High Performing Industry Sectors Effects of Covid-19 and Relocation of Standard & Poors 500 Companies

High Performing Industry Sectors Effects of Covid-19 and Relocation of Standard & Poor’s 500 Companies

Information Technology (IT) is the better sector due to COVID-19, which forced businesses to focus on technology and techniques to gain consumers and improve their business. Technology companies are indeed developed and trending. Most businesses, companies, and the government are utilizing the technology. Due to this pandemic, more consumers are hesitant to purchase their products in the store. Consumers are not comfortable shopping or travelling at all. E-commerce marketing is trending, although it was introduced in 1969  by electrical engineering Dr John R. Goltz and Jefferey Wilkins, where CompuServe was founded with a dial-up (BigCommerce, n.d.). More companies now leverage the use of the technologies. There are higher demands for online shopping, business transactions, education online, virtual meetings, teleworking, doctor’s telephone consults, or online health care. The government is also trying to minimize in-person appointments and deviate their online or phone transactions (International Finance Corporation, n.d.).

Several factors are affected by COVID-19, like travel and tourism, retailers, restaurants, health care, education, etc. All businesses are affected, but the retailers were affected the most and must reinvent their business by accommodating customers through online shopping. COVID-19 hit the economy severely, and it is a matter of reinventing their techniques to reach all consumers. In 2020 the e-commerce transactions hit $82.5 billion, which is 77% more than in 2019, which should take 4 to 6 years when it is traditional sales. By the end of 2024, eCommerce sales will surpass $476 billion in online spending (Big Commerce, n.d.). Although some consumers are not comfortable providing their personal information, especially their credit or debit cards, some are not into online shopping due to its quality. The Retailers must gain the consumer’s trust to gain more online consumers.

Upon reviewing the S&P 500 companies, I chose AT&T as the company that would be a candidate for relocation to another country. The company operates as a holding company, engaging in telecommunications media and technology services. To understand this company’s operations and decision dealings further, I had to complete a breakdown of its industry structure to define what market segments the company appeals to most (UMGC, 2021.) Its main segments are communications, WarnerMedia, and Latin America. Because the company has multiple media and services, many competitors exist, such as Comcast, Verizon, Netflix, Viacom, and T-Mobile. Understanding these segments allows one to properly assess the company’s industry performance as generally good or poor over the long term (UMGC, 2021.) Though the company falls behind Comcast, Verizon, and Netflix in the S&P ranking, AT&T has displayed a close trail in competition exceeding Viacom and T-Mobile as of Aug 16, 2021.

The main hiccup observed with the company is that on March 4, 2021, the company’s revised outlook on credit went from stable to negative (Gubagaras, 2021.) This is particularly from the company paying $23.41 billion on 1,621 licenses. The negative rating also reflects a heightened risk for financial results to remain weak in 2021. Despite this prediction, the financial results will be positive if the company utilizes these licenses to expand and provide more services. In 2018, the company planned to expand its business WiFi service platform to include 60 countries. This provision allowed customers and businesses to stay connected and run critical operations (AT&T, 2018.) The plan also announced that the company would continue to add other countries in the future.

One could’ve easily picked another top-performing company; however, with AT&Ts continued growth and development, it can be predicted that the company can be counted as one of the top-growing businesses in the U.S. and potentially overseas. Especially considering the company’s newest venture in May of 2021, “the company would be spinning off its WarnerMedia assets, combining them with Discovery, leaving AT&T a more concentrated bet on the future of communications” (Jasinski, 2021.) AT&T will ultimately reduce its net debt by approximately $43 billion at the closing mid-2022. These efforts alone reaffirm my choice for the company to continue its expansion overseas or relocate. AT&T’s power moves make up for potential losses the company incurs.

When AT&T does relocate, the company should consider providing telecommunication and media service to s country with little to no access to these industries. Spearheading this development will be a very profitable venture. However, there will be challenges in global value chains to break down production processes to allow different procedures/steps to be executed in different countries. AT&T will need to note labour laws and regulations of the country and determine what companies, if any, can assist in providing or developing the country. Speaking on labour laws and regulations, AT&T will also need to learn cultural/organizational norms, government and local laws, and what developmental processes may cause backlash from the residents. A suggested step is hiring locals or subject matter experts who know the location to provide guidance.

References

Big Commerce (n.d.). Retrieved from HTTPS://www.bigcommerce.com/articles/ecommerce/#history-of- e-commerce

International Finance Corporation ( n.d.). Retrieved from

https://www.ifc.org/wps/wcm/connect/537b9b66-a35c-40cf-bed8- 6f618c4f63d8/202009-COVID-19-Impact-Disruptive-Tech-EM.pdf? MOD=AJPERES&CVID=njn5xG9

AT&T business expands WI-FI services to 60 countries. AT&T Business Expands WiFi Services to 60 Countries. (2018, September 25). https://about.att.com/story/2018/att_business_expands_wi_fi_services.ht ml.

Jasinski, N. (2021, May 17). AT&T is going back to its Roots. What it means for the stock. AT&T Is Back to Being a Telecom Company. What It Means for its Stock, 5G, and Streaming. | Barron’s. https://www.barrons.com/articles/att-telecom-company-what-means- stock-5g-streaming-51621273800.

MarketWatch, & FACTSET. (n.d.). T stock Price: AT&T INC. stock quote (U.S.: NYSE). MarketWatch. https://www.marketwatch.com/investing/stock/t.

S&P 500 Companies. S&p 500 companies – s&p 500 index components by market cap. (2021). https://www.slickcharts.com/sp500.

University of Maryland Global Campus. (2021). Industry Analysis. LEO Content. https://leocontent.umgc.edu/content/umuc/tgs/mba/mba670/2215/learnin g-topic-list/industry-analysis.html?ou=583325.

University of Maryland Global Campus. (2021). Industry Structure. LEO Content. https://leocontent.umgc.edu/content/umuc/tgs/mba/mba670/2215/le arning-topic-list/industry-structure.html?ou=583325

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Topic 1:

What industry sectors tend to be better performers? Why? How may Covid-19 lead to growth in certain sectors and decline in others that will have to ‘re-invent’ themselves to make them competitive? You may pick a sector from healthcare, education, retail, hospitality, manufacturing, IT, or transport.

Topic 2:

Select any company from the Standard & Poor’s 500. Select one or more activities in the company’s value chain that would be candidates for relocation to another country. Provide a brief justification and examine the challenges you see in coordinating the global value chain after the proposed value-chain activities of your chosen company are set up in the new country.

Cite examples when you describe theories from the attached reading and research. You may use examples from your organization or industry, current or recent news-makers, or other reliable sources.