O Lucent Technology's Sustainable Competitive Advantage example essay topic

FACTS ABOUT LUCENT TECHNOLOGIES, INC.A. ENVIRONMENTAL SCANNING 1. Demographic Variables United States of America: o According to the population estimates of the US Census Bureau as of July 1, 2004, the total population of the United States is 293,655,404 (A-1). o Age Distribution of the United States according to Census 2000 (A-2): Age Number Percentage Under 5 years 19,175,798 6.85 to 9 years 20,549,505 7.310 to 14 years 20,528,072 7.315 to 19 years 20,219,890 7.220 to 24 years 18,964,001 6.725 to 34 years 39,891,724 14.235 to 44 years 45,148,527 16.045 to 54 years 37,677,952 13.455 to 59 years 13,469,237 4.860 to 64 years 10,805,447 3.865 to 74 years 18,390,986 6.575 to 84 years 12,361,180 4.485 years and over 4,239,587 1.5 o The five states where population is primarily concentrated are California, Texas, New York, Florida and Illinois (A-1). o The US population's composition of the different races is as follows: 75.1% White, 12.5% Hispanic, 12.3% African American, and 3.6% Asian (A-2). o According to Census 2000, the median income of a typical American household is $41,994 (A-3). o In October 1997, 37.4 million American households, or 36.6 percent had computers. Computer presence was most likely (75.9%) in households with yearly family incomes of $75,000 or more, while only 15.6% of households with incomes below $25,000 had a computer (A-19). The World: o According to US Census Bureau, the world population is estimated to be 6,447,945,987 (2005). o In 2002, the world's annual average growth rate was 1.2 percent, down from a high of 2.2 percent in 1963-1954 (A-17). o The breakdown of age in world's population is as follows (A-17): Age Percentage Children (0-14 years of age) 29%Youth and women of child bearing age (15-29 years of age) 26%Labor force (15-64 years of age) 64%Elderly 7%o Over the next 25 years, the size of child population relative to total population is expected to decline. The numbers of youth and women in their child-bearing years are projected to experience modest increases, but their proportions of the total population are expected to decrease modestly. The population of labor force age is expected to grow steadily.

Finally, the elderly population is projected to grow considerably in both absolute and relative terms (A-17). o The number of men and women on the planet is approximately the same: 101 men for every 100 women (A-17). o Currently, the mostly populated countries in the world are: China, India, United States, Indonesia, Brazil, Pakistan, Bangladesh, Russia, Nigeria and Japan (A-18). 2. Economic Variables United States of America: o In the first quarter of 2005, the inflation-adjusted GDP grew 3.5%. This is expected to encourage consumer spending, business inventory investment and exports (A-4). o According to the Bureau of Economic Analysis (2005), in April 2005, personal income increased $69.1 billion or 0.7%.

In addition, disposable income increased $45.7 billion or 0.5%. o In 2004, information-communications- technology (ICT) producing industries contributed substantially to real-GDP growth. These industries increased 14.7% after increasing 13.2% (A-5). o In April 2005 inflation rate was 3.51%. This rate was slightly above previous months' inflation rates (A-6). The World: o The world's real GDP growth rate and trends (percent change) are shown as below: Year Growth Rate Trend 2005 4.371 4.1592006 4.267 4.1892007 4.233 4.2212008 4.175 4.2542009 4.175 4.254 o The world real per capita GDP (percent change) is shown below: Year Growth Rate Trend 2005 3.194 2.9022006 3.106 2.9262007 3.089 2.9522008 3.048 2.9782009 3.057 3.006 o The world trade volume (percent change): Year Growth Rate Trend 2005 6.584 7.0742006 6.423 7.1092007 6.125 7.1462008 5.954 7.1852009 6.075 7.224 o The world real interest rate (percent change): Year Real Interest Rate 2005 2.7732006 3.1122007 3.2672008 3.2922009 3.24 Information taken from web Socio / Cultural Trends United States of America: o As of April 2005, personal income increased by 0.7% and disposable income increased by 0.5% (US Bureau of Economic Analysis, 2005). o 10.4% of households have income between $60,000 and $74,999; 10.2% fall under $75,000-$99,999 income bracket and 9.5% have less than $10,000 (A-3). o In 2003, 83.6% of the population was estimated to be high school graduates whereas 26.5% was estimated to have a bachelor's degree or higher (A-7). o Majority of the population (in both males and females) is married. This percentage is followed by "Never Been Married"s and "Divorced"s (A-7). o Of the population of 16 years and over, the majority is in labor force. The percentage of unemployed is 7.6% (US Census Bureau, 2005). o Due to the latest advancements in technology and the increase in disposable income, a greater demand for technology and communications products is expected.

