telefonica
What changes in the political and economic environment allowed Telefonica to start expanding globally?
Solution: Around 1990’s, there were many changes both on political and economic front which actually change the working conditions for all the companies in different industries including Telefonica which was a state owned typical monopoly company in national telecommunication sector in Spain. Some of the political changes are as under:
The government privatized the company.
There were many deregulation happened in the Spanish Telecommunication Market.
Some of the changes in the economic front which resulted due to the changes done by the Spanish government were:
The company started to reduce their workforce and thus trying to achieve better results by minimizing the cost involved.
Rapid change in the technology, companies started to perform better by way of adapting to the new and advanced technology available.
The Motive of the company changed to increasing the profits and thus increasing the shareholders’ value.
The company started to concentrate more on efficiency and ways to survive the competition.
Due to all the above changes Telefonica became more and more capable of surviving and expanding its business beyond Spain and thus they started expanding globally.
What did Telefonica initially focus on Latin America? Why was it slower to expanding Europe, even though Spain is a member of the European Union?
Solution: The same type of political changes were happening in Latin America also, they were also going for privatization and deregulation in these sectors. This gives opportunities to players like Telefonica to look and focus. Having already learned to transform itself from a state-owned enterprise into an efficient and effective competitor, Telefonica believed it could do the same for companies it acquired in Latin America, many of which were once part of state-owned telecommunications monopolies.
Factors which lead Telefonica initially
Solution: Around 1990’s, there were many changes both on political and economic front which actually change the working conditions for all the companies in different industries including Telefonica which was a state owned typical monopoly company in national telecommunication sector in Spain. Some of the political changes are as under:
The government privatized the company.
There were many deregulation happened in the Spanish Telecommunication Market.
Some of the changes in the economic front which resulted due to the changes done by the Spanish government were:
The company started to reduce their workforce and thus trying to achieve better results by minimizing the cost involved.
Rapid change in the technology, companies started to perform better by way of adapting to the new and advanced technology available.
The Motive of the company changed to increasing the profits and thus increasing the shareholders’ value.
The company started to concentrate more on efficiency and ways to survive the competition.
Due to all the above changes Telefonica became more and more capable of surviving and expanding its business beyond Spain and thus they started expanding globally.
What did Telefonica initially focus on Latin America? Why was it slower to expanding Europe, even though Spain is a member of the European Union?
Solution: The same type of political changes were happening in Latin America also, they were also going for privatization and deregulation in these sectors. This gives opportunities to players like Telefonica to look and focus. Having already learned to transform itself from a state-owned enterprise into an efficient and effective competitor, Telefonica believed it could do the same for companies it acquired in Latin America, many of which were once part of state-owned telecommunications monopolies.
Factors which lead Telefonica initially