Verizon Communications Inc. Global Expansion
Company overview and why global expansion might be in the company’s best interest.
Verizon Communications Inc. is a telecommunications company that maintains its operations in the United States. The company was formed from a merger between GTE and Bell Atlantic. The two companies had grown and evolved over the years through mergers, divestitures, and acquisitions and had maintained a good record in integrating business operations. The company maintains its focus on technology as a basis for offering value to the target customers in the telecommunications sector based on the specifications of its mission and vision statement. The company’s vision is to inspire future creators to use technology to create brighter futures for themselves, their families, and the world. The mission is to deliver the promise of the digital world to its customers. The company emphasizes realizing innovative lifestyles through the latest technology and the most reliable network. The vision statement presents the significance of the company’s inspirational role in improving lives across the world, and the mission statement specifies the application of technology. Verizon has maintained a competitive advantage in the telecommunications industry. For more than 20 years, it has been at the top of the Fortune list of the top 500 companies in the United States. Although it started as a medium-sized enterprise, it has grown into a multinational enterprise. The company is currently one of the largest multinational companies in the United States telecommunications market. Most of its revenue is generated through the customer services segment. The segment generated approximately thrice the number of business segments in 2020. The revenue generated by the company from all its segments during the quarter ending December 31st, 2021, was $34.067B.
Expanding globally might be in the company’s best interest because the technological evolution through digital technology and computers has radically transformed the telecommunications sector hence creating opportunities for new operators such as Verizon to enter the market in different countries. Governments in various countries across the world have realized that monopoly limits the development of new services and markets. The customer segment in the global market is also expanding, hence creating an opportunity for operators to introduce new services. According to Kovačević et al. (2019), there are three types of customer segments whose needs are pushing telecommunications to expand their services and products to global markets. The first type is local customers whose needs are mainly network use and access but may include end-to-end in a constrained area. The main customers in this segment are small businesses and local residential clients. The second type is regional and national customers whose needs for various data and voice services are end-to-end regionally or nationally but in one country. Customers in this segment are retail chain stores and insurance companies. The third type is regional and global customers whose different data and voice service needs are end-to-end in various countries regionally or globally. Customers in this segment include multinational entities. The customers promote the globalization of telecommunications because of their global networking and local infrastructure needs.
Expanding globally might also be in Verizon’s best interest because the global telecommunications market has experienced significant growth over the years and is expected to continue growing. The telecommunications industry has also continued technology development over the past decades and transitioned to include a wide range of products. The growing 5G technology will differentiate between wireline and wireless networks and is intended to bring together the communication modes into a combined end-to-end system in residential, public, and enterprise settings. Traditional international telecom services markets have transformed drastically with the development of mobile solutions, perform better than fixed-line and the internet, and are replacing foxed voice connection in the market. Expanding penetration of internet services through wireless mode and the network dependent on copper is expected to replace fixed voice traffic in the future. Medium- and small-sized businesses are expected to have solid growth over the forecast period with the enhancing technology reaching every corner of the worldwide nations. Venturing in the global market may create increased production economies, greater control over the direction of the industry, production economies, and decreased competition. Increased production economies may arise as greater distribution and purchasing efficiencies or economies of scope or scale. Carriers such as Verizon are most likely to benefit from a foreign market due to greater distribution economies.
Proposed Global Expansion
Verizon should consider expanding its operations to Germany, India, or South Africa. The countries have a high GDP, as shown in the table below, thus indicating a good flow of money in the economy. However, Germany would be an ideal market for Verizon because the German telecommunications market has grown rapidly over the past few years and is anticipated to continue growing. The sector’s growth is mainly caused by the rise in the country’s population, communication services, and the prevalence in the use of smartphone services. The largest part of the growth of the telecommunications market in Germany is attained by content and premium connectivity in the country. Revenue from the telecommunication service has increased as users are mainly embracing work-from-home practices (Global Monitor, 2022). The industry is also spending more time streaming games, movies, and other types of entertainment.
Germany’s telecommunication market has experienced significant growth from value-added services. The rise in value-added services is mostly because of increased subscribers in the emerging economies and rising demand from network operators to provide efficient mobile services. Telecommunications such as wireline accounts for the major market worldwide and is anticipated to have continued growth due to the increase in the demand for wired communication services. The competition in the telecommunication industry in Germany is highly combined with few players hence creating an opportunity for Verizon to acquire a reasonable market share. Leaders in the telecommunications market in Germany continue enjoying a noteworthy market share at a highly competitive market and competing to be the most innovative, ranging from business connectivity to mass-market (Global Monitor, 2022). The main strategies used in the industry are introducing affordable new services and products, acquisitions, and expansion of network, services, and bandwidth.
