Continental Cablevision Essay

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Question 1: The joint venture of Continental cablevision and Fintelco is indeed a risky strategic move for Continental Cablevision to enter in Argentina market. As mentioned by CFO, Robert Sach, company want to enter the in the country which is economically and politically sable, but this is not the case with Argentina. As seen, in the period around 1994, there is huge political unrest in Argentina, as well as many policy changes related to foreign trade and investment and private sector. Despite the fact that the political and economic situation has improved in recent years, such a long term investment which needs years to amortize remains risky. Besides high inflation the risk of reoccurring crisis is immanent. However, we know that, US government have passes a cable act in 1992 which limits the growth potential in the US. This joint venture will help continental to expand overseas and use Argentina as a starting position for developing the Latin American market. Argentina' market is one of the growing television and cable markets in Latin America and the cable television penetration in Argentina is 50% till 1994, which offers future growth opportunities compared to 62% in the US. Argentina’s cable market is expected to grow rate by 67% in the near future. Furthermore, Argentina offers the highest GDP per capita in Latin America, which should support discretionary spending such as cable TV. Fintelco is the leading cable company in Buenos Aires and among the three largest cable operator in Argentina. It pursues a similar growth strategy as Continental and therefore, would be good choice for joint venture in Argentina. Also both founders of Continental and Fintelco have mutual comfort on a professional and a personal level. This could ensure the necessary trust a 50/50 joint venture needs to be successful and fulfill their objectives. Question 2:

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