Verizon communication incorporation got a certificate of incorporation in 1983. It is a holding company that works through its subsidiaries to offer communication, information and entertainment products and services to individual clients, business agencies as well as the governmental agencies. The services offered by this organization include voice, data and video services and solutions through the wireless and wireline networks. The company offers these services to consumers in North America as well as to carrier businesses and government customers both in the U.S and around the globe. Since the incorporation, the company has remained competitive over the years and has a bigger market share compared to competitors. In this article the Verizon competitive nature, good cooperate strategy and innovative culture are evident to the key contributors of the constant growth of the organization.
Overview of Verizon Market Performance
Verizon communication incorporation market share has been increasing since the conception of web 2.0, and this is based on their approach of targeting the teens and millennials, who are the frequent users of their services. Verizon has recently placed an offer to take over Yahoo cooperation. This is an indication that the company is at its best and is capable of managing its activities together with the ones being undertaken by Yahoo. One of the reasons Verizon wants to take over Yahoo is the fact that the company uses some services from Yahoo in order to offer those services that are considered attractive to teens and millennials. The deal will be beneficial for Verizon because it will avoid the cost of leasing Yahoo services, and this is an illustration of a good strategy by the organization that forms a part of its competitive advantage.
Verizon in the Competitive Environment
Verizon has managed to outperform other organization in the telecommunication industry that is highly competitive with competitors such as Google, Yahoo and Apple. Despite being in the competitive environment, Verizon has managed to maintain its position as the leading organization in providing telecommunication services and products to its client. This is evident by client’s satisfaction and increasing interest from investors to invest in the organization. The following cash flow ratios for a period of four quarters are an evaluation of the good performance of the organization.
From the cash flow ratios, by the operating cash flow growth, it is evident that the cash flow has tremendously reduced. This is an indication that the efficiency of the organization has been increasing over the years. Increasing rate of activities is an indication that the level of sales is high, and the revenue is significant. This also shows that the revenues have been increasing since 2005 to 2014 and the trend is expected to be the same due to the increase in demand for the services and products offered by the organization.
The continuous success of this organization can be attributed to various factors, but the main ones are unique products of the company, its efficient management and strategies.
Company’s Unique Products
The company offers unique products, which are of high quality compared to the competitors. The organization encourages innovativeness that leads to the development of highly competitive products. For instance, the company is regarded as the pioneer of 4G LTE wireless technology, which was developed more than five years ago and in a few coming years it will be developing a fourth generation wireless technology. These services are highly needed by the portable computer users as tablets and phones (Sheffer, 2015). Due to this, it is a good place to make an investment because in the long term the services of this company will be still needed. Even though it faces competition from AT and T and sprint, Verizon has managed to outstand them because of its unique quality products. This is evident from the overall growth in revenue gained from a wireless network. The company’s wireless revenue network has grown to 5%. Equipment’s revenue for the organization amounted to 63% thus showing the competitiveness of the organization (Wagner, Balog, & Sincere, 2012).
According to Wagner, Balog, and Sincere (2012), the organization provides the equipment that is of a high quality at low cost. This makes it possible for the customers to upgrade to newer versions of the services and a product offered by the company (Sheffer, 2015).
The organization strategy of this cooperation is a key factor to achieve success and to encourage innovativeness in the organization. For instance, it includes services diversification that encourages the utilization of their networks such as the Over the top Video, which is to be launched. This service will enable users to stream videos using their hand held devices. It is aimed to be a complementary service to its FIOS TV services. This service will encourage most of the users to move to the fourth Generation subscription that is considered by the management to result in high returns (Hoerth, 2015).
Another strategy that Verizon has been using is the acquisition of some of the competitors’ companies or investing a large amount of capital into competing companies. For instance, the acquisition of the AOL.com, which was likely to offer stiff competition to the company, is one of the strategies that ensures the organization remains competitive in the area (Hoerth, 2015).
Another strategy that is evident from the operation of Verizon in contributing to the success of the organization is the provision of white labeled services. These are composed of services that are sold to other organizations, which later sell them as their own. This has made it possible for the organization to avoid the costs associated with the marketing of some of their products since the companies do it on their behalf. Consequently, this approach has made it possible for the organization to reach a large volume of population share (“Verizon: Dividend contender or pretender?” 2015).
Good management creates a good platform for carrying out business activities by ensuring good relationship of activities in the organization. The management of the Verizon is very strategic and encourages innovation among its employees. Just like Google-Verizon motivates their employees to come with new ideas with the aim of satisfying their customers. Management supports the workers of the organization in their initiatives that match the goals of the organization thus enhancing the innovativeness of the company. Teamwork is highly appreciated, and the managers are from different parts of the world thus bringing different skills that are beneficial to the organization (“Verizon: Dividend contender or pretender?” 2015). Good management is advantageous to the investors because it increases the level of customer’s satisfaction consequently increasing the revenue of the organization.
From the analysis, it is evident that the competitive advantage of Verizon cooperation is attributed to its innovative culture, good cooperate strategies and its competitive nature. These factors have made it possible for the organization to increase its market share while keeping its expenditures as low as possible, thus increasing the profit margin and consequently positively impacting on the dividends per share.
The company focuses on the technological product production and service offering. The strategy of the organization has also enabled it to remain competitive as well as the management. The approaches taken by the management in their investment are aimed at increasing the profit margin hence increasing the profit from the market. Some of the steps taken by the organization are the acquisition of competitors, encouraging innovation and operating as a white labeled company. These strategies have enabled the organization to reach a wider population of the market across the globe. Another strategy is using low costs for a high quality of services and products.