Verizon’s Generic Competitive Strategy & Growth Strategies

Verizon Communications Inc. generic competitive strategy, intensive growth strategies, strategic objectives, telecommunications business analysis case study
A Verizon office building in Irvington, New Jersey in 2010. Verizon Communications Inc. has a generic competitive strategy (Porter model) and intensive growth strategies (Ansoff matrix) that emphasize quality as a competitive advantage in the telecommunications industry. (Photo: Public Domain)

Verizon Communications Inc.’s generic competitive strategy and intensive growth strategies determine the strategic decisions and objectives in the business, including strategic formulation in subsidiaries. Michael Porter’s model states that a firm uses its generic strategy to ensure competitive advantages essential to surviving the external forces that impact the business based on the competitive landscape. Verizon’s generic competitive strategy represents business efforts to stand out in the telecommunications industry. These efforts translate to competitiveness and brand value. On the other hand, the company’s intensive growth strategies shape the overall approach to growing the business. These growth strategies align with the generic competitive strategy and form the basis for strategic objectives for fulfilling the goals of Verizon’s mission statement and vision statement, growing and expanding the business, and addressing challenges in the information and communications services market.

With a generic competitive strategy that emphasizes uniqueness in the market, Verizon Communications Inc. focuses on quality as a selling point to attract and retain customers. Managers aim for competitive advantage through the company’s efforts to ensure quality based on the generic competitive strategy. For example, in Verizon’s wireless services, relatively high quality of connectivity is maintained to attract customers who value quality as the most significant criterion in paying for telecommunications services. Intensive growth strategies are also implemented to maximize the benefits of the generic competitive strategy. Verizon applies strategic objectives that contribute to or use such a competitive advantage to succeed in growing the business through these intensive growth strategies.

Verizon’s Generic Competitive Strategy (Porter’s Model)

Verizon’s generic competitive strategy is differentiation. Differentiation builds competitive advantage based on product uniqueness. Uniqueness is developed through multiple possible variables. In this case, Verizon’s generic competitive strategy uses quality as the most significant factor to differentiate the business from competitors, such as AT&T, T-Mobile, and Alphabet’s Google Fiber. Quality is emphasized in the company’s sales and marketing. For example, advertisements for Verizon typically highlight quality of wireless services, especially connectivity quality based on infrastructure quality. Intensive growth strategies and related strategic objectives are developed to capitalize on product uniqueness. However, because of this generic strategy of differentiation, the company cannot readily build a competitive advantage based on price, considering the costs of higher-quality infrastructure in the information and communications technology industry. Verizon’s wireless services are priced higher compared to competitors, like AT&T and T-Mobile.

A strategic objective based on the differentiation generic strategy is to develop competitive advantage through further investment in infrastructure. For example, to maintain high-quality wireless services, Verizon’s operations management must implement new and advanced information and communications technologies to improve its current infrastructure. In addition, the generic competitive strategy leads to the strategic objective of enhancing human resource training programs to maintain high-quality customer service. Customer service is a significant factor, especially because of rampant customer service issues and complaints experienced in the telecommunications industry. The differentiation generic competitive strategy allows Verizon Communications Inc. to successfully use market penetration as its main intensive strategy for business growth.

Verizon’s Intensive Growth Strategies

Market Penetration (Primary). Market penetration is the most significant intensive growth strategy in Verizon’s business development. The goal in using this intensive strategy is to grow the company by increasing revenues through a bigger share of the current market. For example, Verizon was able to grow and become a leading telecommunications business by attracting more customers in the United States. This business performance is possible by offering high-quality wireless connectivity services, which is a competitive advantage achieved through the differentiation generic competitive strategy. A strategic objective based on market penetration is to use aggressive marketing campaigns to emphasize the high quality of services that attract quality-sensitive customers toward Verizon Communications Inc.

Market Development (Secondary). This intensive strategy serves a secondary role in growing Verizon’s business. The strategy focuses on achieving growth based on entry into new markets or new market segments. In some cases, rebranding an existing product for a different purpose can create opportunities to enter a new market segment. Entry and expansion into an entirely new market also present growth opportunities. Implementing this intensive growth strategy requires that Verizon apply strategic objectives that exploit such opportunities. For example, a strategic objective is to grow the company by expanding operations outside its existing markets. In the case of Verizon’s wireless services, this expansion entails offering wireless telecommunications services outside the United States. The generic competitive strategy of differentiation can support the company’s market development through high-quality services that attract customers in new markets or new market segments.

Product Development (Supporting). Verizon Communications Inc. uses product development as a supporting intensive growth strategy. Growing the business by developing new products or product variants and selling them in the company’s existing markets is the goal in using this intensive growth strategy. For example, a suitable strategic objective is to achieve growth by offering new telecommunications services designed to address the intra-organizational communication needs of firms. Such services may include unlimited group-messaging services for Verizon’s wireless customers belonging to the same organization and located within the same area or region. The company’s differentiation generic competitive strategy requires that product development must involve high quality to ensure new products’ competitive advantage. Any new product developed through this intensive growth strategy affects Verizon’s marketing mix or 4Ps.

Diversification (Supporting). Diversification also has a supporting role in growing Verizon’s business in the information and communications technology and services market. This intensive growth strategy involves providing new products in new markets. New business development, acquisitions, and joint ventures are typical approaches in implementing this intensive growth strategy. For example, years ago, upon acquiring AOL and SocialRadar, Verizon entered the web mapping market and expanded its product mix, which now includes wireless services. In this regard, a strategic objective based on diversification is to continue a history of acquisition as a way of growing the business, strengthening the firm’s market presence, and entering new markets. The company’s differentiation generic competitive strategy requires high quality standards in operating acquired firms. Diversification addresses the opportunity to diversify the business, as noted in the SWOT analysis of Verizon Communications Inc.