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
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
Voice and Data
“ 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
Profit Margin (ttm)*:2.39%
Operating Margin. (ttm):17.42%
Return on Assets (ttm):5.19%
Return on Equity (ttm):11.95%
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
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):
Reliable / Robust WirelessNetwork
Marketing / Brand Awareness
Corporate Strategy/Joint Venture
Financial Performance Position
Advanced Fiber Network
Declining Access Lines
TV services limited / shared
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.
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
Verizon’s Top Three Strategies
Pursue 4G Technology
Transition from CDMA GSM
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
- Tools & framework available to resolve any customer problems
- Passion & Training
Place to Grow
Get Degree Verizon Pay
Medical / Health Benefits compensation for tuition
Day care program
Organizational Culture (current)
- 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
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
- Product Training
- Geographic Structure
- 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)