Question

answer 13-10 through 13-12

und wireless steet access that make possible video worldwide revenues for telecommunications services total 5600 Will I Ency to install Sprint executive Gary Force as CEO and od WorldPartners began as an alliance of AT&T, Kokusai Den- Det (KDD) of Japan, and Telecom of Singapore. The goal to provide improved telecommunications services for compa docting business globally. Today, WorldPartners is com- Anal. Heng Kong Telecom, and Unisource of companies, including Telecom New Zealand. Telestra CHAPTER 13 - SELECTING AND MANAGING ENTRY MODES PRACTICING INTERNATIONAL MANAGEMENT CASE Telecom Ventures Unite the World T: he world of telecommunications is changing. The era of is with international companies accounting for 20 percent of Martet opportunities are opening around the world as post, lphone, and telegraph (PTT) monopolies are undergoing priva- sation. Since 1998, telecom deregulation has been taking place in amest in Europe. Meanwhile, governments in developing countries reboosting investments in infrastructure improvements to increase e number of available telephone lines. The demand for telephone wnice is growing at a sharp pace; international telephone call wolume more than doubled over a recent six-year period. The net result of these changes is the globalization of the telecommunica- tires industry. As William Donovan, a vice president at Sea Land Service, said recently, "I don't want to have to talk to a bunch of different PTTs around the world. I don't want to have to go to one camiet in one country and a second in another just because it doesn't have a presence there." Several alliances and joint venture partnerships formed between companies hoping to capitalize on the changed market and busi- esemironment. France Telecom, Deutsche Telekom, and Sprint mated Global One to bring international telecommunications ser vices to multinational companies. As part of the deal, Sprint sold 1 percent of its stock to each of its French and German partners. One handle for the company was how to integrate the three partners cnication networks into a unified whole. Also, start-up costs e ligh, and the need to communicate in three different languages created some friction among personnel. Early on, lengthy negotia- Does were required to reach agreement about the value cach part- Berbught to the venture. A former Global One executive noted, There is no trust among the partners. Other problems included wwpment and billing incompatibilities resulting from distribution rements with telephone monopolies in individual countries. And en there were the financial losses that prompted Sprint chairman Unisource is itself a joint venture that originally included Swe- den's Telia AB, Swiss Telecom PTT, and PTT Telecom Nether lands. Later, Telefonica de España became an equal equity partner in Unisource Unisource and AT&T then agreed to form a 60-40 joint venture known as AT&T-Unisource Communications to offer voice, data, and messaging services to businesses with European operations. AT&T would have preferred to form a joint venture with the French German telephone companies. Yet European regula- tors, concerned about AT&T's strong brand name and enormous size, refused to approve such a deal. There was strong logic for the deal. AT&T Unisource CEO James Cosgrove explained from headquarters near Amsterdam in Hoofddorp that to be competitive in Europe a telecom company needs to have a base there and offer global solutions. Despite the fact that there are five corporate parents, a sense of quality and congeniality has developed. CEO Congrove explained that after working together for two years, the parent companies realized that their own success is tied to the success of the shared venture. The presence of Telefonica de España in the alliance was especially wig nificant for AT&T because of the Spanish company's strong ence in Latin America. Unfortunately, the alliance was weakened when Telefonica decided to ally itself with Concert Communica tions. To fill the void, AT&T and Italy's Stet announced a new alli- ance that would expand communication services to Latin America as well as Europe, The third major telecommunications alliance, Concert Com munications, was formed when British Telecommunications PLC bought a 20 percent stake in MCI Communications. Again, the goal of the alliance was to offer global voice and data network services to global corporations ng Globally 13-10. What strengths did AT&T bring to its joint venture with Unisource? 13-11. Can you think of any potential complications that could have arisen in the AT&T-Unisource joint venture! 13-12. Assess the formation of Global One, Unisource, and other partnerships in this case. What strategic factors might have influenced the entry mode choices that these firms made? ident of Global One, ATAT also depends on various partnership strategies as entry Sources: Barbara Martinet. "Sprint Names listengdistance Chief Reset Global One Venture Street Journal tary 17,191.. 32. Jen nifer L. Schenker and James Pressley, European Telecoms Vestur with Sprin Han't Become the Bully Some Feared Wall Streamat. December 23 1997. p. All: Alan Can Use Peter Strengthen Ties" Times, June 4, 1997, p. 13 Gauta Naktisure Expected Merge Open tions," Wall Suv Journal, June 4, 1997. p. 3

Answer 1

(13-10)

AT& T through the joint venture with Unisource ( which is considered to be one of the best Telecom service provider across mainland European countries like Sweden. Spain., France, Dutch etc) will definetely give them an upper edge with their target operations in Europe region.This will help AT& T to utilise their resources and technology in European region and will break the European regulator barriers. It was impossitbel for AT&T to sustain in Europe regions without the help of a strong team like Unisrouce in Europe. The company brought following strengths to its joint venture with Unisource:

• Voice services
• Data services and
• Messaging services to its European operations.

(13-11)

Unisource is itself a joint venture of many companies from many countries. Any change in political and legal environment of any of these countries may have negative impact on the functioning of Unisource. In this case, joint venture of AT&T and Unisource will also be affected adversely. This joint venture might create a monoply of market in Europe and it may create a negative impact to the customers. The monopoy of market may results in increasing service cost and other cost based on the sole decision of this joint venture company. This will decrease the bargaining capability of customers. Along with that cultural difference between organisation of AT&T , Unisource might create a gap between their management and it may also affect their overall business operations and its effectiveness adversly

(13-12)

Following strategic factors should be kept in mind while deciding on entry mode:

• Tastes and preferences of buyers
• Political and legal environment of the market
• Market potential
• Availability of labor
• Reducing thr trade barriers in several countries
• Will reduce the setup cost drastically
• It will help in exchaning of resource and technology
• Customer base can be effectiveley utilised through joint venture
• Marketing cost can be reduced.

Unisource, GO or other similar partnerships have many partner companies from many countries. Such ventures always have advantages in terms of entry mode. Since they have access to many countries, they can expand their business operations in the most preferred country on the basis of above strategic factors.

PLEASE HELP ME BY LIKING THIS ANSWER. THANK YOU VERY MUCH FOR THE LIKE!