Introduction to the Company, Industry and the Consumers
Verizon is a leading service provider of communication, information and entertainment technologies in the form of data, voice and video products. It makes use of intelligent wireless, global IP and broadband networks to address and meet the growing demands of speed, utility, mobility, and convenience of on-the-go and high-end and low end technology consumers. Because of its pro-active approach in bringing new product and service ideas as well as injection of ingenuity in technological expertise in the industry, the company enjoys the status of being an innovation leader (Verizon, 2011). Verizon’s goal is to be the global leader in the 4G LTE wireless network. It is the first company to have introduced the idea. It is committed to use collaborations, partnerships and strategic alliances to attain market leadership and global market share (Verizon Business, 2011).
It spends heavily annually to expand and enhance its technological expertise to sustain its innovation leadership in the industry that is otherwise bombarded with intense rivalry. Verizon’s main rivals include AT&T, Google, HP, Microsoft, who are continually engaged in bringing new technological innovations to the technology and IT industry (Verizon Business, 2011). In order to stay ahead in the game, Verizon has made use of acquisition, partnership and collaboration strategy that allows it to utilize the technological expertise to introduce innovations regularly in the industry before others and fortify its market share in the industry to reduce the threat of competition (Bigliardi et al., 2011).
Competition is not the only threat from the external environment that Verizon faces, consumers present the company with the biggest challenge. Verizon’s customers include high-end and low-end users. The high-end users comprise of business and industry users, whereas, the low-end users comprise of private consumers who use gadgets and IT equipment and services for personal use (Verizon Business, 2011). Where high-end users seek convenience, speed and efficiency in the IT products and services from Verizon, low-end users seek gadgets that are affordable and compliment their lifestyle above their requirements for speed, convenience and efficiency (Bigliardi et al., 2011). The IT and technological companies have induced a new culture of consumerism that entails complete reliance on gadgets and high-tech equipments for everyday activities. Because of the continuous introduction of new products and services in the markets by rivals and competing firms to stay in the market, a new culture of consumption has emerged where consumers are less brand-loyal and more price-sensitive (Zhu et al, 2011). They seek new products every quarter and regularly switch to new products and new brands to stay “in” and up to date with technological consumption. This becomes challenging when technology changes at a rapid pace. The rapid pace of technological change is another big challenge that has to be coped up with (Bigliardi et al., 2011).
Verizon has invested heavily over the past years to stay ahead in the market. It has launched innovation centers, reshaped and restructured its internal organization, revolutionized corporate and marketing decision making and implementation and information management, all of which allows it to address changing technological, and consumer trends and sustain its position in the market as an innovation leader. Verizon plans to expand across 20 to 30 new markets internationally and cater to new ethnic consumers, such as in India, China, Russia, and other emerging markets. The paper discusses Verizon’s approach to innovation in the form of the innovative products services it has introduced, how technological leadership has been attained and managed and how is the workforce and organization structured and managed to meet the industry and consumer demands of innovation.
Verizon is positioned in the market as a visionary innovation leader. Figure 1 illustrates the positioning of Verizon against rivals, such as AT&T.
Verizon ranks high in terms of completeness of vision and ability to execute strategies. It is an industry leader in 4G LTE smart phones. And the main reason that accounts for this positioning as its pro-active response to industry changes and consumer trends. This is the main reason which makes the firm an innovative one. Each of its products and services reflect the embedment of innovative technology and innovative ideas (Verizon Business, 2011).
It has three key markets that it caters to with its products and services: the wireless market, broadband network market and enterprise and business market. Verizon Wireless is targeted at the low-end consumer market. Verizon offers them 3G and 4G smart phones and related services as well as broadband and internet services. Verizon offers broadband and internet services as monthly packages. For phones and gadgets the company sues competitive pricing models to attract more price sensitive consumers. Verizon has attained innovation in each of these markets. In the wireless market, Verizon offers voice and data products (Verizon, 2011).
Verizon introduced the largest 3G network for the customers that incorporate the innovative features of internet usage, emailing, video and picture sharing as well as access to play downloadable games. This was followed by its break-thorough innovation of 4G LTE smart phones and services to allow consumers to enjoy the best that wireless service provider like Verizon has to offer. The product package that Verizon introduced for the customers incorporated apps from Google, Microsoft and leading gaming software providers that allowed consumers to attain a wholesome smart phone and IT experience. The technological innovation at Verizon is aimed at on-the-go consumer lifestyle (Washington Post, 2011). For internet users, Verizon makes use of fiber technology that allows consumers to enjoy high speed internet surfing and downloading as well as connecting their gadgets and phones with their PCs and laptops and download and save HD videos (Cisco, 2011).
