Verizon Communications

Verizon Communications

This paper focuses on the financial status of Verizon Communication for 4 years that are from 2007 to 2011. This study will describe the importance of choosing the right strategy. Internal and external analysis of Verizon Communication is made in order to maintain the status in the industry. It includes the model of the strategy in use. The strategic choice of Verizon Communication makes the company a leader in the industry. The company has become an example in the strategic management because of its successful implementation of the strategy. Internal and external analysis of Verizon Communication shows the set of managerial decisions and actions that determine the long-run performance of a corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control.

Company Overview

Formerly known as Bell Atlantic Corporation, Verizon Communications was formed following the 2000 merger between Bell Atlantic Corp and GTE. Verizon Communications is one of the largest telecommunications providers in the world offering a mix of wireline and wireless services. Wireline services include: local, long distance, broadband video and data and network access to consumers in more than 150 countries. Wireline services are segmented into two units: Verizon Telecom and Verizon Business. Verizon Telecom provides wireline services to 28 states and Washington DC, as well as national long distance services. Verizon Business on the other hand provides IP based telephony services (VoIP) to medium and large businesses as well as various levels of government. Verizon Business was formed from the $8.5 billion acquisition of MCI (Ray and Peter, 2008).

Verizon's network is licensed and operational in 49 of the 50 largest metropolitan areas in the United States In 2009, Verizon Telecom had 32.6 million access lines, which was 33.3% lower than 2005 (Leeand Wyer, 2008). Verizon's wireline revenue at first did not shrunk at the same rate as access lines as growth in Verizon Business mitigated the impact of declining revenue from the Verizon Telecom unit. Frontier Communications (formerly Citizen) acquired the operations for $8.6 billion and received about 4.8 million local access lines, 2.2 million long-distance customers and 1 million high-speed data customers. The assets sold to Frontier generated $4 billion of revenue for Verizon in 2009 and about $1.7 billion during the first half of 2010 (before the merger).

SWOT Analysis

Strengths

Weaknesses

Robust network serves as a competitive advantage for the company

Strong domestic wireless segment enhances Verizon's brand image

Growth in Verizon's FiOS subscribers will improve Verizon's financial performance

Weak performance of wireline division will affect the financial performance of the company

Opportunities

Threats

Growing broadband penetration to boost its top line growth

Growth of HDTV market to provide incremental revenues for the company

Positive outlook for cloud computing provides new revenue opportunity

Intense competition may impact the company's market share

Prolonged recovery in Americas may affect its operating performance in near term

Increasing pension costs may affect the profitability of the company

Strengths

Robust network serves as a competitive advantage for the company

Verizon has robust wireless and wireline network in the US. The company's network has operational and licensed coverage in the US metropolitan areas which ...