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Verizon communications inc.


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Verizon communications inc.

  1. 1. Verizon Communications Inc.
  2. 2. Presentation panel <ul><li>Abdul Samad (32) </li></ul><ul><li>(history, statistics, organizational chart, product n services n mission statement) </li></ul><ul><li>Muhammad Riaz(40) </li></ul><ul><li>(vision statement, current strategy, financial analysis) </li></ul><ul><li>Shah e Rawan(48) </li></ul><ul><li>(Financial ratios, internal assessment n external assessment) </li></ul><ul><li>Akhtar Zaib Khan(46) </li></ul><ul><li>(Swot matrix, strategies n recommended strategy) </li></ul><ul><li>Waqar(17) </li></ul><ul><li>(Organizational culture, target market & description </li></ul><ul><li>Rumelts criteria) </li></ul>
  3. 3. History of Verizon Communications <ul><li>2000 – Bell Atlantic and Vodafone combine U.S. wireless operations to form Verizon Wireless </li></ul><ul><li>Jun 2000 – Verizon Communications Inc. formed with merger of Bell Atlantic Corp. and GTE Corp to become the number one communications provider. </li></ul><ul><li>2004 – Verizon embarks on next generation broadband services (EV-DO, FiOS) </li></ul><ul><li>Dec 2005 – Acquired competitor MCI Inc. </li></ul><ul><li>2005 – Verizon becomes first wireless provider to offer a nationwide broadband service </li></ul><ul><li>2005 – Wins Frost & Sullivan’s Product Innovation Award </li></ul><ul><li>2006 – 2007 – Invested $34.6 billion to maintain, upgrade, and expand its technology infrastructure </li></ul>
  4. 4. <ul><li>Headquartered in New York, New York </li></ul><ul><li>2009 Total Operating Revenue of $93.5 billion </li></ul><ul><li>Employs nearly 235,000 employees </li></ul><ul><li>Largest wireless and fixed-line service provider </li></ul><ul><li>Operates three business units </li></ul><ul><ul><li>Verizon Wireless </li></ul></ul><ul><ul><li>Wireline </li></ul></ul><ul><ul><li>Verizon Business </li></ul></ul>Statistics
  5. 5. 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
  6. 6. Products and Services <ul><li>Services </li></ul><ul><ul><li>Voice and Data </li></ul></ul><ul><ul><li>Info./Dir. Publishing </li></ul></ul><ul><li>Products </li></ul><ul><ul><li>Handsets </li></ul></ul><ul><ul><li>Accessories </li></ul></ul><ul><ul><li>Calling Cards </li></ul></ul>
  7. 7. <ul><li>“ 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.” </li></ul>Mission Statement (Actual)
  8. 8. Mission Statement (Proposed) <ul><li>“ 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.” </li></ul>
  9. 9. Vision Statement (Actual) “ For our Core Goals, we decided on just one: To create the most respected brand in communications.”
  10. 10. 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.”
  11. 11. Current Key Strategies
  12. 12. 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
  13. 13. Price Performance
  14. 14. Financial Ratios <ul><li>Profitability </li></ul><ul><li>Profit Margin (ttm)*:2.39% </li></ul><ul><li>Operating Margin. (ttm):17.42% </li></ul><ul><li>Management Effectiveness </li></ul><ul><li>Return on Assets (ttm):5.19% </li></ul><ul><li>Return on Equity (ttm):11.95% </li></ul><ul><li>Balance Sheet </li></ul><ul><li>Total Cash (mrq): 7.21B </li></ul><ul><li>Total Cash Per Share (mrq): 2.55 </li></ul><ul><li>Total Debt (mrq): 52.79B </li></ul><ul><li>Total Debt/Equity (mrq): 60.74 </li></ul><ul><li>Current Ratio (mrq): 0.73 </li></ul><ul><li>Book Value Per Share (mrq): 13.64 </li></ul><ul><li>Income Statement </li></ul><ul><li>Revenue (ttm): 106.56B </li></ul><ul><li>Revenue Per Share (ttm):37.66 </li></ul><ul><li>Qtrly Revenue Growth 2.60% </li></ul><ul><li>Gross Profit (ttm): 62.42B </li></ul><ul><li>EBITDA (ttm): 34.97B </li></ul><ul><li>Net Income (ttm): 2.55B </li></ul><ul><li>Diluted EPS (ttm): 0.90 </li></ul><ul><li>Qtrly Earnings Growth (yoy): </li></ul><ul><li>146.90% </li></ul>
  15. 15. Internal assessment <ul><li>Strengths </li></ul><ul><li>Reliable / Robust WirelessNetwork </li></ul><ul><li>Marketing / Brand Awareness </li></ul><ul><li>Corporate Strategy/Joint Venture </li></ul><ul><li>Financial Performance Position </li></ul><ul><li>Advanced Fiber Network </li></ul>
  16. 16. Internal Assessment <ul><li>Weakness </li></ul><ul><li>Geographic Concentration </li></ul><ul><li>CDMA Technology </li></ul><ul><li>Declining Access Lines </li></ul><ul><li>TV services limited / shared </li></ul><ul><li>Fee Structure </li></ul>
  17. 17. External Assessment <ul><li>Opportunities </li></ul><ul><li>Increasing usage of wireless broadband applications </li></ul><ul><li>Increasing % of their capital expenditures toward growth-oriented ventures, through reduced debt load </li></ul><ul><li>Ability to bring cost structures more in line with revenues through consolidations, as work forces are reduced, businesses streamlined, and services further bundled </li></ul><ul><li>Price reductions for broadband service coupled with demand for faster connections. </li></ul><ul><li>Using new size to reach further in the U.S. but mainly to expand into the foreign markets. </li></ul>
