Analyzing interrelationships of managerial decisions/actions within and between the Verizon firm and its environment. Applies multi-disciplinary techniques to diagnose and recommend actions appropriate to specific company situations, using case method.

1. Verizon Communications Inc. Strategic Management BUS 189 – Section 3 Thomas A. Shirley July 2, 2008 Marisa Phillips

9. Vision Statement (Actual) 14 “ For our Core Goals, we decided on just one: To create the most respected brand in communications.”

10. Vision Statement (Proposed) “ For our Core Goals, we decided on just one: To create the most respected brand in communications through product and technological innovation paired with excellent customer service.”

11. Current Key Strategies

12. External Factor Evaluation (EFE) External Factor Evaluation (EFE) Key External Factors Weight Rating Score Opportunities 1.) Increasing usage of wireless broadband applications 0.13 4 0.52 2.) Increasing percentage of their capital expenditures toward growth-oriented ventures, through reduced debt load. 0.12 4 0.48 3.) Ability to bring cost structures more in line with revenues through consolidations, as work forces are reduced, businesses streamlined, and services further bundled 0.12 3 0.36 4.) Price reductions for broadband service coupled with demand for faster connections (to support working from home, online gaming, and watching videos ex. YouTube) 0.09 2 0.18 5.) Using new size to reach further in the U.S. but mainly to expand into Europe 0.12 1 0.12 Threats 1.) Competitor’s adaptation of Verizon’s core competency in customer service 0.08 3 0.24 2.) Technological advances and regulatory reforms 0.09 2 0.18 3.) Economic slowdown resulting in weaker consumer spending 0.08 2 0.16 4.) Competition: AT&T’s contract with Apple 0.07 2 0.14 5.) CDMA technology’s cost benefits coming to an end with advances in GSM 0.10 1 0.10 Total 1.00 2.48

13. External Factor Evaluation (EFE) External Factor Evaluation (EFE) Key External Factors Weight Rating Score Opportunities 1.) Increasing usage of wireless broadband applications 18 0.13 4 0.52 2.) Increasing percentage of their capital expenditures toward growth-oriented ventures, through reduced debt load 19 0.12 4 0.48 3.) Ability to bring cost structures more in line with revenues through consolidations, as work forces are reduced, businesses streamlined, and services further bundled 0.12 3 0.36 4.) Price reductions for broadband service coupled with demand for faster connections (to support working from home, online gaming, and watching videos ex. YouTube) 0.09 2 0.18 5.) Using new size to reach further in the U.S. but mainly to expand into Europe 0.12 1 0.12 Threats 1.) Competitor’s adaptation of Verizon’s core competency in customer service 0.08 3 0.24 2.) Technological advances and regulatory reforms 0.09 2 0.18 3.) Economic slowdown resulting in weaker consumer spending 0.08 2 0.16 4.) Competition: AT&T’s contract with Apple 20 0.07 2 0.14 5.) CDMA technology’s cost benefits coming to an end with advances in GSM 0.10 1 0.10 Total 1.00 2.48

14. Competitive Profiles Matrix (CPM) Competitive Profiles Matrix (CPM) Verizon AT&T Qwest Critical Success Factors Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score Global Expansion 0.12 1 0.12 2 0.24 1 0.12 Market Share 0.16 4 0.64 3 0.48 2 0.32 Customer Loyalty 0.14 4 0.56 3 0.42 2 0.28 Financial Position 0.10 3 0.30 4 0.40 2 0.20 Service Quality 0.16 4 0.64 3 0.48 2 0.32 Customer Service 0.12 4 0.48 2 0.24 2 0.24 Price Competitive 0.09 3 0.27 3 0.27 3 0.27 Management 0.11 3 0.33 3 0.33 2 0.22 Total 1.00 3.34 2.86 1.97

15. Competitive Profiles Matrix (CPM) Competitive Profiles Matrix (CPM) Verizon AT&T Qwest Critical Success Factors Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score Global Expansion 0.12 1 0.12 2 0.24 1 0.12 Market Share 0.16 4 0.64 3 0.48 2 0.32 Customer Loyalty 21 0.14 4 0.56 3 0.42 2 0.28 Financial Position 0.10 3 0.30 4 0.40 2 0.20 Service Quality 22 0.16 4 0.64 3 0.48 2 0.32 Customer Service 0.12 4 0.48 2 0.24 2 0.24 Price Competitive 0.09 3 0.27 3 0.27 3 0.27 Management 0.11 3 0.33 3 0.33 2 0.22 Total 1.00 3.34 2.86 1.97

