'America Movil – The Jaguar’s Next Move\r'

'After a orphic abridgment of the strengths and light-headednesses of the States Movil, and meeting the forces that argon shortly driving the product of the piano tuner telecommunication commercialize in Latin the States and the rest of the humanity, we wee-wee elaborated authorized recomm barricadeations concerning the ships conjunction’s future strategic decisions which, in our opinion, should be considered in signifier angle to consolidate the society’s modern get as a globose leader in this industriousness.Regarding the issue of the accomplishable expansion of the States Movil into impertinentfound food marts; the analysis shows that the best schema for the family to fol showtime, considering its menstruation investments, assets and the forecasts for each realm, is to sharpen on the quantity growth and to continue strengthening its authority in the Latin Ameri digest market, where the weed has been able to progress noniceable st ain awargonness among the consumers and where the cultural, social and economic aspects of the surface area bring an proceeds against competitors.Regarding the possibility of a future merge between the States Movil and Telmex foreign, there is no doubt that the synergy that both(prenominal) companies could generate is fantastic, nevertheless, imputable to the grassroots yet noneworthy differences in these telecom segments, the best option is to keep both companies as separate entities art object all(a)owing them to hold up together by the take inment of phrase ventures and strategic alliances in specific upchucks. genuinely Yours, Author Organic Growth against spatial relation in New MarketsAfter quite a long â€Å"shopping spree” that lasted all over seven years, from 2000 to 2007, in which the States Movil invested and acquired assets all over Latin the States, becoming the largest and nigh powerful companionship in the theatrical role; today the comp s ome(prenominal) needs to conclude whether to continue its expansion through acquirements †either in the equivalent region or in different potency markets much(prenominal) as Europe or Asia †or to settle down and focus on getting the close out of its trus twainrthy investments.To determine which of these options brings the most benefits for the States Movil, we leave al single analyze several aspects of the company and the purlieu in which it competes, as swell forecasts, opportunities and threats that fix with each one of these options. Analysis of the States Movil and its current position in the Latin American MarketAmerica Movil presently holds a inside matched position in the Latin American Market, with affectionate movement in 16 different countries that at the similar time, share a wide motley of cultural, economical and social aspects. These common characteristics act an benefit for America Movil against foreign competitors overdue to the hold u p and proven success of the company in positioning itself and understanding the dynamics in this region.Some of the countries in which the corporation competes, are currently in an advanced stage of development regarding the wireless market †such as Argentina, Chile, El Salvador and Uruguay, where the wireless fate of shrewdness is above 85% of the existence †while other(a)wises represent an attractive prospect of growth †such as Brazil, Colombia, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, Peru and Puerto anti-racketeering law †where the contribution of penetration ranges from 41% to 75% of the people.The impact of these percentages can be conk out appreciated in abut 1, where it shows that the total fleck of potential clients in the region can be assumed to be above 150 one million million, a publication which exceeds the total build of customers currently assort with America Movil †141 million-, especially in countries suc h as Brazil, Colombia, Mexico and Peru, where the company already has a relatively high percentage of the market share.The total number of potential customers in effect(p) in these four countries is near cxxx million, 85% of the total number of potential customers. As distinguished as the surface of the market available for this corporation, is the distribution of revenue enhancement that each one of these countries represents. This distribution can be better appreciated in represent 2. What the trend is showing is that the percentage of revenue from Mexico, the most important market for America Movil, is decreasing compared to other countries in which the company live ons.From 2004 to 2008 the participation of Mexico has reduced from 54% to 39%, stand foring that over half(prenominal) of the revenue of the corporation today comes from its operations in foreign markets, emphasizing their change magnitude grandeur relative to the interior(prenominal)ated market, which importance has decreased in over 15% while the Brazilian, Caribbean, Andean and Mercosur markets demand blush between 4% and 7% each. However, as we can appreciate in exhibit 3, the overall behavior of the Latin American Market shows that it has been in an important phase of growth in the past 4 years, from 2004 to 2008, where revenues have augment over 151%.These verse together support the arguments of both, the strong position that America Movil currently has in the Latin American market, and of the success of the company in understanding the dynamics of the Latin American economy and culture; which translate in a competitive advantage over its important competitor in the region, Telefonica, and other European and North American found corporations that have struggled in positioning themselves in the countries where America Movil has established.Current trunk in Latin America The success meanss of America Movil scheme in this region can be summarized in two main(prenomi nal) categories; the penetration strategy and the positioning strategy. Penetration Strategy The penetration strategy unquestionable by the company has been clear since the beginning; the acquisition of assets in the different Latin American countries for a low price.This strategy has benefited the corporation by providing them with the indispensable root word to operate at a relatively low cost, pickings advantage of opportunities generated by the also-ran of other companies to develop a strong position in the market and taking advantage of the liberalization of the Latin American economies. Examples of these acquisitions are the purchase of BCP from BellSouth Corp. (USA) and Verbier (Brazil) in 2003 for $643 million and American Movil Peru from TIM internationalistic (Italy) for $503.4 million. The main reasons for the retreat of these companies from the region were either difficulties at their domestic markets or failed business strategies, two itemors that America Movil h ad under control, with a strong domestic market performance in Mexico and with a profitable business strategy in the region. Positioning Strategy The second factor that drove the success of the corporation in the countries where it penetrated was the positioning strategy.The strategy to obtain a strong position in the markets where it competes was developed considering the economic situation of the majority of the Latin American population, which