Teletech
In the demanding world of information technology movement and management, Teletech Corporation is a major player. Headquartered in Dallas, Texas, Teletech is comprised of two main business segments: Telecommunications Services and Products and Systems. Products and Systems main focus is the manufacture of computing and telecommunications equipment. Within the company, the telecommunications services sector accounted for 75% of the market value of Teletech while Products and Systems provided the remaining 25% of Teletech's market value. The prospective return on capital for the company as a whole would be 10.35%. It was decided by top management to apply a hurdle rate of 10.41% to all capital projects, as well as in evaluating the performance of the business unit. Within Teletech's mission statement there is a phrase that is of utmost importance to the success of Teletech. The phrase reads, "We will create value by pursuing business activities that earn premium rates of return." Translating that statement into practice has been a challenge for management. Despite some growth, Teletech's stock has not grown at a rate equal to that of overall stock market indices or with industry indexes for telephone, equipment, or computer stocks. The disappointing growth has been attributed to poor earnings growth, increased telecommunication competition, and the disappointing performance of the Products and Systems segment.
A closer look at each segment of Teletech allows for a greater understanding of the overall situation at Teletech. The telecommunications services segment is a major provider of long-distance, local, and cellular service throughout the Southwest and Midwest United States. Telecommunications provides service lines to more than ...