Verizon Communications Inc. is an international company that was formed in 2000 after the merging of Bell Atlantic and GTE in 2000. It supplies wireless mobile services to American citizens, through working with competitive brands such as Apple in meeting the needs of consumers. In 2011, the organization faced various challenges in its operations, which had a high negative impact on the performance and image of the company (Raffo, 2011). This paper highlights the 2011 case, conducts a SWOT and financial analysis of Verizon Communications to recommend feasible solutions for the problems the company was facing.
Central Issues in the Case
In 2011, half of the companys wireless employees demonstrated after the management refused to renew their contracts. From the case, Verizon Communications does not have good relations with the workers Union. This is evidenced by the managers refusal to hold a meeting with the leaders of the various unions. Instead of discussing the plight of the workers with these leaders, the company sought for a court order to prevent the employees from blocking access to its building as they demonstrated.
The organization also did not work towards the welfare of the employees. The activities within the organization were designed specifically for meeting the needs of the customers. There was minimal effort to increase employee motivation in the workplace. For example, the company lacked to work with the informal sector to cater for the needs of the staff members. There were 23 reports filed against managers who injured the demonstrators as they were driving. Moreover, lack of renewing contracts would render many people unemployment. The managers, instead of creating more jobs through renewing the contracts, opted to raise their salaries. Consequently, there would be increased job insecurity that would result to reduced employee motivation (Raffo, 2011).
SWOT Analysis of the Company
One of its strengths is the production of products that target a broad range of consumers. In 2011, the company launched phones that were not limited to AT&T customers. Increased market scope raised its level of competitiveness. The high innovative products attract consumers attention, resulting in increased profitability and market share. For instance, the firm launched 4G mobile phones, which helped improve the sales level. Additionally, the company has created employment for more than 194,000 persons. This has helped reduce the unemployment rate in the State. Another strength is that the organization works towards meeting customer satisfaction through product differentiation strategy, to meet the diverse needs in the market. Increased social responsibility has also led to increased brand awareness.
The company faces numerous weaknesses. One of them is the poor relations between the company and the workers union. The limited effort towards meeting the workers needs reduced employee motivation. This poses a risk of reduced performance of the company. The company faces increased complaints from the customers on the faulty products. This poses a threat of reduced consumer loyalty and reduced competitiveness in the market.
Various opportunities arise in the communication industry. for example, the technological innovations provide the company opportunities to develop better products to meet the consumer needs. There is also a change of customer needs in the market. This gives the company an opportunity to embrace product differentiation and concentrate more in the smartphones industry.
One of the threats the organization faces is increased competition. The major competitor of the company is AT&T. T-Mobile and Nextel poses a lower level of threat. However, in case AT&T merges with T-Mobile, Verizon would face increased competition. The Government regulations also present several threats. In case the government considers the federal Communications option of the company allowing smaller companies to use their data for mobile internet services, the organization may experience stifled innovations. Reduced customer loyalty may result from provision of faulty products. The mobile phones still had a call drop problem in places with weak signal conditioning. Inability to attract the best talent may result from the companys inability to register good relations with the workers unions and increased job insecurity due to lack of renewing the contracts (Raffo, 2011; Thomson & Martin, 2010).
Financial Analysis of the Company: Financials of the company between 2006 and 2008
The company has been experiencing improved financial status, due to increased revenue. From 2006-2008, the company recorded an average of annual increase of 0.3%. The total revenue raised from US $88,144,000 in 2006 to 97,354,000 in 2008. The net income increased by approximately US $300,000 through the two years. The management also focused on increasing the welfare of the organization financially through reducing the liability of the company. By 2008, there was increased funds set aside for innovations. One can trace the significance of embracing technological innovations through the products design in the market (Morning Star, 2016).
Verizon Communications should improve its relationship with the workers union. T is through the union that employees can raise the issues they face in the company. The Human Resource Management could address these matters to ensure improved performance in the workplace. There are different ways of improving the level of motivation, such as increasing job security by renewing contracts of performing workers. To ensure that the organization maintains its competitiveness in the market, Verizon should focus on improving the quality of its products. This would result in improved customer loyalty and reduced threat of increased competitiveness from the competitors (Thomson & Martin, 2010).
Morning Star. (2016). Verizon Communications Inc. retrieved from http://financials.morningstar.com/ratios/r.html?t=VZ April 12 2014
Raffo, D. (2011). Verizon Communications Inc-2011. Middle Tennessee State University, Case 16, p157-168
Thomson, J. & Martin, F. (2010). Strategic Management: Awareness & Change. Andover: South-Western Cengage Learning
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