Verizon Communications, Inc Case Study
Zhiyuan ChengCommonwealth, Mod CBrief background of Verizon: Verizon Communications, Inc is a broadband and telecommunications company, which was funded in October 7, 1983 as Bell Atlantic. And now become the largest provider of wireless communications service in the United States. Verizon;s business contains five main lines, which includes wireless, residential and small business, operation companies, enterprise and Verizon Partner Program. It offers a variety of communications, information and entertainment services through different distribution channels. Financial analysis of Verizon According to Verizon’s annual report in 2015, the consolidated revenue of this company is 131.62 billion US dollars, an increase of 3.6% over last year. The wireless segment contributes nearly 70% of the total revenues and the rest is gained from the wireline segment. In year 2015, Verizon 21.2 billon dollars in free cash flow, and the annual dividend increased by 2.7% compared to last year. Furthermore, Verizon has 112.1 million wireless retail connections and 35.7 million wireless retail postpaid accounts in year 2015, which bring Verizon the 4.6% growth in wireless total operating revenues. Moreover, it also shows that Verizon has a growth of 3.5% in its wireline consumer retail revenues and 8.6% growth in FiOS revenues. Last but not least, Verizon company has hired approximately 180000 employees worldwide in 2015.
Competitive analysis of Verizon: Strengths—Leading market position with strong brand reputation. Verizon has a great market share in the telecommunications industry and is growing faster than its rivals. As the largest wireless carrier in US, Verizon attracts over 110 million wireless retail connections in various areas. Also, Verizon has the largest 4G LTE network coverage in the US, covering over 75% in the US. Besides, Verizon’s business expand in over 150 countries with its global network coverage, which brings Verizon a great customer base and strong brand recognition. High speed broadband. Verizon’s high quality network performance is another competitive strength over its peers. With the advance technology group, Verizon is able to enhance its internet accessibility and aims to be the fastest internet compared to other main competitors. For example, the ultra-fast FiOS connection. Large pool of employees. Verizon has hired over 180000 employees around the world with from different backgrounds. This priceless resource brings Verizon a positive internal working environment. Weakness—Higher cost than competitors. Although Verizon has the biggest customer base currently in the United States. But it charges more of the services than its lead competitors such as Comcast and T-mobile. Currently, Verizon Communications still holds a large amount of wired lines which may negatively affect Verizon’s profitable performance in the future. Low market shares outside the US. Verizon use the CDMA technology. However, with the spread of GSM globally, it is potentially difficult for Verizon to expand its market internationally with this technological barrier, especially in 3G segment.