Business-Finance-Accounting work

External and Internal Environmental Analysis

Qassam Alshaikh

STR/581

February 16, 2015

Christina Behlin

External and Internal Environmental Analysis

Verizon Communications is American based company whose headquarter in in the prominent city New York, it deals in mobile business. It gives services of broadband and telecommunications. “Verizon Communications is one of the largest telecommunications providers in the world. Headquartered in New York, Verizon's global network reaches customers in more than 150 countries and services over 100.0 million Americans.”(Verizon Communcication Inc., 2015) This paper will be an external and internal environmental scan of Verizon Communications. The scan will be used to focus and analyze the important factors of the internal environment that involve the strengths, weaknesses,and opportunites. This scan will also identify with the external reources that involve threats, opportunities, and external global environments. The organizational structure that Verizon Communications has will be discussed and analyzed.

Industry

Verizon does not focus to create their own shows or writing their own gaming strategy, or does not interested in making movies.  It does not create any media appearance; instead we have focused the strategy how we deliver information and how we develop the communication medium for people. In addition, Verizon creates right applications that carries these information’s that they easily accessible for customers. 

Remote

The remote environment is important for Verizon Communications through different aspects, such as economic, social, and technologial factors. Economic factors play an important part in the remote environment for Verizon Communications because the better the economic factor rate is good, the better the company will do efficient results. Social factors also play an important role in the remote environment. Social factors are important to the company because it impacts both negatively and positively in the business of the company.Technological factors also will impact the company because it considers as major factor of competitive advantage and then establish the superiority of rival companies.

Social, economic, technological, and cultural factors of the VERIZON Company. 

Economic Factrs:

Economic factors play the key role in Verizon communications Inc. because economic conditions change the business picture in the twinkling of eyes. These factors create hurdles into the smooth running of Verizon business. The previous research that is exist tell that this company always care of judging these factors that create troubles to smoothly run their business.

1. Inflation: Economic factors consist of inflation it affects the business when its rate is high, in this situation prices are increased the reason is that supply of money is at high pace and customers did not afford it.

1. Balance of payment: if company import raw material at high rate or large in number and its export or ratio of service is less then heavy amount of capital goes outside and BOP level is detract

1. Fiscal and Monetary policies: fiscal and monetary policy is also affects company economic structure

Social Facotrs

Social factors are used by Verizon communications Inc to assess

· income resources of its promising customers,

· social framework,

· educational level,

· religion aspects

· family structure

These factors impact both negatively and positively in the business of the company. In 2015, Verizon's wired fiber-optic network provides access services in many states and the operations provide services to residential and small business subscribers.” (Verizon Communcication Inc., 2015)

Social factors changes the

· beliefs,

· interests

· customer’s mind

Technological Factors:

Technological factors nowadays examined as major factor of competitive advantage and then establish the superiority of rival companies. Globalization is the big issue and badly changed under new technologies and then boosts all marketing activities. Computer is the key aspect of Verizon communications Inc. introduction of e-commerce change the business scenario of Verizon communications Inc. and with the help of it company discover new markets globally. Technologies are now considered as lifesaving drugs for company’s business costs and time. With help of this factor company grasp profits and saved funds.Electronic financing facility that Verizon communications gives it carry out company’s business very smoothly without any interruption in cash flows. (Verizon Wireless Interactive Timeline, 2015)

External Environmental Analysis

External environmental analysis is a key part in the external analyzes of Verizon Communcication Exteranl environment that inovle opportunities, threats, and globalization will make the business successful or failure. The external environment is a way for the company to build a good benefits and increase customer loyalty towards the company. Within this environment Verizon will own the power to declining or growing over time.

