AT&T's strategy for expansion into China
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To what extent was the market for telecommunications products globalized? If it was becoming more global, what drivers were pushing the market in that direction?
To what extent was the telecommunications industry globalized? If it was becoming more global, what drivers were pushing the industry in that direction?
To what extent was China's economy globalized? If it was becoming more global, what drivers were pushing the economy in that direction?
What was the resulting impact on AT&T from the globalization of each of the above?
In this section, you will identify the major market and nonmarket environmental concerns that AT&T should consider as it attempts to capture a piece of the potential industry earnings (PIE) in China's telecommunications industry. In this section, you should address the following questions:
What demand and supply characteristics differentiate the Chinese telecommunications PIE from the U.S. telecommunications PIE?
Who are the buyers and what power do they have?
Who are the suppliers and what power do they have?
Who are AT&T's competitors and what power do they have?
How does each of these affect AT&T as it attempts to capture a piece of the PIE?
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Solution Summary
The expert examines AT&T's strategy for expansion into China.
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AT&T Expansion into China
Memorandum
To: Sharon Voit, VP New Business Development
From: XYZ, New Business Development Assistant
Date: July 3, 2010
Sub.: AT&T Expansion into China
AT&T's China Strategy
Globalization of Market for Telecommunication Products:
The growing trend of the globalization of economies, industry and markets are affecting to the current business environment. Globalization facilitates both opportunities and threats for the firms (Jones & Dimitratos, 2004). In the current business environment, the telecommunication products are being highly globalized due to enhancement in technology. The use of satellites and optical fibers by the different economies and businesses caused an increase in the globalization of telecommunication products. The research and development by the governments of different economies for the telecommunication products also made the telecommunication market more globalized. It was becoming more global because of the evolution in the global taste and preferences.
Liberalization and privatization, development in technology, international reciprocity, and an increased demand from the multinational corporations is some reasons that pushed the market for telecommunication products towards becoming more global. Reduction in trade barriers also opened new market opportunities like China, India for the telecommunication products that pushed it towards globalization (Olmsteda & Jamison, 2001).
Globalization of Telecommunication Industry:
The market for the telecommunication industry has started to change from last three decades. The implementation of global stage was causing a change in the telecommunication industry. The telecommunication industry was becoming more global with an increased competition. The technological development in the mobile telecommunications also posed a significant restructuring for telecommunication industry. The era of liberalization and privatization, were changing the direction of telecommunication industry towards becoming more global. The liberalization & privatization created an open and competitive market for the telecommunication companies in the industry (Pennings, Kranenburg & Hagedoorn, 2005).
The main factors that were pushing the industry towards globalization are the opportunities that were seemed by the telecommunication companies. The opportunity of achieving the economies of scale was the major advantage that was attracted to the telecommunication industry towards globalization. The economies of scales caused an increase in ...
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