External and Internal Analysis of Telstra Corporation - Case Study Example

Strаtеgiеs Mаnаgеmеnt Name Institution Strаtеgiеs Mаnаgеmеnt Introduction The operation and success of any organization relies on the operational backbone that entails the ultimate strategic management. Primarily, strategic management deploys essential managerial aspects revolving around the entire formulation as well as implementation of the goals and the initiatives considered by the organization’s top management on the ultimate behalf of the owners. However, for the absolute handling of the aspects mentioned above, such factors like operational aspects, assessment of the external and internal environments as well as resource management should be placed under consideration. It must be noted that strategic management goes alongside the best leadership of the organization (Warren, 2008, p. 108). One such company that has seen the fruits of strategic management is Telstra Corporation Limited. The company is best known in telecommunications within and across the borders of Australia. For the past operations, the cooperation saw the benefit of good management aligned with the best laid strategies. The history steal reflects on management as the operational backbone of the entire organization. However, any organizational operation usually encounters various challenges and Telstra Corporation limited is not exceptional. Brief History of Telstra Corporation Limited Telstra Corporation Limited is a telecommunication as well as the information services company that provides its services to both the domestic and the international customers. It however, concentrates on building and operating the telecommunication networks as well as the market voice, internet access, mobile and other closely related entertainment products and services. Briefly, Telstra Corporation draws its origin from the postmaster-general’s department, which is believed to have been formed way back in 1901. Due to consistence in management and operation, a separate commission was formed to substitute PMG, where Telecom Australia was allowed to run the domestic telecommunication related services. However, in the year 1989, the Australian Telecommunications Corporation was reconstituted, which merged with Overseas Telecommunications Commission. The trade never lasted long before the birth of Telstra Corporation, which was as a result of the merger way back in 1993. However, the corporation was officially introduced throughout the organization in the year 1995. Like many other organizations, Telstra Corporation has been facing competition since 1990s from a renowned organization known as Optus. The company is believed to have retained the ownership of fixed-line telephone network and at the same time, pay for the television and Foxtel, which is a data cable network. This has historically made it impossible for Telstra to execute its operation in the most effective manner. Despite the competitive challenge from the renowned organization, Telstra Corporation has maintained the reputation and endeavors of channeling its services under the prior established platforms. Borrowing its operation ground from Overseas Telecommunication Commission, the corporation has maintained the absolute consistency in development of the undersea cable network, burgeoning digital technologies as well as the global satellite systems. This was initially deliberated with an intention of preliminary observation of quality, which was the essential aspect considered in every organizational operation (Sekhar, n.d, p. 234). The company has currently registered a substantial gain in terms of performance. This is due to the policies and strategies set in place in ensuring the proper and effective running of the company. Some of the outstanding strategies set in place by the corporation entail market share recovery, customer service recovery, Telstra digital, digital first, new brand, share price development and finally the ultimate expansion of the retail network. External and Internal Analysis of Telstra Corporation The need for analyzing both the microenvironment and macro environment of Telstra raises a great concern on the formulation and implementation of the above mentioned strategies. This section devotes the entire discussion on a detailed analysis that identifies special factors on either side (Kalakota & Whinston, 1997, p. 210). However, it must be noted that the ultimate combination of the two environments facilitates the smooth running of Telstra Corporation. External Environment Analysis Competitive Rivalry The close competitors of Telstra Corporation are majorly covered under the Fixed-line voice service industry. In addition, the company competes to the wireless communication, cable as well as the satellite services and data services. Namely, the outstanding competitors include the previously mentioned Optus, Asia Netcom and the New Zealand Telecom Corporation. However, the landscape in the entire competitive business entail the ultimate demand for the most outstanding technological innovations that facilitates the required growth rate of the business activities (Information Resources Management Association, & Khosrow-Pour 2002, p. 90). It is notable that the exhibited competitive pressure on Telstra Corporation seems to foster much on the on better prices, innovation and investment within the borders of Australia. This is because, for the past four years, the outstanding competitors seem to broaden the inducement of dial-up internet, 3G mobile services, capped mobile price plan, high-speed ADSL 2+ as well as the capped broadband plan. However, Telstra Corporation is not the only company that is offering the broadband services. Other sectors have proved to be in the best position in delivering best broadband services compared to the ones availed by Telstra. The corporation has encountering strong external