphone PFC is the first
AT&T Magicphone PFC1
Introduction The American Telephone and Telegraph Company (AT&T) was incorporated in 1885. For nearly a century, AT&T provided universal phone service throughout the United States. AT&T would describe its primary business as the moving and managing of information: providing quality products, systems, and services in the United States and internationally. AT&T’s Bell Laboratories (Bell Labs), dedicated to basic research, had been the source of many quality products throughout AT&T’s history. The Bell System was dissolved at the end of 1983 with AT&T’s divestiture of the Bell Telephone Companies. At that time, the Federal Communications Commission chairman, Charles D. Ferris, stated, “Today we have removed the barricades from the door to the information age. Government will no longer be a barrier that prevents or delays the introduction of innovations in technology.” Today, AT&T operates worldwide in competitive, hightechnology markets with, principally, only its long distance operation remaining under government regulation. This case examines the development and launch of a new product, the AT&T Magicphone PFC, aimed at the industrial market, and also investigates AT&T’s defensive behavior in the face of an attack by a competitor with a comparable product. In the first part of the case (development of the Magicphone), AT&T must carry out several forms of analysis: early, judgment-based demand forecasting; positioning analysis relative to competing products; selection of advertising, promotion, and distribution levels; and profit analysis. Each of these forms of analysis is supported by spreadsheets in the Toolbox. The last part of the case explores the effects of competitive attack on the Magicphone and assesses AT&T’s defense options.
The Magicphone PFC In 1995, AT&T announced the Magicphone PFC (Phone-Fax-Copier) as a complement to its Magicphone Plus and System 25 communications systems. The Magicphone PFC is the first