is relatively weaker and more bad and than the one in markets such as North America or Europe. With this in mind, America Movil developed a system of pre-paid cards, which to this date, has been the driving force of the company’s growth in the region.The advantage of this computer simulation lies in the fact that the corporation sight that Latin Americans were more likely to kick the bucket users of wireless communication services if they had the fortune to pay for the service as they required it; quashing long term contracts and potentially escalating debts, which, because of the unstable economical situation, could go impossible to pay.The customers were not the only ones beneficiated, since with this model, America Movil became able to advantageously reduce collection costs and to avoid invoice defaults that on the long run, could have affected the revenues of the company as well as the number of their clients. There are, however, two main weaknesses in this model, the first one lying in the fact that this strategy can be relatively well copied by its competitors and in the long run, it doesn’t represent a significant competitive advantage over them.The second damage is that the revenues generated by this strategy are glare than the ones obtained by a post-paid model, which mean that its lucrativeness is based on the volume. Nevertheless, this is currently not a problem for the company since over 83% of its customers are using the pre-paid option. Forecasts of the tuner Market in Latin America As appreciated in exhibit 1, there are currently a huge number of unsupervised potential customers in the Latin American Market.This can be assumed by noticing that the overall penetration is 66%, with countries such as Argentina with an astonishing 97% penetration percentage while others important markets such as Brazil and Mexico are about 65%, a number that can be largely outgrowthd considering the pre-paid strategy used by America Movil, which simplifies and encourages the use of its service among the population.As seen in exhibit 4, according to the case, the forecast for the year 2012 expects an increase from 66% to 76% in the number of subscribers in the wireless market; this represents an increase of almost 50 million new customers, which, as analyzed earlier, are by and large expected to come from four countries: Brazil, Colombia, Mexico and Peru, which combined, have a population of unsubscribed potential customers of almost 130 million, while all of the other c ountries barely reach 22 million.This selective information can help the company focus their efforts in the markets mentioned before, while maintaining a relatively stable growth in the others, think mostly not in attracting new customers but in increasing the profitability of each one of them. Analysis and Forecasts of the Wireless Market in the rest of the universe of discourse After analyzing the benefits of focusing on the natural growth of the company, it is also important to consider the option of expanding further into new non-natural markets for America Movil.The options available are the Asian, European and the place East/Africa and North American Market, where the company currently has a small operation. The main advantage of the Asian market is unquestionably its size; as the continent with the bigger population, over 3,879,000,000 according to the World telamon’ estimates of 2006, and over 10 times the population in South America; it’s definitely the most attractive market to consider. Nevertheless, there are two main barriers that might decrease the attractiveness of trying to penetrate in this market; the competitors and the enormous cultural differences between Asia and Latin America.The disputation in Asia represent a huge threat for newcomers, since is the domestic market of mainland mainland China Mobile, the largest wireless corporation in the world with over $275 billion in revenue and the financial power to overwhelm any new entrant. In addition to this, the fact that, as in Latin America, America Movil is knownized with the economic, social and cultural aspects of the population, China Mobile has a huge advantage and experience with the Asian culture.Europe is also another(prenominal) important market to consider, and the one that America Movil has been closer to penetrate in; however, the same problems arise, with the presence of Vodafone, a British corporation with over $152 Billion in revenue and the advantage o f competing in a market in which the company is more familiar with. This in addition to the fact that, as stated in the case, Europe doesn’t depend to be ready to plainspoken to competitors from the new world, which mean that America Movil is overtaking to have more trouble keen with its acquisitions strategy.Finally, North America doesn’t seem to be an attractive market due to its saturation and low expected growth of only 1. 2% and in the diaphragm East and Africa America Movil may end up making the same mistakes do by European and North American Corporations in Latin America, which is a weak positioning strategy. These are the reasons why the most feasible strategy is to focus on the organic growth, since the strengths that the company has in Latin America, specially the knowledge of the market, can become weaknesses when trying to expand to new markets where strong competitors already have the advantage of experience and economic power.Merger between America Movil and Telmex worldwide The rapid technological changes in the telecommunications industry and the emergence of new receiveers, combined with the reducing of traditional entry barriers and the rise of secondary service providers are forces that currently represent a huge threat for both America Movil and Telmex International. This is the reason why, taking advantage of being part of Carlos Slim’s Holdings, both companies should be able to establish synergy in the markets where they compete in order to offer a combining of services that would be more difficult, if not impossible, to provide by separate.Nevertheless, due to the significant differences in issues such as the infrastructure and strategies required to operate, a merger could not be the best option, however this doesn’t mean that both America Movil and Telmex International are not able to develop joint ventures or strategic alliances while working in specific project that might, in the long-term, increa se their profitability, competitiveness and presence in the Latin American Markets.New trends in telecommunications such as the triple play which offers voice, date and video are rapidly acquiring popularity and obtaining an important share of the market, if Telmex International and America Movil can combine these with the wireless service, there is no doubt that they volition obtain an important advantage in any of the countries where they establish.Cited Works Rullan, Samantha. America Movil, The devising of a Mexican Global Latina. 2008. INSEAD The phone line School for the World America Movil. â€Å"2008 annual Report. ” 2008. 29th April 2010 <http://www. americamovil. com/docs/reportes/eng/2008. pdf>. World Atlas. Continents of the World. 2006. 29th April 2010 <http://www. worldatlas. com/geoquiz/thelist. htm>.\r\n'