Brandon Six
BUS-105-A Intro to Business
Dr. Ellis
Business Case Study
01/05/14
Business Case Study # 1: Verizon Wireless
The origin of Verizon began in 1984, after the United States government antitrust suit
broke up AT&T monopoly.1 This lawsuit lead to the establishment of several communication
companies, one in particular was Bell Atlantic. Bell Atlantic pursued unregulated businesses
such as wireless, internet, directory publishing, and catalog sales of computer parts and office
supplies.2 Although, only a year within the communications industry, already was proven to be
very successful. In 1985, Bell Atlantic offered the first CO-LAN (control-office local area
network) system.3 Then a year later the company introduced switched public data network and
began testing integrating services digital network (ISDN) technology that combined voice and
data transmission over the same lines.4 The company would continue to grow well into the
1990’s. Then in 1999 Bell Atlantic agreed to buy GTE, the giant non-Bell local phone company,
for fifty-three billion dollars.5 Unfortunately, like most major deals, there were complication
during the merge. In order to get around the telecommunication Act of 1996, prohibition against
the regional Bell opening companies offering long-distance services, Bell Atlantic and GTE
proposed spinning off the internet backbone into a new entity Genuity. 6 The two companies
would later get the green light and in 2000 Verizon Communications Inc. i.e.; Verizon Wireless
1
Panek, Tracey. "Verizon Communications Inc." Hovers Inc. October 4, 2014. Accessed October 4, 2014.
http://subscriber.hoovers.com/H/company360/quickReport.html?companyId=10197000000000&newsCompanyD
uns=107212169. Pg. 1
2
Panek, Tracey. “Verizon Communication Inc.” pg. 1
3
Panek, Tracey. “Verizon Communication Inc.” pg. 1
4
Panek, Tracey. “Verizon Communication Inc.” pg. 1
5
Panek, Tracey. “Verizon Communication Inc.” pg. 1
6
Weaver, Heather Forsgren. 2000. “Verizon gets green light”. Rcr 19, no. 25: 3. Business Source Complete,
EBSCOhost (accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3261401&site=ehost-live.
Pg. 2
Brandon Six
BUS-105-A Intro to Business
Dr. Ellis
Business Case Study
01/05/14
was born. As a result of this joint venture Verizon would enter in the corporate world as the
nation’s largest wireless company, with approximately 24. 5 million customers and 4 million
paying customers-usurping AT&T.7
As of September 30, 2014 Verizon Communications brought in $31.59 billion in revenue,
which is up 4.3 percent from last year profit at $30. 3 billion dollars.8 Yet, like major companies
in the United States, Verizon Communications, display both strengths and weaknesses both
within and outside the company. One strength that Verizon displays is that of their extensive
wireless network. At the end of 2013, the company’s 4G LTE network was available to nightyseven percent of the United States population in more than five-hundred markets covering
approximately three-hundred and five million people, including those in areas served by LTE in
Rural American partners.9 Although, Verizon’s wireless network has attracted numerous
customers, like most companies they still display some form of weakness. One weakness is that
the company displays is that Verizon suffers from substantial debt. At the end of March 2014,
the company’s average debt outstanding stood at $103. 2 billion, an increase of $20. 3 billion
primarily due to the acquisition of Vodafone’s forty-five stake in Verizon Wireless.10 Although,
7
Smith, Hilary. 2000. “Verizon is new #1. (cover story).” Rcr 19, no. 15: 1. Business Source Complete, EBSCOhost
(accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3025072&site=ehost-live.
Pg. 1
8
Weiss, Todd R. 2014. Up, While Wireless Unit Gains Another 1.5M Customers.” Eweek 11. Business Source
Complete, EBSCOhost (accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=99046459&site=ehost-live.
Pg. 1
9
2014. “Verizon Communication Inc. SWOT Analysis.” Verizon Communications SWOT Analysis 1-10. Business
Source Complete, EBSCOhost (accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=98131947&site=ehost-live.
