The New Conquistutar Case Analysis

The New Conquistador

Case Analysis by Valerie Howell

October 25, 2015

11-28. How important was the EU’s directive eliminating national telecommunications monopolies by 1998 in shaping Telefonica’s strategy? What would the company look like today if Spain were not a member of the European Union?

The decision by the EU to abolish national telecommunications monopolies was instrumental in forcing Telefonica to recognize that they will have to become aggressive in developing and implementing new business strategies that will allow them to continue to keep most of their market share in telecommunications. If it wasn’t for the directive, Telefonica would be behind the curve and struggling to keep up with their rivals.

If Spain were not a member of the European Union, Telefonica’s manager would never have taken a second look at their business in Spain to find out that they had a strong hold there, creating a missed opportunity for growth. The company would be scrabble to find another market to invest in and would probably have to start over in another market to capture market share. Telefonica would have remained ill-equipped to deal with this change because they had a monopoly for so long, they did not take the initiative to upgrade their business strategies to fit the changing economies. Also, Telefonica probably would have been taken over by bigger rival because they would never have improved their services and would have lost their market share.

11-29. How important were cultural ties in determining Telefonica’s success in Latin America?

Telefonica realized that they possessed the competitive advantage over other European rivals entering into the Latin market because Telefonica had 69 percent of the Spain’s fixed-line business and 41 percent of its mobile phone market. It would be easy for Telefonica to enter the Latin American market. In addition, since Spain and South America share the same cultural and linguistic ties, implementing business...