The Qwest Communications Company LLC is a telecommunication company which is based in Denver, Colorado. It offers long distance services to its customers (Funding Universe, n.d). This paper is going to look at how this company can go global instead of just operating in the domestic market and an analysis and comparison of the industry in the global and domestic environment is going to be carried out.
It is important for any company that has realized stability in its operations in the domestic market to consider going global. One of the major reasons for doing this is to expand the company’s market. Another reason for this is to create value for the company’s shareholders and also to acquire key resources such as technology. There are various ways available that a company can employ in gaining entry in to the global market. These ways may include formation of strategic alliances, merger and acquisitions and organic growth. However, not all these ways are effective and some of them are associated with many disadvantages. For the case of the Qwest Company, the best way that this company needs to use to go global is forming mergers and acquisitions.
Since this company is operating in an industry that is expanding and advancing at a higher rate, the most appropriate way to cope up with this is to consider merging and acquisitions with other companies operating in the global market within the same industry. One great benefit of mergers and acquisition derived by a company following this way is that, as pointed out by Yeung (2005), “a company can rise to be among the top-rank companies and enhance itself in a short time” (Page 2). This helps a company in speeding up its globalization. More so, by using merger and acquisition method as a means of going global, the Qwest Communications Company will be able to obtain some crucial resources which may include new talents, technology and channels (Linyong, 2006).
The Qwest Company might consider to expand its market and to have a significant share in the global market and access new channels and technology through the mergers and acquisition with companies in other parties of the world. This is now common in the telecommunication industry since technology is advancing at a rapid rate and companies need to operate globally in order to increase their market share and create value for the shareholders. However, using mergers and acquisition as a way of gaining entry in to the global market is not without its own dangers. The risk behind use of M&A, is that if the company is not very much aware of the real problems of the companies that it plans to merged with or acquire, these problems may be transferred to the company and this may in turn hamper the company’s operations.
Therefore, it is quite important for Qwest Communications Company to take caution when using mergers and acquisition as a way of gaining entry in to the global market. Before merging or acquiring a company or companies, there is need to have a proper analysis of these companies, especially in regard to the problems faced by the companies and actual reasons why they want to merge or to be acquired. Once this is done, particularly in the case of the Qwest Company, there will be real success in the company’s operations and this company will now have a chance to operate at a whole higher new level.
Funding Universe, (n.d). Qwest Communications International, Inc. Retrieved on 23 May 2011 from, http://www.fundinguniverse.com/company-histories/Qwest-Communications-International-Inc-Company-History.html
Linyong, L. C. (2006). International mergers and acquisitions: The private enterprises in Zhejiang expecting much magnificence. Retrieved on 25 May 2011 from, http://wjm.zj.gov.cn/english/NewsRelease/GA/T171953.shtml
Yeung, A. (2005). How Chinese Companies go global successfully. Retrieved on 24 May 2011 from, http://www.ceibs.edu/link/latest/images/20051012/1734.pdf