Week 4 Case Study

Topics: European Union, Deregulation, Energy Pages: 2 (339 words) Published: February 12, 2012
Spain’s Telefonica Case Study
1 & 3

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

In 1990 when the company privatized the company and deregulated the telecommunication market.By selling off 12 % of its holdings in the company and offering 100 million share on the market. I also found on the internet that the company expanded into the internet arena in 95 by launching InfoVia, even though the comapny did not completely privatize until 97 when they then sold off its remining 20.9% interst in the company. The Telecommunication Market Commission was then created and then used to promote competition in the rapidly deregulating telecommunications industry.

3. Telefonica has used 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?

By firms choosing to use acquisition by taking over existing local firms instead of using greenfield investments and setting up new ventures they reduce complexity. Mostly because todays softwear works together. Multinational firms can enter a foreign market by taking over existing local firms (acquisitions) or by setting up new verntures (greenfield investments)

European Energy Market Case Study
1 & 3

What do you think are the economic benefits of liberalizing the EU energy market? Who stands to gain the most from liberalization?

The economic benefits of liberalizing the EU energy is; Greater efficiency leads to lower costs and prices that are competing in a more global market., As liberalization and the introduction of competition becomes more widespread across Europe this should lead to further efficiency gains, costs reductions and the potential for lower prices. A completely open European market will allow all consumers to benefit from the cheapest available sources of enery and will drive companies costs down based on...
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