  18. 18. External Assessment <ul><li>Threats </li></ul><ul><li>Competitor's adaptation of Verizon's core competency in customer service </li></ul><ul><li>Technological advances and regulatory reforms. </li></ul><ul><li>Economic slowdown resulting in weaker consumer spending. </li></ul><ul><li>Competition: AT&T's contract with Apple. </li></ul><ul><li>CDMA technology's cost benefits coming to an end with advances in GSM </li></ul>
  19. 19. SWOT Matrix
  20. 20. Verizon’s Top Three Strategies <ul><li>Pursue 4G Technology </li></ul><ul><ul><li>Transition from CDMA  GSM </li></ul></ul>Recommended Strategies: <ul><li>Be the first to bring FiOS into the home nationally </li></ul><ul><ul><li>Increased Speed, Quality, & Flexibility </li></ul></ul><ul><ul><li>Opportunity for premier quad bundling </li></ul></ul><ul><li>Increase Investment in R&D </li></ul><ul><ul><li>Long Term Evolution </li></ul></ul><ul><ul><li>Fiber Optic Service </li></ul></ul>
  21. 21. <ul><li>Pursue 4G technology (Long Term Evolution) with the transition from CDMA  GSM </li></ul><ul><ul><li>Initial Target: Europe/ Asia </li></ul></ul><ul><ul><li>“ Any apps, Any device” </li></ul></ul><ul><ul><ul><li>Free and wide open network </li></ul></ul></ul><ul><li>Expand coverage network </li></ul><ul><li>Expand customer base </li></ul><ul><li>Opportunity to dominate </li></ul>Final Recommended Strategy
  22. 22. <ul><li>Employees Own Their Career </li></ul><ul><li>- Company knows improvement of company & workforce </li></ul><ul><ul><li>- Company wants workforce to have careers not just jobs </li></ul></ul><ul><ul><li>- “Customers like current affair & passion.” - Melissa (customer service supervisor) </li></ul></ul><ul><ul><li>- Trained to be team spirited. Helped each other & help employees to see & overcome challenges </li></ul></ul><ul><li>Employee Training </li></ul><ul><ul><li>- Tools & framework available to resolve any customer problems </li></ul></ul><ul><ul><li>- Support </li></ul></ul><ul><ul><li>- Passion & Training </li></ul></ul><ul><li>Place to Grow </li></ul><ul><li>Get Degree Verizon Pay </li></ul><ul><li>Medical / Health Benefits compensation for tuition </li></ul><ul><li>Day care program </li></ul>Organizational Culture (current)
  23. 23. <ul><li>Motivational Factors </li></ul><ul><li>- Company wants to treat their job as a career </li></ul><ul><li>- Continued support to their employees professional or personally </li></ul><ul><li>- Aspires to further develop their employees standard </li></ul><ul><li>- Holds motivational meetings </li></ul><ul><li>- Holds informal affairs for their employees </li></ul><ul><li>- “Company wants improvement of company and workforce” </li></ul><ul><li>- Trains employees to be team-spirited to helped employees to see and overcome challenges. </li></ul>Organizational Culture (Revised)
  24. 24. Target Market Description <ul><li>Geographic : Mostly U.S.; more prevalent in the North Eastern region of the U.S. </li></ul><ul><li>Age : Male and female, young teens (12-17), college students (18-24), recent college grads (25-30), and families 1 . </li></ul><ul><li>Ethnicity : Caucasian, Hispanic, African-American, and other non-Hispanic. </li></ul><ul><li>Education: High school diploma and college grads. </li></ul><ul><li>Occupation : Students, blue collar and white collar, young and older professionals, executives, business owners. </li></ul><ul><li>User status : Regular user </li></ul><ul><li>Usage rate : Medium and Heavy users </li></ul><ul><li>Loyalty status : Strong </li></ul><ul><li>Attitude towards product : Positive </li></ul>
  25. 25. Target Market <ul><li>Current Market Position </li></ul><ul><ul><li>Heavily saturated market with a massive user base of over 67.2 million users </li></ul></ul><ul><ul><li>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 </li></ul></ul><ul><li>Revised Market Position (the above plus) </li></ul><ul><ul><li>Integrate marketing divisions in different regional areas to better focus on the target market in the area. </li></ul></ul>
  26. 26. Strategy: Transition towards implementing 4G technology in order to gain an international footprint. Rumelt’s Four Criteria Consistency – Yes Consonance – Yes <ul><li>Innovate products moving towards 4G technology </li></ul><ul><li>- Wireless should obtain only 4G conversion </li></ul><ul><li>Implement Strategy </li></ul><ul><li>- Product Training </li></ul><ul><li>- Geographic Structure </li></ul><ul><li>Transition </li></ul><ul><li>- Change from CDMA to GSM </li></ul><ul><li>- Focus on greater global reach </li></ul><ul><li>Merging International & Current Customer </li></ul><ul><li>- Vodafone subs will be able to roam on Verizon’s </li></ul>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. <ul><li>International Travelers can use GSM (SIM card devices) </li></ul><ul><li>Opportunity to expand into emerging markets </li></ul><ul><li>Strengthen Network </li></ul>
  27. 27. Thank You