Strategic Plan Presented By:. Brief History April 1987 Nextel's predecessor—Fleet Call, Inc.—is founded 1993 Fleet Call, Inc. changes name to Nextel Communications,

Strategic Plan Presented By:

Brief History

• April 1987Nextel's predecessor—Fleet Call, Inc.—is founded

• 1993Fleet Call, Inc. changes name to Nextel Communications, Inc

• 1997Nextel introduces the Nextel National Network and announces no roaming fees for customers traveling on the network—a first in the wireless industry

• 2004

Nextel and Verizon trying to settle dispute over walkie-talkie service each has to offer

Vision

• The company’s vision is to make Nextel the first telecommunications company that draws customers because of – not despite – the quality of both our network and our customer service.

Mission Statement

• Our business is wireless communications.

• Our mission is actually to help people talk less and do more.

• Wireless products and services that help doers get it done, instantly, anywhere.

• Our mission is to provide high quality, integrated wireless service that maximizes customer and investor value.

Guiding Principles

• Strive for 100% customer satisfaction• Strive for 100% partner satisfaction• Achieve targeted revenue growth with

a low cost structure• Achieve win-win results through the

power of teamwork• Work smart while remaining humble

Company Overview

• Nextel is a Fortune 200 company based in Reston, Virginia.

• Nextel is traded on the NASDQ National Market under the symbol NXTL.

• It employs approximately 18,000 workers in the U.S.

• We recognizes that people are the company’s biggest asset.

• Diversity and inclusion is our commitment.

• We work hard to create a working environment where all employees, customers, suppliers, and community partners feel welcome, valued, and respected regardless of their background.

• Nextel has recently become an International company with service in Mexico, Canada, and Latin America.

Statement of the Problem • Nextel recently battled with Verizon over its walkie-talkie service. • Walkie-talkie is a service that allows phones to send voice

messages to each other instantaneously. • Nextel and Verizon have been in court trying to settle a dispute

over Verizon’s announcement of “Push to Talk”. • Verizon’s “Push to Talk” service is a copy of Nextel’s Direct

Connect walkie-talkie service, which is its major chief competitive advantage.

• Nextel is accusing Verizon of stealing the slogan “Push to Talk” and of false advertising.

• Verizon has counter sued, saying that the idea was theirs first and that it is in fact Nextel that stole the idea.

• If Verizon succeeds, it could potentially take some of the walkie-talkie service market share from Nextel.

Organizational Analysis

What do we do?

• leading provider of fully integrated wireless communication services

• largest guaranteed all-digital wireless network in the country

• only nationwide network with 99.5% uptime • cover thousands of communities across the United

States • Nextel and Nextel Partners, Inc. serve 297 of the

top 300 U.S. markets

How do we survive?

• competitive advantage determines the survival ability of the company

• Nextel’s chief competitive advantage is its Direct Connect walkie-talkie service

• being threatened by Verizon’s “Push to Talk” which provides a similar approach to Nextel’s Direct Connect

• feature is key among competitors’ initiatives to copy and improve upon

How to stay in the game.

• walkie-talkie feature has helped Nextel to attract high-value customers

• Nextel is the current leader in Average Revenue per user

• lower plan prices or expand coverage areas to remain competitive

• must react effectively to penetration of its market to remain the leader in this type of service

Strategic Partnerships & Alliances

• Nextel offers technology and services differentiation • Strategic partnerships and alliances helps provide end-to-

end solutions • Nextel’s goal is to provide each of its customers solutions

tailored to their specific needs • Provides services for corporations, education, public

safety, and most importantly the public sector • Complex systems integration• Enterprise applications development & support• Hardware manufacturing & support• Motorola, IBM, Trimble, NASCAR

Broad Environment Issues

Legal and Governmental Issues

• Federal Communications Commission (FCC)– Independent United States government agency,

directly responsible to Congress – Responsible for implementing the competitive

bidding authority for spectrum auctions, given to the Commission by the 1993 Omnibus Budget Reconciliation Act.

Legal and Governmental Issues

• What is spectrum?– Spectrum is defined as the distribution of

wavelengths and frequencies.

• Why is it important to the wireless industry?– Valuable asset in wireless communications– Determines the frequency levels that maintain

signal strength and speed of connectivity

Legal and Governmental Issues

• Frivolous lawsuits– Ownership of overcrowded airwaves have

increased– Class action lawsuits have been filed on the

basis of health issues such as cancer caused by wireless device

– Claims that rate structures assesses federal program cost recovery fees on monthly customer bills are misleading and unlawful

Legal and Governmental Issues

• FCC designates a range of 800 MHz and 900 MHz to cellular wireless

• 800 range of spectrum is shared with police, fire, and ambulance systems

• Limits growth and strategy plans

Social Issues

• Concerns about health risks associated with wireless equipment may reduce the demand for our services.– Alleged to pose health risks including cancer

due to radio frequency emissions from these devices.