The World: o The population in the world is expected to become older and more urban. Therefore, public life may become more zealous and less friendly, social intolerance may grow, values coalitions may become more influential (A-20). o Advances in bioengineering and communications industries (A-20). o Many foreign nations are on the move in science and engineering education and research. o Rapid growth of specialization in the communications industries (A-20). o Globalization of economic, regulatory, political, ideological and social organizations increasingly breaks down the limitations of national boundaries. o The usage and access to internet is on the rise. 4. Political / Legal Parameters United States of America: o The United States, under its Constitution, is a federal, representative, democratic republic, an indivisible union of 50 sovereign States. o The US current- account deficit (the broadest measure of receipts and payments for trade in goods and services, income, and net unilateral current transfers, such as gifts) increased 5.7% in 2004 from 4.8% in 2003 (A-8). o In 2003, the value of foreign investment in the US exceeded the value of US investments abroad (A-9). o As a share of GDP, in 2003 corporate income tax has risen close to 2% as opposed to close to 1% in 2002 (A-10). o Currently, Lucent Technologies, Inc. is involved in several lawsuits. The World: o Multi-polarization of the world, both economic and political, increased, thus making it possible to establish new alliances and pacts in order to take better advantage of the new social division of labor on a world scale (A-21). o Underdeveloped countries will continue to suffer political instability and that the probability of revolutionary successes in the hot zones is increasing (A-21). 5.

Technological Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks (Lucent. com). o Lucent uses and produces innovative technological products and services such as wireless, voice networking, optical networking, optical fiber and data and network management (2004 Annual Report). o Bell Labs, which is one of the business groups of Lucent Technologies, is the largest R&D organization focused on the communications networking needs of the U.S. Government and service providers around the world and is the leading source of new technologies found in communications networking today (Lucent. com). o Lucent Technologies along with Bell Labs makes scientific investments that can lead to sustainable development in countries throughout the world (A-11). 6. Global Segments As we advance in the 21st century, the development of technological products has become very rigorous and competitive. o New markets for technological products are opening all the time. o Developing or under-developed countries are good sources to cut down labor and material costs. o In order to remain competitive in the market place, Lucent Technologies should be able to offer unique products and services, achieve inventory cost control, identify and partner with new customers. 7. Opportunities Lucent Technologies' CEO, Pat Russo, sees a big opportunity in helping their customers integrate networks in a world where different types of communication are converging (A-12). o "Services are going to be an increasingly important part of the business over time, but not in lieu of its commitment to providing equipment for wired and wireless networks" (A-12). o The company can gain extreme importance by being strategically partners with its customers. o There is an increasing demand for optical and mobile networks today, so Lucent Technologies, by investing in its R&D efforts, can gain market opportunity and remain competitive in the market place. o There are a lot of growth opportunities in emerging markets, where communications networks are being built to support fundamental economic development. The company has global market opportunities in countries like China, India and Russia. o According to Pat Russo, there is a great opportunity in Asia since the world's population is mostly concentrated there.

There is also increasing demand in the Caribbean, Latin America and Eastern Europe (A-12). 8. Threat so Strong competitors such as Cisco Systems, Inc., Alcatel and Nortel Networks Corp. o The threat of potential entrants; if a company finds the necessary capital and resources to start the business. o Excess inventory and other costs can leave Lucent behind its competitors, as this has also happened in the past. o Lucent needs to keep up with the latest R&D improvements; otherwise, it can fall short on production and marketing of advanced technological products and services. Conclusions on Environmental Scanning Communications equipment industry is an international industry. However, almost 60% of all Lucent Technologies' operations are located and targeted in the United States as opposed to 40% of international markets.

Therefore, the demographic, economic, socio / cultural and legal parameters of the United States are of utmost importance for the company. The increase in gross domestic product and personal / disposable income in the United States encourage people and enterprises to spend more funds on technological products and taking advantage of this situation, Lucent should strive to develop these products for better ones. In addition, looking at the case from the global perspective, the fact that globalization of economic, regulatory, political, ideological and social organizations increasingly breaks down the limitations of national boundaries is a great driving force for the growth of this industry. Finally, as we advance in the 21st century, we are more and more surrounded by technological products; and therefore, have learned to demand for more developed ones.

