This PESTLE analysis has revealed that the company has strength for growth by exploiting the global markets of developing countries. The external factors examined have exposed the company’s opportunity about its remote environment in the telecoms industrial sector.
Verizon Communications has been able to achieve the leading global position by successfully exploiting the opportunities and effectively addressing the threats through strategic decision-making. The analysis is carried out through careful examination of the external factors prevalent in the macro-environment of the company in communications and information services and technologies. The PESTEL model highlights the threats besides opportunities in the way of Verizon. The analysis is based on an investigation of several factors, including political, economic, social or socio-cultural, technological, environmental, and legal trends or environments prevalent in this industrial sector. The company is affected by these external factors in various dimensions, mainly in the operations of the business and the generation of revenue. For instance, Verizon Wireless has the opportunity to expand its operations beyond the US borders as the world has experienced developments in telecommunications and networks, but still, there exists a gap to be filled in by some experts. The company can ensure growth and financial gains, as shown by this analysis, if it is ready to take the opportunities and avoids threats by systematically addressing them.
The outcomes of the PESTEL analysis have given the managers a chance to examine the company’s performance and effectiveness, and thereby, they can create a strategic management agenda for the recommendations given. The remote environmental factors affecting the business of the company vary in importance. Verizon can evaluate its performance by carefully considering the examined external factors revealed in this analysis. Therefore, the company needs to devise its policies and strategies effectively so that it can ensure maximum exploitation of the opportunities and minimum confrontation with the threats revealed in this analysis.
Political Factors Affecting Verizon Communications
Governmental policies and their executions have certain direct impacts on the working of the businesses. Verizon is no different. The industrial environment is shaped by the success or failure of these policies. The success of these policies ensures the generation of new opportunities for growth and development, whereas the failure of political policies can bring inflictions to the company. The subsequent political factors exerting externally are revealed in this analysis:
- Governmental shift toward the open markets (threat and opportunity)
- Infrastructural development by the governments (opportunity)
- Setup of Wi-Fi hotspots by the governments (opportunity)
The novel governmental policies accelerate businesses across the states by adopting an open market model. This model supports the globalized form of business where businesses are not limited by boundaries. Furthermore, this external factor states that the firm can grow its business through this opportunity. An open market business model can help the government to expand its operations by successfully capturing the rapidly developing markets. However, the threat of increased competition by an open market approach can manifest itself. In the same way, the increased spending of governments on the infrastructure, including the development of telecommunications infrastructure, is another opportunity for the company where the company can flourish its growth via improved operational capacities and services. Lastly, another political decision that creates opportunities for more business and growth is the provision of free Wi-Fi hotspots in public places. The company can take up this task on its shoulders and can improve its revenues. Thereby, Verizon Wireless can expand its operations and services by providing public Wi-Fi hotspots. To sum up, the political factors surfacing the external industrial environment bring forth opportunities for expansion and growth for the company.
Economic Factors evolving around Verizon’s Business
This section of the analysis reveals the external economic factors relevant to the business of the company. The economic conditions which are trending externally are responsible for determining the fate of the businesses. This telecommunication industry is functioning in the presence of mixed economic factors, i.e., in the presence of opportunities as well as threats. The company must give special attention to the next discussed external economic factors:
- Developing states’ growth in terms of disposable income
- Optimistic growth of economies in developing countries
- Penetration of asymmetrical information
The disposable incomes are increasing rapidly in the developing states. One reason for this factor is that these states have started exploiting their resources late compared to the developed countries. This external factor has allowed the company to grow the business. Verizon Wireless has the opportunity to exploit this condition to expand its customer base in the new markets. Moreover, the improving growth of the economies of these states also exerts opportunity for the globally leading industry to benefit from the situation. On the contrary, the penetration of asymmetrical information is posing a threat to the company. The customers have resources and access to information whereby they can compare the products with one another and are empowered to influence the market. The enhanced bargaining power of customers is a threat to the company. In this way, the customers secure the upper hand in influencing the company through their demands. Verizon Wireless, therefore, is exposed to this threat based on the availability of asymmetrical information to the customer. By devising an effective strategic policy to ensure market competitiveness along with the policies of growth and exploitation, the company can exploit the above-stated opportunities.
