Current and Future Market Trends Essay

When returning of radiocommunication name or net profit emolument, the first troupe that probably comes to mind is Verizon radio. Verizon officially became a force to be reck unrivaledd with in the wireless grocery store in 2000 when Verizon communications and Vodafone merged. Verizon states, Verizon Communications Inc., head pull outed in virgin York, is a global leader in delivering broadband and other(a) wireless and wire line communications works to mass market, business, g everywherenment and wholesale customers. Since entering the market in 2000, Verizon has made itself popular by offer service in more than atomic number 18as than any other wireless network.Market StructureWithin economics, four types of market structures exist. The four types are monopoly, monopolistic aspiration, sinless contention, and oligopoly. Colander (2008) describes market structure as, the physical characteristics of the market within which quicks interact. Verizon Wireless market st ructure provide be defined by a combination of monopolistic competition and oligopoly. Colander (2008) defines monopolistic competition and oligopoly as, a market structure in which there are many firms selling differentiated products and few barriers to entryand oligopoly a market structure in which there are only a few firms and firms explicitly take other firms likely response into account.The wireless industry is little that people think and not much competiton exists. For example Cingular and AT&T are both wireless carriers, and Cingular is a part of AT&T. Essentially, when a consumer spends money with Cingular, it mute goes to AT&T. Using an oligopoly structure has worked well for Verizon in the past and currently. Current and early market trends should not have any affect on the market structure of Verizon.New CompaniesCompetition in the wireless industry has always been tough. It seems as though any month or few weeks, a sweet mobilise or new service is exis decenn iumce unveiled by a well-know amicable club or a community trying to get started. anyhowAlltell, Verizon is usually the participation the competition seeks to compete with. To compete with Verizon most companies offer a service identical to Verizon for a cheaper footing, or they offer a similar phone for a cheaper expense. Verizon would not be touched heavily by any new companies entering the market, because Verizon is already established and consumers are already acquainted(predicate) with the brand. Aside from that, Verizon offers a number of services and slogans to keep their consumers interested. Some of the slogans used are Americas largest and most trustworthy network, 1 in customer loyalty, and the touch on free guarantee. Verizon does not have to worry about the competition, the competition should worry about Verizon.PricesOne of the downsides to having wireless services and phones is the price. Since the introduction of cell phones, the price of phones and the pr ice of service have risen significantly. On average, a contract for cell phone service with two lines would cost anywhere from $160 $250, depending on the services the customer chooses. That price does not allow in the price of the phone which could be anywhere from $50 $900. The prices to maintain the convenience of a cell phone are ridiculous, but it is a necessity that most individuals find it hard to live without. The current and approaching trend of the wireless industry shows the price of services and phones increasing. With that being said, despite the prices of phones and service, consumers go out continue to turn over the prices set by Verizon and other wireless companies.TechnologyCell phones and services have definitely evolved over the years. Technology is one of the leading factors when consumers consider purchasing a phone or selecting a company as their wireless provider. Most cell phone users use text messaging, check email, and log onto social networking sites like facebook and myspace from their mobile phones. Like any other invention cell phones have evolved and become an principal(prenominal) part of our lives. Televisions went from just being in homes to our cars. Computers were usually found in places such as homes, offices, and libraries. instantaneously cell phones are the more modern version of computers. Verizon has always made note of the ever-changing trends when it comes to applied science and the company has always delivered excellent products the consumer wants or needs.ProductivityTo maintain the position as the largest and most reliable wireless carrier, Verizon Wireless must spend money. The cost range from building the network, to maintaining the network. Costs include employees, equipment and engineering needed to keep the company on top. The company makes decisions based on what the benefit allow be in the long run. These decisions are made by researching trends and technology in the wireless market and changing t astes of the consumer. The company knows the catalyst of success is a strong network. The law of diminishing marginal productivity states as more of a variable input is added to an existing fixed input, eventually the additional output one gets from that additional input is going to fall (Colander 2008). I was not able to get information limited from Verizon Wireless that would help me graph out this law.The company has over 86,000 employees and made 56.8 billion dollars in arrive at for 2008 (about us 2009). Each year bonuses are given to employees based on individual performance and company performance. Last year the bonuses were based on the fact that the company made 12% in get. In instantlys economic times, the e profit achieved was outstanding and was above any other profits made in the wireless industry for 2008.Cost Structure Wages and BenefitsEmployees of Verizon Wireless are compensated well. The employees salary along with the benefits provided are above others emplo yed in the wireless industry, according to David Brown an analyst at Verizon Wireless human resources. At Verizon Wireless a broad-banded structure is used to organize jobs and neck pay. There are six bands that range from A to F. Depending on the skills of the individual, he or she is usually chartered in on the F band, which is a customer service representative, or assistant. The duties are usually task oriented. The next band is E, which is a coordinator or analyst, who are proven to work independently, usually on projects and good functions. D band consists of level one managers, supervisors etcetera. C through A bands are the higher levels of charge and CEO. Jobs are assigned to bands based on similar roles and levels of responsibility.The jobs themselves can