For business and enterprise users of Verizon, it is a leading service provider of IT, enterprise solutions, communication systems and networking solutions. It caters to 96 per cent of the Fortune 1000 companies and organisations across 150 countries worldwide with its innovative and strategic oriented services and products. Verizon has, thus, attained innovation leadership in terms of its products and services not only in the low-end consumer market but also in the high-end business market.
Figure 2 illustrates the products and services categories of Verizon in the realm of innovation. Verizon has also recently entered into new customer markets with the launch of its new LTE technology center. These markets include application providers and technology providers. This has been enabled with the help of its partner Cisco that has incorporated its technological expertise in the LTE innovation centers of Verizon and is continuously engaged in developing software, applications and phones that could add to the company’s innovation targets and goals as it continues to expand across the world (Cisco, 2011).
Attaining technological leadership is a challenge in the industry that Verizon operates in considering the fact the industry inculcates a rapid pace of change. This rapid pace of change threatens the companies to strive for survival and, herein, innovation comes to rescue the firms who use it as a tool for acquiring survival, competitive advantage and market leadership. Break-through as well as continuous innovations cannot introduced and executed effectively in the market without technological leadership (Washington Post, 2011). Use of technological expertise for the development of a product line is not a one-time game for companies in the IT industry. For this purpose, Verizon has sought partnerships and strategic alliances with technology and IT leaders in the industry to aid in its market growth and allow it to attain technological leadership (Cisco, 2011). Also, part of its strategy is to vertically integrate is operational and production circuit to induce effectiveness in its value chain that allows it to meet innovation and technological standards of the industry (CNET, 2011).
The soundness and accurateness as well as efficiency and wholesomeness in the technology used in the products and services can only be attained if specialized service providers are used for each of the technological requirements. Verizon has partnered with Cisco, Google and IaaS Terremark to attain a competitive edge in the market in terms of technological leadership. Each of these partners provides Verizon with a distinct technological service that allows Verizon to operate in a vertically integrated value chain.
Partnership with Cisco is associated with the launch of the new LTE innovation centers. These innovation centers have been developed to conduct in-company research and development in a more advanced fashion. The company has incorporated high-tech technological equipment in to the centers which have cost the company nearly $2 million. The facility at Boston, US, that has been opened occupies a space of 150,000 square feet and has employed 300 engineers (CNET, 2011). The LTE innovation centers allow the company to produce and improve products and services for both high end and low end consumers. These innovation centers are launched in major locations across the US which is its home country. Cisco allows Verizon to induce technological expertise in the back-end services and operational processes such as research and development and production and testing of new ideas (Cisco, 2011).
On the other hand, Verizon has partnered with Google to add Google applications such as Google Calendar, Google Docs and Google sites in the 4G LTE smart phones for its low-end as well as high-end users. Google’s expertise in the application and software development that is tied with the internet has allowed Verizon to incorporate into its 4G LTE smart phones wholesome internet experience for on-the-go consumers that allows them to stay connected and synchronize their phones with their personal computers and other gadgets of use (Daily Tech, 2011).
With the assistance of it’s another strategic partner, IaaS Terremark which specializes in cloud computing services, Verizon has introduced cloud computing in its organisation-wide operations. Cloud computing is an essential requirement of IT companies who are bombarded with data that needs to be continually sorted out and made use of. The advantages of this change that the company has received are: faster procurement, deployment and management of technological resources as well as faster transformation of information received from business intelligence into new product ideas and strategies to tackle competition and threats from the industry (Cisco, 2011).
Therefore, Verizon’s vertical integration business model that incorporates partnerships and alliances with technology and IT service providers allows it to sustain technological leadership. This technological leadership is an essential component for an innovative firm which in an ongoing fashion allows the company to stay ahead in the market (Barczak and Sultan, 2001). Verizon uses this technological leadership that it has attained through a vertical value chain with a hand full of investments to compete effectively in the market, fortify its market share, expand in to new customer segments and geographic markets and sustain its position in the market as an innovation leader.
Organizational Approaches towards Innovation
Verizon realizes that, in order to compete effectively with rivals, keep up with the changes in the industry and sustain its position in the industry as an innovative company, it has to align its internal company environment with the changes in the external environmental and the demands of the consumers. In order to survive in the industry, customer focus and an internal culture of innovation is fundamental (Agarwal and Selen, 2011). There is pressure on the IT companies to reinforce the culture of innovation in the organization which only adds to the pressure on the employees. Supervision and controlled environment of working are two forces that produce a negative impact upon the performance of the employees. Employees of the IT companies are the drivers of the technological revolutions and induce new ideas that shape technological break-through that companies introduce in the market. They need to be motivated in order for the companies to stay innovative and attain technological leadership in the industry (Verizon Business, 2011).
