Verizon or GAP Inc - Research Paper Example

Legal, Social and Economic Environment Given its broad range of products and services, together with the intense competition that is prevalent in the telecommunications industry, Brien (2010) believes that the external environment plays an influential role in determining Verizon’s goals and business strategy. Apart from fulfilling the needs of customers, Verizon is also involved extensively in complying with regulatory requirements besides developing better strategies to tackle its competitors.

Winer (2011) analyzed Verizon using an elaborate SWOT analysis and concluded that the company is best placed in terms of marketing as it is an established and recognized brand across the United States and in other countries. However, Bohlander (2009) argues that the company faces multiple threats across legal, social and economic environments. He states that customers have largely refrained from using wireless technologies in favor of long distance services that are offered by local providers.

While Verizon has the potential to overcome this trend by expanding its wireless services into newer markets, it will be difficult to offset this threat completely (Winer, 2011). The global financial crisis and the resulting decline in economic activity have had an impact on the telecommunications sector. . For instance, Verizon is now required to lease its access lines to these local exchange carriers at two-fifths of the prevailing market rates. This has not only reduced the barriers to entry for the local exchange carriers, but has also diminished Verizon’s market share (Bohlander, 2009).

The FCC’s actions towards reducing most barriers to entry and enhancing the level of market competition has intensified the rivalry among all major players in the telecommunications industry besides eroding several strategic advantages that were enjoyed by established firms like Verizon for over five decades. Customers no longer face any additional switching costs for changing service providers while new entrants to the market receive significant financial backing from the FCC in addition to adequate network capacity.

Despite these disadvantageous factors, Verizon enjoys a strong and recognized brand identity and elaborate distribution channels that cannot be matched by newer rivals over the next few years (Altmann, 2008). Better economies of scale are however expected to erode over time as the level of competition intensifies in the market. Managerial, Operational, and Financial issues The increasing competition in the telecommunications industry implies that the success of most projects undertaken by Verizon depends on efficient workflows, reduced costs, quicker turnarounds and creation of better values.

Altmann (2008) says that achieving these objectives requires the development of advanced strategies that offer a unique challenge to larger, hierarchical organizations. Wallace (2010) explains that Verizon has adapted to this evolving business environment by