Verizon is the 2nd largest wireless network in the US. The company behind Verizon is Verizon Wireless, or its parent company Verizon Communications. Similarly, Verizon operates in many countries across the globe. However, its primary market is still the US market, where it offers a majority of its products and services. Verizon operates in the Wireless market primarily. However, it also provides services through other segments.
Verizon started its operations in the year 2000. The company was formed as a result of a merger between Bell Atlantic and GTE. The company soon became the largest name in local telephone services. However, due to the developments in mobile technology, that didn’t last long. The company then moved towards the wireless communications business.
Verizon entered the market through several acquisitions of preexisting names in the wireless communication business. Over the years, Verizon has had its ups and downs. However, it has consistently remained one of the top names in the industry. The main competition that Verizon has faced is from AT&T and T-Mobile.
Verizon is a highly profitable company. It ranks among the top companies in the US in profitability. Similarly, it has a high brand value that is among the top names. Verizon generated revenues of $133.613 billion in 2021. It was the highest revenue to date for the company. However, Verizon also reached the $131 billion revenue mark in 2015.
This article covers the SWOT Analysis of Verizon consisting of the company’s strengths, weaknesses, opportunities, and threats. Before jumping into the detail of Verizon’s SWOT Analysis, let’s go through the brief highlight of the company.
Verizon – At a Glance
Given below is Verizon’s company profile.
| Name | Verizon Communications Inc. |
| Website | verizon.com |
| Year founded | 1983 / 2000 |
| Chief Executive Officer (CEO) | Hans Vestberg |
| Headquarters | New York City, New York, US |
| Type of corporation | Public |
| Revenues (2021) | $133.613 billion |
| Company valuation (approximate) | $230 billion |
| Key products/ services | Cable Television, Landline, Mobile Phone, Broadband, Digital Television, IPTV, Digital Media, Internet, Telematics, Wireless Network |
| Key competitors | AT&T, T-Mobile, Cox Communications, Cricket Warless, Comcast, RCN Telecom Services, etc. |
| Key subsidiaries | Verizon Delaware, Verizon New Jersey, Verizon New York, Verizon Pennsylvania, Verizon Washington, DC, Visible, XO Communications, Verizon Hearst Media Partners, etc. |
Verizon’s SWOT Analysis
SWOT Analysis is a tool used by stakeholders to evaluate a company’s current position. It includes identifying a company’s Strengths, Weaknesses, Opportunities, and Threats. Through this analysis, users can identify a company’s competitive advantage and weak points. Similarly, it allows them to evaluate their prospects.
The Verizon SWOT Analysis below involves identifying four aspects of a company’s operations. These include strengths and weaknesses, which are internal factors. Similarly, it also consists of opportunities and threats, which are external factors. These all combine together to provide a better insight into a company’s operations. For Verizon, each of these is as below.
Verizon’s Strengths
Strengths are internal factors that allow companies to obtain a competitive advantage. These are things that a company does right or includes that its competitors lack. Strengths come from internal factors. Likewise, companies may develop them as a result of past activities. In Verizon SWOT analysis, its strengths include the following.
High-Quality Services
Verizon provides various wireless and other solutions to customers. All of these products and services are of the highest quality. Verizon has received been rated the top wireless network by various sources due to this reason. Verizon’s high-quality services have allowed it to attract more customers while also overtaking its competitors.
Technology Development
Verizon has been among the leaders in adopting the latest technology in its operations. The company has incorporated innovation into its products and services to allow customers to receive the best services. For a company the size of Verizon, doing so is crucial. This innovation and development have allowed the company to accumulate more users.
Economies of Scale
Verizon benefits significantly from the economies of scale in its operations. it allows the company to optimize its efficiencies and provide services to target customers. The company obtains products and services on a large scale and also distributes them on a multinational level. It has allowed the company to benefit from lower prices and increase its quality significantly.
