“Delivering the promise of a digital world.” Sticking true to the statement, Verizon Communications Inc. is an American multinational telecommunications company that offers voice, data, and video services around the globe. The main headquarters of the company is in New York City, and it is currently chaired by Hans Vestberg, who is also the CEO.
The company comes from a rich history consisting of many mergers and acquisitions. Verizon came out of a merger between Bell Atlantic and GTE in 2000. Since then MNC has acquired AOL and Yahoo!, and also developed many subsidiaries like Verizon wireless.
The annual revenue of the company has increased almost every year. The company reported its revenue to be $131.868 billion in the fiscal year 2019. And as of 2020, the company has been 20th on a list of 500 largest corporations in the United States (by revenue), according to Fortune.
Since it was created, Verizon has put out many well-known marketing campaigns. Some of these include Can You Hear Me Now?, Powerful Answers, Inspire Her Mind, Flipside Stories, and Better Matters.
Like other multinational companies, Verizon has also emphasized corporate social responsibility in the form of its philanthropic arm, the Verizon Foundation. Their primary focus is on social issues like domestic violence, education, and energy management, for which they donate millions of dollars per year to not-for-profit organizations. They have also taken many educational initiatives like starting competitions and development programs.
The company has also started focusing on sustainability initiatives to reduce its carbon footprint and increase energy efficiency in its operations. They are also working on an initiative to develop renewable sources of energy for their projects, like solar and wind power.
Verizon has also sponsored many sporting organizations, leagues, and sporting venues. But despite all these promising initiatives, the company has had its fair share of criticism as well, which is why we undertake a Verizon SWOT Analysis to better understand these aspects of the company.
What are Verizon’s strengths?
In today’s fast-paced world, companies constantly need to develop something unique and innovative that sets them apart from everyone else in the market. Verizon takes an excellent lead in this process because they are always taking technological initiatives like 5G Network or 4G LTE.
A company that is constantly improving its operations and offering new services sits better with a broader range of consumers. Hence, this is one of Verizon’s biggest strengths right now.
Domination in the Market
Verizon is the largest wireless carrier in the US with respect to both network strength and market share. Domination over the market share gives the company a considerable edge. Verizon gets to have a high number of consumers hence they also get a substantial influence on policies concerning the communications market. This is a strength as it gives Verizon the space to lobby for policies and regulations that suit its benefit.
Their position is not limited just to the local market. Verizon runs its operations globally. The company’s services are offered through 150 locations worldwide, from Europe to North America to Asia-Pacific and so on.
Verizon Communications Inc. has acquired many other companies over the years, which has helped MNC obtain a strategic position in the market. These companies include Yahoo, AOL, Alltell, and BlueJeans.
Verizon has been ranked as the 3rd most profitable public company in the USA. This is a significant strength because if a company is strong financially, it has money to maintain its superiority over other market suppliers. A robust revenue model also stabilizes a company’s operations and workforce.
Valuable Brand Name
Verizon has successfully managed to create a valuable brand name for itself. It has been ranked as one of the most valuable brands by both Forbes and Fortune 500. By putting effort into establishing a brand image, a company secures its position with many of its customers and creates a good life for itself.
Effective marketing acts as one of the most significant factors in differentiating any company from its competitors. As discussed before, Verizon is renowned for its creative marketing campaigns and promotions.
A good example is the 2014 campaign by Verizon called “Inspire Her Mind” in which the company showed their support for encouraging young girls to take an interest in STEM subjects. This example is not the only one; many other marketing campaigns by the brand also proved to be highly influential and successful.
What are Verizon’s weaknesses?
Telecommunication companies have been under fire many times for concerns regarding safety and breach of consumers’ privacy. A similar incident happened with Verizon when it was found guilty of selling location data to third parties. Electronic Frontier Foundation has given Verizon a one-star rating for privacy.
The company has also been accused of not focusing enough on security-relevant features and using simplistic methodologies for these issues. Once a company’s reputation for security is tainted, it can profoundly affect the trust customers have for them.
Criticism of 5G Advertising
The Better Business Bureau had repeatedly called out Verizon and showed that the company falsely claimed to have deployed 5G network services before the technology was even available. The ads in this regard put out by Verizon have been called deceptive and misleading. The Bureau also asked the company to fully disclose to its customers that their 5G network was actually minimal as opposed to their claims of it being consequential.
Reliance on the US Market
If a company relies heavily on just one market as its primary revenue source, it is exposed to all of its vulnerabilities. A similar situation is presented to Verizon as well that depends mainly on the US market for its sales. To solve this problem, a company must branch out to foreign markets and work to increase its customer base.
