Spain’s Telefonica 1. What changes in Political and economic environment allowed Telefonica to expand globally? The changes that were involved in the political and economic environment, which allowed Telefonica to start expanding globally, were privatization and deregulation. In addition economic growth, removal of many restrictions on FDI and programs that opened to foreign investors made some countries more attractive to Telefonica for expansion. Spain’s Telefonica was established in the 1920s being a state-owned national telecommunications monopoly. Soon, the Spanish government privatized it, as well as deregulated the market for Spanish telecommunications. Due to these changes, Telefonica has a reduction in workforce, rapid …show more content…
Licensing may result in a firm’s giving away its know-how to a potential foreign competitor. Firms cannot maximize its profitability, as it does not have strong control over manufacturing, marketing and strategy in a foreign country. Benefits of acquisition There are many benefits of acquiring current assets than undertaking greenfield investments. First mergers and acquisitions are quicker to execute. In fast evolving markets this is very important consideration. When Telefonica wanted to build a service presence in Latin America, it did so through a series of acquisitions, purchasing telecommunications companies in Brazil and Argentina. The reason was Telefonica knew that was the quickest way to establish a sizable presence in the target market. Second reason for Telefonica preferred to acquire firms was because those firms had valuable strategic assets such as brand loyalty, customer relationships, trademarks or patents, distribution systems, production systems and so on. Hence it was easier and less risky for Telefonica to acquire those assets than to build them from ground up through a greenfield investment. Thirdly Telefonica might have believed that they can increase the efficiency of the acquired unit by transferring capital, technology or management skills. However, there are some risks involved in merging with or acquiring the firms as companies may fail to realize
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used
1. If you get it right, there can be many good reasons why buying an existing business could make good business sense. Remember though, that you will be taking on the legacy of the
On 04/22/16, Ken'Dell came to school with a red scratch mark on his face. The reporter stated that the child isnt complaining of pain or needs any medical treatment. According to the reporter, Ken'Dell told her the scratch on his face came from running into a pole. According to the reporter, the child told he ran into a pole while chasing his baby brother, that chased a cat. The reporter stated that the children were not properly supervised and was outside the home alone. Ms. Pendleton stated there are not any prior concerns and the child's basic needs are being met. Ms. Pendelton stated her primary concern is the proper supervision.
control, (4) purchase of assets below replacement cost, and (5) synergy. From the standpoint of society, which of these reasons are justifiable? Which are not? Why is such a question relevant to a company like CompuTech, which is considering a specific acquisition? Explain your answers.
One key financial driver would be to gain new capital assets. Merging with another company is a faster and often a more inexpensive way to gain capital assets without building new facilities and hiring inexperienced staff. Merging allows you to gain
As a company decides to become a MNE (Multinational Enterprise), it “deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least 2 countries. Rothaermel (2013, p. 271) By licensing patents to foreign competitors, it is believed that it will in turn reducing its own competitive advantage due to decreasing the uniqueness of its product. Allowing a foreign competitor to have permission to utilize its product, consumers will have access to the targeted product from more than one source. As the competitor is foreign and presenting the targeted product within a market outside of the MNE’s market base, complete elimination of the MNE’s competitive advantage would be unlikely as long as there
Answer: d. With licencing, a company provides technological know-how to a licensee in the foreign country. Although quality control can be a factor in the licensing contract, the licensee, not the licensor, would have the actual control over product and service quality. Distractors: a) An exporting strategy would result in increased cost savings from economies of scale by producing the product at a single location. b) An advantage of a strategic alliance is that it strengthens the competitiveness in a foreign market by allowing the parties to focus on what they do best. c) An advantage of an exporting as an entry strategy in a foreign market is that is has the lowest degree of risk. Establishing a subsidiary in the foreign country has a high degree of risk.
Alex wanted to capture foreign markets directly but he didn’t have enough resources on its own to do that. After their promising new product was developed, they had a chance to license it to a Scottish manufacturer, McTaggart. McTaggart couldn’t build the market based on shipments from America because it was too expensive. There was a 5% tariff coming in, freight and insurance was another 10% on top of the price and also there was the matter of currency values. He wanted to enter a licensing agreement. McTaggart already had a demand for the product so getting into a license agreement with him would be in Alex’s advantage. For Alex it was a good way to enter the U.K. market swiftly via McTaggart’s sales force. There was no financial risk involved. If Alex agreed on licensing he would have advantages such as low investment costs, reduced financial risk and quick market entry. He agreed on a deal with McTaggart for the U.K market only so he got his chance to exploit its technology there. The license granted to McTaggart will help bring in the cash flow needed so that they can try to expand. However, the profit of the licensor may not be maximized
Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.
On the other hand, licensing has several drawbacks. Firstly, it imposes a minimum standard for entering the market but it does not provide information on the good and bad performers to the purchaser weather individual or state. Nevertheless, it gives a little incentive to distinguish high performers and help to improve the organisations on that (Ensor & Weinzierl, 2007).
REF OF GROUP MEMBERS’: TABLE 1 : 5 C’s SITUATION ANALYSIS Factors Dell Company: Resources 1.4 Licensing, Distribution channel, Supply • Intellectual property, Human resources, Patent, Competences Brand acuity1 chain management 24 25 Techno structure • Just-in-Time; CRM; Engineer R&D, Acquisition
“Assess the merits and demerits of international licensing as a mode of entry into new markets”
Licensing differs from contract manufacturing in that more value chain functions have been transferred to the licensee. In outsourcing production and downstream activities a licensor firm can concentrate on its core competences and therefore will remain technologically superior in its product development- for example Apple licenses its brand to manufacturers of accessory products, and the BBC licenses rights to broadcast TV shows around the world. However a lack of control over licensor operations and therefore quality may lead a company to use franchising (a sub variant of licensing) in which the franchisor gives a right to the franchisee against a
First the licensing may result in a firm's giving away its know-how that is giving away his competitive advantage to the competitor in the foreign market. Suppose Ford gives license to AvtoVAZ, one of the large Russian manufacture then it can start its own car manufacturing using Ford's know how. Second disadvantage is providing the license to the company there is no tight control over the subsidiary firm in foreign market. Ford wants to exploits the opportunity that it has in Russia by its own way. Licensee may not follow all instruction of Ford. The last problem with the giving license is that some terms of know-how can not be defined on a page or documented. Like service industry (Hospitality industry) that how to license the subsidiary for "how to well come and how to greet" as a part of the service.(Hill, 2003,p-215).