Verizon Communications Inc SWOT Analysis and Competitive Strategy
Verizon communications inc
This paper presents A SWOT Analysis and forces of completion of Verizon Communication, Inc., which effectively analyzes external and internal factors. It also discusses the organization’s resources, capabilities, and core competencies. Incorporated elements are based on the firm’s information and communications technology conditions in the service industry and the mass media and telecommunications market. Verizon Communications, Inc., as noted in this paper, is the largest communication technology company worldwide and an award-winning networking organization delivering customer’s mobility demand, and that future improvement for its faced issues are also addressed.
General Environment
The two significant segments impacting Verizon Communications Inc. are social factors and environmental factors. Primarily, organizational culture is influenced by society’s way of doing things and overall culture. A population shared attitudes and beliefs determine a firm’s marketing design and message (Hitt et al. 2020, p. 25). On the other hand, distinctive markets have different environmental standards and norms impacting their profitability in the chosen market. Thus, before entering new markets, it is effective for Verizon Communications Inc. to evaluate the environmental standards in the area of operation.
Social Factors
Social factors adhesively impact the firm’s decision-making processes, among other activities (Hitt et al. 2020, p. 96). Verizon Communications Inc., for instance, in their area of operation, understands the society’s culture, which involves their shared attitudes and beliefs. The population norms affect Verizon Communication Inc.’s marketing position. Also, it determined its marketing and designing massage techniques for its set Telecom services. The firm at large, before initiating its goals and objectives based on social factors, is forced to consider critical elements. They include the skill and demographic levels of the population, the hierarchy, class structure, and society’s power structure and gender roles, social conventions and education, and standard level of its social targets.
Environmental Factors
In its area of operation, it often focuses on understanding the different markets, norms, and standards, which in the long-run impacts their profitability. Its daily process analyzes the liability and environmental laws in markets it wishes to operate (Marques, 2019, p.17). Thus, it considers major ecological factors: climate change, weather, environment pollution regulatory laws, waste management and its relation in the technology sector, and the overall attitude designated towards ecological or green products. The factors mentioned above heavily influence Verizon Communication Inc.’s profitability.
Five Forces of Competition
Verizon Communications Inc. remains the largest in the United States wireless communications service provider. As of 2018, the firm’s market share was 35%, betting on its rivals such as T-Mobile (17%), AT & T (34%), and Sprint (12%) (Marques, 2019, p.39). The firm rampantly dominates the market based on its expansive network coverage and in customer service, outstanding reputation. Besides catering to high-level consumers, Verizon Communication Inc. also provides on embedding its services based on value perceptions. The standard forces of competition the firm has faced come from the threat of substitutes and suppliers’ bargaining power.
Threat of Substitutes
One of the most significant forces of competition Verizon Communications Inc. faces comes from the threat of substitutes. In their past surveys, the company has argued that services from Sprint or AT & T Mobile are a perfect substitute for its services. The chasm narrows adhesively the firm’s network with its financial shifting profoundly in different years such as 2008 (Barry, 2018, p. 221). Besides that, due to high competition, the company has been tempted to loom its services for the consumers who would undoubtedly impact its profit level.
Suppliers’ Bargaining Power
Verizon Communications Inc. has high bargaining power. The latter continuously present a significant threat to the firm. With high bargaining power, the industry becomes less attractive, and that the firm is likely to experience a decrease in profit from its seller (Hitt et al. 2020, p. 113). Its suppliers’ bargaining power has depended on the price and quality or reliability of services.
Future Improvement
Verizon Communications Inc. should ensure it remains focused and responsive to meet its set targets to handle the threat of substitutes. Verizon Communications Inc. should offer to its consumer’s extensive coverage and friendly coverage, prompting a competitive advantage. Also, its primary focus should remain to cater to its higher-income leveled consumers and imbued its services successfully depending on value perception (Marques, 2019, p.17). To address high suppliers’ bargaining power, the firm should switch its strategy to low suppliers’ bargaining power. It will help them interact with its suppliers for products helping expand and build its networking infrastructure and physical manufacture components and products. Also, it can negotiate from a power position and further switch from one supplier to the next.
Greatest External Threat
Verizon Communications Inc. faces competition and remains the most significant external threat to the firm. Competitors threaten the firm via their aggressiveness and strategies. Via progressive information and technology improvement from rivals, Verizon faces stiff competition (Barry, 2018, p. 268). AT & T constantly improves their technology process and aggressive marketing techniques, posing a severe threat to Verizon Communication Inc.
Greatest Opportunity
Verizon Communications Inc.’s significant opportunity is global growth and expansion. As noted, worldwide growth and expansion are linked to general information and communications network development (Barry, 2018, p. 229). Since time immemorial, Verizon Wire has expanded significantly of its services and offerings to other nations depending on the capitalized technology trends. As a result, it increases its economic upticks and customer spending, and that the dilution has prompted a competitive advantage to the firm.
Strength and Weaknesses
Verizon Communications Inc.’s greatest weakness is that it has a low diversification level. As a result, the firm is increased to market-orientated risks exposure. For instance, since Verizon Communication Inc. represents the most efficient business revenue streams, its risk exposure in the market of wireless telecommunication is likely to be high (Marques, 2019, p.54). On the other hand, Verizon Communications Inc.’s biggest strength is its strong branding image. It empowers the firm to compete efficiently with its competitors in the information and communications technology and service market. The strong brand image also boosts its emphasis on adequate product quality, differentiating it from its competitors.
Strategy or Tactic
Thus for Verizon Communications Inc. to continuously have a strong brand image and take advantage of its competitors, it should effectively identify its audiences, determine its fundamental business goals rampantly and develop central messages depending on its designated society’s culture. On the other hand, for Verizon Communications Inc. to fix the issue of low diversification level, it should focus on expanding its operation via the addition of services, markets, and products (Marques, 2019, p.62). Also, it should understand the various production stages existing in the organization; it should enter into new businesses by margining with other firms.
Resources, Capabilities, and Core Competencies
Verizon Communications Inc.’s significant resources are based on its innovation centers. In its innovation centers, the firm develops new ideas and strategies for its services and products (Barry, 2018, p. 221). Its resources also come from human resources existing in sales and marketing employees, industry experts, and customer service staff.
On the other hand, the firm’s significant capabilities are fixed to its business segments. Its business segments provide wireline and wireless communications products and services. They include video, conferencing; data services managed security and network services, and long-distance and local voice services, which boost their competitive advantage (Marques, 2019, p.69). Lastly, its core competencies are fixed to its personnel, marketing, leadership, and operation techniques. Its effective personnel selection strategies provide the firm with the best expertise and skills to negotiate group benefits packages. Besides that, it has well-defined marketing strategies leading to an increase in its marketing and sales.
Sources
- Hitt, Ireland, & Hoskisson (2020). Strategic management: Concepts and Cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning p. 17-184.
- Marques, L. F. F. 2019. Equity research-Verizon Communications Inc(Doctoral dissertation, Instituto Superior de Economia e Gestão p.15-69.
- Barry, M., 2018. Verizon Wireless Communications: A Financial Analysis p.220-365.
