China Mobile Limited Essay Example | Topics and Well Written Essays - 1500 words

China Mobile Limited - Essay Example The telecom industry has undergone reforms which have been driven by the regulations of the European Union (EU). Through successive liberalization directives and harmonization directives, the EU has played a vital role in liberalization of the EU telecom market (OECD, 2001). Italy now has a comprehensive regulatory regime which enables it to promote competition in the sector. Italy also has one of the most pro-competitive approaches among all the OECD members in monitoring service quality and coverage of carrier pre-selection. China Mobile Limited (CHL) is one of the world’s largest mobile network operators, headquartered in China and having operations in Mainland China, Hong Kong and Pakistan. Despite its presence only in three countries it has the largest customer base in the world of approximately 650 million with a market share of 65% in Mainland China (China Mobile Limited, 2012). CHL has been evaluating the prospects of entering the European markets as a strategy seeking growth and expansion. Besides, the government in China also encourages Chinese companies to expand overseas. Growing organically is time consuming and hence CHL intends to enter into alliance or acquire majority stakes in an existing mobile network operator (MNO). Telecom Italia (TM), the leading service provider in Italy is heavily indebted and running in losses (Sanderson, 2012). The organization needs funds to grow but is already in heavy debts. CHL has an opportunity to enter into an agreement with TM and fund their growth. CHL is cash-rich and has massive network as well. In entering new markets the risk and control is proportionately related to the investments. CHL can fund their growth but this would require controlling stakes, which implies high investments. Low investments would not give CHL controlling stakes without which CHL would have to function as the other stakeholders insist. However, CHL would need the support of the existing MNO as the two countries are wide apar t in cultural dimensions, particularly in uncertainty avoidance and long-term orientation, according to Hofstede’s dimensions. Thus, CHL would have to adapt to short-term orientation in decision-making and accept risks as well. Risks include obtaining controlling stakes in the company by paying more than the market price. Since CHL has experience in technology this would help offset risks from not having country-specific experience (Braunstein, Jussawalla and Morris, n.d.). The Italian economy is in trouble and the political condition in Italy is unstable too (Sanderson, 2012). However, in the telecom sector there are no restrictions on foreign ownership and on shareholding of a single party (OECD, 2001). Therefore, even though CHL would have to change its strategy to adapt to Italian cultural standards, they would make profits because of their experience in the sector and the strength of financial resources. However, they may not be able to make profits in the first few year s but eventually they would be able to get return on their investments. First Solar First Solar has been one of the largest and most successful solar panel manufacturers so far but it faces stiff competition from Chinese manufactures which has driven down the prices by 50 percent (Bullis, 2012). Oversupply of panels and sales below production cost by Chinese manufacturers has intensified competition (Wang, 2012). Technologically, First Solar’s thin-film, cadmium-telluride solar panels are less efficient than the silica solar panels made by the Chinese manufacturers. First Solar’s panels can be used for large, ground-mounted installations. However, this has limited market and the company is no longer able to sustain selling its products below