Deltacom
Environmental Scan
The environmental scan is focused on identifying and analyzing the threats in the external environment. There are factors outside of the company that can reduce revenue or profits for the future. These can be obstacles, externally-driven changes or just competition (MindTools, 2013). Deltacom faces a number of such threats. The main threats in the external environment are competitors, regulators, and economic threats. Competitors are a significant threat. Deltacom operates in eight southern states, and it competes against other national and regional players. Deltacom has been purchased by Earthlink and renamed Earthlink Business, indicating that it competes for business with corporate customers (Deltacom.com, 2013). The competition includes some major companies, like AT&T, Verizon and more, in addition to smaller, more regional players. Competitors will use all manner of enticements to attract competitors, and this can affect the prices or the margins that Deltacom earns. Clearly, Deltacom faced substantial competition in its market, as it was forced to sell out to Earthlink, a tactic normally associated with a struggling company.
The second major environmental threat is regulatory. While all businesses face basic regulatory burden in the form of human resources and environmental laws, the telecommunications industry is one of the more heavily-regulated industries. The industry is governed by the Federal Communications Commission (FCC), a body that among other things investigates the conduct of telecommunications firms and auctions off wireless bandwidth. Because most of Deltacom's business is landline-based, the company is not as heavily-impacted by regulatory burden as many other firms in the industry.
The third major environmental threat is economic. When the economy is struggling, firms will often reduce their expenditure on all items, including telecommunications. It could be argued that a sluggish economy represents an opportunity to grow telecommunications businesses as a substitute for travel, but when businesses are closing and contracting, the net effect is at best a wash, and more likely a revenue downturn for firms that service other businesses.
Strengths
Deltacom does not have too many strengths. The company was bought out by Earthlink, and this gives it two main sources of strength. First, the Earthlink...
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