Digital transformation in Germany is also progressing rapidly hence creating a need for information and communications technologies to shape the society and economy. Many people and businesses are also embracing telecommunications by using technological gadgets. For instance, a study conducted by The Federal Government of Germany (2022) indicates that currently, more than 60% of Germans are using a smartphone, and more than 30% are using tablets and can access the internet. This implies going online is becoming a necessity in most households and businesses. The volume of data on German mobile communications networks is anticipated to be more than one billion gigabytes. Digital transformation is becoming evident in the Internet of Things and the number of connected devices in everyday life. The availability of high bandwidths in the country and the broad choice of video-on-demand services are pushing the growth of customers in the telecommunication sector. Convergent offers, including mobile communications and fixed networks, give customers many benefits and help enhance customer retention. The trend towards fixed-mobile convergence offerings is rising, with many providers increasing their portfolios. The market size in the German telecommunications market was valued at $48.3 billion last year. The market is anticipated to increase at a CAGR of more than 1% by 2030. The growth in the market will be supported by growth in fixed broadband, mobile data, and pay TV sections (Global Data, 2022). In July 2021, the country’s network regulator announced a doubling of Wi-Fi use. The extra 480MHz spectrum will increase band capacity for the applications connected to Wi-Fi in densely populated regions and enable the use of innovative technologies such as Wi-Fi featuring wider channels.
The German government has invested $14.6 billion in an initiative to increase network connectivity, thus creating opportunities for telecommunication companies. The continued expansion of 5G services across the country has also created opportunities for telecommunication companies, particularly those specializing in network distribution. The population in Germany has also embraced mobile subscriptions, and the growth in subscriptions is anticipated to increase due to the increase in smartphone subscriptions (Global Data, 2022). However, the most dominant subscriptions are handset subscriptions, which will continue to be the dominant device category. Fixed broadband penetration in the country’s population will increase due to the ongoing expansion of the coverage in the fixed broadband network across the country. For example, the German government announced plans to give funds to expand broadband services in the country, particularly in regions without broadband access or those with low speeds.
References
The Federal Government of Germany. (2022). 5G Strategy for Germany. https://www.bmvi.de/SharedDocs/EN/publications/5g-strategy-for-germany.pdf?__blob=publicationFile
Global Monitor. (2022, March 21). Germany telecommunication market report (2020-2025). GlobalMonitor | Data, Research, And Analytics. https://www.globalmonitor.us/product/germany-telecommunication-market-report
GlobalData. (2022, March 10). Germany telecom operators country intelligence report. GlobalData Report Store. https://store.globaldata.com/report/germany-telecom-operators-country-intelligence-report-2/
Kovačević, D., Krajnović, A., & Čičin-Šain, D. (2019). MARKET ANALYSIS OF THE TELECOMMUNICATIONS MARKET – THE CASE OF CROATIA. Information Technology.
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Question 
This course will require exploring essential elements of establishing and conducting international business. For this assignment, you will begin the development of a Global Expansion Plan that will be presented in four parts during Weeks 3, 5, 6, and 8. The assignment will allow you to apply the Five Key Dimensions of International Business Firms: Visionary Leadership, Strategy, Organizational Structure, Organizational Processes, and Organizational Culture.
Verizon Communications Inc. Global Expansion
The global expansion plan will include 1) Company Selection (Visionary Leadership and Strategy), 2) the Organizational Structure, 3) Organizational Processes and Organizational Culture, and 4) Risk Assessment. The project will allow you to gain insight into what businesses need to know and how they need to adapt in order to not only enter but be competitive in the global marketplace. A compilation of all elements of the global expansion plan will be submitted in Week 8. Project assignments are due by Sunday, 11:59 p.m. Central time, of the designated weeks.
For the first phase of the project, you will make your company selection for the Global Expansion Plan project following the assignment instructions below:
1. Choose an existing non-global company whose service or product could benefit from global expansion.
Describe the company’s industry or service, including its annual revenue and why global expansion might be
in the company’s best interest.
2. If you are able to locate them, include the company’s vision and mission statements that respectively
describe what the firm desires to become or achieve and its purpose for existence. If you are unable to
locate this information about the company, propose your own vision and mission statements.
3. Based on textbook readings, indicate if the company should be categorized as a Multinational Enterprise
(MNE) or Small and Medium-sized Enterprise (SME).
4. Select the top three countries in rank order that might be most suitable for the company’s international
business and explain your rationale. Create a small table to show how the three countries compare. To
facilitate this portion of the assignment, visit Michigan State’s GlobalEdge website
(http://globaledge.msu.edu) to gain valuable insights into how countries compare to each other. The site
contains dozens of criteria ranking countries based on GDP per capita, Education—literacy rate, People—
population total; People—population density; Health—mortality rate; Energy—electricity production;
Infrastructure—mobile cellular subscriptions; Infrastructure—roads, total network; Trade and Investment—
foreign direct investment net inflows, and many other factors. Your country comparisons may look
something like this:(See file attached)
5. Make your final country selection and provide a rationale for your choice.