Social Issues

• People are busy and on the move– Allows customers to communicate freely

without slowing down

Economic Issues

• Recent decline in economy has began to slow the demand for wireless technology

• Technology is always changing causing overhead costs to increase

• Stiff competition

SWOT Analysis

Internal Strength:•The first one with Walkie-talkie

•Sponsor of Wiston Cup

•Best Website Award

•Highest Per United Revenue

•CEO- Tim Donahue

Internal Weakness•Not enough Advertisement(Not creative)

•Walkie talkie is restricted

•Walkie-talkie is not useful with the it is in a long run

•Too small of a market we have

External Opportunity•Rest of the World

•New Advertisements

•Provide a bigger selection of phone

•3 G technology

External Threat•Competition

•Not being the strongest

•A lot of phone models we do not have

•Not enough market share

Strength

• The first one with Walkie-talkie

• Sponsor of Wiston Cup

• Best Website Award

• Highest Per United Revenue

• CEO- Tim Donahue

Weakness

• Not well Known • Not enough Advertisement(Not creative)• Walkie talkie is restricted• Walkie-talkie is not useful with the it is in a long

run• Too small of a market we have

Opportunity

• Rest of the World• New Advertisements• Provide a bigger

selection of phones• 3 G technology

Threat

• Competition• Complains about customer service• A lot of phone models we do not

have• Not enough market share

Strategy Formulation

Growth Strategy

• Price• Differentiation • Focus

Pricing Strategy

The prices of our calling plans will be geared toward the competitive nature of our industry.

Calling Plans

Nextel National Power PlansPlan Monthly

feeAnytime Minutes

Night and Weekend Minutes

Long Distance

Direct Connect

Nextel National Power 500

$45.99 500 Unlimited Included Unlimited

Nextel National Power 800

$55.99 800 Unlimited Included Unlimited

Technology and Service Differentiation

• iDEN™ technology

• Digital Cellular

• Direct Connect ® Service

• Nextel Mobile Messaging

• Nextel Online®Service

Product Innovation

• Personalized to customers needs

• Java technology-enabled

• Enhanced with latest business tools

The iBoard

• Compiles email• Manages address

books and calendars• Java-enabled

applications• From a wireless phone

and keyboard

The Handheld Blackberry

• Versatile• Powerful• Portable

Nextel Worldwide

Our customers will have the freedom to travel the world knowing that our network is continuous in global satellite mode.

Focus

Target Audiences: Enterprise General Business Vertical Markets

Vertical Industry

- Computer services    - Construction and building trades    - Education    - Field sales and service    - Financial services    - Government/Public sector    - Healthcare    - Hospitality    - Manufacturing    - Professional services    - Real estate    - Retail    - Transportation and distribution

Service Area

Nextel’s Market Share

Market Share of 6 Largest U.S. Firms

Cingular19%

AT&T Wireless

18%

Sprint PCS13%

Nextel10%

T-Mobile10% Verizon

30%

Customer ServiceTrouble!!!

• Extra Charges

• Bad attitude

• Never call back after they promised

Human Resource Department

• Human resource Department will work with line managers as an advisor.

• Bring in older workers

• More training

HR work with line manager

• Monitor and find out what exactly went wrong • Serve as an advisor • Avoid turf war between department

Older Workers

• Bring in experience younger people don’t have

• Good communication skills which takes years to develop.

• Good sense of Ethics which younger workers have not yet developed.

• Loyalty.

Training

• If necessary, employees will go through the training they need in order to provide excellent customer service.

• New workers will work with senior workers for around 6 hours a month in order to improve quicker.

Accounting Recommendations

• Adopt SFAS No. 142. “Goodwill and Other Intangible Assets”. – Not required to amortize goodwill and

intangible assets with indefinite useful lives• FCC Licenses for Spectrum

• Capitalize on global market

• No International Accounting Standards in place

Finance Recommendations

• Stay Focused on Mission and Vision because of its value of people

• Do not focus on competitor’s plans for generating revenue– Example: Verizon’s Push to Talk Service

• Continue to balance disciplined financial management with smart strategic investments

Marketing Recommendations

• Differentiation in product lines to fit different market segments

• Expansion into currently untapped markets

• Differentiation from competitors through technological advancement

READY. SET. DONE.