SWOT and Financial Analysis for Verizon - Case Study Example

? SWOT and Financial Analysis for Verizon Verizon is regarded as one of the most consistent performers in the telecommunication industry. Since its establishment in the year 2000, the company has emerged as one of the most renowned performers providing advance technological aspects to the public resulting in attracting huge figure of customers. After analyzing the SWOT and the financial position of Verizon, it can be affirmed that Verizon is quite able to develop its business as compared to others by delivering quality services to the customers. Although factors like increased level of business market competition and wider use of advanced technologies act as barriers for the company, it can address this critical situation through adopting along with executing certain effective strategies or plans. SWOT and Financial Analysis for Verizon Verizon Communications Inc., which is also acknowledged as Verizon is duly considered to be one of the largest service providers of broadband and telecommunication in America. Verizon was formed in the year 2000 after the merging of Bell Atlantic Corp. and GTE Corp. The company has been listed in Dow Jones Industrial Average in the year 2004 due to its consistent performance in delivering quality services to the clients. It can be apparently observed that the company earned greater business reputation and established itself as one of the leading providers of advanced IT solutions to large business association and government bodies worldwide. Resulting from consistence performance in the telecommunication industry, the company has acquired number of well-known companies like Alltel (Verizon, 2013). With this concern, this paper intends to conduct a complete SWOT analysis and financial analysis of the company (Verizon, 2013). Discussion SWOT Analysis SWOT analysis is regarded as the most common adapted techniques which helps in understanding the strengths along with the weaknesses and also to identify the opportunities available and threats that the organization face and/or would face in future. The main objective behind adapting SWOT technique by modern business organizations in today’s business world is that it helps in identifying the internal along with external factors. These factors often act in favor or against a particular company providing opportunities to mitigate the issues and develop plans to maintain the current position of the company in the global platform (University of Washington, n.d.). In this similar concern, Verizon is regarded as an American based company which deals with the products or services such as broadband and wire line and wireless communication among other related products. It can be viewed that Verizon’s fourth-generation Long Term Evolution (4G LTE) is considered to be the most advanced 4G network around the United States of America (USA). However, the gaining momentum of business market competition in the telecommunication industry and the invention of new technologies are creating a barrier for Verizon to maintain its leading position in the respective industry. Additionally, it has also been viewed that the operation plans of Verizon are facing crucial challenges with the increased level of competitors, alterations in government regulations and global economic slowdown (Verizon, 2013). The SWOT analysis of Verizon has been demonstrated hereunder. Strengths. One of the major strengths of Verizon is normally considered to be its strong liquidity position. The company is regarded as one of the most consistence performers in the global telecommunication platform. The company reported an annual increase in the liquidity ratio resulting in 38% increase in its current assets and 1% increase in current liability in the year 2011. Moreover, the company has also reported a rapid growth in its receivable rate in the year 2011 which is also regarded as the other strength of the company. In terms of strengths, it can be viewed that the company possesses a substantial wireless capacity and coverage in the U.S covering nearly about 296 million customers. The company’s 4G LTE network in USA covers more than 38 major metropolitan cities and is present in excess of 60 commercial airports. It has also been viewed that the wireline network of Verizon Communication allows it to serve a wider customer base. The company’s FiOS network is estimated to pass through 16.5million homes in the USA providing high quality broadband services. In global platform, the company provides several facilities like Cloud Services and other security services. Verizon also provides superfast digital data services to its global customers like Ethernet and Synchronous Optical Network. It is worth mentioning that acquisition of Terremark Worldwide Inc., a global service provider of information technology has strengthened its wireline networking resulting in increasing its customer base at large (Verizon Communications Inc., 2012). Weaknesses. In terms of weaknesses, it can be viewed that Verizon along with its divisions have experienced several lawsuits especially in their operational aspects. This critical aspect can be considered as a chief weakness of the company as it resulted in increased expenses, decreased business reputation and loss customer faith over the company. This can be justified with reference to the fact that Verizon along with other telecommunication companies allegedly participated in the intelligence-gathering activity and provided permission to the government in accessing the call of the record subscribers along with their contents violating statutory law. It has also been viewed that Verizon charges high price for the services that it provides to the customers which in turn lessens its profitability by a certain degree. It is worth mentioning that the company mainly focuses on establishing or expanding its business particularly in metropolitan places neglecting