Pg. 5
10
2014. “Verizon Communication Inc. SWOT Analysis.” Pg. 6
Brandon Six
BUS-105-A Intro to Business
Dr. Ellis
Business Case Study
01/05/14
as mentioned Verizon in September 2014 brought in 31.59 billion in revenue, the company’s
adjusted debt balances are expected to be around more than $125 billion at the end of 2014.11
Another aspect with Verizon Communication is that there are a number of opportunities
that the company can exploit. One of these opportunities is the increasing adoption of cloud
computing service. The worldwide demand for cloud computing services is expected to grow
from $70.1 billion in 2012 to $158.8 billion in 2014 growing at a CAGR of 51 percent during the
same period.12 Despite, the opportunities there are still threats that can emerge. One major threat
that can cause problems for Verizon, is an impending price war may affect profitability. As part
of their own campaigns, both T-Mobile and AT&T begin to offer their own plans to drive up
subscribers and increase sales. T-Mobile had started providing financing for phones and other
packages, including cheap international rates and approximately $650 to people who switch
services.13 AT&T, in February 2014 lowered its monthly fee for ten gigabytes monthly data
share plan to fifteen dollars per devices, from for forty dollars.14 Although, Verizon as of now
lead the industry in LTE, these plain offered by the companies’ competitors could cause problem
in the future, if not debt with.
Verizon Communications Inc. corporate strategy, is to expand technology within the
United States. The company currently is looking for every opportunity to make FiOS service
available to customers. FiOS can be accessed through Verizon wireless service and devices, and
is also available through Verizon wireless services and such as Microsoft’s Xbox home video
11
2014. “Verizon Communication Inc. SWOT Analysis.” Pg. 6
2014. “Verizon Communication Inc. SWOT Analysis.” Pg. 7
13
2014. “Verizon Communication Inc. SWOT Analysis.” Pg. 8
14
2014. “Verizon Communication Inc. SWOT Analysis.” Pg. 9
12
Brandon Six
BUS-105-A Intro to Business
Dr. Ellis
Business Case Study
01/05/14
game console.15 Another, area that Verizon is trying to establish their influences in, is the
entertainment industry. In 2014 Verizon bought Intel Media, an Intel division that had been
developing a streaming television service under the OnCue brand.16 Combined with Verizon
FiOS service will allows customers to watch programming from any devise at any time.
If I were to make any recommendation for Verizon Communication Inc., I would first
recommend that to expand on their corporate strategy. As mentioned, Verizon has already shown
signs of expanding their market from the communication to entertainment industry by partnering
with companies like Microsoft and Intel. Yet, I feel that if the company expanse further, like in
education. By introducing products that could be beneficial to assisting students from public
schools to college students, Verizon not only can expand their influences further, but also can tap
into an expanding market. Another recommendation is that to expand the company’s strengths
and opportunities, to confront the threats to the company. As mention, Verizon’s 4G LTE has
proven to be very beneficial to the company, and if the company continues to expand its services,
it can overcome possible price wars.
References
1. Weaver, Heather Forsgren. 2000. “Verizon gets green light”. Rcr 19, no. 25: 3. Business
Source Complete, EBSCOhost (accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=32
61401&site=ehost-live.
2. Smith, Hilary. 2000. “Verizon is new #1. (cover story).” Rcr 19, no. 15: 1. Business
Source Complete, EBSCOhost (accessed November 3, 2014) http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=30
25072&site=ehost-live.
15
16
Panek, Tracey. “Verizon Communication Inc.” pg. 2
Panek, Tracey. “Verizon Communication Inc.” pg. 2
Brandon Six
BUS-105-A Intro to Business
Dr. Ellis
Business Case Study
01/05/14
3. Weiss, Todd R. 2014. Up, While Wireless Unit Gains Another 1.5M Customers.” Eweek
11. Business Source Complete, EBSCOhost (accessed November 3, 2014)
http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=99
046459&site=ehost-live.
4. 2014. “Verizon Communication Inc. SWOT Analysis.” Verizon Communications SWOT
Analysis 1-10. Business Source Complete, EBSCOhost (accessed November 3, 2014)
http://proxy.lib.ohiostate.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=98
131947&site=ehost-live.
5. Panek, Tracey. "Verizon Communications Inc." Hovers Inc. October 4, 2014. Accessed
October 4, 2014.
http://subscriber.hoovers.com/H/company360/quickReport.html?companyId=101970000
00000&newsCompanyDuns=107212169.