Social/Socio-cultural Factors prevalent in the Business Environment of Verizon
This section deals with the prevalent social and socio-cultural norms and conditions. These external factors are responsible for shaping the business growth of the company. The behaviors and, therefore, actions of the employees along with the customers are shaped by this environmental factor. The business is successful only if it utterly understands the socio-cultural spirit of the business surroundings. This PESTEL Analysis highlights the significant external factors prevalent in the remote environment of telecommunications industries:
- Penetration of Mobile phones (threat and opportunity)
- Growing online mobile services (threat and opportunity)
- Adoption of high-quality products by customers (opportunity)
The increased use of mobile phone devices is giving another opportunity to the company. These devices also increase the chances of wireless telecommunications penetrating the market through them. The company can take advantage of this newly established socio-cultural norm to add up its customers and revenues. Even more, the growing online services via the internet hold another significant opportunity for telecommunication giants like Verizon to grow their business. These rising trends can contribute to the penetration of the company at a further level. Nonetheless, the increased market and industrial value of telecommunications via these two factors pose another threat to the company. It can attract other firms towards this and thus can contribute to the rise in competition. Furthermore, the analysis of social factors has revealed that the customers are more attracted to the quality products. This is another opportunity for the company as the company can increase its customer base by providing quality products to its customers. It would further ensure the market presence and retention of loyal customers of Verizon. This section emphasized the evolutionary growth strategies of the company to retain the long-term benefit. Therefore, this segment has allowed the company to expand its business and revenue.
Technological Factors on Verizon Telcom
This section of the analysis emphasizes the technological factors that are relevant to the industrial telecommunication culture. The segment will shed light on the infrastructure and abilities of the company empowered by technological advancement. Technology can affect several working zones of the company. Therefore, this section will explore the external technological factors that are relevant to the working of the industry and are prevalent in the external working environment of Verizon Telecommunications:
- Global development of channels and networks of information communication (opportunity)
- Security threats through information or network technologies (threat)
- Growing penetration of communications and information technologies (opportunity and threat)
The company has the opportunity to grow and expand due to the development of information channels and communication networks throughout the globe. For this purpose, the company can invest in new telecommunication provisions as the rapid development of telecommunication infrastructure even in remote areas has suggested this. These opportunitie4s are not only available in the United States but also around the globe. On the other hand, the threat of security is prevailing in the telecommunication industry. The threat is mainly affecting the stability and integrity of the company in information and network technologies. Furthermore, the advancement in communication and information technologies further suggests the company improve its technology for expansion and growth. In the same, this opportunity can be realized as a threat. When viewed through the lens that the rapid advancement and technological growth can attract potential business as well as potential rivals in the market. Therefore, the strategic competition can bring in new substitutes along with the players. Hence the technological factors prevalent in the external environment of the company suggest that with the threat of increased competition, the company has many opportunities to grow business and improve technology, brand image, and market presence.
Legal Factors circulating the external business environment
The last section of the analysis reveals the impact of legal policies on the business. These rules and regulations require certain conditions and often put a restraint on business operations. Verizon Communication lnc. is facing certain legal implications in the external environment of the company. The following legal factors affecting the externally are relevant to the business of the company:
- Competition law (opportunity and threat)
- Regulations in Telecommunications (threat)
- Rising concerns for consumer protection (opportunity and threat)
Competition law, legally known as anti-monopoly or anti-trust law, dually serves the industrial environment. The law is responsible for restricting the growth and, thereby, expansion of any company’s business. To exemplify, Verizon is restricted to acquisitions and mergers as the law identifies this as an attempt to monopolize the telecommunication industry business. Nevertheless, the companies are kept under check through this law. At the same time, aggressive regulations are carried out to secure the consumers from any security breach. These external legal factors are shaping the business growth and expansion. The issues related to security breaches can force the company to limit its services. Nonetheless, the increased emphasis on security can boost customer satisfaction and, thereby, can foster growth in this way. Hence, the legal factors hold serious implications for the company’s business and have the potential to limit as well as boost business growth.
Environmental/Ecological Factors
This segment highlights the natural environments affecting the business of the company. The PESTEL analysis reveals significant implications of the environment on the industry environment. The availability of natural resources, along with the effect of the operations on the environment, is significant to industry. The succeeding factors are given and implicate the industry environment of Verizon:
- Loss in infrastructure by natural disasters (threat)
- Increasing use of renewable energy and resources (opportunity)
- Increased stress on the achievement of long-term sustainability (opportunity)
The segment highlights the vulnerability of the telecommunication industry, especially the company, to environmental hazards and disasters. The telecommunication industry is especially dependent on infrastructures like networks and stations to deliver their services to the customers. Therefore, natural calamity can threaten their business. In comparison, the increased capacity of renewable resources is readily available at the firm’s disposal. This can lead to the realization of the goal of long-term sustainability. This measure, if adopted, can improve the company’s brand image among the citizens and the customers. This section, therefore, determines that the firm must explore the opportunities as it would lead to the fulfilment of its social responsibility.
+447462439809