This very last reason sets forth why there is a huge demand for technology and its products in the entire world today. B. INDUSTRY and COMPETITIVE ANALYSIS 1. Dominant Economic Characteristics of the Industry Market Size: $339 billion (A-13). o Sales Growth Rate (5-Year): 9.39%o Sales Growth Rate (TTM): 24.88%o Earnings per Share (TTM): 36.03% o Geographic scope: Global Economies of Scale: Present on standard products; but many products are specialized and produced in small manufacturing plants. o Capital required: High; because of advanced technology needs, sophisticated customer taste and high R&D costs. o Dominant technologies: Voice over IP (VoIP) technology, wireless structures, DSL high speed internet access with video products. The largest battle being fought by telecommunications providers is the battle to offer voice, video and data in a single package. 2. Competition Analysis (Strong, Medium, Weak) o Rivalry among Competing Sellers: Strong; is expected to become stronger as customers demand more technologically advanced products and services. o Threat of Potential Entry: Weak to Medium; since capital required to start business is high. o Competition from Substitutes: Weak Power of Suppliers: Strong Power of Customers: Strong, since there are only a few-governments and large enterprises. 3.

Competitor Analysis Key Companies Market Capitalization Employees Quarterly Revenue Growth Lucent Technologies 12.63 billion 31,800 6.40%Cisco Systems 124.43 billion 34,000 10.10%Alcatel 14.40 billion 55,718 -3.50% (A-14) 4. Driving Forces In the first quarter of 2005, the inflation-adjusted GDP in the United States grew 3.5%. This is expected to encourage consumer spending, business inventory investment and exports (A-4). o In April 2005, personal income in the United States increased $69.1 billion or 0.7%. In addition, disposable income increased $45.7 billion or 0.5%. o In 2003, 83.6% of the population of US was estimated to be high school graduates whereas 26.5% was estimated to have a bachelor's degree or higher (A-7). o There is an intensifying competition in communications equipment industry on a global scale. o The pace of technological change is very fast. o There is a big decrease in product development cycle times. o There is a large battle between telecommunications providers to offer voice, video and data in a single package. 5.

Key Success Factors Identification of customer needs, o Close working relationships with suppliers in order to establish control over the raw materials, o Low cost production (economies of scale) and inventory control, o Offering consistent, high quality and innovative products and services at reasonable prices, o Coordinated product introduction, o Strong marketing activities in order to establish brand name, o Being flexible and futuristic in order to keep up with the changes in technological advancements, o Strong distribution channels, o ISO registration. 6. Industry Prospects and Overall Attractiveness o In 2008, the communications equipment market is forecast ed to have a value of $361.7 billion, an increase of 24.4% since 2003 (A-15). o The Asia-Pacific market is the fastest growing market and achieved a CAGR of 8.2% over the 1999-2003 period (A-15). o In the period 2003-2008, the compound annual growth rate of the market is predicted to be 4.5% (A-15): Year $ billion % growth 2003 290.7 0.502004 299.7 3.102005 311.2 3.802006 325.2 4.502007 342.0 5.202008 361.7 5.80 CAGR, 2003-2008 4.5 o Overall, the communications equipment industry is fairly attractive: The projected percentage sales growth in the coming years can be considered as "high", the geographic scope of the market is growing rapidly, the profit margins are acceptable even though capital required to start up is high and finally, there are many fierce competitors in the market battling to produce better products than each other and serve. Conclusions on Industry Analysis The communications equipment industry can be considered as a pretty large industry with good profit margins for successfully competing companies.

This industry has been growing fairly rapidly for the past few years. The intensifying competition in communications equipment industry on a global basis, the fast pace of technology and the huge decrease in product life cycles are the most important factors which affect the rapid growth. In addition, the increase in Gross Domestic Product (GDP), and disposable income in the United States reinforce the reasons stated previously. On the other hand, the real GDP per capita, real GDP growth rate and world trade volume are decreasing while world real interest rates are increasing.

