Fred N. Castro

1

Qwest Communications International

• Fred N. Castro
• Scott Knudsen
• Sara McLaughlin
• Nitin Jain
• Alex Patlay
• James Watabe
• Helen Xiao

2
History

• 1980 Originally was founded.
• (Quest- Qwest)
• 1995 Philip Anschutz
• 2000 Acquisition of U.S. West

3
Financial
4
Qwest Organizational Structure

• Service Industry
• Matrix
• - Functional divisions
• Law
• H.R. department
• - Multidivisional
• Consumers
• Businesses
• Wholesale customers
• Special group
• Related Diversification

5
Macroenvironment Issues

• Social/technological trends
• Demographic Trends
• Governmental and legal Issues
• International and Global Issues
• Other Issues Currently Important to Qwest

6
Five Forces Model

• Potential Entrants - Many new competitors
• - FTC regulations
  have decreased

Rivalry among existing firms - Sprint, ATT
-
Do not have long distance
Substitutes - Cell phones
- Internet
Bargaining Power of Buyers - Low Switching costs
Bargaining Power of Suppliers - Many suppliers

- Difficult to integrate forward
7
Potential Opportunities and Threats

• Opportunities
• Long Distance
• Global markets
• Threats
• Substitutes
• Increased Competition

8
Qwest Vision Statement

• Our Vision Is to Build Shareholder Value by
  Becoming the Customer-focused Market Leader for
  the Worldwide Broadband Communications and
  Applications Services.

9
Strengths and weaknesses

• 26 million dollars of debt
• Competition
• Gap between Shareholders and Management

• Strategic alliances with IBM and Microsoft
• Acquisition of US WEST

10
Current Strategies

• Business-Level Strategy
• Differentiation
• Functional Strategy
• Customer Responsiveness
• Global Strategy
• International
• Corporate Strategies
• Strategic Alliances

11
Recommendations

• Key Issues
• A - Prioritized Rankings of Strategic Issues
• (1) Resolve internal strife (SEC Investigation,
  stockholder dispute, financial debt structure
  debt to equity ratio.
• (2) Reverse negative cash flow and profit margins
• (3) Optimize and capitalize on strategic
  alliances with IBM and MSN to regain competitive
  advantage.
• (4) Expand internationally.
• (5) Expand domestically.

12
B - Rationale for Recommendations

• Fraudulent bookkeeping is illegal
• Ethically correct behavior, demonstrate corporate
  responsibility.
• Public perception and negative public relations
  are detrimental.
• Eroding competitive advantage.
• Cost effective, cut losses and move forward.