Verizon Porter's Five Forces Analysis

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I will analyze Verizon using Porter’s Five Forces Model. Verizon faces a strong threat of existing competition. This force deals with the effects of competing firms which influence Verizon as an organization. There are many external factors which guide me to my position regarding existing competition. Besides Verizon, there are other companies that provide similar services as Verizon. Verizon offers diversified services to its consumers. These services range from providing television access to offering internet, landline, and wireless communication services. Verizon faces tough challenges from other firms in the industry on all business fronts. For example, Verizon faces AT&T, T-Mobile, Sprint, and a few other organizations in wireless communication …show more content…
Verizon’s customers hold bargaining rights over Verizon because of the following reasons. The availability of different service providers is the most significant factor. There are at least three other firms who provide the same service as Verizon on all ends. Substitutes for services provided by Verizon are also common. Verizon’s moderate contract termination costs are overshadowed because competition provides incentives to consumers to switch service providers. Sometimes, they agree to pay the total switching costs including early contract termination fees to gain more business and expand their consumer base. For instance, Sprint ran a marketing plan in early 2016, offering to cut customers’ monthly costs in half when they changed to Sprint. This promotion was directly targeted at Verizon’s customers. The size of consumer population is a medium to high threat as well because Verizon consistently competes with other firms. Buyers hold important edge in this regard since there are other options available to them in case they are not satisfied with Verizon’s costs and services. Verizon has to cope with the constant pressure of buyers and it has to be one of their top …show more content…
I come to this conclusion because Verizon has a sophisticated and enlarge chain of suppliers. Their substantial overall supply also lessens the effects of any individual supplier on the organization. Verizon has always emphasized diversity when dealing with their supply chain. They operate an industry dominant logistics team which has helped to maintain their prestige. This comes as a result through their focus on excellent supply chain management. At the same time, they also dictate the terms and condition with their suppliers because they set very high and transparent expectations when it comes to the standard of equipment they acquire. For example, Verizon made a clear point to invest in suppliers who focus on energy efficient cables and other equipment in 2013. Based on all these factors, supplier power does not require immediate and focal attention for

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