‘Customer Focus’ and ‘Innovativeness’ are two key fundamental values that shape the management approach of the company. These values are withheld by each employee that allows the management to align individual goals with the corporate goals. An innovation-centered culture prevails in the organization that encourages employees to bring forth new ideas to the management (Verizon Business, 2011). The company-wide focus towards innovation is curtailed and effectively managed through a business model that allows the management to make sure that information and knowledge is shared mutually, on time and at a speed that allows the smooth flow of operations and activities necessary to meet the performance targets (Uri, 2002).
Verizon previously made use of an IT enabled business model that allowed virtually monitoring, managing and coordinating with all employees. Now, it has moved from the IT enabled business model to an empowered business technology model (BT). This is a strategic shift that the organization has taken to induce a more sound, high-tech and innovation-centered structure into the company. Within this structure “web-centric” management of the workforce takes form (Verizon Business, 2011). Workers and employees are allowed flexible working hours. They are dealt with virtually by the manager. The company hires only the most talented staff and management practices minimum supervision of the workforce (Amalia and Nugroho, 2011).
This is the beauty of the organizational structure of the company that through the web-centric structure, multiple employees and projects can be managed and monitored easily (Amalia and Nugroho, 2011). Cloud-computing is embedded in the internal infrastructure of the company, from teleconferencing to virtual management; employees are connected with the company at all times. This makes it easier for the company to align the activities of the employees to its corporate targets and goals. Not only this but the structure gives space as well as freedom to explore to employees which is a powerful tool of motivation that the management makes use of to keep employees aligned to the corporate goals and objectives (Verizon Business, 2011). This organizational structure requires decentralized approach to decision making which is effectively practiced in the organisation (Uri, 2002).
The organisational structure that is “web-centric” and incorporates cloud computing allows Verizon’s management to effectively procure, deploy and management technological resources and in time transform these into innovative products and services and sustain technological leadership.
Innovation Concepts and Process
The innovation issues that are relevant to Verizon are the type of innovations that it introduces in the market as well as the process it makes use of to introduce innovations. Verizon’s innovations can be termed as continuous product innovation rather than break-through. The continuous product innovations are those that are introduced regularly in the market that are improvements of the previous innovations (Agarwal and Selen, 2011). Breakthrough innovations are those new ideas that take the society by a storm. They change the consumerism altogether and move consumer towards a new shift (Drucker, 2006).
Smart phones, broadband and enterprise solutions have already been introduced in the past decade. Therefore, Verizon’s improvements in the already existing product ideas cannot be termed as a breakthrough innovation. Verizon has, however, has introduced product innovations, in the form of 3G and 4G smart phones, high-speed broadband as well as innovative enterprise solutions that have not induced a revolution in the society but have improved the services and products using technological leadership. Verizon’s innovation stems from its ability to transform industry changes and consumption trends into new product, applications and service ideas. The innovations are introduced in a continuous basis. This involves continuously engaging in taking feed from the market through business intelligence and consumer and market research studies, research and development in laps and introducing and testing new improvements to the products that meet customer expectations (Verizon Business, 2011).
The information obtained from the business intelligence, benchmarking, and market and consumer research studies triggers the innovation process at Verizon. The innovation process starts with the realization that there is a need to improve the product. This realization comes from the research findings of consumer trends, sales trends and industry trends and the pro-active approach of the management. Followed by this, brainstorming takes place to find solutions to potential problems that the company foresees in the data it has obtained. Brainstorming comprises of engineers and managers sitting together in meetings and conferences (Drucker, 2006). The most common innovative thinking tool used by IT companies is ‘product bundling’ that combines two or more services or product ideas together. This is evident from the incorporation of several applications and services into a single smart phone or a gadget. This idea generation leads to product development and market testing. This is an ongoing and continuous process that is followed within Verizon. The new LTE innovation center has been launched specifically by Verizon for the purpose of a high level of innovation building in the company. This reflects the commitment of the company towards bringing continuous product innovations in the industry.
Verizon is positioned in the market as a visionary innovation leader. It has three key markets that it caters to with its products and services: the wireless market, broadband network market and enterprise and business market. With innovation tucked under its belt, it plans to expand across 20 to 30 new markets internationally and cater to new ethnic consumers, such as in India, China, Russia, and other emerging markets. The corporate strategy of Verizon to incorporate the social media to sense trends, cloud computing to and communicate with the low-end users and co-branding with rivals to bring new technologically sound innovations in the market and curb the threat from competitors has allowed Verizon to become an innovative company. Verizon’s vertical integration business model that incorporates partnerships and alliances with technology and IT service providers allows it to sustain technological leadership (Barczak and Sultan, 2001). This technological leadership is an essential component for an innovative firm which in an ongoing fashion allows the company to stay ahead in the market. Verizon uses this technological leadership that it has attained through a vertical value chain with a hand full of investments to compete effectively in the market, fortify its market share, expand in to new customer segments and geographic markets and sustain its position in the market as an innovation leader.