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Spain's Telefonica

In: Other Topics

Submitted By Relata
Words 494
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RELATA, Redentor C. April 4, 2014
ALINGASA, Marjun T. GLOBPRO

Case No. 5: Spain’s Telefonica

1. What changes in the political and economic environment allowed Telefonica to start expanding globally?

* The changes involved in political and economic environment were the Spanish government starts privatized the company and deregulated the Spanish telecommunications in the market. Due to these changes, followed by a sharp reduction in workforce, rapid adaptation of new technologies, and begun to focus in driving up profits and shareholder's value, the Telefonica began to grow and allowed the business to expand globally.

2. Why Telefonica did initially focused on Latin America? Why was it slower to expand in Europe, even though Spain is a member of European Union?

* As Telefonica looking for a growth, they searched first the Latin America and it seemed that the nation is the perfect fit for them because the Latin America also experienced the rapid deregulation and privatization across the region. So, telefonica initially focused on Latin America because the similarities in the development of the market, language and culture. Also, Latin America markets were increasing the adoptation rate and usage not just traditional fixed line telecommunications services, but also include the internet connections and mobile phones. * Even though Spain is a member of the European Union, the Telefonica had been an implied agreement between the national telecommunication companies that they would not invade each other's market which result for Telefonica to slower their expansion in Europe.

3. Telefonica has used to acquisitions, rather than Greenfield ventures, as its entry strategy. Why do you think this has been the case? What are the potential risks associated with this entry strategy?

* Telefonica has used acquisitions…...

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