Verizon Communications has secured a leading position in the US market. The company is successful in securing business growth and stability in the long term. The telecommunication and mass media industries are prone to many threats prevalent in the external macro-environment of the company. Therefore, the company must address its weaknesses to remove its vulnerability against those threats. However, Verizon has many strengths in the internal environment and prevalent opportunities in the external environment of the company. Verizon must exploit these opportunities as the company has strong foundations based on internal strengths. This SWOT Analysis will examine the internal and external factors strategically imperative for the business of the company. These factors are explored in detail one by one in successive discussions. As the company is playing a leading role in communications and information services and technology, the firm can exploit its strong market position to strengthen its business. For this purpose, the company can use its strong customer base to introduce newer services based on innovative technology. Nonetheless, the company must adjust itself to the shifts in the internal as well as external factors by employing strategic policies and effective decision-making.
Verizon must employ this SWOT analysis while planning and making key decisions to incorporate analytical inputs and outputs based on internal and external strategic factors as the telecoms industrial environment is very volatile with advancements in tech-space with every passing day. Thereby, the company can ensure business growth and expansion besides ensuring effective operations and smooth functioning of the business. Verizon can still venture into new horizons to further strengthen its customer base and business growth. Verizon Wireless can exploit the emerging markets outside the US in the developing world.
Strengths of Verizon Communications (Internal Factors)
This section of the SWOT Analysis sheds light on the strengths of the company. These strengths are prevalent in the internal strategic environment and are responsible for continuous growth and stability. The adverse impacts of the surrounding external factors are mitigated through these strengths. The following strengths are noteworthy in this segment of the SWOT Analysis:
- High Brand Recognition
- Elevated scale of economy
- Providing Quality Services
The company’s high recognition of the brand is one of its strengths that enables the company to penetrate the masses. Verizon’s quest to provide quality standard products to the customers is its strength in the competitive communications and information services, and technology industry. Even more, the elevated scales of the economy are another strength of the company that makes the company effective in operational activities besides ensuring efficient service delivery. To demonstrate, Verizon’s ownership of costly wireless telecom infrastructures ensures the operational and service delivery capacity and thus contributes to the generation of revenue. Furthermore, the provision of quality products to the customers is another strength of the company. The firm has already captured quality-sensitive clients who are ready to spend money as well as shown by Verizon Wireless marketing strategies. These strengths are the significant factors that ensure the long-term growth and development of the company.
Verizon’s Weaknesses (Internal Factors)
This section of the SWOT Analysis gives insight into the factors which retards the growth of the company and are acting internally. Verizon must address these weaknesses, or they will inflict harm to the competitive edge and effectiveness of the business operations. The ensuing weaknesses are exposed while doing the SWOT Analysis of Verizon Communications:
- Strained Diversification
- Expensive Infrastructure
- Incapacitated in competition due to price differentiation
The low diversification is a weakness prevailing in the internal environment of the company. As the company earns revenue from the Wireless business, it is, therefore, risky for the company to depend completely on this sector. Wireless telecommunication is prone to many risks, including rising competition; thereby, the firm may suffer in the long run. The other weakness is the costly infrastructure of the company. This expensive infrastructure requires extra pennies for maintenance, although the company can produce high-quality products and services for the customers. Still, Verizon finds it difficult to compete against its rivals in terms of capturing customers when it comes to the pricing of its services. For instance, Sprint is effectively capturing customers based on its low-priced product strategy. Therefore, as exposed in the analysis, Verizon must address the problem of diversification by introducing new services other than Verizon Wireless along with lowering the costs of its products.
Opportunities for Verizon Communications (External Factors)
This section of the SWOT Analysis reveals the opportunities for the company to act as an external factor in the business environment. The company can exploit these opportunities to foster growth and stability besides accumulating more resources. The telecommunication industry has shown several opportunities for growth and expansion of industry and business. The next highlighted opportunities could play a significant role if they are exploited in a strategic approach:
- Global expansion and growth
- Diversified business
- Strengthening the network
The spread of communication and information services across the globe has played a significant role in giving Verizon this opportunity. The company can exploit newer markets and can expand its operations. The strong financial position of the company enables it to establish business in developing markets and ensure its growth. Moreover, the company must expand the range of business and must not depend entirely on Wireless telecommunications in the long run. In this way, the company can increase the ventures and thereby can generate more revenue ss in addition to lowering the risks of overdependence on a single business. In addition, the company can increase the growth of the business by strengthening the network externalities. In this way, Verizon can potentially reach more customers and clients and can increase its market share of the company. Long-term strategic development and growth can also be ensured by ensuring this development. Therefore, the company can strengthen its operations and can stabilize and can become more competitive by exploiting these opportunities.
Threats About the company (External Factors)
This section of SWOT Analysis highlights the threats which are threatening the growth, development, and stability of the company. These threats are acting externally on the company and bear the potential to endanger the stability, growth, and finances of the company. Shrewd decision-making through a strategic approach is needed to minimize these externally prevalent threats. The subsequent discussion highlights the significant threats that need to be addressed to ensure the long-term development of the company:
- Threat of aggressive competition
- Threat to the security posed through information or network technology
- The hazards of natural calamity destroying the infrastructure
The threat of competition holds significance as it can disrupt the normal growth and development of the company. The rapidly developing telecommunication services threaten the market of the company. These newer or already surviving firms can threaten the company by following robust competitive strategies through advancement in technology along with posing price war. Even more, the threats of security breaches bear far more consequences than the competitional threat. Security breaches into the wireless telecommunications system of Verizon can bring down the public confidence in the company and, therefore, the company’s business at once. In addition, the natural calamities and disasters are dangerous to the firm’s operational business as the infrastructure of telecommunication technology and services are prone to these natural disasters. For example, earthquakes or tornados, or related disasters can bring down the services of the company along with inflicting severe damage to the company’s infrastructural assets. The US security and Exchange Commission shared the report with the aid of the company and highlighted the threat and further recommendations that the company must strengthen its competitiveness, security measures related to networks, and redundancies in technological measures.
Summary and Recommendations
Summary
SWOT Analysis of Verizon Communications is conducted by examining the internal and external strategic factors prevalent in the working environment of the business. The telecommunications industry is based on information and communication services, the telecoms market, and mass media advertising. This analysis has revealed that the company is prone to many threats, although it can exploit many opportunities by expanding the business into the global markets. Likewise, Verizon can retain its market value and even grow further. Nonetheless, the threats of low diversification and the threat of aggressive competition in the market.
Recommendations
The recommendations discussed here can directly address the threats as these are devised after carefully examining the weaknesses. This SWOT analysis has carefully examined all the internal and external factors prevalent in the company’s environment. Therefore, it is recommended that Verizon Communications, lnc,
- The company must diversify its business via acquisitions and mergers; thereby, the company can reduce the risk factors of sole dependence on a single business.
- Verizon must expand globally so that it may capture the developing markets outside the US borders. In this way, it can utilize its strong brand image.
- The company must secure a competitive edge by highlighting the quality of its products in advertisements and marketing.
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