Lack of Diversification
Verizon’s primary operations lie in the telecommunications industry; if something happens to this particular industry, the entire source of revenues for Verizon will crash. Companies can prevent this from happening if they branch out into other sectors of other industries and develop multiple revenue sources.
The company currently has a lot of money in liabilities, which can become a massive problem for the company if not handled in time. Many companies often declare bankruptcy if they are unable to deal with the burdens of increasing liabilities.
What are Verizon’s opportunities?
Verizon can use this as an opportunity to explore other services beyond just telecommunications. The world of technology is vast enough to offer limitless opportunities for expansion. By doing so, Verizon can opt to build a more sustainable revenue model for itself. One example is developing better broadband packages that offer more coverage of a wider area.
By expanding services, the company seeks not only new customers but also has a chance to gain back the ones it lost to competition.
Globalization has opened up many avenues for businesses to expand their sales. Verizon currently is not offering all of its services globally but it definitely has the potential to do so. The company can generate many more opportunities for itself by tapping into international markets. This expansion will also improve the revenue model of the company, as discussed previously.
By developing a stronger position in the global market, the company will be able to get more shares in the market, which serves as a huge plus point. Verizon can also utilize this opportunity to develop a more substantial presence in rural areas, a sector it currently lacks in and one that is a huge opportunity waiting to be tapped into.
Expansion of Acquisitions
When Verizon acquired Alltell, this particular acquisition drastically improved the company’s market share. With other competitors being in close ties now, Verizon needs to look towards acquiring more of the smaller wireless companies to strengthen its position even further.
Acquiring other companies also helps improve the market share of a company.
Expansion of Services
Working from home using video conferencing portals has become the new normal ever since the pandemic struck earlier in 2020. The sales of platforms like Zoom suddenly skyrocketed. Verizon also offers a similar service hence it can make it into a significant source of revenue by focusing more on promoting it.
This way, the company diversifies its sources and that too, in a sector with massive potential, in light of recent events. Video conferencing has almost become the future of work as people realize how easy it has made meetings. Hence, this point serves as a vast opportunity for Verizon.
What are some threats currently facing Verizon?
The pandemic has produced uncertain situations everywhere. The economy has crumbled all around the world, businesses have taken a hit, and millions of people have lost their jobs. The lockdown and quarantine have reduced both sales and the production of goods and services. This situation has impacted all businesses alike. Verizon is no exception to this unfortunate situation.
The recession is looming right around the corner, and there is no telling when things will be going back to normal or even if that will happen anytime soon. There is nothing else for the company to do except to just gear up and try to make the most of the current situation.
Verizon has many powerful rivals in the US market, such as AT&T and T-Mobile. These brands are always in a constant struggle to snatch away consumers from each other, and this tussle only grows stronger. Verizon has to put in a lot of effort to ensure that it does not lose any of its customers to these other brands which can be very hard to do.
To protect itself from its competitors, a company must constantly develop innovative ideas to prove that it is better than other suppliers and offers something that they do not. The market struggle is also a constant fight that the companies can never entirely escape from, and hence it always remains a considerable threat.
As noticed previously, security concerns are one of the biggest dangers attached to any telecommunication company. Verizon has had its user data leaked once before and that too of almost 6 million users, which does not prove very good for its image. Such an incident can incur many millions of dollars in losses to a company in the form of lawsuits and other legal procedures.
But apart from that, the company also has to put in massive efforts to gain back the trust of people that it lost which can be a very arduous task. People remember such events, and they cause them to become wary of these companies. Adding fuel to the fire, there is this general discourse against tech companies nowadays, with many people believing that they are evil and should be used less. All in all, another incident of data leakage will prove to be highly threatening if not fatal for Verizon.
Verizon SWOT Analysis: Conclusion
Verizon is one of the biggest names in the telecommunications industry, instantly recognized all over the world. The company has established a place for itself that it will retain no matter what, but that does not mean there are no dangerous waters. There are still many threats facing the company. However, it also has a lot of opportunities to turn those weaknesses into strengths.
A SWOT Analysis is a managerial tool used by professionals to understand different aspects of their institutions or businesses. It underlines the strengths, weaknesses and opportunities, and threats for any business, which can help you evaluate the future course of action. Looking up SWOT Analysis of other firms can aid you in doing your own and developing a better understanding of the corporate world. Our site has a detailed SWOT guide available if you want to know how to perform your own SWOT Analysis.