Verizon communications inc.
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  • 2000 – Bell Atlantic and Vodafone combine U.S. wireless operations to form Verizon Wireless Jun 2000 – Verizon Communications Inc. formed with merger of Bell Atlantic Corp. and GTE Corp to become the number one communications provider. 2004 – Verizon embarks on next generation broadband services (EV-DO, FiOS) Dec 2005 – Acquired competitor MCI Inc. 4 2005 – Verizon becomes first wireless provider to offer a nationwide broadband service 2005 – Wins Frost & Sullivan’s Product Innovation Award 5 2006 – 2007 – Invested $34.6 billion to maintain, upgrade, and expand its technology infrastructure
  • Headquartered in New York, New York Major Operations Hub at former headquarters in Basking Ridge, New Jersey   2007 Total Operating Revenue of $93.5 billion   Employs nearly 235,000 employees Serving customers in over 140 countries   Largest wireless and fixed-line service provider Serving 66 million customers in U.S. and Europe   Operates three business units Verizon Wireless Wireline Verizon Telecom: Deployment of broadband and video network FiOS Network Verizon Business Former MCI operations; serves businesses and government customers
  • http://investor.verizon.com/corp_gov/corp_officers.aspx
  • Services Voice and Data VoIP “VoiceWing” FiOS / Broadband FiOS TV   Info./Dir. Publishing Yellow Pages   Products Handsets Discontinued do to manufacturing pricing issues; bargaining power of manufactures. Accessories Caller ID Answering Machines Headsets Battery Packs Cases Chargers Etc. Calling Cards Phone-In-Cards Able to call anyone in world from own home
  • WHY: (REGUARDING NEXT SLIDE) Should… be Narrowed/More focused Explain their positioning Be proud of their success Create excitement
  • WHY: (REGUARDING NEXT SLIDE) Should stress innovation… Creates barriers to entry Not easily replicated Creates value/utility Neglects to mention any attempt at customer service.
  • Verizon Communications Bring Fiber into the Home FiOS - Create competitive advantage - Pushing advanced services - FiOS TV - VoIP “VoiceWing” Customer Service for the Digital Age CEO Ivan Seidenberg quoted recently in their 2007 Annual Report: “ No one in our industry has cracked the code on customer service for the digital age. Verizon can be the company that does that, and we are attacking this mission with the same kind of consistency, clarity and accountability that we have exhibited in achieving our other performance objectives.” Verizon Wireless Create an Open Network - Any cellular phone will be able to use the Verizon network - Expands market share - Creates huge value/utility Expand Coverage Area Alltel Merger
  • Reference by personal interview to Verizon employee

Verizon communications inc. Verizon communications inc. Presentation Transcript

  • Verizon Communications Inc.
  • Presentation panel
    • Abdul Samad (32)
    • (history, statistics, organizational chart, product n services n mission statement)
    • Muhammad Riaz(40)
    • (vision statement, current strategy, financial analysis)
    • Shah e Rawan(48)
    • (Financial ratios, internal assessment n external assessment)
    • Akhtar Zaib Khan(46)
    • (Swot matrix, strategies n recommended strategy)
    • Waqar(17)
    • (Organizational culture, target market & description
    • Rumelts criteria)
  • History of Verizon Communications
    • 2000 – Bell Atlantic and Vodafone combine U.S. wireless operations to form Verizon Wireless
    • Jun 2000 – Verizon Communications Inc. formed with merger of Bell Atlantic Corp. and GTE Corp to become the number one communications provider.
    • 2004 – Verizon embarks on next generation broadband services (EV-DO, FiOS)
    • Dec 2005 – Acquired competitor MCI Inc.
