The history behind the joint venture is elaborated below. In 2000, Bell Atlantic Corporation and Vodafone AirTouch Plc. agreed for joint venture of $70 billion joint venture that created the largest mobile phone company of nation, Verizon Wireless. The new venture has 3.5 million paging customers and 20 million cellular users. The agreement of joint venture was a major step in the strategy of United States. It is very important to gain a nationwide recognition when the growth of the telecommunication industry is fast and the penetration level of new companies is less. The new venture combined the assets from AirTouch Cellular, Bell Atlantic Mobile, PrimeCo Personnel Communications, AirTouch Paging and GTE Corp which comprised around 90% of the population of Unites States. It took 26% of the total national market share of the country. The new venture needed to divest some overlapping holdings for meeting the requirements of Federal Communication Commission. The transaction for the joint venture is expected to complete within 6 to 12 months. The venture introduced a strong player in the United States wireless market with an asset value of $5 billion. The venture competed with the strong competitors like Sprint PCS and AT&T, who had a 12.9% and 5.7% control on the national market respectively. The venture gave Vodafone the kind of coverage it is needed to acquire San Francisco-based AirTouch Communications Inc. in January, 2001. The deal also benefited Vodafone to get hold of the Midwest and west and around 9 million customers (Noguchi, 2000). The joint venture took place because of the fact that the national providers are gaining prominence faster than the regional providers. Thus the two giant companies went into a national joint venture which was successful as it acquired around 26% of the market share in United States. The increase in the competition among the players of the telecommunication market was good for the consumers as they received better services from the companies. The call rates has dramatically decreased to 30-40% in the last three to four years as the companies tried to differentiate themselves from the others in price rather trying to distinguish in services. b. Rationale behind the Verizon-Vodafone stake The main rationale behind the Verizon-Vodafone stake is explained through the chronological responses and agreements that have taken place between the two companies. The needs and benefits of both the companies are highlighted in the following paragraph that is identified as the main rationale behind the buy and sell of the stake. Vodafone-Verizon Stake On 28th August, 2013, Vodafone had confirmed the news that they had been contemplating the sale of their stakes to Verizon Communication but have not reached any agreement to it. In the morning trading, the shares of Vodafone have increased by 8.6% at 205.7 pence which have been recorded as the highest gainer in the listed companies of FTSE 100. After few years of extensive speculation, the two companies have reached a serious level where they are in conversation for undertaking the largest deal in the corporate history. It would put an end to the fourteen years of disagreement that had existed between the two partner companies. There had been news that the companies are in discussions with banks for a loan of ten billion, which is the estimated and needed amount for the success of the deal (Hamilton, 2013). Verizon has decided for
Vodafone’s stake a. History of the Joint Venture The telecommunication industry of United States has gone through revolutionary changes in the area of digitalization and technology. The main players of the markets of United Kingdom and United States are named as Vodafone Group Plc…
Topics for discussion will include overall cost leadership and differentiation tied together with focus.
Porter's first consideration is Cost Leadership. The goal is to produce the most products for the cheapest price. Cost leadership for Vodafone lies in their consolidation with several mainstream companies as well as their extension into fifty-nine countries worldwide.
For Morepen, the present level of diversification has meant that it has expanded its approach to the game with multiple fronts of play.
This process of diversification has created strategic commitments for Morepen and as it is moving
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