Opportunities:

For companies when the decided to achieve the set objectives, then they identify the sectors where in their point of view chances for their business and these devise factors or features that comes from the external environment of their business will give them edge and volume and give them some advantages or we can say some chances to perform into well-mannered style as compare to their competitors. “Verizon's global network reaches customers in more than 150 countries and services over 100.0 million Americans. The telecom giant operates in two segments: wireless and wireline. Only wireline operations are relevant to the Internet Service Providers industry.” (Verizon Communcication Inc., 2014)

Verizon communications Inc. has some vast range of opportunities that if they utilize it in effective way no doubt, they will be achieve huge benefits as compare to other firms because it lead them in exploring and the reaching to other new markets. “Verizon provides M2M support services for a variety of vertical market segments, including healthcare, education, manufacturing, utilities, distribution and consumer products. Verizon offers platform-based solutions tailored to specific industries to enable value creation and new commercial business models.” (Verizon Communcication Inc., 2014)

Different level of Research points out that huge level of demand is found in these products in Africa and management of the company will decided to open different level of subsidiaries in these countries but after keen analysis of the situational analysis in these markets. (Verizon Communication Inc., 2013)

Threats:

Verizon communications Inc. faces new regulation that can restrict its abiity to promote in the market and also limit its future investments in the market. “Changes in the regulatory framework under which the company operates could adversely affect its business prospects or results of operations.” (Verizon Communcication Inc., 2014)

Competitive Position

Verizon determines the differentiation strategy and also seeks to providing diverse services and products through different areas, such as fiber-optic communications, high –speed, 3G-networks, telephone, and TV serves, high-speed of Internet.

Another factor that also adds to Verizon's competitive edge is that their products and services are known for better quality and efficiency. “Verizon's operating margin was at 26.5%. Comparatively, AT&T's revenues grew at a slower pace of 1% in FY2013.” (Verizon Communcication Inc., 2014)

Verizon Structure

Verizon provides responsibility and quality servides to people. The company structure depend on efficient strategic planning that corporate the success and benefits to the company. Also, the company determine the quality objectives and goals.

The human resources mananmgnet and Labor Relations are tow important factors that can impact servide quality. The management relationships impact the quality measures in telecommunications and its employees.

Internal Environmental Analysis

Strengths:

All organizations used modern technology and innovation to change its production style. They transform themselves, they try to reinvent them in the map of world, all heads of the company wanted that they go through with a smooth transition and they also try to modify the style of their services and change and improve the way through which they make their products best among others. They always keen about market needs and demands of their customers. (Verizon Communication Inc., 2013)

Weakness:

Substantial debt

According to the substantial debt. (2013) Verizon had approximately $93.6 billion of outstanding indebtedness and also in the end of March 2014, the company’s average debt outstanding stood at $103.2 billion, this increase occurred due to the acquisition of Vodafone’s 45% stake in Verizon Wireless. This will also is expected to lead to higher interest expense and further increase the debt reduction. “According to industry estimates, the company’s adjusted debt balances are expected to be around more than $125 billion at the end of 2014.” (Verizon Wireless Interactive Timeline, 2014)

High rate of substantial debt will increase the vulnerability to be subject to recurring interest payments, declining cash flows, and adverse cycles of Verizon. The company’s high level of debt obligations could lead to the diversion of its cash flows from operations, support its expansion plans, and to influence its ability to obtain additional financing. “as Verizon will be subject to recurring interest payments. In lieu of higher debt, the company's interest expense increased from $2,571 million in FY2012 to $2,667 million in FY2013.” (Verizon Wireless Interactive Timeline, 2014)

SWOT Analysis

Modern businesses usually faced different level of problems that they faced it as the business environment changed during today competitive world and due to business environments that is changed on daily basis. Therefore Verizon communications Inc. is how not affected with it so they have to face different level of changes within the changes context of their business.

To do the SWOT analysis, we first overlooked the environmental analysis because it plays a crucial role in the analysis of corporation business norms and it is usually consisting of two sectors;

· the external environment

· internal environment

SWOT Analysis

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Conclusion

Verizon communications Inc. is now consider the leader of current Wireless and IT solutions market leaders. It is a name in the market of information technology industry. It creates huge amount of market share and make them a brand name whose products are keeping high quality.

The management of the company should check its market strength and make plans to achieve a good future of the company, and raised both its new and loyal customers. They also focused upon all needs and fulfill the expectations of their customers. So, they have to construct and a vast range of IT solutions products and adopt effective strategies, so that they achieved new markets where we find massive level of IT solutions demands.

References