Verizon Wireless Multi-Department SWOT Analysis

Introduction

Verizon Wireless was formed from a massive merger that brought Bell Atlantic Mobile together with a number of other major wireless service providers in 1995, establishing what would become the largest wireless carrier in the United States. At present, though Verizon has many competitors, none are as large or have as wide a reach within the country. The SWOT analysis provided here for each area of Verizon's business assesses the current realities facing a company of this scale in an economy that remains challenging for decision-makers and business leaders across all industries.

With respect to its operations, Verizon Wireless is unparalleled. It "is one of the strongest competitors due to the foundation of its large nationwide service area and strong customer base. With two quarters of 1.9 million net additions, it has set the bar for competitors to reach" (BW, 1). This is based on a convergence of highly visible advertising tactics — via television, radio, billboard, and sponsorship — with a service quality that is unmatched. Boasting a wireless network with limited gaps in service reliability, Verizon demonstrates particular competence in wireless service quality. This is its most distinctive competitive strength, with the fewest dropped calls recorded by its customer base and the most expansive calling area in the industry.

Operations

Among its weaknesses, Verizon has shown too great a reliance on the clearly obsolescent landline. Its continued interest in serving as a landline provider has prevented it from taking the necessary steps to cushion the company from inevitable losses in this area. In a shrinking segment of the market, Verizon's leadership has recognized this as a core competitive weakness. According to Carew (2008), "Verizon reported an 8.1 percent total phone line loss, including business and residential customers. Residential access line losses were 10.6 percent compared with 10 percent a year ago. Chief Operating Officer Denny Strigl said the losses were due to competition and described them as unacceptable" (Carew, 1). It is not entirely clear that competition is the primary reason for these losses. It seems more appropriate to conclude that they stem from a fundamental shift in the marketplace. Verizon demonstrates a clear weakness here by failing to engage that shift, choosing instead to maintain a middle ground with a dying technology.

Where competition with other providers is concerned, a number of additional issues emerge. Specifically, Verizon has sustained damage from its failure to reach an agreement with Apple on the iPhone. While Cingular and AT&T continued to attract new customers drawn to what was widely regarded as the most innovative consumer device available, Verizon missed out on new subscribers due to its device provider preferences. Another competitive area — one with a more positive outlook for Verizon — is FIOS, which is designed to bring cable television competition to local markets. This presents a likelihood of growth in a new sector as Verizon targets competitors in the television market. Most markets demonstrate a genuine need for the consumer-oriented competitive pricing that FIOS promises to provide.

Verizon is particularly strong in the area of Management Information Systems. It has espoused and demonstrated an IT policy that incorporates the human needs of the organization with flexibility. Verizon's own press release on the subject states that it is "important for company leaders to define a realistic roadmap for critical IT infrastructure and plan for additional load on the workforce during the transition, and to communicate this information to employees effectively" (PR Newswire, 1). This positions Verizon as having a particular competence in designing systems managed by human operators. In recent years, Verizon has dedicated considerable effort to enhancing its customer service operations by building more effective universal customer information systems and more reliably trained personnel.

One weakness in this area has been the pressure induced by globalization. Verizon had spent a number of years pursuing an IT orientation that appeared innovative at the time. The combined forces of globalization and technological advancement created a scenario in which customer service issues were handled through a combination of automated dialing systems and support technicians operating from call centers in countries such as India and the Philippines. Though these measures drastically reduced the expenses associated with consumer demands and customer service, they also drastically reduced the effectiveness of the department. The orientation of information technologies toward a less personalized customer service approach proved to be a faulty strategy, and Verizon is now moving away from it. This primary weakness is increasingly a thing of the past, but the adjustment process — which has notably incorporated a return to domestic hiring practices — continues even today.

Issues such as globalization and the reduced cost of overseas customer service labor, which many competitors have chosen to exploit, are recognized by Verizon's leadership. However, it is ultimately more important for Verizon to build an information system channeled through personal and flexible service representatives. Verizon is today moving back toward an emphasis on customer service as a means of retaining its already massive customer base.

Management Information Systems

The Human Resource Management picture at Verizon presents a mixed outlook. Among its strengths, the company has succeeded in developing a workforce that is well-educated, effectively trained, and oriented toward stronger customer service. As Verizon moves back to a staff that is geographically local and more culturally attuned to the demands of American consumers, it demonstrates increased effectiveness in meeting the ambitions of its own stated goals. Even through mergers, acquisitions, and economic downturns, Verizon has espoused an approach of openness and honesty with its staff. Its press release on the subject notes that in such contexts, "there may be significant turmoil and uncertainty among employees of an acquired organization. IT executives should communicate information to their employees in a timely, easy-to-understand manner to stave off productivity loss and ill intent due to speculation and fear" (PR Newswire, 1). This presents Verizon as a company attuned to the needs of its many operational units.

However, there is also considerable evidence that its franchising model has led to some level of disconnect from the central corporate structure. Many small outlets that are independently owned and operated tend to take on the characteristics of their own internal management. This results in pricing inconsistencies with respect to devices, policy inconsistencies with respect to product replacements, and a distinctive inconsistency in the demeanor and training of employees. The result is that Verizon faces a meaningful Human Resources challenge, with many of its outlets failing to represent the brand consistently or positively.

This points to an area where Verizon must confront genuine structural issues. In the current economic climate, it is imperative that Verizon maintain these independent outlets, as it is not realistic to consider absorbing their personnel and physical locations into the central corporate structure. Indeed, the company is already facing cutbacks that will significantly impact Human Resources. From its own leadership, "if an economic slowdown did start to affect demand, Verizon could avoid a financial impact with spending cutbacks, such as workforce reductions. Verizon in the fourth quarter made 4,000 of a planned 9,000 job cuts" (Carew, 1). This demonstrates the severity of the economic crisis even for companies like Verizon, which possess broad reach and a wealth of contracted customers.

In the area of research and development, Verizon is at a point of disadvantage. As noted above, its failure to establish a contract with Apple for the sale of the iPhone caused it to miss a significant opportunity to attract new subscribers. This is a weakness in research and development, particularly given that Apple was widely regarded as the most innovative consumer technology company of the era. This failure is compounded by the failure to recognize research indicators pointing to the coming collapse of the fixed-line phone industry. The Carew report notes that "Verizon promised a strong 2008 and said it was not being hurt by U.S. economic concerns, but investors still worried that weakness in its fixed-line home phone business would worsen if the economy slows further" (Carew, 1).

Conclusion