However, the fact that there will be more demand in the future years makes communications equipment industry even more competitive for existing firms and very attractive for prospective firms. In order to be successful, though, a competing firm should closely follow and accomplish the key success factors listed in this report. C. COMPANY ANALYSIS 1. Current Strategy. Strategic Intent: "Lucent Technologies will be the leading network integrator worldwide and the number one network solutions provider in the world" (Lucent. com). b. Strategic Mission: "To be the partner of choice for the world's leading service providers, governments and enterprises by helping them create, build and maintain the most innovative, reliable and cost-effective communications networks and meet their customers' growing needs through the rapid deployment of new communication services".

(Lucent. com) i. Products: Lucent designs, builds and delivers public and private networks, communications systems and software, consumer and business telephone systems and microelectronic components. Lucent Technologies has three business groups: o Network Solutions Group: Lucent Technologies' Network Solutions Group helps service providers capture the market opportunities being created by the growing demand for blended lifestyle services. To better support the wire line, mobile, and converged customers, Lucent is combining its wireless and wire line business units to form a single, unified organization squarely focused on delivering the vision, architectures, and solutions needed to enable the rapid, cost-effective delivery of integrated voice, data, video and multimedia services to subscribers, anytime, anywhere. o Lucent Worldwide Services: As a network services organization, with technicians, network designers, consultants and engineers, LWS serves the world's largest service providers, enterprises and government institutions in countries around the world. o Bell Labs: Bell Labs is the largest R&D organization focused on the communications networking needs of the U.S. Government and service providers around the world and is the leading source of new technologies found in communications networking today. Bell Labs' innovations span numerous diverse fields such as physical sciences / nanotechnology, computer sciences and software, mathematical sciences, advanced wireless and wire line networking research, and network security, standards, and planning. The percentage share of products and services of Lucent Technologies is as below (2004 Annual Report): Revenues (in Millions) 2004 INS $2,984 (33%) Mobility 4,007 (44%) Services 1,932 (21%) Optical Fiber Business -Other 122 (2%) Revenues 9,045 (100%) ii.

Markets: Lucent's customer base includes: o communications service providers, such as Verizon Wireless whose revenues accounted for 27% of consolidated revenues in fiscal 2004 and Sprint whose revenues accounted for 11% in the same years governments, such as China accounted for 10% of revenues in fiscal 2004 o enterprises worldwide.. Geographic Scope: Revenues PercentageUS $5,517 (61%) Other Americas (Canada, Caribbean & Latin America) 538 (6%) EMEA (Europe, Middle East, Africa) 1,293 (14%) APAC (Asia Pacific & China) 1,697 (19%) Revenues $9,045 (100%) iv. Business Level and / or Corporate Level Strategy: o Business Level Strategy: Integrated Cost Leadership / Differentiation-leaning towards Broad Differentiation Strategy Corporate Level Strategy: Expanding through organic growth in new markets, acquisitions of small companies and using strategic alliances. vs. Corporate Goals and Objectives: o Financial: Lucent Technologies expects fiscal 2005 annual revenues to grow on a percentage basis in the mid-single digits, which it believes is at or above the market. It also expects annual gross margin rate to be in the low 40's and annual operating expenses as a percentage of revenue to be 30% (2004 Annual Report). o Operational: "To provide our customers the most efficient, scale able, reliable and technologically advanced products possible".

2. Strategic Performance Indicators (A-16) Growth Rates Growth Rates (%) Company Industry Sales (MRQ) vs. Qtr. 1 Yr. Ago 6.43 18.32 Sales (TTM) vs. TTM 1 Yr. Ago 9.67 24.88 Sales - 5 Yr. Growth Rate -19.64 9.39 EPS (MRQ) vs. Qtr.

1 Yr. Ago 243.75 24.39 EPS (TTM) vs. TTM 1 Yr. Ago 982.86 36.15 EPS - 5 Yr. Growth Rate -10.74 20.07 Capital Spending - 5 Yr.

Growth Rate -35.32 -1.63 o Sales growth rate of the company was very much below the industry's growth rate 5 years ago. However, according to the sales growth rate (TTM), Lucent Technologies has captured market share and grew its sales rapidly which indicates that the management is doing a more efficient and effective job than 5 years ago. o The capital spending statistic (5 year growth rate) is very bad compared to the industry's statistic. This is a strategic problem in the sense that Lucent was spending more of its capital compared to other businesses in the industry. Financial Strength Financial Strength Company Industry Quick Ratio (MRQ) 1.26 2.62 Current Ratio (MRQ) 1.99 3.18 LT Debt to Equity (MRQ) NM 0.13 Total Debt to Equity (MRQ) NM 0.15 Interest Coverage (TTM) 3.39 4.62 o Lucent's Quick Ratio and Current Ratio is well below the industry's ratios.

