Verizon Wireless - Case Study Example

These are its high quality nationwide wireless network, technological choice of CDMA instead of GSM, constant monitoring of its products and services, and provision of the best product to the customer through an automated software which analyzes customers' calling habits. The company's investment in building a system which takes into consideration the customer service capabilities and coverage has important implications on the company's long-term cost structure. Through these investments, the company is able to provide the best for its clients thereby minimizing churn.

The case states that customer loyalty is very important as the acquisition of a customer totals to $300 to $400 each and it takes six to eight months before this cost of customer acquisition is recouped by a business organization. Thus, when a customer stays longer in a service provider, this will mean that the cost of acquisition is covered while the company will not be spending so much in order to acquire new ones. Loyalty also has important implications for a company. If customers are loyal, they tend to spread it to word of mouth allowing the companies not to spend too much on other promotional activities like television advertising.

This, in time, reduces the acquisition cost for a business organization. . This business level strategy is complemented by the functional strategies of quality, efficiency, and responsiveness to customer. The company has invested in quality by checking its signals in nationwide locations through its Test Men as well as having the largest coverage, clearer connections, and fewer dropped calls. Efficiency is also ensured through the employment of CDMA technology which functions better than its GSM counterpart.

The company also proves its commitment to customer responsiveness through its consistent communication with clients offering them with the best plans that suit their calling habits. These strengths allow Verizon Wireless to have a competitive advantage in the wireless business. It should be noted that having a nationwide coverage is very hard to be replicated by another player since it will call for a massive outlay of investment in its part. As Verizon has already been operating in this nationwide network, it also enjoys economies of scale which drives down cost significantly.

Weaknesses: Verizon Wireless churn rate is 0.87%. Through lower than its competitors, this still indicate that the company is not able to serve all of its clients and meet their requirements. The company should aim and strive to bring down the churn rate to 0% since these aggravated customers through word of mouth can ruin the image of the company which is detrimental in the long run Opportunities: The quality, efficiency, and customer responsiveness can be used by Verizon in order to allow it to go after its rival's customers.

It should be noted that the company does not have the most number of subscribers. It can earn more clients through a more intensive