be quite different in terms of what people do. Jobs in the same band are similar in terms of their partake on our business results, the decision-making authority of the employees who hold them, and the knowledge and s kills required. VZW classifies a job as either compensable exempt or salaried non-exempt. Verizon Wireless provides medical, dental and vision benefits to employees at a reduced cost, but also provides at no cost an education benefit up to 8,000 per year, 401k contribution matching up to 6% and yearly performance bonuses as well as profit sharing if enrolled in 401k and a long term incentive program that is also based on company performance.Employees are a vital asset to Verizon Wireless and the salaries along with the benefits are designed to maximize performance.Cost Structure decided and Variable CostsFixed costs are defined as costs that are dog-tired and cannot be changed in the period under consideration (2008). Fixed costs for Verizon Wireless include buildings, warehouses used, and support of cellular sites. Variable costs, or costs that change, include workers employed, contracts for equipment production, new technology etcetera. Verizon Wireless is a firm that sells pr oduced goods to individuals, businesses and government (2008). The companys main output is technology. The fixed costs dived by the variable costs equal the average costs of the company. As was stated earlier, last year Verizon Wireless made a 12% increase in profits from the year before.Most of the tax income occurred in the 4th quarter of the year with the release of the BlackBerry hale touch screen cheat. The device was the answer to the I phone distributed by AT&T. Over 100,000 devices were sold on the first day of release alone. The cost of the device was 199.99, which is around 2 million dollars made in one day. The demand for the devices increased, and the company met the demand with more phones. According to the March 2009 newsletter given to the company for 4th quarter earnings, the CEO Lowell McAdam advised that Storm sales were the factor thatsignificantly raised the companys profits and set the bar for future ventures.Price Elasticity of DemandThe relation between the shift in quantity and shift in price of a product is known as price elasticity. Price elasticity of demand is the unhurriedness of the percentage change in quantity demanded divided by the percentage change in price (Colander, 2008). Verizon Wireless has to make an effort to stay in synch with the price and offerings by their competition. Verizon Wireless must apply services and products that incorporate modern technology and are ground-breaking to compete in the wireless market and inexpensive in todays economy.Impact of Government RegulationsVerizon Wireless realizes the importance in ensuring that all regulations that are established by the Federal Communications Commission. Abiding by these regulations will guarantee that Verizon Wireless will keep providing long-standing benefits for the taxpayer and customers. Verizon Wireless trusts that the present structure of auctioning spectrum licenses, with get toly defined, exclusive-use and flexible rights, is the right approach to spectrum policy (Verizon Wireless, 2009). Although clear benefits towards allowing unlicensed use of spectrum is visible, that advance will not create the revenue for the United States Treasury or the best value for American economy. Broadband is one of the services provided by Verizon Wireless. Over the past ten years Broadband services have been used commercially.During that time the government has acknowledged the significance of implementing market-based motivations to pack broadband usage and investment. Rather than applying more-stringent regulations to telecommunications services and infrastructure, the FCC generally has applied an old wires, old rules new wires, new rules philosophy towards broadband services and networks (Verizon Wireless, 2009) By doing this, customers will reap in the benefits form the governments decision to enhance incentives for broadband service providers to invest in better and superior broadband networks and services. investment funds and deploy ment in next-generation broadband networks such as Verizons FiOS network is happening at a unparalleled pace, and consumersnow have more choices than ever before (Verizon Wireless, 2009).CompetitorsVerizon Wireless has a substantial amount of competition in the wireless industry. Verizon competes with wireless companies such as T-Mobile, Sprint and AT&T. Verizon Wireless became the largest wireless service provider by beating out AT&T. Nonetheless, Verizons landline industry is affected by the large opposition of modern technology and tends to confront challenges from various other competitors with high speed internet and cable companies such as Time Warner Cable. Verizon Wireless has to make an effort to stay in synch with the pricing and offerings of its competitors. The Wireless industry is so competitive, equipment can outdate within a few months. Companies must develop wireless devices that are affordable as well as reliable.Supply and Demand AnalysisEven with todays economi c challenges, many opportunities to create innovative new products to meet customer demand still abound. In a bold new step the company introduced its line of netbooks, mini lightweight laptop computer computers that consumers can take with them anywhere. The netbooks have all the functionality of a laptop, with the convenience of a smaller wireless device. The smaller size and the low price the netbooks are offered, is what todays consumers are demanding. Tapping into this market gives Verizon Wireless a piece of the notebook and laptop market that was only accessible in the past by offering mobile broadband cards. The added revenue from this market keeps Verizon Wireless ahead of the competition. Verizon Wireless also has the opportunity to hit the ceiling its coverage globally with the 3G UMTS, Quad Band GSM networks.This means that business travelers as well as consumers will now have access to roam on more networks in over 250 countries across the globe. Verizon Wireless stri ves to produce the best most reliable wireless voice and data coverage in the industry. In order to obtain that goal the company will have to gain customers faster than the competition, widen the revenue lead and lead in profitability. As long as Verizon stays on the right track, the company should not have any issues presently and in the future.Reference PageColander, D (2008).Economics, Fifth Edition. McGraw-Hill/Irwin, New York, NewYork, 10020 Verizon Wireless. (2009). Corporate History/investor relations. Retrieved June 26th, 2009 from www.verizon.com.