This indicates that Lucent has more leverage than its assets. This is also a strategic problem because it shows that Lucent has been using more debt in order to operate than generate enough sales. o The Interest Coverage Ratio is below the industry's average also. This is not a good sign for Lucent because low interest coverage ratio indicates low reliability. Profitability Ratios Profitability Ratios (%) Company Industry Gross Margin (TTM) 41.90 54.95 Gross Margin - 5 Yr. Avg. 28.30 50.40 EBITD Margin (TTM) 20.28 20.53 EBITD - 5 Yr.

Avg. -19.04 10.55 Operating Margin (TTM) 13.17 18.93 Operating Margin - 5 Yr. Avg. -26.38 6.95 Pre-Tax Margin (TTM) 12.85 21.35 Pre-Tax Margin - 5 Yr. Avg. -28.56 7.53 Net Profit Margin (TTM) 21.99 13.50 Net Profit Margin - 5 Yr.

Avg. -28.91 2.33 Effective Tax Rate (TTM) NM 27.83 Effective Tax Rate - 5 Yr. Avg. 39.20 35.78 o When Gross Margin (TTM) and Gross Margin-5 Year Average are compared, we see an increase on them even though they are well below the industry's averages.

This shows that Lucent has had high cost of goods sold. As the company cut back costs and expenses, the gross margin has increased. o The company enjoys a higher Net Profit Margin than the industry average. Again, by cutting costs and expenses and making the business more efficient and effective, the company has been able to increase net profit margin prior to previous four years and above the industry average. Management Effectiveness Management Effectiveness (%) Company Industry Return On Assets (TTM) 12.45 9.08 Return On Assets - 5 Yr. Avg. -13.96 1.52 Return On Investment (TTM) 17.12 11.78 Return On Investment - 5 Yr.

Avg. -19.91 2.33 Return On Equity (TTM) NM 12.43 Return On Equity - 5 Yr. Avg. NA 3.44 o Even though ROE is not measurable, Lucent Technologies is experiencing a higher ROA and ROI than the industry average. This is a good sign that the strategy that the company was implementing is definitely working. Efficiency Efficiency Company Industry Revenue / Employee (TTM) 291,258 530,163 Net Income / Employee (TTM) 64,057 130,520 Receivable Turnover (TTM) 6.23 9.05 Inventory Turnover (TTM) 6.16 7.46 Asset Turnover (TTM) 0.57 0.68 o The Revenue / Employee and Net Income / Employee in the trailing twelve months statistics are below the industry average.

This is most probably because Lucent Technologies' revenue is not as high as its competitors' revenue, therefore, making these statistics smaller than the industry's. o The Turnover ratios are below the industry's averages signaling that the company is not doing a good job in asset and inventory management. 3. Resource Assessment and Uniqueness i. Resources: o 31,800 employees, o $9.05 billion of revenues, o Bell Labs where innovative products are produced, o Effective management capabilities-cutting costs and expenses and turning the company around, o Improved customer order process, o Increased standardization across product lines, o Global treasury management system (2004 Annual Report). ii.

Capabilities: o Producing innovative products and services, o Cutting and controlling costs and expenses, o Investing in key areas of convergence, o Working closely with customers and suppliers, o Looking for opportunities to grow (2004 Annual Report).. Sustainable Competitive Advantage: o Lucent Technology's sustainable competitive advantage is producing reliable and innovative products for its customers as well as offering them an utmost customer service. iv. Core Competencies: o Technology management, since it produces innovative technological products, o Information management, since it keeps a close relationship with its customers and suppliers. 4. Major Strategic and Operational Weaknesses Lucent Technologies was a vastly different company than it was four years ago. With effective and efficient management style, today Lucent Technologies has been turned around and has profited for the first time in the past previous years.

One of the major factors which drew Lucent back from its competitors in the past years was its high costs and expenses. In order to establish a more effectively-running company, management had to cut costs and expenses. However, one of the most strategic and operational weaknesses done was to cut the labor force substantially which might, in the future, affect the company's strategic position in the marketplace. 5. Conclusions Concerning Competitive Position (Is current strategy working?) Current strategy for Lucent Technologies is working because (2004 Annual Report): o As for year ended September 30, 2004, revenues increased 7% prior to previous year, o Gross margin rate improved 11% points to 42%, o Net Income increased to $2 billion compared with a net loss of $770 million in the prior year, o Operating expenses decreased to $2.6 billion from $2.9 billion in fiscal 2003. It is obvious that the current management of Lucent Technologies has been trying to turn the company around from its previous position of a "high costs and debts" company to a position of "a strong competitor in the market place" company.

