Our book talks about managing strategy and strategic planning. I chose to write my paper on AT&T's recent breakup into four satellite companies. I intend to show how their past planning was not well-suited for their rapidly changing industry, and how they are now adjusting strategies and preparing for the uncertainties that the future holds. AT&T's voluntary breakup marks the end of the bigger-is-better era. For much of the 20th century, business strategy was relatively simple - scale up operations and expand market share. The greatest opportunities lay in providing standardized products, with incremental improvements, to a middle-class market. But the simple pursuit of scale and market share lost its effectiveness as the 20th century ended. Another prime example of this is what is happening to Microsoft. Even though they have different legal problems, their days of gobbling up any and all businesses that got in their way is over. Smaller firms - particularly those with innovative, customer-centric business designs became the most profitable. This is evident with the popularity of the dot.com's and how well they are doing in the market. AT&T had not predicted that their stranglehold on the market would be sacrificed because of new start-up companies. Scale no longer provides the same benefits, even in telecom. But the large number of telecom providers competing for business globally and locally shows that many firms have sufficient scale, and that the key to success lies elsewhere. Perhaps the new solutions lay in new management and management strategies. But more important is creating new forms of value for customers, leading to sustained growth. AT&T's breakup reflects the new logic. It now sees broadband, wireless, consumer and business telecom, like equipment manufacturing, as distinct, fast-moving businesses. Each has significantly different customers, relationships, and production systems, an
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