For my UCF Capstone presentation, my team and I analyzed Verizon's current position and identified a possible acquisition within their business connectivity sector. We then create a comprehensive implementation plan to ensure a smooth acquisition.
2. What is the current state of the wireless
industry?
Smartphone sales
are slowing.
Customers aren’t
upgrading their
phones as often
as they used to.
Wireless carriers’
services revenues
declined for the
first time ever in
2015.
Dano, 2016
3. How can Verizon expand and grow in new
areas?
Telematics
Online
Advertising
Business
Connectivity
Time to Complete:
Six Weeks
Acquisition Budget:
$1-5 Billion
6. EXTERNAL ANALYSIS •Four companies own 90% of
markets
•Compete by using plan buyouts
Very high competitive
rivalry
•High barriers to entry
Low threat of new
entrants
Consumers view wireless
services as a necessity
The Telecommunications Industry
Blau, 2016
7. EXTERNAL ANALYSIS
•1st in comparison to
competition
•This allows Verizon to
expand alternate business
segments
Verizon currently owns
33% of the marketThe Telecommunications Industry
Blau, 2016
8. INTERNAL ANALYSIS
Value Chain Analysis – Support Activities
Procurement
118 licenses
acquired in 2015
alone
Greater
demand
for
spectrum
Verizon Communications, Inc, 2017
9. VRIO FRAMEWORK
Value? Rare? Difficult to Imitate? Organized?
Physical: Land,
buildings,
machinery,
equipment
Yes No No Yes Competitive Parity
Technological:
Logistics system
Yes Yes Yes Yes Sustainable competitive
advantage
Financial: Ability to
retain capital
Yes No No Yes Competitive Parity
Brand reputation Yes Yes Yes Yes Sustainable competitive
advantage
Network depth and
breadth
Yes Yes Yes Yes Sustainable competitive
advantage
10. FINANCIAL ANALYSIS
Market Capitalization =
$200.8 billion
Annual Revenue =
$126 billion
Enterprise Value =
$307.5 billion
• Value of outstanding
stock
• Wireless revenue
accounted for 68% of
total revenue
• This is the complete
value of the firm
Yahoo Finance, 2017
11. FINANCIAL ANALYSIS
Verizon’s revenue - 8 different
business areas
•Highest grossing area is wireless services at
$66 billion in 2016
•Wireless services segment is growth restricted
•Verizon can achieve growth by acquiring a
company in another business area
Yahoo Finance, 2017
12. Strengths
•Wireless segment
•Spectrum
Weaknesses
•Large amount of debt:
$115 billion
•Limited vendors
Opportunities
•High demand for mobile
connectivity and broadband and
cloud technology
•New opportunities with
purchase of Yahoo!
Threats
•Industry competition
•Technology changes
SWOT
ANALYSIS
Fiegerman, 2017
Strong hold on wireless
market
Spectrum availability
Mobile dependancy has
dramatically increased
14. Business Connectivity
Why?
Continued growth within
the industry
Increase in working remotely
and online teams
Verizon already has a large
corporate customer base
“Over the next three
years, growth in
business services is
forecast to surpass
the consumer market
and become one of
the key growth
engines for telecom
companies.”
Weyer and Costers, 2016
15. STRATEGIC
PROPOSAL
IDENTIFICATION •Business intelligence software
•Connects people
•Visualizes data from spreadsheets
to databases
•Publishes dashboards
•Organizes supply chain
management
What is Tableau?
“Gold standard for intuitive
interactive exploration.” – Gartner
Featured in Forbes, Fortune, the
Wall Street Journal, and many
more
16. STRATEGIC
PROPOSAL
IDENTIFICATION THE PLAN
•While AT&T is focusing its resources
elsewhere, Verizon moves to expand
their business connectivity segment by
acquiring Tableau
•Verizon is already in the business of
connecting people
•As a subsidiary of Verizon, Tableau will
prove to be a valuable partner
•Verizon will be able to offer its
customers even more business products
17. STRATEGIC
PROPOSAL
IDENTIFICATION
•Verizon has a large
corporate customer base
•Verizon can successfully
increase data capacity to
permit Tableau usage on
tablets and smartphones
•Verizon has excellent
data coverage
Strengths of
Tableau Acquisition
21. STRATEGIC PROPOSAL JUSTIFICATION
Using
company and
industry
benchmarks
30-50% Growth Rate
Increase in Operating Margin of 17-29%
of Revenue
Internal Rate of Return = 17%
Net Present Value = $674 million
22. Tableau’s Projected Growth
YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue $ 826,943,000 $ 1,075,025,900 $ 1,451,284,965 $ 2,031,798,951 $ 2,946,108,478 $ 4,419,162,718
Revenue Growth Rate 30% 35% 40% 45% 50%
Operating $ (139,561,000) $ 182,754,403 $ 290,256,993 $ 467,313,758 $ 765,988,204 $ 1,281,557,188
Operating Rate 17% 20% 23% 26% 29%
23. STRATEGIC PROPOSAL JUSTIFICATION
Verizon’s goal is to promote their
business connectivity solutions
Tableau delivers on this goal
A great amount of Tableau’s
technology is catered towards mobility
24. STRATEGIC PROPOSAL JUSTIFICATION
•Tableau is an established company which saves Verizon time
and resources
•Tableau has shown impressive growth since its start
Another goal for Verizon is growth
“On going change and innovation” is expected to
take place in the business connectivity sector
Wigginton, 2017
25. STRATEGIC PROPOSAL JUSTIFICATION
Example of similar acquisition
•In 2015, Nokia bought Alcatel-Lucent
•At the time, Nokia was lacking in IP and cloud networking
•With this acquisition, Nokia was able specialize in a new
business group
27. STRATEGIC IMPLEMENTATION PLAN
GOAL
•Fully implement
Tableau’s offerings into
Verizon’s business
connectivity segment
•Increase sales of
Tableau’s software
•Facilitate continued
growth for Tableau
•Facilitate increased data
consumption among
Verizon’s customers
28.
