Swot analysis of Verizon. Verizon Communications Inc is a US telecommunication conglomerate multinational company and corporate part of the Dow Jones Industrial Average. The headquarter of the telecommunication company is at 1095 Avenue of the Americans, New York City, New York. USA.
The US Justice Department gave the rights to AT&T to separate the Bell System Company into 7 small companies due to the monopoly in 1984. Bell Atlantic was one of the surviving companies. It spent the 80s and 90s establishing its brand. However, Baby Atlantic bought a telecommunication company GTE in 2000 and changed its name to Verizon.
Verizon’s main products and services are Hum by Verizon, Verizon Smart Family, Roadside Assistance, Safe Wi-Fi, Security & Privacy, VZ Navigator, Verizon Support & Protection, and Total Mobile Protection.
According to an estimate, the annual revenue of Verizon in 2020 was 128.292 billion dollars, and it has decreased by 2.71%. Out of which, the net income of the telecommunication brand was 17.801 billion dollars, and it has reduced by 7.6%. The company has employed over 135,300 employees to manage various operations worldwide.
Verizon’s main competitors are Deutsche Telekom, AT&T, Spectrum, T-Mobile, Comcast, Sprint Nextel, RCN Telecom, Vodafone, Cricket Wireless, and Cox Communication.
Today, we’ll discuss the swot analysis of Verizon. It’s going to analyze the internal and external factors impacting the world’s leading telecommunication company. Here’s the swot analysis of Verizon as follows;
Strengths of Verizon
Verizon has made successful acquisitions of Blue Jeans, Yahoo, Alltel, and AOL for over 500 million dollars. Such acquisitions played a significant role in the success of the telecommunication company. For instance, when Verizon purchased Alltel, it allowed the parent brand to achieve the maximum market share and become the market leader.
Advanced Marketing Strategies
The telecommunication market is very competitive, and the competitors try to differentiate themselves with different offers. Verizon has established a reputation of launching creative offers by focusing on the customers.
High Brand Value
According to an estimate by Forbes, Verizon ranks at the 17th position of the world’s most valuable brand in 2020. It used to rank at the 8th position of the largest public company in the US. However, the market capitalization of the telecommunication company in 2020 was 234.18 billion dollars.
Creativity & Innovation
The focus of Verizon has always been very clear and that is to satisfy the needs of the digital customers market and offer them something different. Verizon is a market leader in terms of creativity and innovation. The telecommunication brand has offered innovative products and services over the years like Fios, VoIP, and 5G Network.
Besides the low profitability of the company in 2020 due to the pandemic of covid-19, other than that Verizon has a strong financial record. It has helped the telecom brand to make various acquisitions and launch different innovative and creative offers. Verizon was the 3rd most profitable brand in 2019 in the US market.
Verizon has been operating its services in over 150 locations points worldwide in Asia-Pacific, Europe, North America, and Latin America. The IP network of the telecom brand is available in more than 2770 cities across the globe.
Verizon has strong network access and the largest market share and wireless carrier in the US market. It provides the brand tremendous influence over the policy and regulation that could impact the telecom industry.
Weaknesses of Verizon
It seems as Verizon has put all of its offers and resources in one telecom industry. When the pandemic of covid-19 hit the world and impacted businesses, Verizon’s profitability declined to a great extent because of the low diversification.
The reason customers choose a specific brand is because of trust, and that’s they build long-term customer-company relations. Many critics say that Verizon has betrayed that trust relationship by selling users’ location information to government agencies.
Many customers have complained that Verizon charges them for extra data usage that they haven’t used. It would be fair if the telecom brand charges them only for the services that customers are using it.
Telecom and customer service companies are supposed to protect the interest and personal data of the customers. When a brand fails to protect the private data of its users, then it jeopardizes their trust. However, when hackers hacked the company’s database and gained access to the personal data of millions of customers. It tainted the company’s image and brand reputation to a great extent.
Reliance on the US Market
According to an estimate, Verizon has over 68000 subscribers in 2020 in the US market. It means that the telecom brand is heavily relying on the US market as its main source of revenue. It’s not good marketing and business strategy.
Opportunities available to Verizon
Verizon should consider expanding and diversifying its portfolio. Now, telecom should add more products like autonomous vehicles, smart cities, augmented reality, and many others. The company should exploit the 5G technology and improve its sustainability.
Merger & Acquisitions
Verizon has made various acquisitions over the years and they have enabled the telecom brand to expand its market share. For instance, the Alltel acquisition helped the brand to beat AT&T and take over the market. Therefore, Verizon should keep on acquiring and merging with other smaller wireless brands to expand its market share.
The target market of Verizon outside the US market is various governments and businesses and companies. However, the global customer market has great growth potential. The telecom brand should expand its market and target global wireless customers.
The pandemic of covid-19 has promoted the culture of work from home because of the lockdown and shutdown of businesses. Companies like Zoom exploited the opportunity and excelled during the pandemic. However, Verizon has also recently bought BlueJeans to grow in the video conferencing field.
Threats Verizon has to face
The pandemic of covid-19 has pushed the global economy into the deep hole of recession. It caused worldwide unemployment, lower purchasing power, and an uncertain economic environment. The whole scenario decreased Verizon’s annual revenue and profitability.
Telecom companies like Verizon are always on the verge of cyberattacks. Any such incident could cost the company millions of dollars of the lawsuit and break customers’ trust. For instance, a change in security settings accidentally released the personal data of over 6 million customers.
Telecommunication companies deal with the sensitive information of the users, and that’s why they have to face strict regulations. Any change in policy and introduction of the new laws could impact the company’s functionality.
T-Mobile and AT&T are some of the main competitors and fierce rivals of Verizon in the telecom industry. The competitive environment puts extra pressure on the company to increase market share and earn more revenue.
Conclusion: Verizon Swot Analysis
After a careful study of the swot analysis of Verizon, we have concluded that Verizon is indeed the world’s leading telecom company. Data privacy issues, cyber-attacks, lawsuits, and strict regulations are some of the main competitors of the company. Verizon should utilize its brand value and resources to expand its market share and product portfolio.