SWOT Analysis
Of
Verizon Communications

Author
DeVry University
Instructor
Principles of Management/MGMT-303ON Spring Session A
March 22, 2008

Introduction

As Stacy Collet stated, “In order to swat the competition you need to understand SWOT. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It's a way to analyze a company's or a department's position in the market in relation to its competitors. The goal is to identify all the major factors affecting competitiveness before crafting a business strategy. “Verizon, formerly a Communications has now evolved into an Entertainment Company. Verizon now provides Telephone, Television and Internet services. (ComputerWorld, 2002)

History Verizon Communications Inc., based in New York and incorporated in Delaware, was formed on June 30, 2000, with the merger of Bell Atlantic Corp. and GTE Corp. Verizon began trading on the New York Stock Exchange (NYSE) under the VZ symbol on Monday, July 3, 2000. The symbol was selected because it uses the two letters of the Verizon logo that graphically portray speed, while also echoing the genesis of the company name: veritas, the Latin word connoting certainty and reliability, and horizon, signifying forward-looking and visionary. While Verizon is truly a 21st century company, the mergers that formed Verizon were many years in the making, involving companies with roots that can be traced to the beginnings of the telephone business in the late 19th century.

Government regulation largely shaped the evolution of the industry throughout most of the 20th century. Then, with the signing of the Telecommunications Act on Feb. 8, 1996, federal law directed a shift to more market-based policies. This promise of a new competitive marketplace was a driving force behind Verizon's formation. (Verizon, 2008)

Strengths Verizon’s human resources policies and practices foster a culture that rewards performance excellence, maintains our competitiveness and provides exciting career opportunities. Our total rewards package, including salary and benefits, is among the best in corporate America. We provide a full range of work/life programs to help employees manage their work and personal lives, and we have a variety of programs to ensure we tap the talent of our diverse employee base. (Verizon, 2006)

Consumers looking for Internet, television, and telephone service should consider Verizon FiOS. In Consumer Reports’ latest survey of several major telecom providers, featured in the February issue, Verizon FiOS, whose network is fiber-optic based, received superior scores for reliability and performance for its Internet, television, and telephone services. (Consumer Reports, 2008)

New customers for Verizon's Fios fiber-to-the-home television service helped spur the increased revenue. About 167,000 new customers signed up for the Fios TV service, bringing the customer base to 515,000. Verizon reported 288,000 new broadband connections for the quarter, including Fios and DSL (digital subscriber lines); 203,000 of the new broadband connections were Fios service. Verizon now has 1.1 million Fios broadband customers, it said. (ITworld, 2008)

Weaknesses An overall slowdown in new U.S. mobile users could be a reflection of the nation's high 45 percent wireless penetration rate. However, carriers and vendors alike have looked to third-generation products and services to keep consumers buying new gear and depending on new services. (WirelessWeek, 2008) A recent slowdown in growth opportunities to advance within Verizon results in a weakness. A number of employees are discouraged and are not as motivated due to the lack of personal career growth. The overall result is a complacent workforce. The U.S. economy is responsible for the lack of growth. The continual competition of other vendors, such as other providers of phone, television, internet and cellular service present a very competitive environment. Competing vendors are constantly lowering their prices which reduce the margin of the products being sold by Verizon. Also, competing vendors marketing and advertising is very effective, presenting Verizon with very challenging circumstances. Verizon does not have a strong marketing and advertising plan.

OPPORTUNITIES Verizon has opportunities to improve upon their Marketing and Advertising Departments. The challenge of being able to provide information to potential customers is a constant challenge. Verizon has a superior product, FiOS, which is Telephone, Television and Internet provided over Verizon’s Fiber Optic Cable Network. It is a superb product which needs to be explained to customers in layman’s terms so that they understand the difference between FiOS and other products provided by other vendors. Verizon has the opportunity improve the overall customer experience. There is an opportunity to improve on Customer Service. Providing customers with superb Customer Service is a very important for the success of any company. It is important to convey the importance of Customer Service to all employees and provide appropriate customer service training. A happy customer is a promoter of Verizon. Happy Verizon customer will tell their friends and family about Verizon. The customers overall content with the ordering installation and service of the product experience will promote Verizon’s products and services. Cutting operating cost and departmental budgets will allow Verizon to reduce their operating cost. By reducing the expenses of operating the business will allow Verizon to provide their products for very competitive prices. Continuing to seek methods and procedures which will decrease the costs associated with running the business will allow Verizon to excel and surpass their competitors.

THREATS One of the threats is telephone services (voice) which can be provided to customers by way of an Internet connection, for example, Vonage, which can provide unlimited phone call service for very competitive prices. The emergence of phone services availability over the Internet has resulted in large number of telephone service cancellations for Verizon. Other vendors are beginning to provide more High Definition Television channels than Verizon which results in a competitive advantage for other providers of Television service. Customers seeking more High Definitions channels will end up ordering Television from the provider which has more High Definition channels available on their network. Providers of Telephone, Television and Internet service, such as Time Warner and AT&T are beginning to advertise they have Fiber Optic Service. Verizon has a true Fiber Optic Network, providing fiber optic cable throughout to whole network to the subscriber’s home. Companies such as Time Warner, AT&T and other providers do not provide fiber optic cabling the the customers home. They provide fiber optic cable to a hub (central location) and then provide a wired connection from that point to the subscriber’s home. The fiber cable all the way to the home provides a much better product. Because these other providers are not clearly clarifying the difference results in the loss of potential customers to Verizon.

CONCLUSION
Strengths, weaknesses, opportunities and threats are important aspects within a company. Presenting this information to all levels of management and to all employees within a company is important. It provides a very clear understanding of the company and allows all employees to recognize the company’s strengths, weaknesses, opportunities and threats presented within the company. Verizon has provided six key imperatives objectives which are based on SWOT Analysis of Verizon. It enables Verizon to communicate the direction and areas of focus for the companies success.

References

Consumer Reports (February 2008) 12 Money mistakes that can cost you 1,000,000 Retrieved March 22, 2008, from http://www.consumerreports.org/cro/cu-press-room/pressroom/archive/2008/02/0802eng0802itt.htm
IT World, Gross, Grant, IDG News Service, Washington Bureau (July 2007) Verizon revenue, net income up on Fios strength Retrieved March 22, 2008, from http://www.itworld.com/Tech/5050/070730verizon/
Verizon (2006) Living our Values Retrieved March 22, from http://multimedia.verizon.com/responsibility/pdf/CRReport2005.pdf Verizon (2008) Corporate History Retrieved March 22, 2008, from http://investor.verizon.com/profile/history/ Wireless Week, Bassuener, Kristy (2008) Verizon Wireless Reveals Fourth Quarter Weakness Retrieved March 22, 2008, from http://www.wirelessweek.com/article.aspx?id=96000