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Sample Essay on Porter’s 5 forces analysis of Verizon

Porter’s 5 forces analysis of Verizon

Company history of Verizon

Verizon is the second largest telecommunication company in USA and was conceived from a merger between the GTE Corp and Bell Atlantic Corp in 2000. The company was later acquired by MRI in 2006 and it became the top service provider for advanced communication and information technology solutions to all types of clients worldwide. The company has grown and it recently became America’s leading provider of innovative communication and technology services for governmental and nongovernmental organizations.

Porter’s 5 forces analysis of Verizon

The Porter’s 5 forces analysis is a type of internal and external evaluation methods that are used in determining how competitive a company is in a specific industry. The following is the analysis of the five forces for Verizon:

  • The Buyer Power. The communication and technology industry is extremely competitive and buyers have a wide range of services and products to choose from. In addition to these varieties, there are also many options in terms of service providers. For instance in the Wireless services, Verizon has to impress customers in order to beat market rivals such as Nextel, T-Mobile, Spring and the very popular AT&T mobile. In order to do this, Verizon has always prided in offering the latest technological services. Their confidence and limited aversion to risk has made them popular among many clients.
  • The Supplier Power. The suppliers determine the prices of the products and services. Verizon has effectively reduced the supplier power by setting up an organization to deal with all purchases and supplies of products and services from the main suppliers. The Strategic Sourcing Organization is in charge of dealing with all suppliers on behalf of the company and negotiates with the best suppliers. This makes the company get the best suppliers at affordable prices.
  • Threat of Substitute Products and Services. Even though the communication and technology industry is full of substitutable products and services, Verizon has found a way to ensure that it attracts and retains most clients in the market. The company invests in creation of new technologies and this is done through its LTE Innovation Center. Additionally, the company also switches its prices to ensure that more customers buy their products. Verizon also offers promotions, discounts, contracts and bundle packages to ensure they attract new clients and retain old ones. This way the company ensures that their services and technologically savvy products are unmatchable.
  • Threat of New Entrants. In the communication and technology industry, Verizon is one of the last entrants and the company has tackled this quite well. New entrants may not be able to match the company’s fast pace which has made them beat the more established and older companies. The fact that Verizon has invested heavily in technological innovations makes it difficult for the new market entrants to compete effectively with the company.
  • Rivalry amongst existing competitors. Despite the extremely competitive communication and technology industry, Verizon has managed to curve a niche for itself and become the leading service provider. The main rivals that Verizon competes with are Spring, T-Mobile, Nextel and AT&T. its biggest area of competition is provision of the wireless services. Whilst all these companies want to grow and provide new services and products, Verizon has amassed more revenue and clients as compared to its main rival company, AT&T hence led the entire pack. This is because of its constant innovations, flexible prices and strategic services.

Generally, Verizon is doing relatively well in a fiercely competitive market. This is because the company is constantly creating new technologies and switching prices to attract and retain clients. It has also invested in smart supplying organization and this has made it the best telecommunications company in America.

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References

http://verizonteam2.blogspot.com/2010/09/business-strategies.html

https://www.academia.edu/6378986/Verizon_wireless_and_competitive_advantage

http://www.wikiwealth.com/five-forces:verizon-communications

 

 

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