Firms strive to increase there market share and Verizon communications Inc is not an exceptional from such objective. It is for this reason that the company has to analyze the political, economic, social and legal factors before embarking on marketing strategies such as market segmentations. Because of changing business environment brought about by intense competition in the information technology industry, it will be an ideal situation for the company to constantly evaluate and examine its market competitiveness in terms of the product it offers to the market; under this case in information technology solution products. Therefore, Verizon communications Inc has the duty to critically analyze any existing strengths, weaknesses, opportunities and threats that might affect the company's production and profitability in long term. Marketing managers should embrace the concept of all inclusive decision making process in order to formulate viable and marketing strategies that will boost the competitive edge of the company over its rival firms. The company can only cope with such changing business environment if it constantly carries out research in the market. It should be noted that no matter how attractive an opportunity can be Verizon communications Inc cannot fully utilize it if it does not have the distinct competencies to handle it.Introduction
Firms are increasingly faced with many challenges as a result of changing business environments which has brought about competition among various firms. In order for firms to cope with such competition brought as a result of rivalry in the market, the respective management has to formulate suitable strategies that will enhance their survival and continuity in their businesses.
This study will therefore focus on Verizon communications Inc as a broadband and telecommunication company. It will investigate the current business strategies used by the company in its attempts to meet it objectives.Company Description
Verizon communications Inc. is one of the largest American broadband and telecommunication companies that are components of the DOW 30 companies in the United States. Verizon founded in 1983 when Bell Atlantic acquired GTE which was by then a large independent local exchange telephone company . Its name originates from veritas and horizon. The company's headquarters is in New York and it offers services such as; broadband internet services, local wire line, wireless telecommunication services, television services etc. As of 2007, the company has a total revenue of $93.22and more than 230,000 employees in throughout the world (Verizon's press release, 2007).Mission and Vision
Mission statement describes the Verizon's fundamental purpose in the surrounding society especially with regards to products or services that it offers to its potential customers. It is also argued that a mission statement must clearly depict some essentials such as the purpose; under this, it is basically what the Verizon is doing and the reasons for its existence in the first place. A mission statement is defined as a statement of what an organization aspires to carry out in its business endeavours. In essence, it shows the main reason as to why an organization exists in its business settings. Generally a good mission statement should be broad, visionary, motivational, brief and concise, easily comprehendible and realistic in its nature. (Verizon's press release, 2009)
The other crucial element that it should have is that of the strategy where it must depict its products that it plans to offer and its subsequent competitive position and the competencies that the company will utilize in order to succeed. Verizon has over the past years formulated a plan of actions such as diversification and production of quality products that meet the criteria of the customers and thus in the process acquired competitive edge over its main competitors in the market. A good mission statement should also have policy and standard of behavior i.e. the mission need to be translated into daily events such as providing quality services to its customers.
Verizon recently released a new Mission Statement. With this Mission Statement a new set of "Core Values" was also introduced. The "Core Values" of: "Customers First - being the Biggest and the Best" "Quality and Innovation "Shareholder Value" "Respect for Employees" "Integrity" and "Personal and Team Commitment" are what will tie Verizon's strategic business plan of a "One Source" and the Mission Statement together.
Although the change to "One Source" is just being rolled out across the country, it is actually the final phase of major change initiative that has spanned several years. The "merging of over 2,800+ M&P's (Methods and Procedures) and over 3,000 policies - reducing the verbiage, improving and redesigning the format and content, will yield high results. The cost involved for these changes are all nominal since all of the documents are prepared and distributed by the in-house Operations and IT Department, but the results could save hundreds of thousands of dollars and countless hours of time for employees. (Verizon's press release, 2009)The Products and Services
The products and services offered by Verizon include; VOIP, data and IP services, internet access security, IT solutions and hosting, managed networks, premises equipment, contact centers, conferencing, voice, solutions e.g. mobility and business continuity, segments e.g. governments, education and wholesale services.Situational Analysis
For any contemporary company to survive the growing competition and to effectively utilize its opportunities, a situational analysis commonly referred to as PESTLE analysis is very critical and all firms including Verizon communications Inc should utilize this kind of market analysis. The aim of Verizon communications Inc has always been to become a market leader in computer solutions production globally by diversifying and reaching to many new markets and an analysis of political, economic, social, technological and legal factors is of benefit to the its operations. However, research indicates that through such analysis, the company has done well in many countries and thus in the process gained a large significant market share over time. Through this situational analysis, the company therefore should consider the following concerns:Political Factors
The first aspect is that of political issues or factors which involve analyzing the political systems of the countries that a firm intends to invest at. From the company's profile it can be deduced that Verizon communications Inc did and constantly carry out such analysis of political factors in their areas of interest. It is also noted that the company has constantly opted to invest in countries that adopt capitalism system of government rather than those countries that are communists in nature. Political instabilities should be considered when considering where to invest at and Verizon communications Inc management has considered such an issue when marketing its computer solutions products in various target markets and in the process has avoided the issue of suffering losses through such events. (Lee and Carter, 2005)Economic Factors