    • 2005 – Verizon becomes first wireless provider to offer a nationwide broadband service
    • 2005 – Wins Frost & Sullivan’s Product Innovation Award
    • 2006 – 2007 – Invested $34.6 billion to maintain, upgrade, and expand its technology infrastructure
    • Headquartered in New York, New York
    • 2009 Total Operating Revenue of $93.5 billion
    • Employs nearly 235,000 employees
    • Largest wireless and fixed-line service provider
    • Operates three business units
      • Verizon Wireless
      • Wireline
      • Verizon Business
    Statistics
  • Lowell McAdam President & CEO Ivan G. Seidenberg Chairman and Chief Executive Officer Organizational Chart (Current)                   Richard J. Lynch Executive Vice President & Chief Technology Officer                    Dennis F. Strigl President and Chief Operating Officer                   William P. Barr Executive Vice President & General Counsel                    John W. Diercksen Executive Vice President – Strategy, Development & Planning                    Shaygan Kheradpir Executive Vice President & Chief Information Officer                    Marc C. Reed Executive Vice President - Human Resources                    John G. Stratton Executive Vice President & Chief Marketing Officer                    Thomas J. Tauke Executive Vice President – Public Affairs, Policy & Communications                    Doreen A. Toben Executive Vice President and Chief Financial Officer                    John F. Killian President – Verizon Business                    Daniel S. Mead President – Verizon Services Operations                    Virginia P. Ruesterholz President – Verizon Telecom                    Thomas A. Bartlett Senior Vice President and Controller                    Marianne Drost Senior Vice President - Deputy General Counsel & Corporate Secretary                    Ronald H. Lataille Senior Vice President - Investor Relations                    Kathleen H. Leidheiser Senior Vice President - Internal Auditing                    Catherine T. Webster Senior Vice President and Treasurer
  • Products and Services
    • Services
      • Voice and Data
      • Info./Dir. Publishing
    • Products
      • Handsets
      • Accessories
      • Calling Cards
    • “ Verizon’s mission is to enable people and businesses to communicate with each other. We are also committed to providing full and open communication with our customers, employees and investors.”
    Mission Statement (Actual)
  • Mission Statement (Proposed)
    • “ Verizon’s mission is to maintain leadership in communications by continuously stretching the boundaries of technology and providing our customers with the means to communicate in ways not thought before.”
  • Vision Statement (Actual) “ For our Core Goals, we decided on just one: To create the most respected brand in communications.”
  • Vision Statement (Proposed) “ For our Core Goals, we decided on just one: To create the most respected brand in communications through latest technological innovations in products paired with excellent customer service.”
  • Current Key Strategies
  • Financial Analysis Metric Verizon AT&T Qwest Industry Earnings per Share (TTM - Diluted) 1.96 2.06 1.49 1.67* Price / Earnings Ratio (TTM - as of 6/30/2008) 17.48 15.93 2.52 17.25 EBITDA (TTM in billions) 31.51 42.58 4.61 9.09* Share Price Performance (Prior 12 Months) -14.9% -18.6% -60.2% -31.1%** ROE 11.44 11.11 n/a 10.24 Leaders are in bold * Average of ten largest companies (by market cap) in industry ** iShares Dow Jones US Telecom Sector ETF
  • Price Performance
  • Financial Ratios
    • Profitability
    • Profit Margin (ttm)*:2.39%
    • Operating Margin. (ttm):17.42%
    • Management Effectiveness
    • Return on Assets (ttm):5.19%
    • Return on Equity (ttm):11.95%
    • Balance Sheet
    • Total Cash (mrq): 7.21B
    • Total Cash Per Share (mrq): 2.55
    • Total Debt (mrq): 52.79B
    • Total Debt/Equity (mrq): 60.74
    • Current Ratio (mrq): 0.73
    • Book Value Per Share (mrq): 13.64
    • Income Statement
    • Revenue (ttm): 106.56B
    • Revenue Per Share (ttm):37.66
    • Qtrly Revenue Growth 2.60%
    • Gross Profit (ttm): 62.42B
    • EBITDA (ttm): 34.97B
    • Net Income (ttm): 2.55B
    • Diluted EPS (ttm): 0.90
    • Qtrly Earnings Growth (yoy):
    • 146.90%
  • Internal assessment
    • Strengths
    • Reliable / Robust WirelessNetwork
    • Marketing / Brand Awareness
    • Corporate Strategy/Joint Venture
    • Financial Performance Position
    • Advanced Fiber Network
  • Internal Assessment
    • Weakness
    • Geographic Concentration
    • CDMA Technology
    • Declining Access Lines
    • TV services limited / shared
    • Fee Structure
  • External Assessment
    • Opportunities
    • Increasing usage of wireless broadband applications
    • Increasing % of their capital expenditures toward growth-oriented ventures, through reduced debt load
    • Ability to bring cost structures more in line with revenues through consolidations, as work forces are reduced, businesses streamlined, and services further bundled
    • Price reductions for broadband service coupled with demand for faster connections.