forces that seem to put down the strength of the organization. Eleven competitors, in the year 2007, pulled their interests together in countering the claim placed forth by Telstra concerning deceptive information. The group, jointly, had previously introduced a website with an intention of a brief number of outstanding fabricated MPs as well as indicating incorrectly the government policy revolving around the national uniform pricing in the broadband services and the ACCC policy, accompanied with dissimilar prices for standard television prices. This, among other actions taken by this group, intentionally wanted to deprive off the platform on which Telstra was enjoying the relief as well as the protection it was getting from the regulations (Telstra Corporation Limited, 2008). Telstra Supply Power The ultimate significance attached to the power supply, the corporation had set aside $10 billion meant to purchase the goods and services for operation of the year 2007, as well as for the dealings in the established 9000 suppliers, of which the majority comprised of the medium and small business enterprises. Basing on the sheer number of suppliers attached to the company and the range of products supplied, it was evident that the company had taken into consideration the behavior of the suppliers thereby having an impact on the environment and the society in major places within the Australian borders. The suppliers are seen to possess the ultimate and required potential of contributing towards the community, and at the same time having an impact on the corporate responsibility running and performance of the entire corporation. Furthermore, the acknowledgement displayed by Telstra indicates the great impact that the above contribution can make on the side of both the suppliers and employees. However, it must be noted that evaluation of suppliers is based on the responsibilities attached to the suppliers, which entails deduction of the formal system of management as well as the plans in pace. Such an evaluation seem to favor the entire management of health, safety as well as the immediate environment that goes alongside the impact posed on the products and services offered by the corporation. The Substitution Threat The operational regime of the company revolves around open market. Despite the fact that 3G had recorded an outstanding growth, a large number of the customers are updated on the changes of the CDMA network (Telstra Corporation Limited, 2008). This indicates the ongoing capital expensive exercise that settles on the ultimate derivation from the substitution. Therefore, the pragmatic market for GSM is supposedly expected to move to 3G. This further indicates the growth of the customers’ potentiality in the consistent searching for cheaper and better services. Such outstanding substitutions have necessitated the need for customers to keep updates on the changes and substitutes with an intention of operating and configuring with the most accessible expert staff. Other recognizable features of the product substitution revolve around termination of calls and the substitution between the mobile networks and the B-parties, which are seen to influence the price. Internal Environment Analysis The core competitive advantages of the corporation revolve around its size and the wealth. The two aspects pose a big challenge to the competitors, who are willing enough to build a network worthy billion of dollars as well as the wireless that can cover the large section of Australia. Close analysis deduce the influence of the company, which makes it to be the biggest telecommunication company in Australia. Its major strength lies behind the ultimate provision of the most reliable and durable telecommunication services, which cover a large geographical area through both the fixed and mobile infrastructure. The infrastructural system hampers termination of both domestic and majority of the Australian voice and telephony traffic (Kalakota & Whinston, 1997, p. 104). Nevertheless, the organization is faced with several challenges such as hacking as well as rejection of the services. These among other aspects entail the threats and the firewall that faces the company’s supply chain management. It is worth noting that best brand forms part of the competitive advantages attached to the performance of the company. In addition, the company is in possession of over 9.2 million mobile services and the fixed line services approximated to be 9.8 million. The 3 million customers have also made the company to be the leader in marketing of 3G including the one million G services. The record reveals the top position the company has attained in controlling the leading real estate and furnishing website. The company, further, offers more than eleven thousand telephone exchanges accompanied with approximated 12000 installation services recorded every day. On the other hand, the sustainability of the corporation is attached to the management and the impact of the environment in the extensive infrastructure and operations. This has been achieved through the company’s membership in the Federal Government Greenhouse Challenge Plus, which has seen effective methods of greenhouse gas emission without posing any negative effect on the environment in Australia (Telstra Corporation Limited, 2008). The company has committed itself to the absolute provision of the great services and experience that recognize recommended practices for the solutions in communication and best service delivery to customers. This has made the company to consider a forged alliance as well as partnership with some renowned leading communication technology suppliers. The intention of such partnership revolved around building and designing the most appropriate network for the next generation as well as providing the latest application. Some of the partnerships formed with the company