16. Internal Factor Evaluation (IFE) Key Internal Factors Weight Rating Score Strengths Reliable / Robust Wireless Network 0.20 4 0.80 Marketing / Brand Awareness 0.12 4 0.48 Corporate Strategy - Joint Venture 0.12 3 0.36 Financial Performance / Position 0.08 3 0.24 Advanced Fiber Network 0.05 3 0.15 Weaknesses Geographic Concentration 0.15 1 0.15 CDMA Technology 0.15 1 0.15 Declining Access Lines 0.05 2 0.10 TV services limited / shared 0.05 2 0.10 Fee Structure 0.03 1 0.03 Total 1.00 2.56

17. Internal Factor Evaluation (IFE) Key Internal Factors Weight Rating Score Strengths Reliable / Robust Wireless Network 23 0.20 4 0.80 Marketing / Brand Awareness 24 0.12 4 0.48 Corporate Strategy - Joint Venture 25 0.12 3 0.36 Financial Performance / Position 23 0.08 3 0.24 Advanced Fiber Network 25 0.05 3 0.15 Weaknesses Geographic Concentration 23 0.15 1 0.15 CDMA Technology 0.15 1 0.15 Declining Access Lines 25 0.05 2 0.10 TV services limited / shared 0.05 2 0.10 Fee Structure 0.03 1 0.03 Total 1.00 2.56

18. Financial Analysis Metric Verizon 26 AT&T 27 Qwest 28 Industry 29 Earnings per Share (TTM - Diluted) 1.96 2.06 1.49 1.67* Price / Earnings Ratio (TTM - as of 6/30/2008) 17.48 15.93 2.52 17.25 EBITDA (TTM in billions) 31.51 42.58 4.61 9.09* Share Price Performance (Prior 12 Months) -14.9% -18.6% -60.2% -31.1%** ROE 11.44 11.11 n/a 10.24 Leaders are in bold * Average of ten largest companies (by market cap) in industry ** iShares Dow Jones US Telecom Sector ETF

19. Price Performance 30

20. IE Matrix

21. SWOT Matrix

23. Quantitative Strategic Planning Matrix Pursue 4G Technology Bring FioS into Increase Investment in R&D Based on GSM home to offer high service towards future technology Key Factors Weight AS TAS AS TAS AS TAS OPPORTUNITIES from EFE (= weight x AS) (= weight x AS) (= weight x AS) 1. Increasing usage of wireless broadband applications 0.13 4.00 0.52 3.00 0.39 2.00 0.26 2. Increasing % of their capital expenditures toward growth-oriented ventures, through reduced debt load. 0.12 4.00 0.48 3.00 0.36 2.00 0.24 3. Ability to bring cost structures more in line with revenues through consolidations, as work forces are reduced, businesses streamlined, and services further bundled. 0.12 2.00 0.24 1.00 0.12 4.00 0.48 4. Price reductions for broadband service coupled with demand for faster connections. 0.09 2.00 0.18 4.00 0.36 3.00 0.27 5. Using new size to reach further in the U.S. but mainly to expand into the foreign markets. 0.12 4.00 0.48 3.00 0.36 2.00 0.24 THREATS 1. Competitor's adaptation of Verizon's core competency in customer service. 0.08 - 0.00 - 0.00 - 0.00 2. Technological advances and regulatory reforms. 0.09 4.00 0.36 2.00 0.18 3.00 0.27 3. Economic slowdown resulting in weaker consumer spending. 0.08 4.00 0.32 3.00 0.24 2.00 0.16 4. Competition: AT&T's contract with Apple 0.07 4.00 0.28 1.00 0.07 3.00 0.21 5. CDMA technology's cost benefits coming to an end with advances in GSM 0.10 4.00 0.40 1.00 0.10 3.00 0.30 1.00 AS= Attractiveness Score: TAS= Total Attractiveness Score Attractiveness Score: 1= not attractive; 2= somewhat attractive; 3= reasonably attractive; 4= highly attractive

