Telefonica SWOT and PESTLE Analysis

Strength

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Weakness

1. Lack of presence in fast growing Asian countries except China: In purchasing power parity terms, Asia and the Pacific generated more than 40% of global Gross Domestic Product in 2014. Telefonica is not present in many of the Asian countries like India, Thailand, Malaysia, etc. Lack of presence in such emerging economies which can give huge revenue and market share is a weakness of Telefonica.

Opportunity

1. Internet connectivity becoming a necessity worldwide: Telefónica continued to work on networks that are increasingly ready to provide the best service to customers and to manage growing traffic thanks to the company’s technological leadership in fixed and mobile infrastructures. With more than 166 million real estate units travelled over ultrafast networks (+6%), of which 87.2 million passed through the company's own networks, Telefónica has continued to hold the global lead in fibre (apart from China). The bulk (59.4 million) of the 62.2 million fiber-to-the-home (FTTH) ultrafast networks passed through Telefónica's network. More than 800 towns and cities in the UK, 75% of the population in Germany, 83% in Spain, and 35 cities in Brazil are already covered by 5G technology. This is an opportunity for Telefonica to reach to more and more customers through its internet and related services.

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Threat

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Political

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Economic

1. Weak macroeconomic environment in major markets: Telefónica is facing weak economic conditions in many of its major markets in Latin America and Europe. Venezuela is suffering a severe economic crisis and is considered to be a hyperinflationary economy since the past few years. The economic recovery in Argentina, Brazil and Mexico also has been quite slow. There is also uncertainty in UK after the Brexit referendum last year and companies are delaying investment decisions. Spain which is the home country and major market for Telefónica also has concerns about Catalonian secession plans which will hurt the Spanish economy.

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Social

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Technological

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Legal

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Environmental

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