Telefonica

Topics: Latin America, Spanish language, Privatization Pages: 3 (679 words) Published: April 22, 2011
INTERNATIONAL BUSINESS

Case Study 3: Telefonica

Group 8:

|Bùi Thanh Nam | |Lê Minh Ngân | |Phạm Phương Ngọc | |Đinh Vũ Công Nguyên | |Nguyễn Thu Phương |

Question 1:

Spain’s Telefonica had the chance to start expanding globally thanked to two significant changes in the economic and political environment: privatization and deregulation. Telefonica was a typical state-owned national telecommunication monopoly when being established and then, the Spanish government privatized it and deregulated the Spanish telecommunications market. It means that Telefonica from a state-owned company became privately controlled. Government also reduced rules to open telecommunications market for more competition. For these reasons, Telefonica had a sharp reduction in the workforce, rapid adoption of new technology and focused on profits and shareholder value and also started expanding globally for growth.

Question 2:

Telefonica initially focused on Latin America because of the similarity in culture and the development of Latin American market. Much of region of Latin America and Spain had common language and deep similarity in culture and history. Moreover, Latin America were really a potential telecommunications market which were now growing rapidly, increasing the adoption rate and usage not just of traditional fixed-line telecommunications services, but also of mobile phones and internet connection.

Telefonica was slower to expand in Europe even though Spain is a member of the EU because for years, there had been a tacit agreement between national telecommunications...
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