The other factor which is very important to all companies including the Verizon communications Inc is that of factors of economic conditions which may hinder the running of a business. From the previous research it can be noted that the company has constantly evaluated such factors in order to run there business smoothly. Economic factors that must be put into consideration include inflation which affects the business of the firm for example in cases when it is high, there will be increased rise of prices because of increased money supply and thus the customers might not afford to buy. Other economic factors include balance of payments, counter trade, fiscal and monetary policies among other factors. After a detailed and cautious research of Verizon communications Inc it is evident that the company does not face a lot of such economic factors in their areas of investments and that has been the reason why it has been doing well. However, the company faces economic factors such as inflations and changes of monetary and fiscal policies and should focus on making its reliable projections of the future expectations. (Lee and Carter, 2005)Social Factors
Another factor is that of social factor which has been used by many firms including Verizon communications Inc to constantly evaluate or assess issues like income sources of potential customers, social systems and structures, educational, religion and family backgrounds which may impact negatively or positively the conduct of business and in this case marketing of its products. Since social factors influence beliefs, interests and attitudes of the customers it has been and will be prudent for Verizon communications Inc to evaluate the above factors. The record of the company is not bad but however, it should do more on such issue of attitude of the customers in order to attract and retain many customers of computer products. (Lee and Carter, 2005)Technological Factors
Another key factor of situational analysis is that of technological factors which is nowadays considered as the root of gaining competitive advantage over rival companies by firms in their respective markets. Through globalization, superior and new technologies have been invented and have boosted the marketing activities of businesses including that of Verizon communications Inc in the market arena. Computerization has been the key in-thing in the Verizon communications Inc marketing operations since it has made easy and reliable to carry out business transactions such as record keeping and retrieving of information, for example tracking customer's records in order to supply its products if he or she re-orders it. The introduction of e-commerce for example has enabled Verizon communications Inc to market its product and invent new markets in many countries globally. Such technologies saves costs and time that could have eaten the company's profits and research reveals that the company has used such saved funds to further other investments and activities. Also through electronic financing procedures Verizon communications Inc has been able to carry out its business smoothly without cash flow interruptions. The use of emails and chatting has also contributed immensely to the success of the organization employees of the company communicating instantly without many communication barriers. (Daniels and Caroline, 1993)Legal factors
Another situational factor that necessitates analysis is that of legal factors that might affect a business which varies from one country to another. Verizon communications Inc has invested in many countries and a legal issue exists, however, it has done well through careful analysis by the management before conducting these transactions. Such factors like legality of the business must be considered and Verizon communications Inc has done well in its target markets because computer solutions manufacturing and sale of IT products are not illegal business activities and can be carried out anywhere in the world. However, at some instances, the government has imposed restrictions on IT products that are considered to be misleading to the members of the public. (Daniels and Caroline, 1993)SWOT Analysis
Modern businesses are faced with changing business environments and Verizon communications Inc is not exceptional from facing such changes within their business context. By carrying out SWOT analysis, environment analysis is very decisive to corporations and it is usually analyzed in two extents; the external environment and internal environment examination within the business perspective. Research reveals that the analysis of external environment illustrates opportunities and threats that exist in the market for a firm that may be either present or impending. On the other hand, internal environment examination depicts the strengths and weaknesses that the business may face in the market place. (Anthony, 1998)Strengths
Strength in this context can be identified as that distinctive ability posed by a firm and if the company utilizes such an opportunity it can succeed and can gain competitive advantage, over its rivals in the industry. The most common strength associated with Verizon communications Inc is that of being a market leader in the IT industry. Research indicates that Verizon communications Inc is better placed than its main rivals in the market in that it has significantly large market share which is attributed to its diversification to various countries in the world, for example it has opened many subsidiaries in nearly all continents of the world. It is also reported that the company has a strong brand name of its products which have significantly aided the company in terms of achieving a large market share. The other strength that the company has is that of the best marketing channels that have aided marketing of its communications solutions and IT products to a wider range of customers. Through e-commerce and particularly the use of internet has boosted the company's chances of exploring new markets for its products that they manufacture. (Anthony, 1998)Weakness
Weakness too in this context can be referred to as any dimension of a firm that possibly will deter the accomplishment of set objectives by the firm and usually considered to comprise the company's resources, capabilities and assets that are not fully utilized. From the company's profile it can be noted that Verizon communications Inc has weak policies, procedures and regulations that may deter the meeting of target performance of the corporation in some target markets. It is also reported that recently, the employees are not motivated to work and there has been complains regarding low pay and poor working conditions among others although such reports have not been proved. The management of the company should therefore look for ways in solving such problems that may affect adversely the performance of the employees and thus the overall performance of the company.Opportunities