29. STRATEGIC IMPLEMENTATION PLAN
Reorganization – Approximately 2 months
Keep Tableau’s corporate
headquarters in Seattle,
Washington
• Seattle is the new center for a
technology boom
• Seattle draws many engineers
and computer scientists
• Moving the headquarters
would be costly and would risk
losing valuable talent
Consolidations
• Decrease support services
costs
• Analyze Tableau’s operations
to determine where downsizing
can take place
30.
31. STRATEGIC IMPLEMENTATION PLAN
Marketing and Sales – Approximately 2 months
Identify key employees
within Tableau to create a
training program
Train the existing Verizon
marketing and sales team
to become Tableau experts
Sales team that is focused on Verizon’s specific needs
Two target areas: Verizon’s corporate accounts and sales at
Verizon stores
32.
33. STRATEGIC IMPLEMENTATION PLAN
Corporate Account Sales – Approximately 18 months
Very important
implementation
step
Verizon has a
substantial
corporate
account
customer base
Tableau’s
software is a
perfect fit for this
customer base
Verizon’s sales
team’s goal will
be to increase
sales of Tableau
to compliment
the customers’
current business
operations
34.
35. STRATEGIC IMPLEMENTATION PLAN
Step Roll-Out in Verizon Stores -
Approximately 18 months
New York City
1.) Sales Training
2.) Sales
3.) Evaluation
Major Metropolitan Areas
1.) Sales
Trainings
2.) Sales
3.) Evaluation
Smaller Markets
1.) Sales Training
2.) Sales
3.) Evaluation
Staggered roll-out will reduce risk
and facilitate future success
Marketing materials will need to be
designed and produced
During each separate evaluation,
success will be measured by
assessing Tableau signups among
Verizon customers
Training and sales processes can be
reviewed and altered as needed
36.
37. STRATEGIC IMPLEMENTATION PLAN
Overall Evaluation – Approximately 1 month
Evaluate
• Sales Training
• Implementation Process
Assessment of
Success
• Increase of Tableau customers
• Increase of data usage among new Tableau
customers
Remember
• Tableau’s regular operations and sales will
continue throughout this process
• Verizon’s increased efforts to add value to their
customers will improve Tableau’s growth
38. STRATEGIC IMPLEMENTATION PLAN
Implementation Budget
Activity Benefit or (Cost)
Consolidation
Downsizing of business activities 250,000
Marketing and Sales
Training
Marketing Materials Design and Distributions
(200,000)
(100,000)
Evaluation (100,000)
Increased Revenue 1,000,000
TOTAL Benefit or (Cost) $850,000
40. VERIZON’S ACQUISITION OF TABLEAU
A Strategic Partnership
A Growing Business Segment
A Rising Subsidiary
Increased Value for Verizon Customers
41. REFERENCES
• BBB Accredited Business Profile: Verizon Communications. (n.d.). Retrieved April 05, 2017, from
https://www.bbb.org/new-york-city/business-reviews/telephone-communications/verizon-
communications-in-new-york-ny-411/reviews-and-complaints
• Blau, G. (2016). Major Companies. Retrieved February 20, 2017, from
http://clients1.ibisworld.com/reports/us/industry/majorcompanies.aspx?entid=1267
• Fiegerman , S. (2017, February 21). Verizon cuts Yahoo deal price by $350 million. Retrieved
April 10, 2017, from http://money.cnn.com/2017/02/21/technology/yahoo-verizon-deal/
• Verizon Communications Inc. (2017, February 21). Form 10-K. Retrieved April 3, 2017, from
https://www.sec.gov/Archives/edgar/data/732712/000119312516473367/d35513d10k.htm
• Van de Weyer, C., & Costers, C. (2016). How to Capture the B2B Growth Opportunity in Telecom.
Insights. Retrieved April 22, 2017, from http://www.bain.com/publications/articles/how-to-
capture-the-b2b-growth-opportunity-in-telecom.aspx
• Wigginton, C. (2017, March 02). 2017 Telecommunications Industry Outlook | Deloitte US.
Retrieved April 10, 2017, from https://www2.deloitte.com/us/en/pages/technology-media-and-
telecommunications/articles/telecommunications-industry-outlook.html
42. What can we clarify?
Jennifer
Aviles
Marketing Major
Jenny_Aviles@knights.ucf.edu
Kimber
Davis
Accounting Major
KimberDavis@knights.ucf.edu
Dayna
Halstead
Accounting Major
DNHalstead@knights.ucf.edu
Brianna
Prenn
Marketing Major
BriPrenn@knights.ucf.edu
Shantell
Smith
Finance Major
Smith_Shantell@knights.ucf.edu