    • Using new size to reach further in the U.S. but mainly to expand into the foreign markets.
  • External Assessment
    • Threats
    • Competitor's adaptation of Verizon's core competency in customer service
    • Technological advances and regulatory reforms.
    • Economic slowdown resulting in weaker consumer spending.
    • Competition: AT&T's contract with Apple.
    • CDMA technology's cost benefits coming to an end with advances in GSM
  • SWOT Matrix
  • Verizon’s Top Three Strategies
    • Pursue 4G Technology
      • Transition from CDMA  GSM
    Recommended Strategies:
    • Be the first to bring FiOS into the home nationally
      • Increased Speed, Quality, & Flexibility
      • Opportunity for premier quad bundling
    • Increase Investment in R&D
      • Long Term Evolution
      • Fiber Optic Service
    • Pursue 4G technology (Long Term Evolution) with the transition from CDMA  GSM
      • Initial Target: Europe/ Asia
      • “ Any apps, Any device”
        • Free and wide open network
    • Expand coverage network
    • Expand customer base
    • Opportunity to dominate
    Final Recommended Strategy
    • Employees Own Their Career
    • - Company knows improvement of company & workforce
      • - Company wants workforce to have careers not just jobs
      • - “Customers like current affair & passion.” - Melissa (customer service supervisor)
      • - Trained to be team spirited. Helped each other & help employees to see & overcome challenges
    • Employee Training
      • - Tools & framework available to resolve any customer problems
      • - Support
      • - Passion & Training
    • Place to Grow
    • Get Degree Verizon Pay
    • Medical / Health Benefits compensation for tuition
    • Day care program
    Organizational Culture (current)
    • Motivational Factors
    • - Company wants to treat their job as a career
    • - Continued support to their employees professional or personally
    • - Aspires to further develop their employees standard
    • - Holds motivational meetings
    • - Holds informal affairs for their employees
    • - “Company wants improvement of company and workforce”
    • - Trains employees to be team-spirited to helped employees to see and overcome challenges.
    Organizational Culture (Revised)
  • Target Market Description
    • Geographic : Mostly U.S.; more prevalent in the North Eastern region of the U.S.
    • Age : Male and female, young teens (12-17), college students (18-24), recent college grads (25-30), and families 1 .
    • Ethnicity : Caucasian, Hispanic, African-American, and other non-Hispanic.
    • Education: High school diploma and college grads.
    • Occupation : Students, blue collar and white collar, young and older professionals, executives, business owners.
    • User status : Regular user
    • Usage rate : Medium and Heavy users
    • Loyalty status : Strong
    • Attitude towards product : Positive
  • Target Market
    • Current Market Position
      • Heavily saturated market with a massive user base of over 67.2 million users
      • They differentiate themselves from others through network quality and customer service as shown in ads and also slogans: “We never stop working for you” and “Can you hear me now?” 2
    • Revised Market Position (the above plus)
      • Integrate marketing divisions in different regional areas to better focus on the target market in the area.
  • Strategy: Transition towards implementing 4G technology in order to gain an international footprint. Rumelt’s Four Criteria Consistency – Yes Consonance – Yes
    • Innovate products moving towards 4G technology
    • - Wireless should obtain only 4G conversion
    • Implement Strategy
    • - Product Training
    • - Geographic Structure
    • Transition
    • - Change from CDMA to GSM
    • - Focus on greater global reach
    • Merging International & Current Customer
    • - Vodafone subs will be able to roam on Verizon’s
    Feasibility – Yes Advantage – Yes Verizon has the recourses to implement the technological change. New Innovated Products - Faster, Profitable CPU in the palm of your hands.
    • International Travelers can use GSM (SIM card devices)
    • Opportunity to expand into emerging markets
    • Strengthen Network
  • Thank You