In times of globalisation it is so important for our MNE Deutsche Telekom to find early new markets in order to detect or expand the position in the hard global competitiveness. We are good positioned in West Europe and in the growing markets in Eastern Europe and with our division T-Mobile also very successful in the USA, but the potential growth rates are much higher in Asia. The growth motor in Asia is China with the biggest population worldwide. Nearly 80 % of the top 500 companies have invested in China and it is the fast-growing telecommunication market in the entire world1. This shows how important China for our MNE is. The continuous high growth in this telecommunication industry leads to the question how our mobile division T-Mobile belonging to the concern Deutsche Telekom should invest in the coming most powerful market China after the USA. First of all, I am going to present the concern Deutsche Telekom and will then focus in detail on the division T-Mobile. Additionally, I am going to give an overview about the mobile industry itself and how the distribution of their products proceeds. Before I am going to recommend a market servicing strategy for our MNE, I would like to analyse the environment in China in which we want to invest and weigh up the advantages and disadvantages for an investment abroad2. After this analysis has been presented a proposal for the best type of international business strategy in China will follow and finally a summary finishes this assignment. 1 The People’s Bank of China (2004) 2 Daniels, J., Radebaugh L., Sullivan, D. (2004)
Contents
1. Introduction
2. The concern Deutsche Telekom
2.1 General overview
2.2 The divisions of the concern
2.2.1 T-Com
2.2.2 T-Systems
2.2.3 T-Online
2.2.4 T-Mobile
3. The Telecommunication industry
3.1 Development within the industry
3.2 Technical Standard
3.3 Business policy
4. Environmental Analysis
4.1 Political environment
4.2 Economic environment
4.2.1 Market size
4.2.2 Economic Growth
4.2.3 Competitive situation
4.3 Sociocultural environment
4.4 Technological environment
5. Mode of Entry
5.1 Joint Venture
5.1.1 Equity Joint Venture
5.1.2 Contractual Joint Venture
6. Recommendation for T-Mobile
7. Summary
Objectives and Topics
This report evaluates the strategic market entry of Deutsche Telekom's mobile division, T-Mobile, into the Chinese telecommunications market. The central research question examines how T-Mobile should invest in China's rapidly growing environment while navigating its political, economic, and cultural complexities.
- Overview of Deutsche Telekom and the T-Mobile division.
- SWOT and PEST analysis of the Chinese business environment.
- Examination of technical standards and market competition in China.
- Comparative analysis of Joint Venture types as an entry strategy.
- Strategic recommendations for successful market penetration.
Excerpt from the Book
6. Recommendation for T-Mobile
Each form of co-operative joint venture is attractive, but for our business policy it is more reasonable to make a contractual JV, as the Chinese mobile companies owned already a mobile network and a distribution network in forms of shops. If the Chinese partner provides the facilities our division will provide next to the GSM Standard the UMTS technology in order to supply a better service to the customers in China. This involves a technological transfer into the JV. Both sides should gain from a JV, our division T-Mobile to enter into the fast growing Chinese market and our Chinese partner in form of our strong international business connections and the technological transfer. An important point of a successful JV is that there is trust between the Chinese partner and our management.
The most common business form in China with foreigner investment is a JV and there are positive examples. With regard to allocation of the licenses for the third generation in 2005 in China there is a JV between the German telecom company Siemens and China’s largest network equipment firm Huawei. This JV will together develop technical equipment and mobiles for the third generation. Over 100 million US dollars will be injected into the project. Siemens will hold a 51-percent stake and Huawei 49 percent. The development of new technologies would effectively cut research and development costs for both sides.
Summary of Chapters
1. Introduction: Outlines the importance of expansion into the Chinese market for Deutsche Telekom given the global telecommunications growth trends.
2. The concern Deutsche Telekom: Provides a profile of the company and its four strategic divisions: T-Com, T-Systems, T-Online, and T-Mobile.
3. The Telecommunication industry: Analyzes industry developments, technical standards, and business policies essential for global competitiveness.
4. Environmental Analysis: Utilizes PEST analysis to assess the political, economic, sociocultural, and technological landscape of China.
5. Mode of Entry: Explores Joint Ventures as the most viable strategy for entering the Chinese market under existing regulations.
6. Recommendation for T-Mobile: Suggests a contractual Joint Venture as the preferred strategic alliance model for T-Mobile in China.
7. Summary: Concludes that a strategic alliance is essential for survival and growth in the evolving Chinese market.
Keywords
Deutsche Telekom, T-Mobile, China, Telecommunications, Globalisation, Market Entry, Joint Venture, PEST Analysis, SWOT Analysis, UMTS, GSM, Foreign Investment, Economic Growth, Strategic Alliance, Technology Transfer
Frequently Asked Questions
What is the primary focus of this report?
The report focuses on evaluating the best market servicing strategy for T-Mobile to expand its operations into China.
Which divisions does Deutsche Telekom encompass?
Deutsche Telekom operates four core strategic divisions: T-Com, T-Systems, T-Online, and T-Mobile.
What is the central goal of the proposed strategy?
The goal is to successfully enter the Chinese market by forming a strategic alliance that leverages T-Mobile's technological strengths alongside a local partner's infrastructure.
Which analytical frameworks are used in the research?
The report utilizes SWOT analysis for internal and external assessment and PEST analysis to examine the macro-environmental factors in China.
What does the main body of the work cover?
The main body covers company background, industry analysis, environmental (PEST) analysis of China, evaluation of entry modes, and final strategic recommendations.
How are the key terms for this research defined?
The report characterizes the research through themes like globalization, market entry strategies, joint ventures, and the specific dynamics of the Chinese telecommunications industry.
Why is a Joint Venture considered the best entry mode for China?
The report argues that direct investment or mergers are hindered by strict regulations and bureaucracy; therefore, a Joint Venture allows for shared risk, regulatory compliance, and access to established local networks.
What is the significance of the Siemens-Huawei case study mentioned in the text?
It serves as a successful real-world example of how a Joint Venture can facilitate technological transfer and benefit both foreign and local companies in the Chinese telecom sector.
- Arbeit zitieren
- Roland Urban (Autor:in), 2005, Written Report on Foreign Market Servicing Strategy for the Deutsche Telekom for an expansion in China, München, GRIN Verlag, https://www.grin.com/document/40940
