"Case studies YEAR6. Disintegration of the national companies to help decline the cost of energy and increasecompetition, so that the customer gets the real benefit.The environment they face change post liberalization includes the followings.1. Opposition from the national companies due to disintegration.2. Non interest of the companies already having vertically integrated production process forenergy.3. Lack of mandate reached between the countries of the European Union including France andGermany who opposed disintegration as they already had large vertically integreted energycompanies.4. Cross border takeover bids leading to local politicians opposition and resentment amongpublic.The action they will have to take will include the followings.1. Follow the instructions and guidelines as per the European Union laws and reformations.2. To bring in level of acceptance in the local people about the cross border investment or FDI sothat the various benefits of liberalization can be reaped.3. To support and execute the disintegration of the process of manufacturing, transmitting andselling energy.4. To make efforts towards gaining economies of scale and helping the end consumer to get lowcost energy.5 Case studies YEARAnswer 3: The de-integration of large energy companies is seen as an important part of attempt to liberalizethe European Union energy market. This can be explained as follows..1. To achieve economies of scale that could further help in declining cost of energy.2. To end the monopoly of national companies who are already vertically integrated andcharging heavy prices for energy.3. To bring in competition in the market so that the supply of the energy can be increased but itscost be can be decreased.4. To make use of the extra capital by the Capital intensive countries by investing in the labourintensive countries.5. To improve business relations between the European Union member countries.6. To increase employment opportunities in different European Union countries.7. To decline the factor costs that affects the prices of the energy production.8. The level of production of the energy will rise by bringing expertize at various levels ofproduction, transmission and distribution.9. The cost of energy will decline.10. The monopoly of few companies will end and price competition will rise.6 Case studies YEARThus, the above said are the causes due to which the de-integration of large energy companiesseen as an important part of any attempt to liberalize the EU market.Answer 4: The progress towards the liberalization of the EU energy market has been slow so far because ofthe following reasons.1. Opposition by the local politicians and public on the issue of FDI or Foreign DirectInvestment.2. Opposition by the national companies in France and Germany which already had large verticalintegration of the energy.3. Lack of mandate reached by the member countries of European Union countries on variousissues.4. Non interest of the companies in the European Union towards the reforms that directdisintegration of the manufacturing, transmitting and selling of energy.5. The political and social barriers adding to the problems of foreign investments.6. Opposition of the rise in competition concept in the energy market opposed by the bigproducers of Energy. For instance Electricitie de France having 87% of the market share ofproducing electricity opposing the idea of bringing competition in the french market.7 Case studies YEAR7. Personal thoughts and old rivalries of the people letting the other country invest in the nationalcompany leading to slow progress in the way of political liberalization. For instance Spanishpeople and politicians did not wanted to sell their companies in the hands of Germany fromwhom they had bitter past experience.Case 2:Answer 1: The trade helps in lowering the costs of making computer peripherals such as mice and keyboardin the following ways.1. The low cost of labor in China helps the company in producing at higher production at lowfactor costs. For instance a young woman in China would earn only $75 per month byparticipating in the manufacturing process sitting near conveyor belts and plugging three tiny bitsof metal in the circuit board which is repeated 2000 times in one day. This way a dailyproduction of 2000 company products and on a monthly basis approximately 60,000 circuitboards by just paying $75 brings in high level of low factor cost benefits.2. The buying of raw material from the country where it is available at cheap rates helps inreducing the cost of raw material inputs. This way the low cost production benefit is gained.3. The Economies to scale can be achieved by increasing production and the thus setting upplants in countries which has high technological upgrades but low factor costs helps in gainingbenefits from such trade ties and set up.8 "