There are a variety of tools that AT&T used during the merger process with TCI. The fact that they have AT&T and TCI have chosen to merge is a major indicator that both companies have obviously decided to go with an expansion strategy. .
Within the expansion strategy, AT&T used diversification to grow its market share. There are two types of diversification strategies: concentric, and conglomerate. Both of these strategies were used in the merger. The concentric strategy involves the acquisition of businesses related to acquiring a firm in terms of technology, markets, or product. The conglomerate strategy involves the acquisition of a business because it represents a promising investment opportunity. The primary motivation is a profit pattern of venture. .
There are two types of development strategies. Market development consists of marketing present products, often with only cosmetic modifications, to customers in related market areas by either adding channels of distribution, or changing the content of advertising or promotion. Product development, which AT&T used, involves substantial modification of existing products or creation of new but related products. It is based on penetrating existing markets by incorporating product modifications into existing items, or developing new products connected to existing products. .
By AT&T and TCI merging, their expansion strategy could be described as either horizontal or vertical. Horizontal integration, which AT&T used, is based on growth via acquisition on one or more similar firms operating at the same stage of the production-marketing chain. It also involves the eliminating of competitors, providing acquiring firms with access to new markets. Vertical integration involves acquiring firms either to supply acquiring firms with inputs- backward integration, or are customers for firm outputs - forward integration.