For companies to achieve the set objectives, they have to identify and devise events or features in the business external environment that will give them an added advantage or chance of performing well than their competitors, such an event or feature can be referred to as an opportunity because it will create more chances to the company of increasing the current proceeds through acquiring a significant market share. Verizon communications Inc has opportunities that if utilized will be of great benefit to the firm because it will lead to exploring and reaching to more new markets. With regards to the emerging new markets of communications solution systems and IT products in some countries particularly in African countries, the company can take advantage of such opportunity and thus increase its market share and in the process increase its market share. Research indicates that there is a greater demand for such products in Africa and the management of Verizon communications Inc should open subsidiaries in some of those countries after carefully analyzing the situational analysis in those potential markets. Since Verizon communications Inc is among the market leaders in Information technology solutions systems and IT products it is perceived to be having a well developed financial foundation and thus does not face any liquidity or cash flow problems. It is for this reason that the company should explore new markets and can compete across the entire market without fearing that competitors can outdo them financially. However, before competing Verizon communications Inc should carry out cost benefit analysis in order to avoid unnecessary expenditure. (Anthony, 1998)Threat
In business context, a threat is regarded as an event which if not taken care of it may possibly deter the accomplishment of company's goals e.g. customers declining income and competition among other events deemed to causing danger to the operations of the business. Verizon communications Inc is basically faced with intense rivalry in IT solutions production industry since many firms have opted to join the market because it is considered profitable. In fact, in some market segments particularly in Japan there has been a significant drop in terms of the corporation market share because new firms has entered the industry. Globalization concept has brought about new inventions and Verizon is faced with the task of coping with such innovations, for example the task of training and development programs to educate the employees on new technologies might be costly and difficult to acquire such as the use of on-line marketing techniques and networking facilities. (Bagley and Savage, 2006)Strategy and Strategic Management
Strategy is a term that is derived from military and it implies to a calculated means that a firm uses to attain its long run as well as short run objectives. Therefore, Verizon Communication Inc. strategies implies to plan of actions that the firm utilizes in order to attain its goals.
In today's business world, competition has highly become competitive, budget-oriented planning or predict-based planning approaches are not sufficient for firms like Verizon to survive and flourish. Porter (1985) clearly states that, for a company to survive and flourish in this contemporary competitive business world, it has to engage in strategic planning or management. Therefore strategic management clearly defines firm's objectives and examines both the inner and outer situations to formulate a strategy, implement that strategy, evaluate its progress, and make any adjustments where necessary in order to stay on the track. Such strategies formulated by Verizon Communication Inc. include the following;Marketing Strategy
Marketing strategy is a plan of action in which the company has to utilize in order to achieve its stated goals of increasing sales and hence the proceeds. In order to formulate an efficient and effective marketing strategy Verizon communications Inc has dealt with issues such as marketing needs and carrying out market research. (Cullen & Parboteeah, 2005)
The following strategies have been utilized by Verizon communications Inc in the production of its products and it has succeeded over the past few years:
Gap analysis; this is said to be a planning procedure which typically recognizes possible underperformances in future performance and critically considers how it can be filled excellently. Verizon communications Inc has done this by utilizing forecasting techniques such as time series analysis which has helped it to forecast on the performance of some market segments in different countries. This has aided the company to make decisions such as closing the business branches that does not yield good returns and concentrate on that achievement well. Bagley and Savage, 2006 notes that to effectively carry out gap analysis, it will involve comparing sales and revenues of the company, extrapolating them in to the future founded on past development and deliberation of issues that may affect proceeds.
The other strategy that the company has opted to do is that of market development whereby it comprises coming up with new markets for the existing IT products. Such new markets achieved may be dissimilar geographically; new market segments or inventing new purposes for the existing IT Products in all its markets. However, the management of Verizon communications Inc should be sharp in formulating speedy, effectual and creative promotion activities which if it succeeds it will yield considerable returns in future years for the company. (Bagley and Savage, 2006)
The other strategy that the Verizon communications Inc has focused on is that of product development whereby the marketing strategists of the company have revamp and reposition the IT solutions products or completely introduced new products to there present markets that have meet the customers' expectations and needs. (Brassington & Pettitt, 2000)
The other key strategy suitable for Verizon communications Inc is that of diversification whereby it will involve the company exploring new markets and try to market both the existing and the new products. Research shows that Verizon communications Inc for example is facing a crisis whereby customers are not buying its products because they have already acquired before or they have sourced it somewhere else thus necessitating the company to move to new areas. Though it is a risky marketing strategy, it will be an ideal for Verizon communications Inc to employ this strategy especially in areas perceived to be with less competition and it will be a success if particularly used as a long-term strategy.