6. Major Strategic Issues Company Must Address Continue to invest in key growth areas related to convergence, while leveraging the expertise in designing, deploying and servicing converged networks, o Continue to expand revenue base by making strides in new markets as services, the government sector and emerging markets outside the United States (2004 Annual Report). D. EXECUTIVE SUMMARY Only a couple of years ago, Lucent Technologies was a company struggling with its high costs and expenses. It had lost most of its market share and competitiveness among the other firms. However, after a detailed analysis of the environment, the communications equipment industry and the company itself, it was found out that Lucent Technologies current strategy to turn the company around has been very effective. As a business level strategy, Lucent implements integrated cost leadership / differentiation strategy and at the corporate level, it implements expanding through new markets by organic growth.

The success of these strategies can be clearly seen by looking at the increases in the ROE, net profit margin and the decreases in the costs and expenses of the previous years. In summary, in order to stay competitive in the market place, Lucent Technologies needs to continue implementing its current strategy: It needs to control its costs and expenses, form close relationships with its suppliers and customers, produce innovative products and expand into new markets with these innovative products. PROBLEMS AND ISSUES 1. Current Business and Corporate Level Strategies Lucent's current Business Level Strategy is Integrated Cost Leadership / Differentiation-leaning towards broad differentiation strategy. o Lucent's current Corporate Level Strategy is Synergistic Expansion. It achieves this by organic growth, expansion or diversification, mergers, acquisitions and strategic alliances. 2.

Strategic Problems A. Strategic Problem 1: "There is a clear unbalance in the geographic scope of Lucent Technologies' operations". o As it has already been discussed in the industry analysis of this report, there is a growing demand in telecommunications equipment industry in North America. The industry's market size is 339 billion and its growth rate in the trailing twelve months is 24.88% (A-13). However, one would clearly see that the biggest market share does not actually belong to United States in the global communications equipment market. In fact the market segmentation of this industry is shown as below (A-15): Geography % Share Europe 33.50%Asia-Pacific 31.10%US 24.60%Rest of the World 10.80%Total 100%o As can be seen the biggest market share belongs to Europe with 33.50%. This is followed by Asia-Pacific market and then, the United States market makes up the third largest market in the world with a 24.60% percentage share in this industry. o However, as opposed to this market segmentation, Lucent Technologies predominantly operates and derives most of its revenues from its North America operations. The distribution of Lucent's current geographic scope can be seen as below (2004 Annual Report): Revenues PercentageUS $5,517 (61%) Other Americas (Canada, Caribbean & Latin America) 538 (6%) EMEA (Europe, Middle East, Africa) 1,293 (14%) APAC (Asia Pacific & China) 1,697 (19%) Revenues $9,045 (100%) o Even though there is a growing need and a greater demand in the European and Asia-Pacific telecommunications equipment market, Lucent currently generates 61% of its revenues from its US operations.

This is then followed by Asia Pacific and China operations (19%) and finally, the European, Middle Eastern and African operations (14%). o This situation constitutes an obvious strategic problem for Lucent Technologies. Lucent does not sufficiently concentrate on the market segments where there is the real growth and the demand. This is also a strategic problem because it conflicts with the strategic mission of Lucent: To be the partner of choice for the world's leading service providers, governments and enterprises by helping them create, build and maintain the most innovative, reliable and cost-effective communications networks and meet their customers' growing needs through the rapid deployment of new communication services (Lucent. com). o Lucent's current geographical scope of operations strategy conflicts with its strategic mission's global perspective. o Even though Lucent's CEO Pat Russo states that the company has been pursuing other global and growing markets, if it does not do this quickly enough, Lucent can lose its chance and competitiveness in the other markets to its strong competitors such as Cisco Systems. o In order to avoid this strategic problem become a real issue for the corporation, Lucent Technologies needs to clearly identify customer needs in different geographical segments. And then, it needs to invest and operate according to the customers' needs and the geographical places where there is the greatest demand and growth. B. Strategic Problem 2:

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