include such companies like Alcatel-Lucent, Ericson, IBM Australia and Cisco. Competitive Challenges Facing Telstra Corporation Like any other organization, the company has been facing the most pressing competitive challenges. It is evident that for Telstra to upgrade the performance, it has to pay prices for the upgrade. The domination of the corporation in availing the fixed voice and fixed data has extensively triggered the undertaking of NBN in ensuring that some parts of Telstra become more competitive in the near future. Despite the speculation, it is evident that the company has been rewarded for an audacious action of giving up the infrastructure due to the migration of the network from fixed to wireless. The competitive pressure runs deep as far as internet and home phones are put into consideration. The global streaming and outstanding giant Netflix has already shown its excellent performance and is now commanding 27% of the known Australia’s online streaming market place (Kohler, 2006). The long time rival, Optus, which is owned by Singapore Telecommunication Limited, is currently offering fetch television. This seems to block more survival chances for Telstra. This might force Telstra to rely on its entire ability of offering competitively-priced bundled packages with an intention of maintaining the dominant position. In addition, the lucrative mobile business can make the operation of Telstra to thrive even in the near future. Telstra is further considering the domestic market as the ultimate platform for its growth. This goes alongside the local operations and healthy cash flows thereby increasing the capital expenditure fostering regional growth (Raskiewiocz, 2014). Formulation and Implementation of Strategies This is the most essential part of the Telstra Corporation management as far as the entire performance is placed under consideration. Under the management of David Thodey, the company prefers working on a transformation agenda such stand it can stand out as a figurative organization in sales and services. Under the primary intention of working more on sales and service delivery, the ambition of the customer is granted the absolute priority. Market share recovery is part of the strategies that are laid down by the company in making sure that it survives in the competitive environment (Sadler & Craig, 2003, p. 123). Under this strategy, the company has already announced the creation of approximately $ 1billion to be utilized in winning back the market through the fighting fund strategy. On the other hand, the customer service recovery seems to be working on the customers’ complaints. Under this strategy, the company intends to handle the grievances in the most effective manner that will lead into realization of a positive impact. However, the company saw a drop of 3% in the customers’ complaints in February 2011. This is a positive outcome of the well implemented strategy. Finally, the Telstra digital strategy focuses on the use of digital channels in delivering the customer service. In March 2011, the company, under the Telstra digital strategy, launched a new mobile phone that intends to include electronic bills as well as payments. Making Strategic Management Recommendation The company has been working hard to maintain its domination position. In its struggle, Telstra encounters challenges beyond ambiguity thereby endangering the normal organizational operations. However, it is recommendable that the company concentrates on the new brand strategy, which might entail working on colors and other aspects that can satisfy the customers’ interests. It is also recommendable that company works on the expansion of the retail network. This may include opening the world’s Android store with an intention of expanding the supply of products. Conclusion Strategy management is one of the most significant ways of ensuring the company maintains the most expected performance. The brief history of Telstra reveals reveal its strength that lies under the pragmatic formulation and implementation of the most lucrative strategies. The further analysis of both the macro and microenvironment displays the strength and threats that the company is facing. The continued competitive challenge seems to compel the company to forcefully work on quality and concentrate more on sales and services. Finally, the strategies laid down by Telstra seem to be more realistic thereby establishing certainty on its venture. However, working on new brand and expansion of the retail network will help the company realize its best position. References Warren, K 2008, Strategic management dynamics. Chichester, West Sussex, England, J. Wiley & Sons. Sekhar, G. V. S. n.d, Business policy and strategic management. [S.l.], I K International Publishers. Sadler, P., & Craig, J. C 2003, Strategic management. London, Kogan Page. Information Resources Management Association, & Khosrow-Pour, M 2002, Issues & trends of information technology management in contemporary organizations. Hershey, PA, Idea Group Publishing. http://libaccess.mcmaster.ca/login?url=http://www.infosci- online.com/content/tocVolumes.asp?ID=409. Kalakota, R., & Whinston, A. B 1997, Electronic commerce: a manager's guide. Reading, Mass, Addison-Wesley. Kalakota, R., & Whinston, A. B 1997, The media and communication. Allen & Unwin. Australian. Kohler, A 2006, Telstra wireless may have been stage managed, but it's a stage it had to reach. http://www.theage.com.au/news/business/telstra-wireless-may-have-been-stage- managed-but-its-a-stage-ithad-to-reach/2006/10/06/1159641529469.html Raskiewiocz, O 2014, Telstra Corporation Ltd and M2 Group Ltd: Should you buy? http://www.fool.com.au/2014/09/22/telstra-corporation-ltd-and-m2-group-ltd-should- you-buy/ Telstra Corporation Limited 2008, Telstra. http://wwwtelstra.com.au Telstra Corporation Limited 2008, Hoover. http://www.hoovers.com Read More