The company should also consider adopt a strategy of market penetration by trying to market the products to rival markets because it carries less risk. This strategy will necessitate Verizon communications Inc to invent new ways of increasing sales of their products in the already existing markets. It is considered a low risk strategy particularly when the target is not already saturated. (Brassington & Pettitt, 2000)Porter's Generic Strategies
Michael Porter is a well-known American academician who focused on issues of management in economics and more specifically the need to build competitive strategy and competitive advantage in firms. He is credited for outlining the fives forces of strategic analysis; strategic groups, value chain, generic strategies, marketing positioning and product differentiation. He summed these forces to three main generic strategic orientations which Verizon Communication Inc, has to utilize in order to succeed. The first one is the growth strategy that includes the integrative growth, expansive growth and intensive growth all of which are aimed at penetrating the market that may be saturated with competition. The second is the product market strategies that enable the firm to develop products that will satisfy the needs of the customers. It also includes the development of the markets and products alike. In fact, Porter explains that there is need to expand capacity of a firm through product-market development strategy. The third one is the integrating and diversification strategy that involves the combination of the first two strategies in order to come up with a competitive strategy for the firm.
Although these strategies have a distinguishing feature that combines the need to answer the question of why, how and when there is an opportunity for Verizon, they have some differences. The product market development strategy focuses mainly on the risks that Verizon can take to develop the market and the product in general. The diversification s strategy entails the growth of opportunities, which are outside the current Verizon competence. Vertical integration strategy allows for the gain in operation economies such as low cost production and controlling the supply in demand in order to assimilate all sections of Verizon Communication Inc. such as management, innovation and productivity. One of the main reasons for market penetration strategies by Verizon is to dominate the market by all costs and standards given the right mixture for production. However, it should be noted that the three strategic orientations described by Porter are very broad and varied even though all should be aimed at improving the productivity, efficiency and development of Verizon Communication Inc.Future investments
With greater opportunities for expansion, the company should plan to venture into the South African market and the business is therefore expected to be introduced within the next four months. Since the South African market offers a larger customer base, there the business will attract greater investment in terms of an increased human resource. The company intends to employ 5-6 salesmen in its South African branch and will potentially take 20 contracts per salesman which will translate to $ 7.2milion in sales. This kind of sale will put the business in a good position hence able to serve the region betterImplementation, Evaluation and Control
Verizon communications Inc should implement its marketing strategies particularly in the identified target markets. Implementation is putting in to action whatever plan or strategy that the management had formulated and therefore human resource is the most crucial asset in this stage. Research indicates that any company must motivate and provide clear direction to its human resource in order to attain its objectives. Therefore, Verizon communications Inc should clearly identify the needs of its employees and try to meet them in order to give them an ample opportunity to serve diligently and dedicated to the company. By offering a competitive package and offering performance contracts to the employees will ensure that they perform to the fullest because they will be highly motivated to work. Good leadership and management skills will be essential to Verizon's management staff in order to get command respect of the employees. (Hilltop and Sparrow, 1994)
Previous studies show that for every company to succeed including Verizon communications Inc in its marketing activities it should constantly evaluate its production and marketing activities in the market place. This will involve the management of Verizon communications Inc comparing the actual sales and projected sales of the IT solutions products in the identified market segments. This constant evaluation will ensure that its products retain its market share and at the same time provide an opportunity to decision makers of the company to identify the markets that can be retained and others that can be done away with in the company's plan. Verizon communications Inc should also concentrate on monitoring the already existing markets of the company in diverse segments in order to ensure profitability and success of the organization.Conclusion
Verizon communications Inc is among the current market leaders in the information technology industry and therefore stands a better chance of attaining a significant market share as a result of the brand name of its products that are regarded to be of high quality. The concept of globalization cannot be written off either since many firms including Verizon communications Inc should diversify to various countries and there are problems and opportunities associated with such globalization. Therefore the company should formulate strategies that are considered global in nature in order to meet the current expectations of the customers in the target customers. Such strategies like build, harvest or divest should be considered by the Verizon communications Inc when assessing the performance of its product in its target markets.
The management of the Verizon communications Inc should focus in the future and particularly focusing to both new and existing customers' needs and expectations. From this study, it can be deduced that Verizon communications Inc is a customer-focused business. Therefore the available knowledge of customers and markets should facilitate Verizon communications Inc to construct and develop an extensive range of IT solutions products that are considered relevant to its target customers as well as formulating efficient and effective strategies to tap new IT solutions markets.Reference
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