rural or low populated area which can be treated as the other major weakness of the company. Additionally, the franchise stores of the company are independent and follow their own rules along with regulations that can be are considered to be a major weakness of Verizon (SlideShare Inc., 2012). Opportunities. In this modernized world, individuals or people especially the younger ones are most attracted towards using smart phones. In this regard, Verizon has also expanded its business in selling smart phones along with providing other telecommunication related services. However, the company sells limited smart phones to its customers. Therefore, if the company expands its line of smart phone business in a broader manner with respect towards increased use of smart phones by the youths, it can avail the opportunity of rising greater market share and increased level of profitability. Specially mentioning, the business houses in this globalization and technology driven era have felt the need to possess secured telecommunication connection as vital data needs to be exchanged. Therefore, relating to this aspect, if Verizon develop and deliver its high end secure telecommunication services to the customers, then the company can avail the opportunity of accomplishing superior competitive position over its chief business market competitors (University of Oregon, 2012). Threats. The first crucial factor which can be considered as a threat for Verizon is the economic slowdown impacting the operational sector of the company at large. Apart from this, the company faced critical challenges and is exposed to follow regulations and policies of diverse regulations authority affecting its overall performance at the global level. Telecommunication is considered to be one of the most highly competitive industrial sectors in comparison with other business segments. It has been viewed that multinational telecommunication companies like Sprint, AT & T are adapting modern technologies to develop their respective services attracting more customers globally. This eventually created a crucial threat for Verizon in terms of raising greater business market competition (Verizon Communications Inc., 2012). Financial Analysis Financial analysis is fundamentally regarded as the process of accepting the risks and raising the profitability of the firms by analyzing financial related information. It is often viewed as the process of evaluating financial and other related information in order to acquire a better idea about the current position of the business and make strategies along with plans accordingly for maintaining leading position in this competitive landscape. In order to analyze the financial position of Verizon, it can be affirmed that the company is regarded as one of the most consistent performers in the respective industry in terms of enhanced financial position. In this regard, it has been estimated that the revenue earned by the company for the year 2011 stood at US$110,875,000, while the total revenue earned by the company for the year ending 2012 amounted to US$115,846,000. This signifies that the company has been a consistent performer in terms of its financial position. This can be better understood with the help of the following pictorial illustration. Source: (Yahoo! Finance, 2013). Furthermore, it can also be viewed that the liability of Verizon has decreased by US $436,000 which is considered to be a positive aspect for the company. Additionally, the net borrowing of the company has also decreased by a considerable extent which signifies that the financial condition of the company is at a stagnant position (Verizon Communications Inc., 2012). Summary Verizon is duly considered to be one of the most renowned telecommunication business houses in the telecom industry. Although the company is regarded as a consistent performer, increased level of business market competition and rapid development of the industrial sectors are creating threats for the company. After conducting SWOT analysis and reviewing the financial position of Verizon, it can be stated that if proper managerial skills along with modern technologies are adapted by the company, then it can maintain its leading position in the business markets where it operates and also in the respective industry by a greater extent. Conclusion From the above analysis, it can be affirmed from a broader outlook that by conducting SWOT analysis and determining financial position, the overall business position of the companies can be analyzed and various remedial measures or significant steps can be taken in developing any adverse situation. In this context, Verizon has been recognized to be a consistent performer in delivering effective services to the customers and developing its financial position by a considerable level. With reference to the above discussion, it can be stated that if Verizon adapts techniques and implement new strategies to mitigate its threats along with weaknesses, it can certainly place its self as one of the leading companies in the telecommunication industry. References SlideShare Inc. (2012). ATT vs. Verizon. Retrieved from http://www.slideshare.net/BCronin2/mgmt-360-revised-final-powerpoint University of Oregon. (2012). Verizon Communications Inc. Retrieved from http://uoinvestmentgroup.org/wp-content/uploads/2011/04/Verizon.pdf University of Washington. (n.d.). SWOT analysis. Retrieved from https://depts.washington.edu/oei/resources/toolsTemplates/SWOT_analysis.pdf Verizon. (2013). Corporate history. Retrieved from http://www.verizon.com/investor/corporatehistory.htm Verizon Communications Inc. (2012). Verizon Communications Inc. - financial and strategic analysis review. GlobalData, 1-4. Yahoo! Finance. (2013). Verizon Communications Inc. (VZ). Retrieved from http://finance.yahoo.com/echarts?s=VZ+Interactive#symbol=vz;range=20110404,20121224;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; Read More