Verizon Cost Benefit Analysis

Project 2 – Shift to digital

In an effort to reduce cost, the second initiative that we focused on was our direct store foot print. On average, Verizon Wireless spend nearly $4B a year on direct stores including rent & lease expense, signage, commission expense, store refreshes and new builds. With the help of an internal tool called Tableau, we were able to obtain analysis of customers store visits across the U.S. in comparison to the numbers of customers who used our website or mobile app. Based on this analysis, we determined that our digital sales were steadily increasing as physical store sales were decreasing. With the current uncertainty of brick and mortar stores and with the use of data analytics tools, we were able to create a

Although outsourcing the distribution of devices and accessories allows Verizon to focus on its core competency, the expense is recurring and difficult to reduce. As a part of the lean six sigma process, our team performed a cost benefit analysis and cause and effect diagram to determine the operational and financial impact of partnering with Amazon. Amazon, is known for having the largest digital distribution platform and more than 63M customers, partnering with of a company of this magnitude could have a significant impact on our bottom line. Based on our research we determined that we incurred an average cost of $12 per unit shipped and shipped an estimate of 8M units annually. Our cost of partnering with amazon to fulfill our distribution would decrease our operating expenses by more than half of our current expenses if we elected to change our distribution strategy.

This project would also directly correlate with our initiative to drive digital sales growth as we would leverage Amazon’s platform and customer base to stimulate future revenue growth. Additionally, this strategy would complement our inventory rationalization strategy as it allows us to further promote our Bring Your Own Device (BYOD) strategy. We would look to monetize Amazon’s platform by incentivizing customers to purchase their device on Amazon’s website and providing the network service at a discounted