The Telecommunication Industry: The Sucess of TV Azteca

The following case study is in regards of economic market structure. In the world of economics all businesses or companies rather, are categorized in certain market structures such as monopoly, oligopoly, or perfect competition, for instance, the market structure for restaurants. Most restaurants are considered monopolistic competition. Being that they all sell and serve food. They have to have instances that vary such as price, logos, servers, locations, décor, types of food, and hospitality.

Oligopolistic markets, such as supermarkets or car manufacturing, can be defined in terms of market structure or in terms of market conduct.

In business, market structure plays an important role, which helps to shape the competitive landscape for businesses at all levels. Each business industry will naturally form a market structure that comes in numerous forms: Perfect competition, monopolistic competition, oligopoly, or monopoly. Verizon Wireless is a well-known communications company and large enough to affect the market. Oligopoly is defined as a market in which only a few firms dominate, and judging from Verizon competition there are only a few firms involve: T-Mobile, AT&T and Sprint. With only few competitors involve the barrier to entry is high, but there still lies a large pool of customers. The barriers are high because of the amount of money that has to into the infrastructure

Many utilities are monopolies by having the entire market share in certain areas. With deregulation of these utilities, the market becomes open to competition for market share to begin. In terms of regulation of monopoly, the government attempts to prevent operations that are against the public interest, call anti-competitive practices. Likewise, oligopoly is a market condition where there are minimal distributors that have a major influence on prices and other market factors. This causes market failure, especially if evidence of collusive behavior by dominant businesses is found.

"In 1994, both countries [Mexico and the United States] signed the North American Free Trade Agreement (NAFTA) which has increased their mutual trade and foreign direct investment. Between 1994 And 2005, the US-Mexico foreign direct investment flows increased substantially from 16,968 billion to $71,423 billion. By 2007, the Mexican commercial relationship with the U.S. almost tripled from $297 billion to $930 billion." [2] This mutual increase in business inherently has had an attendant growth in "the number of foreign enterprises who have situated in each country." [2] With this increase in international business and trade comes cultural shifts and increased globalization and differences in managerial functions.

The first elements Zuloaga points out is that “the protection of the Mexican cultural industry never came up”. (Zuolaga,2001) Indeed, the NAFTA agreements made between major world powers, it is expected that many will question the validity of these agreements on an equality scale for Mexico, known as a weak country on many levels.

There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.

One positive of the NAFTA agreement was the GPD value increasing, “In Mexico the GDP has nearly tripled, rising from 11 percent in 1980 to 32 percent in 2002.” (Bacon, 2014) But To avert a flood of capital to the north, then-U.S. Treasury Secretary Robert Rubin engineered a $20 billion loan to Mexico, which was paid to bondholders, mostly U.S. banks. In return, U.S. and British banks gained control of the country’s financial system. Before NAFTA the Mexican government had no problem providing subsidies to farmer in areas such as Veracruz but once the structures were put in place, preventing that, farmers headed North. And Mexican rail employment dropped from more than 90,000 to 36,000. The benefits of liberalization also helped

To begin describing how has been the growth and progress of FDI in Mexico it is important to define FDI itself. According to the OECD Economic Outlook of 2003, Foreign Direct Investment is “an activity in which an investor resident in one country obtains a lasting interest in, and a significant influence on the management of, an entity resident in another country. This may involve either creating an entirely new enterprise or, more typically, changing the ownership of existing enterprises (via mergers and acquisitions)” (157).

Companies have to strife for a competitive advantage over its rivals. Industry concentration is measured through concentration ratios. A higher concentration

The strong influence of U.S. economy on Mexican one is confirmed analyzing Exhibit 3 with respect to foreign direct investment and exports. United States accounts for more than 45% of total FDI inflows in Mexico and, even if the Country is actually the largest host of FDI in Latin America, it’s undeniable that accordingly with economic downturns in the U.S. the figure of FDI in Mexico declines significantly (Bureau of Western Hemisphere Affairs, December 2010) like happened from 2007 to 2009 (Exhibit 4). The same mechanism act also with exports because U.S. attracts almost 80% of Mexican exports thus during periods of crisis in the U.S. Mexico suffers slowdown in foreign trade (Exhibit 5).

Mexico’s pursuit of free trade agreements with other countries is a way to bring benefits to the

Mexico is the top trading nation in Latin America and the ninth-largest economy in the world. No country has signed more free trade agreements – 33 in all, including the two biggest markets in the world, the US and the EU. Altogether these signatory countries make up a preferential market of over more than billion consumers. Much of the FDI in Mexico is attracted by the country’s strategic location within the North American Free Trade Agreement, which has positioned it as a springboard to the US and Canada. Other attractions are competitive production costs and a young, skilled workforce, together with political stability and an open economy.

In Agreement 006 of 1996, the Colombian National Television Authority also established a set of prohibitions to community television which include signal radio diffusion, service commercialization, reception and distribution of codified signals. However, a year later, the National Authority started to refer to community television as non-profit community television, in which it demanded from Community television to produce contents for keeping their status.

It has been ten years since the signature of the NAFTA agreement among Canada, U.S., and Mexico. For Mexico, this was a decisive step away from a protectionism model toward a