T-Mobile US Harvard Case Solution & Analysis

Financial Analysis

            The financial statements give a clear picture about the company’s financial position. On reviewing the Income statement of T-Mobile it is shown that the total revenues for the company was 20,618.00, which was decreased in the year 2012 and it was estimated to be 19,719.00. The total revenues decreased in the year 2012, which shows that T-Mobile was not able to achieve its target and the revenues fell. Whereas, in 2013 the total revenues were estimated to be 24,420.00. This shows that the revenue gradually increased in the next year (shown in the Exhibit 1)

            Likewise, T-Mobile had a gross profit of 12,020.00 in the year 2011, which was declined to 11,621.00 in the year 2012. But in the year 2013, the gross profit was increased to 12,165.00 which shows that the company showed improvement in the year 2013 after having a blow in 2012. Looking at the expenses for the company in 2011, the operating expenses were9,692.00, which was decreased to 9,660.00 in the year 2012. The year 2013 was a not a better one as compared to the operating expenses as the expenses rose to 11,009.00 in the year 2013. The net income for the year 2010 was calculated as -4,718.00 which was low. Moreover, the net income calculated in the year 2012 was estimated to be -7,336.00 but there was a good increase in the income in 2013, estimated at 35.

            Considering the Balance Sheet of T-Mobile it was again observed that changes occurred in the form of assets, liabilities and profits. The total assets calculated in the year 2011 was 40,609.00, whereas, the assets calculated in the year 2012 were estimated to be 33,622.00. In 2013, positive improvement was shown and total assets valued 49,953.00. There was an increase in the assets of the T-Mobile which is a good sign. The liabilities for 2011, was 40,609.00, whereas, the amount of liabilities decreased in 2012. It was estimated at 33,622.00. In 2013, the liabilities increased to 49,953.00. increase in 2013 was not a good sign for the company as the liabilities increased, causing the profits to decrease (shown in the Exhibit 2).

External Analysis

PESTEL ANALYSIS

            “PESTEL” stands for Political, Economic, Social, Technological, Environmental and Legal analysis. It describes the macro environmental factors and gives the current and exact position through this analysis. These factors are used to identify the environmental condition of the company and what kind of situation it has.

Political

            The political situation depends a lot on the performance of the company. T-Mobile also faced many political issues and changes in the political environment also caused many dramatic changes in the company also. In the USA, George Bush was re-elected through the elections and in this way the country was kept in the hands of republicans. So this was very positive in terms of the telecommunication users as the republicans were in favor of lowering the taxes. Therefore, it was also political change for T-Mobile. The low rates of taxes are always very good for the telecommunication industry and its consumers, as the services could be provided at low tax rates. Similarly, USA also has the democratic society which favors the free market. Which means the politicalsituation of the USA is a democracy in which the publics have their rights and also they have strong power.

Economic

            The economic situation of any country is very important for conducting any business. It is a factor by which the companies are most affected in terms of sales and revenues. Similarly, USA also faced an economic crisis in the recent years. USA which is considered to be the hub of business and best choice for the investors, faced some serious crisis which affected the oil companies working in USA. The economic crisis brings with it some serious issues and problems. One of the main reaction to the economic crisis is that it affects the spending of the customers and this causes a break in the revenues of the telecommunication industry. Hence, T-Mobile was also affected by the economic crisis.

            Whereas, the telecommunication industry is also affected in a way that the consumers are not willing to buy the new and modern phones and also this ultimately affects the mobile plans also.

Social

            The number of mobile phone users is increasing with blinding pace in USA. The social factor plays an important role in the increasing of the mobile services and its promotions. Similarly, the government is targeting the teenagers in promoting the public messages and other dramas or advertisements through the mobile phone service providers like T-Mobile. The people are getting more addicted to the mobile phones day by day most importantly in the USA. Thus, the people are more into socializing through their smart phones...........................

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