1 Strategic Recommendations for Verizon’s Corporate Student’s Name University Course Professor Date

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Strategic Recommendations for Verizon’s Corporate

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Strategic Recommendations for Verizon’s Corporate

Verizon is among the world-leading holding companies in producing wireless communication services, entertainment, and internet of things products to consumers, other businesses, and government agencies. Verizon’s wireless network is mainly extended in the United States under the Verizon brand. However, the company faces various challenges, including lack of diversification of its products, issues related to cybersecurity, outdated technology, and natural disaster issues. These challenges act as drawbacks to its service provision, which attracts more competition from other firms. Therefore, this paper discusses various recommendations, including expansion to other markets like Africa, diversification to other products, improving the security system, and focusing on its competitive advantage to maintain stiff competition from other related firms.

The company should expand to other markets, especially in Africa and third-world countries, to avoid overreliance on the United States (US) market. Expanding to the global market is vital for Verizon Corporate to extend its business to the next level. Verizon is the leading provider of wireless communication services in the United States. According to Sec. Report (2020), the company dominates approximately 32.3% of the US market, a significant indicator in wireless technology. Venturing to less-developed nations creates more opportunities to enhance the growth of the 5G network. Countries in Africa such as Kenya, South Africa, and Morocco are among the very few which have rolled out the 5G technology. Therefore, Verizon Corporates should utilize opportunities in Africa by installing the 5G network to avoid overreliance on the US market.

The company should also employ product diversification to increase profitability. Verizon can employ this strategy to increase sales of various products compared to the product line of other competitors. Verizon can diversify and include a portfolio of augmented reality, smart city, and exploit technologies that can support remote working. Verizon deals with internet services, phone products, and other Internet of things devices (Sec. Report, 2020). The diversification will help tap into other markets and reduce the risk of a limited product range. Thus, Verizon corporate should diversify its product by repricing to attract more customers, ideal for increasing profit.

Verizon Corporation should install a firewall to control malware and cyber-attacks. Threats travel from computers on the internet and harm/attack systems with low-security settings that Trojan horses and worms commonly display. These threats have been evident in companies Verizon Communications hence affecting their businesses and rate of production. Denial of Services is a vital threat aimed by the majority of the attackers that may cause equipment failure or unnecessary network traffics, which disrupts work, employees, and customers. Firewalls are the first line of protection to a network and the whole system. It monitors the network for malware and traffic, which secures the network from vulnerabilities.

The company should ensure consistency in system updates to avoid vital security breaches that may cause vulnerabilities, resulting in enormous threats. The increased cyber-attack on Verizon Communications leads to critical consequences such as losing sensitive personal information and business strategies, requiring this protection plan (Sec. Report, 2020). Updating the system involves software and operating systems updates that eliminate breaches that attackers might have noted or previously used. This method is the simplest to maintain protection and is inexpensive. Hence, Verizon Corporation should consistently update its system to enhance its efficiency of the system.

The organization should improvise multi-factor authorization and authentication, which helps in protecting systems against cyber-attacks. This process ensures that the company’s login credentials, such as passwords primarily targeted in attacks, are protected from attackers or unauthorized individuals. Verizon Corporation might encounter phishing and hacking, which allows hackers to gain access to the system. This factor calls for an authentication process requiring several steps and information pieces, making it hard for cybercriminals to access a business’s strategy. The protection of a business against cyber-attacks is vital for its progress and provision of services.

The company should take an insurance cover of its physical computer assets against natural calamities and accidents. The loss of computers and network systems through natural disasters such as earthquakes, floods, and accidents such as fire may cause significant damage to an organization’s computer systems which causes a substantial drawback in terms of work productivity and business services offered to the customers. Insurance of computer systems will ensure the continuation of work even after a disaster has occurred, giving the company a competitive advantage and preventing the stoppage of work.

Verizon corporate should also focus on providing a 5G network to gain a more competitive advantage. Verizon was the initial company to install and rollout the 5G network in the United States (Sec. Report, 2020). The 5G network is more reliable and efficient than other networks like 4G and 3G due to its excellent transmission speed. It also has lower latency, making it efficient in remote execution for supporting many computing devices. Focusing more on the current 5G technology is an important way of informed investment. Therefore, Verizon should invest many resources in the current 5G technology to maintain the competitive advantage and realize more profits from increased sales.

Justification of Recommendations

Expansion to Other Markets

Verizon’s dependency on the US market is risky since such collapse can render the company a limited market. Expanding the 5G network to other countries that the network is yet to reach can help boost its revenues and market share. Africa is one of the potential markets that the company can tap since most countries have yet to adopt the 5G network, with South Africa being the only one in the continent using 5G. The feasibility of 5G network expansion to other markets can be calculated using the Return on Investment (ROI).

ROI is a financial metric that measures the probability of making profits from investments.

ROI = Net return on investment * 100%

Cost of investment

Suppose Verizon invests 30% of its Net revenues as of 2020 in Africa, the cost of investment will be:

30% * $18,348 million = $5,504.4 million

If, after one year, the company generates net returns of $1,500 million, the ROI can be calculated as follows;

ROI= 1500/ 5504.4 * 100% = 27.25%

The ROI of 27.25% shows that the investment is viable, and the company should consider expanding to less saturated markets.

Improving on System Security

System security is one of the crucial elements in Verizon since it deals with massive data from individuals and corporate. The company’s cybersecurity should be enhanced as it is susceptible to cyber-attacks through malware and computer viruses which may disrupt the systems operations. From Verizon’s annual reports, improving system security is a feasible recommendation since the company can afford it. The company recorded net profits of $18,348 million in 2020. Therefore, Verizon has sufficient financial resources to invest in good system security.

Diversification to other products

Verizon can diversify and include a portfolio of augmented reality, smart city, and exploit technologies that can support remote working. The feasibility of product diversification can be measured using net present value. The Net Present Value (NPV) estimates the values of all future cash flows, whether positive or negative, over the life of an investment discounted to the present. The NPV discounts investments to adjust for the risk of an investment opportunity and accounts for the time value of money.

NPV = Cash flow/ (1+i) ^t – Initial Investment

Assuming the new investment on portfolio diversification generated cash flows for 5 years as follows; $10,000, 15,000, 25,000, 35,000, 45,000; if the rate of return is 8% and initial investment is 50,000, the NPV will be as follows

Cash flow

$

$10,000

(1.08)^

1.08

9259.23

$15,000

(1.08)^2

1.164

12,886.60

$25,000

(1.08)^3

1.259

19,857.03

$35,000

(1.08)^4

1.360

25,586.67

$45,000

(1.08)^5

1.469

30,695.77

Total

98,285.3

Less: Initial Investment

(50,000)

NPV

48,285.3

Since the NPV is a positive value, the diversification portfolio is viable and should be adopted by Verizon as it will result in profits.

References

Sec.report. (2020, February 21). Verizon Communications Inc 2019 annual report 10-K. SEC.report. https://sec.report/Document/0000732712-20-000014/