Case Analysis: Sprint/Next Merger

Topics: Sprint Nextel, Embarq, Mergers and acquisitions Pages: 16 (5652 words) Published: January 24, 2011
Abstract
This research analysis briefly introduces the services offered and markets involved pertaining to the telecommunications company known as Sprint Nextel. It investigates the merger between Sprint and Nextel during the early 2000s and carefully analyzes the causes for the complications resulting in plummeting market value and loss of market share. After careful study it is deduced that the company's failure to predict the stark differences in organizational cultures between the two telecommunication giants resulted in animosity and conflict amongst employees. This disruption in the workforce and environment further exasperated the financial woes afflicting Sprint Nextel post-acquisition. Sprint Nextel could have avoided such troublesome times by encouraging HR and management to play a more proactive role in the entire acquisition process, as well as being better prepared. TABLE OF CONTENTS

Title ....................................................................................... i
Abstract ................................................................................ ii
Table of Contents ................................................................ iii
Company Introduction ......................................................... 1
Organizational Overview ..................................................... 3
Theoretical Overview .......................................................... 5
Concrete Findings & Company Data .................................. 8
Recommendations .............................................................. 12
Conclusion ......................................................................... 17
References ......................................................................... 19

Company Overview
Sprint Nextel is a US based wireless company based in Overland Park, Kansas. Cleyson Leroy Brown founded Sprint in 1899. Sprint is actively involved in the global telecommunication market, it is where Sprint has previously been most profitable. Sprint was also involved in local services prior to their initial stages of corporate restructuring. The executive team at Sprint Nextel includes, and is not limited to, Dan Hesse CEO, Robert H. Brust CFO, and Bob Johnson CSO.

In 2005, Sprint acquired Nextel to create the third largest telecommunications company in the world. This merger spawned the conglomerate we now know as Sprint Nextel. The acquisition of Nextel was a very turbulent time and resulted in Sprint allowing its local division to become a separate entity through the excessive utilization of restructuring and outsourcing. This new spinoff company was called Embarq. Embarq focused on the local markets, comprised of local phone companies serving 8.1 million people in 18 states (Everything DSL, 2008), while Sprint Nextel focused on providing simple, instant, enriching and productive customer experiences through global communication. The merger of Sprint and Nextel allowed them to better serve a larger variety of customers from all walks of life.

Sprint Nextel offers a variety of services on a global scale, but these services do not come without very stiff competition. Sprint Nextel has two very strong competitors: AT&T and Verizon. All three of these companies have been in an epic battle over customer retention in order to be known as the number one telecommunications company. The fields in which Sprint Nextel compete in are: wireless network operations, telecommunication services, data services, data network operators, internet and online services providers, and fixed-line voice services providers. The services that Sprint Nextel offer are very broad, serving 48.1 million customers (Lawson, 2010). The customer-base statistics can be very misleading when comparing them to the competition. Sprint was the only company to lose more customers than it gained in the fourth quarter of 2008, whereas Verizon added 2.1 million customers giving them a...

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Cary, D., & Ogden, D. (1998, November 30). A match made in heaven? Find out before you merge. Wall Street Journal, p. A22.
Everything DSL (2009). Sprint company overview. Retrieved from: http://www.everythingdsl.com/sprint/
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Gertzen, J. (2008, November 7). Sprint loses 1.3 million customers-update, Kansas City Star. Retrieved from http://sprintconnection.kansascity.com/?q=node/859
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Hart, K. (2007, November 24). No cultural merger at Sprint Nextel, Washington Post. Retrieved from: http://www.portfolio.com/news-markets/national-news/portfolio/2007/11/19/Sprint-Nextel-Merger/
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Lawson, S. (2010, February 10). Sprint revenue, loss, user base shrank in Q4. PC World. Retrieved from: http://www.pcworld.com/article/189063/sprint_revenue_loss_user_base_shrank_in_q4.html
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Reardon, Marguerite. (2004, February 3). Sprint PCS Looks Toward Outsourcing. Retrieved from: http://news.cnet.com/Sprint-PCS-looks-toward-outsourcing/2100-1037_3-5152491.html
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