Founded in 1999, Verizon Communications Inc. is one of the biggest telecommunication companies in the world. The company now has over 135,000 employees and has a market cap of $218.11 billion. Verizon is a joint venture of two of the most iconic telecommunication companies, Bell Atlantic and Vodafone. Bell Atlantic is related to Alexander Graham Bell as the company is the brainchild of the inventor of the telephone. Today, Verizon serves over 120 million subscribers and is the largest telecom company in the US.
Verizon – At A Glance
|Founded||October 7, 1983|
|Headquarter||New York City, New York, U.S.|
|Annual Revenue||$133.61 Billion (FY 2021)|
Verizon SWOT Analysis
In order to make a company successful, taking major and minor decisions is inevitable. Hence, the need to analyze all the factors of the business is highly essential. The analysis will give you insight into your operations, your efficiency, and the potential of your business. Same for Verizon as well. The Verizon SWOT Analysis will help the company to understand what it should consider before making any decision.
Strengths of Verizon in SWOT Analysis
In the Verizon SWOT Analysis, the first element we will discuss is strengths. These factors are the key points for which the company is a leading name in the industry. Strengths keep the company stable, profitable, and sustainable. Let’s see some of the strengths of Verizon.
Strong Market Presence: Verizon is the biggest telecommunications network company in the US. According to Camscore, Verizon is the industry leader with the highest market share in the US with a 31% market share. AT&T is the closest rival with a 27% market dominance. However, Verizon falls a bit short of AT&T when it comes to smartphone share. Here, Verizon holds around 27% market share, whereas AT&T has a market share of 38%.
Innovation and Advancements: WHen it comes to technology, Verizon is always in the first line. The company doesn’t compromise to bring the best innovation to its customers. No matter whether it’s 4G LTE or 5G, they will be the first to implement the technology. For this, Verizon invests heavily in innovation. Just recently, Verizon invested around more than $200 in the customers of North Carolina.
Smart Acquisitions: Verizon doesn’t keep its business only in the telecommunication industry but also acquired companies from different industries. Some of Verizon’s notable acquisitions are Yahoo, Straight Path Communication, LQD WiFi, AOL, AllTel, MCI, etc. Verizon has an approximate acquisition value of over $58 billion.
Weaknesses of Verizon in SWOT Analysis
Just like strengths, the company also has quite a few weaknesses which we are going to discuss in this Verizon SWOT Analysis. Weaknesses are the drawbacks of the business which play a vital role in making the business unsuccessful. If they are taken lightly, chances are high that the business will all. Now, let’s have a look at what Verizon should work on.
Dependency on the US Customers: Verizon’s business plan is heavily based on the US market. Even though this has led the company to capture the biggest share in the US industry, this has also made the company depend on this market only. According to Investopedia, the biggest telecom company in the world is AT&T, whereas Verizon is second.
Concerns with Safety: Telecommunication companies have been criticized for their several safety concerns already. Data security is always a thing, especially for telecommunication companies, which have a fair share of our information. Verizon has already released an article regarding that. Also, the role of 5G has already created concerns with the airline safety. Hence, Both Verizon and AT&T delayed their 5G rollout in 2022 January.
False Advertising: Verizon is notorious for its false and misleading advertisements. In one ad, the company showed that with a Verizon account, you are supposed to get a free iPhone which is a false advert. Similarly, their 5G ads received mixed opinions due to misleading claims.
Opportunities for Verizon in SWOT Analysis
Strengths and weaknesses are part of the internal environment. But a business is also affected by the external environment and one of that is the opportunities. Opportunities are how a business can succeed. In the next section of the Verizon SWOT Analysis, we will check some of the opportunities the business can exploit. A
Global Expansion: We have already mentioned the threats of Verizon’s over-dependency on the US market. Verizon can benefit from that situation too, as they have a high potential to penetrate the global market. By expanding its business overseas, Verizon can drastically increase its customer base. A bigger customer base will surely generate a high amount of revenue.
Service Diversification: The presence of the pandemic has opened up a new era of work and that is working from home. One of the biggest considerations of working from home is video-conferencing which has now become a big topic. Verizon can easily take this as an opportunity and introduce services that can help its customers for a smoother video conferencing experience.
Differentiated Pricing Strategy: Verizon heavily focuses on differentiation. This is their main business strategy. They can bring this approach to their pricing too. They can bring a differentiated pricing strategy that can benefit the company and its customers. Not to mention, Verizon has already taken different pricing strategies that are in action. Those prices are high based on psychology.
Threats for Verizon in SWOT Analysis
Other than opportunities, threats are another part of the external environment that can put negative effects. Any external factor that could potentially harm your business is considered a threat. The next section of the Verizon SWOT Analysis is all about the threats.
Tough Competition: Like any other big company, Verizon is competing with the likes of AT&T and T-Mobile. In some areas, Verizon is yet to beat AT&T. Additionally, T-Mobile is gaining more and more customers on a regular basis. Also, there is Sprint, which is also thriving in the market. The main issue is with the aggressive pricing of the competitors which is the biggest headache of Verizon.
Buyer’s Bargaining Power: Compared to other industries, in the telecommunication and wireless industry, the customers have more power than usual. This means, that the companies are always on the verge of losing customers. The same goes to Verizon. Thus, it must always go above and beyond to keep its customers.
Rising Pay Level: As the inflation rate is rising day by day, the wages of the employees are also rising regularly. This is highly impacting the profit margin of Verizon. To keep the business profitable, the company now needs to increase the prices of the services which can lead them to lose customers. Verizon has already increased prices in June 2022.
Verizon SWOT Analysis Overview Template
Conclusions & Recommendations for Microsoft
The following recommendations from industry experts can help Verizon increase its market share:
- Acquire more diversified companies to bring more diversity to the business portfolio.
- Regularly bring technological advancement and innovation to ensure market lead.
- Focus on global expansion and increase international customers.
- Keep environmental safety in mind and enforce data security.
- Refrain from promoting false and controversial advertisements.
- Create a competitor analysis and update it regularly.
- Focus on reducing operational costs to that the service prices remain stable.
Overall, we can conclude that Verizon is a pioneer in the telecommunication industry in the US. The company has been in the business for a long time, and the customer base is larger than ever before. While having such strengths, the company is regularly open to its weaknesses, which it should never neglect. Additionally, staying away from important threats and exploiting the opportunities can provide significant possibilities for the business.
To make Verizon more successful, the need for insightful SWOT analysis is inevitable. The Verizon SWOT analysis will allow the company to understand where it should focus and where it should bring stability. The analysis shows what internal factors of the company can play a big role in making the company world’s biggest. Aside from that, there are also factors mentioned that show, which elements are pulling Verizon down. By doing this, the company will have a profitable and sustainable future.