Business Transformation at Telefónica De España

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Case Details:

Case Code : BSTR256
Case Length : 20 Pages
Period : 1998-2006
Pub Date : 2007
Teaching Note : Not Available
Organization : Telefónica de España
Industry : Telecom
Countries : Spain

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Telefónica was established in 1924 as Compañía Telefónica Nacional de España (CTNE), a limited company, by the US-based International Telegraph and Telephone Corporation (ITTC) and two Spanish banks - Banco Urquijo and Banco Hispano Americano.

The Spanish government and CTNE entered into an agreement under which the company was granted monopoly over operating telephone lines in Spain. This presented a challenge to CTNE as it had to acquire over 70% of the existing 78,000 lines that were operated by several large and small companies...

The Transformation Program

In Telefónica de España, the business transformation program was designed around three modules - growth, competitiveness, and commitment. The company planned to achieve growth by putting in efforts to develop broadband capabilities and revamp the product categories. Competitiveness was to be achieved by improving quality and efficiency and by acquiring online capabilities. Commitment was to be achieved by becoming a high performance organization. Instead of a long-term program, the transformation was aimed to be achieved through a series of short-term programs each of one-year duration...

Growth

In tune with market changes that included new products like ADSL lines, voice mails, lines with caller ids, the growing competition that came with liberalization, and changing customer preferences, Telefónica de España aimed to provide the latest telecommunication technologies and to create internal efficiencies by establishing new ADSL connections, while maintaining its lead in the fixed line and broadband segment and introducing new products.

ADSL
Telefónica de España had begun testing the new

technology ADSL way back in 1997, recognizing the need to provide high-speed Internet access. The services provided through ADSL were superior to the existing telephone lines, and allowed high-speed transmission. The company began concentrating on ADSL as it realized that it was a growth driver and a part of its transformation process...

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