Loyal Customers
Through its years of operations and high-quality services, Verizon has developed a loyal customer base. The company’s customers have increased significantly in the past and continue to do so. In the second quarter of 2020, the company reported it has almost 120 million subscribers, only behind AT&T. Through its loyal customers, the company has enjoyed better profitability and increased its competitiveness.
Brand Name
Verizon’s brand name is one of its largest strengths. The company has developed this brand name through years of work in the industry, allowing it to attract more customers. The company’s brand was ranked 19th most valuable by Forbes in 2019. Similarly, it received the 43rd position in the strongest brand globally list by Fortune 500.
Verizon’s Weaknesses
Weaknesses include activities that companies cannot get right, but competitors can. These come from internal factors. In Verizon SWOT analysis, its weaknesses include the following.
Regional Overdependence
Verizon’s activities expand over various countries. However, the company still relies heavily on the US market for a majority of its revenues and profits. The overdependence on the US market is crucial for Verizon as it means that any problems with the market can significantly impact the company’s operations. In the current world of businesses, expansion and diversification are crucial, something which Verizon lacks.
High Prices
Some customers have complained of the higher prices that Verizon charges for its services. The company has high infrastructure costs, which forces it to charge higher prices. It has further limited the company from offering competitive prices, which has allowed some other competitors to take the lead. The company has also lost its lower-class customers to its competitors due to this.
Controversies
Verizon has suffered due to some controversies in the past, which have decreased its popularity among customers. The company has been a part of security breaches, deceptive advertising tactics, privacy breaches, creating a weakness. These are problems that have stuck with the company over its lifetime.
Verizon’s Opportunities
Opportunities are external factors that can result in positive changes for a company. These may apply to a market or industry as a whole rather than a specific company. Opportunities are exploitable. It depends on companies how they convert them into strengths. For Verizon SWOT analysis, the opportunities include the following.
International Expansion
Verizon is a financially sound company. It is among one of the most profitable companies in the US. On top of that, the company has the financial resources to support international expansion. The opportunity is great for Verizon as it can enter any market easily given its resources and expertise. If Verizon uses this opportunity, it can significantly improve its profitability and increase its customer count.
Technological Innovations
As mentioned, Verizon has been one of the leaders in adopting new technologies into its operations. However, there are many new technologies that come up every day. Verizon has the opportunity to use this to its advantage and trump its long-time rival AT&T. Customers also prefer to use and own the latest technology.
Business Diversification
Verizon’s business model is significantly limited to a specific market. The company has the opportunity to diversify its products and services. While continuing with the same products and services allows the company to obtain expertise, diversification is also significantly crucial in the long run. This way, it can also decrease its overdependence on a single market.
Verizon’s Threats
A company’s threats include external factors that can affect its business prospects adversely in the future. Similar to opportunities, threats can come for the market or industry as a whole. Similarly, they can convert to future weaknesses as well. For Verizon SWOT analysis, the top threats include the following.
Competition
Due to the heavy investment required in the industry, Verizon does not have to worry about new entrants. However, the existing competition is enough to provide a serious threat to Verizon. The company is only the second-best in the US after AT&T. Similarly, the lower-end markets are also captured by other smaller competitors. In theory, it can create a problem for Verizon in the future.
Security Concerns
Verizon has suffered due to data breaches in the past. However, the problem is raising every day due to the increase in attempts by unauthorized parties. While the security solutions are also improving, Verizon always faces a threat from unauthorized security breaches. These have the potential to deter the company’s profitability and reputation.
Government Regulations
Government regulations pose a significant threat to the telecommunications industry at all times. Most companies operating within the industry already have to comply with numerous regulations. However, any future regulations can impact its profitability significantly in the future. As mentioned above, however, this threat exposes the whole industry rather than Verizon only.
Conclusion
Verizon is the 2nd largest wireless communication network in the US, with over 120 million users in 2020. The company has been highly successful due to its past operations. Verizon’s SWOT analysis is provided above, which shows its strengths, weaknesses, opportunities, and threats. Each of those represents a unique aspect of the company’s current or future operations.
