Telstras Performance - Case Study Example

Organizational Analysis University’s Name Submitted by Names: Tutor: Date: Introduction Telstra is a communication company based in Australia. It is one of the leading companies in Australia serving a wide group of customers at varied locations. The company is grouped in the category of mobile service providers where it offers communication and information both to domestic and international clients. Telecommunication is one of the successful industries we have today in the world. Globalization has encouraged sophisticated means of communication; therefore, companies in the telecommunication industry are mandated to offer products and services to quench these raising demands. Technological advancements as well have raised the levels and means of communication (Lemay, 2012). Telstra enjoys the advantage of being in such a growing industry especially at this time of economic boom. In this connection, this paper aims at analyzing Telstra Corporation limited by looking at its internal and external environments as well as analyzing the company’s competitive advantage. All this will be done in the effort to establishing an informed choice of what steps the organization should take towards success. Telstra’s Performance Telstra has been in business since the year 1975. Like any other firm, the company has had its highs and lows at times. Learning how to manage great successes and the worst failures is what makes an organization a success and mature. Telstra can be considered as a mature company in the telecommunication industry and especially in Australia based on the fact that it has been in the market for over three decades now. One main strategy that has helped the company to maintain its competitive advantage is the ability to transcend the changing customer needs. Customers are becoming quite sophisticated as days go by. Today, people are more aware of what they need as opposed to previous times where information on products And services was only available from the seller (Vakkayil, 2012). Technology has helped enlighten the world in a tremendous way. Telstra has overcome this menace by ensuring that their standards move with the current trends, therefore, providing value to customers. The federal government has had a large share on Telstra Corporation for a long time. However, the company was privatized on three different levels beginning in the late nineties leaving the government with a ten percent ownership of the company. By the year 2009, the government decided to separate Telstra into retail and wholesale separate entities. This move did not turn out so well as the majority of clients private information was compromised. This information breach put the firm in a position of questioning in relation to privacy act (Newton et al, 2006). However, the firm was able to act fast enough to cover the errors and restore normalcy to its operations. As a result, Telstra formed a few strategies to help in bringing back the lost glory. Strategies The company has had many strategies some of which did not have much impact on the growth of the firm. In the year 2010, Telstra embarked on a Market Share Recovery strategy to reclaim its position from the company’s main competitor Optus. The move paid off where sales increased tremendously by the beginning of 2011. In addition, Telstra established a Customer Service Recovery System to win back the confidence of its clients. Through this move, the company saw a reduction of customer complaints to a reasonable state (Gurumurthy et al, 2013). These two were the most transparent strategies that the firm engaged in after privatization and separation in 2009. Formation of Telstra digital is one of the strategies that have seen the company great success for the last three years. The idea behind this strategy was to improve the use of digital conduits for consumer overhaul. The latest achievement under this strategy was the launch of a new website, which enables clients to connect their online descriptions to their facebook identity by June this year. Other strategies that Telstra has been operating under include expansion of retail networks, new brand development and national broadband network. All of these have had their contributions towards the success of the organization however small the contribution might appear (Wood, 2012). Telstra’s SWOT Analysis Strengths Weaknesses Opportunities Threats Wide range of services Involvement with communal activities like sporting events Diversified customer service with many employees Leadership in Australian communication industry Tough market subdivision leading to restricted market allocation Partial liquidity situation Raising telecom demands New itinerant broadband initiation Enlarging IT overhaul market Strategic escalation schemes Unexpected technological changes Rigorous regulations Increased rivalry SWOT analysis is one of the best analysis mechanisms that take care of both the internal and external environments. From the above table, it is clear that Telstra has a chance of great success if the company focuses on maximizing its strengths and opportunities and at the same time minimize on threats and weaknesses (wood, 2012). Strengths Telstra is the largest telecommunication company in Australia. This has put the company in a better position in the market. Customers are more confident consuming Telstra’s products based on the assumption that the services are up to standard (Sahney & Ghosh, 2010). Telstra is placed above its competitors Vodafone and Optus in Australia by its ability to offer services to clients anytime and anywhere. Telstra allows coverage throughout the day, therefore, serving a wide range of clients who might be indeed of internet coverage 24 hours a day or during the wee hours. This gives the company a competitive edge over its competitors (Corner, 2013). In addition, Telstra has a wide range of services to clients, and enough personnel to carry out customer services around the globe. This makes the firm more desirable to clients hence a competitive edge. Weaknesses The main weakness that slows down the growth of Telstra is tough market segmentations. Market segmentation determines the market share that a company enjoys and market share is linked to profitability. The main purpose of any business is to make a profit without which an organization cannot survive (Brennan, 2009). Telstra’s market segments are tough hence reducing the market share the company enjoys. This puts the company at a risk of losing its position in the market to either Optus or Vodafone, its great competitors. Opportunities Many opportunities that Telstra can tap into and raise its competitive advantage and market share exist. The demand for telecommunication is raising rapidly, a situation that if Telstra harnesses well will put the company in a great position (Jackson et al, 2009). In addition, IT service markets are growing, hence, opening room for Telstra to expand and cover wider markets. In 2011, Telstra got involved with mobile broadband network, therefore; the 4G mobile launch is a viable move for the company to raise its competitive advantage. Threats Increased competition and stringent regulations are the most terrifying pitfalls to Telstra’s success. Companies have for a while operated in the fear of Telstra, and now organizations are coming together to fight back the competitive standards set by the company. This calls for clear goals and commitment on Telstra’s part to ensure they do not lose their market share to their competitors. However, if well managed, these threats can work for the best of the firm (Corner, 2013). Stakeholders Analysis Telstra’s main stakeholders include the community, employees, customers, the media and the governments. The company relates to its stakeholders both internally and externally to strengthen and maintain shareholders value. Every stakeholder contributes to the success of the firm in one way or the other (Paech & Martell, 2008). In addition, the alignment of expectations from all the parties has helped influence the firm in a positive manner. Stakeholders’ Analysis Stakeholder Generation of stakeholder value Measure of stakeholder value Community Allied %boost in community sales vs. expenses on community linked initiative. Customers Allied %enhancement in sales revenue vs. customer contentment levels. Employees Divergent % of worker based allocation vested Government Divergent acquiescence with government association Media Divergent Affirmative versus pessimistic media releases Recommendations Telstra can engage in many activities that will bring the firm to a successful situation, but only one way is possible at a time. According to my judgment, Telstra does not need to make new strategies; instead, they should aim at implementing the existing ones. Managing mobile networks is an area that any company within the telecommunication industry can focus on and achieve tremendous success. The 4G mobile network launch is an opportunity that Telstra should grab and work on it because they are much involved in the national broadband networking. This will place the company in a better position to remain relevant to its customers, reach many clients and maintain a viable market share (Schawlbe, 2006). In conclusion, success in business is determined by how well the people involved in running such businesses are acquainted with the ongoing trends. Knowing the strong points and flaws of ones operations is the first step towards growth and development (Sarkis, 2009). However, if the acquired knowledge is not put in the rightful use, it serves same as not having the knowledge. Reference List Brennan, K 2009, A guide to the Business analysis body of knowledge (BABOK guide Toronto: International Institute of Business Analysis. 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Vakkayil, J 2012, ‘Boundaries and organizations: a few considerations for research’, International Journal of Organizational Analysis, vol. 20. No. 2, pp. 17-35. Wood, L 2012, Research and Markets: Telstra Corporation Limited- Strategy and SWOT Report, viewed 1 September 2013, . Read More