24. Quantitative Strategic Planning Matrix Pursue 4G Technology Bring FioS into Increase Investment in R&D Based on GSM home to offer high service towards future technology Key Factors Weight AS TAS AS TAS AS TAS Strengths from IFE 1. Reliable/ Robust Network 0.20 4.00 0.80 1.00 0.20 2.00 0.40 2. Corporate Strategy- Joint Venture 0.12 4.00 0.48 2.00 0.24 1.00 0.12 3. Marketing/ Brand Awareness 0.12 4.00 0.48 3.00 0.36 2.00 0.24 4. Financial Performance/ Position 0.08 4.00 0.32 3.00 0.24 2.00 0.16 5. Advanced Fiber Network 0.05 1.00 0.05 4.00 0.20 3.00 0.15 Weaknesses 1. CDMA Technology 0.15 4.00 0.60 1.00 0.15 3.00 0.45 2. Geographic Concentration 0.15 4.00 0.60 3.00 0.45 2.00 0.30 3. Declining Access Lines 0.05 1.00 0.05 4.00 0.20 3.00 0.15 4. TV services limited/ shared 0.05 1.00 0.05 4.00 0.20 3.00 0.15 5. Fee Structure 0.03 3.00 0.09 4.00 0.12 1.00 0.03 Sum Total Attractiveness Score 1.00 6.78 4.54 4.58 AS= Attractiveness Score: TAS= Total Attractiveness Score Attractiveness Score: 1= not attractive; 2= somewhat attractive; 3= reasonably attractive; 4= highly attractive

26. Lowell McAdam President & CEO Ivan G. Seidenberg Chairman and Chief Executive Officer 6 Organizational Chart (Current) Richard J. Lynch Executive Vice President & Chief Technology Officer Dennis F. Strigl President and Chief Operating Officer William P. Barr Executive Vice President & General Counsel John W. Diercksen Executive Vice President – Strategy, Development & Planning Shaygan Kheradpir Executive Vice President & Chief Information Officer Marc C. Reed Executive Vice President - Human Resources John G. Stratton Executive Vice President & Chief Marketing Officer Thomas J. Tauke Executive Vice President – Public Affairs, Policy & Communications Doreen A. Toben Executive Vice President and Chief Financial Officer John F. Killian President – Verizon Business Daniel S. Mead President – Verizon Services Operations Virginia P. Ruesterholz President – Verizon Telecom Thomas A. Bartlett Senior Vice President and Controller Marianne Drost Senior Vice President - Deputy General Counsel & Corporate Secretary Ronald H. Lataille Senior Vice President - Investor Relations Kathleen H. Leidheiser Senior Vice President - Internal Auditing Catherine T. Webster Senior Vice President and Treasurer

27. Organizational Chart (Proposed) Lowell McAdam President & CEO Jack Plating Executive Vice President & COO John Townsend Vice President & CFO Anthony Melone Senior Vice President & CTO Mike Lanman Vice President & CMO Ajay Waghray Chief Information Officer Steve Zipperstein Vice President – Legal & External Affairs Anthony A. Lewis Vice President – Open Development Jim Gerace Vice President – Corporate Communications Martha Delehanty Vice President – Human Resources Margaret Feldman Vice President – Business Development Charlie Falco Vice President – Customer Service Operations Rose M. Kirk Vice President – National Enterprise Sales & Distribution Michael Maiorana Vice President – National Government Sales & Operations President – Latin America President – North America President – Europe President – Asia 6 Ivan G. Seidenberg Chairman and Chief Executive Officer Richard J. Lynch Executive Vice President and Chief Technology Officer

30. Product Positioning Map Price Quality

31. Product Positioning Map (Revised) Price Quality

36. Strategy Evaluation Report: Balanced Scorecard 13 Area of Objective Measure or Target Time Expectation Primary Responsibility Customers 1.Increase Compatibility of Verizon Devices 2.Increase Number of Compatible GSM Devices. + 10% +10% of Data Users Q3 2009 Q3 2009 Product Development Managers/Employees 1.Improve Product Knowledge. Reduce repeated call level by< 20% Q3 2009 Management Operations Processes 1. Decrease Workforce 2. Improve Efficiency < 2% + 10% Q3 2009 Q3 2009 Everyone Financial 1.Increase Revenues 2.Increase Operation Income 93469 – 102815.9+(10%) + 20% Q3 2009 Q3 2009 Q3 2009 Finance

37. Thank You

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