Value Chain Analysis

Verizon Wireless, like many other companies, uses a value chain analysis to comprehend the parts of their operations that create value, and those parts that do not. This analysis is very important because they will only be able to gain high returns within their industry if the value they create is greater than the costs they acquired to create that value. Verizon’s value chain is divided into primary and support activities. Some of the primary activities are research and development, customer service, marketing and sales, and customer service. The competition within the wireless industry is very aggressive, especially between Verizon and AT&T, which are the two largest providers within the United States. This strong competition influences many properties of the value chain including their positioning, brand equity, pricing, and the products that are offered. New carriers such as Cricket have entered the market as a low cost leader, but not at the level of Verizon or AT&T. The access to Verizon’s inputs such as high capital requirements, economies of scale, and switching costs, make it difficult for competitors to enter the market successfully. It is important for Verizon Wireless to differentiate themselves in order for them to create exclusive added value. The products that Verizon offers can generally be categorized into devices, service/network, and customer service. Within any telecommunication company, the network that they work with is the core to their operations. The chosen network within Verizon is what essentially adds long-term value for their customers. The investments needed to upgrade and maintain networks are vast, which also limits the threat of new entrants. Even though these limits are present, the competition is so strong within the prevailing contenders, Verizon is constantly forced to sustain and