Making the things that make communications work
A Lucent Technologies case study

Page 1: Introduction

Organisations gain many different operational benefits from producing goods or providing services on a large scale. As they get larger, often through the integration of business units under a single umbrella company, average unit costs fall and they benefit from economies of scale. Organisations must, however, aim for an optimum size of production, i.e. the size which suits them best. If the...
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Page 2: New start-up company

Lucent Technologies designs, develops, manufactures and markets communication systems and technologies, ranging from microchips to whole networks. It became a fully independent company on April 4th 1996 when its shares were publicly traded on the New York Stock Exchange. At the end of the first day of trading, $3 billion-worth of shares had been sold - the largest initial public offering in...
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Page 3: The new business structure

It was important to provide each of the newly-reorganised business units with direction. In order to build Lucent Technologies into a customer-focused business, each of the newly-created businesses have been set up to serve different market segments. These include: The Microelectronics Group which includes current microelectronics products, such as integrated circuits and optoelectronics...
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Page 4: Growth

Acquisitions As Lucent focused on growth opportunities, it became possible to strengthen its portfolio of businesses with a number of acquisitions (buying other companies) and business partnerships. However, in order to remain a leader in an industry which is currently undergoing profound change, it will be necessary for Lucent to reassess the portfolio of business offerings continually...
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Page 5: R&D and innovation

When the demerger took place, Bell Labs separated from AT&T to become the innovation engine for Lucent Technologies. Bell Labs was the birthplace of the transistor, the communications satellite, laser, solar cell, cellular telephony and stereo recording. Bell Labs focuses its research efforts on product developments related to Lucent Technologies’ business. The future of the data...
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Page 6: Conclusion

By aligning Bell Labs’ research and technology (as well as technology obtained through acquisitions) more closely with the needs of its customers, Lucent Technologies has been able to bring networking technologies to the market faster than ever before. Lucent Technologies recently announced a doubling of net income and earnings per share, providing significantly more value for its...
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