Competitive Strategy Analysis of Telstra Corporation Ltd
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AI Summary
This essay analyzes the competitive strategy of Telstra Corporation Ltd, a leading Australian telecommunications company, using various frameworks such as PESTEL analysis, SWOT analysis, Porter's Five Forces, and Ansoff Matrix. The analysis reveals Telstra's strengths, weaknesses, opportunities, and threats in the competitive landscape. It also examines the company's market position, competitive advantages, and potential growth strategies. The essay concludes by highlighting the importance of developing a robust competitive strategy for Telstra to thrive in the dynamic telecommunications industry.
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HI6006- Competitive Strategy
1
1
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Executive Summary
Competitive strategies will help the businesses to grow effectively and as per the defined
goals of the organization. It is the attribute of the business that will allow the businesses to
get an edge over their competitors. The competitive strategy will help the business managers
to procure new tools and skills and that will help further in gaining the practical knowledge to
acquire strategic business ideas for their business. It is the responsibility of the management
to properly understand the implications of such a framework so that the right benefits are
acquired. Competitive strategy is the need of the current business organization to sustain in
the competitive world.
2
Competitive strategies will help the businesses to grow effectively and as per the defined
goals of the organization. It is the attribute of the business that will allow the businesses to
get an edge over their competitors. The competitive strategy will help the business managers
to procure new tools and skills and that will help further in gaining the practical knowledge to
acquire strategic business ideas for their business. It is the responsibility of the management
to properly understand the implications of such a framework so that the right benefits are
acquired. Competitive strategy is the need of the current business organization to sustain in
the competitive world.
2
Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................ 4
Main Body..................................................................................................................................5
PESTEL analysis on Telstra corporation Ltd......................................................................... 5
SWOT analysis on Telstra corporation Ltd............................................................................6
Five forces strategy on Telstra corporation Ltd..................................................................... 7
Ansoff Matrix model on Telstra corporation Ltd...................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................ 10
3
Executive Summary...................................................................................................................2
Introduction................................................................................................................................ 4
Main Body..................................................................................................................................5
PESTEL analysis on Telstra corporation Ltd......................................................................... 5
SWOT analysis on Telstra corporation Ltd............................................................................6
Five forces strategy on Telstra corporation Ltd..................................................................... 7
Ansoff Matrix model on Telstra corporation Ltd...................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................ 10
3
Introduction
This essay has been based on the analysis of the various strategy developments mechanism like
PESTLE analysis, Porter’s five forces analysis framework, SWOT analysis as well as Ansoff matrix
model framework to analyze the competitive strategy of the business. In this context, Telstra
Corporation Limited has been identified. Telstra is an Australian based company and also has a
presence in New Zealand. They are offering services like voice services, media, and other associated
services to the corporate and normal users and also providing third-party services to several carriers
globally.
4
This essay has been based on the analysis of the various strategy developments mechanism like
PESTLE analysis, Porter’s five forces analysis framework, SWOT analysis as well as Ansoff matrix
model framework to analyze the competitive strategy of the business. In this context, Telstra
Corporation Limited has been identified. Telstra is an Australian based company and also has a
presence in New Zealand. They are offering services like voice services, media, and other associated
services to the corporate and normal users and also providing third-party services to several carriers
globally.
4
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Main Body
PESTEL analysis on Telstra Corporation Ltd
Political factors: The Australian government is emphasizing regulatory reforms. Telstra is
the leading company in Australia. Political pressure that has been supported by legislation
will state that Telstra will progressively sell its HFC and Copper networks to the NBN and
this eliminates the entry barriers for new players in the business. Telstra has been largely
benefitted from the diplomatic relations of Australia with other countries. Geographical
location advantage of Australia has allowed Telstra to establish the infrastructure for the
largest network of cables in the Asia Pacific that is accounting for 30 percent of active intra-
regional capacity.
Economic factors: Commodity prices are falling in Australia and also in Newzealand. This
has also impacted the growth of the telecom sector in Australia and Telstra is also a part of
this degrowth. Exports of Iron ore and coal have been decreased. All these have impacted the
Telstra’s growth (Sigvaldadóttir and Taylor, 2016)
Social factors: This is the crucial factor in the context of the Australia telecom sector as well
as for Telstra. The young population is currently expatriating outside Australia and they are
using the services of Telstra and it is increasing the growth of Telstra.
Technological factors: Telstra is investing in digital infrastructure to enhance their service
offerings as well as customer experience. Telstra is currently leasing their telecom
infrastructure as well as a network because their technology is better than other new players
in the telecom sector.
Legal factors: Telstra has been impacted because of the regulatory changes are done by
ACCC. Telstra has widespread their operation s in the several other countries globally they
have to face the complex telecom regulatory compliance laws prevailing in the several
countries (Sigvaldadóttir and Taylor, 2016).
Environmental factors: Telstra is providing solutions for environmental sustainability. They
have entered and promoted the environment affable battery storage mechanism.
5
PESTEL analysis on Telstra Corporation Ltd
Political factors: The Australian government is emphasizing regulatory reforms. Telstra is
the leading company in Australia. Political pressure that has been supported by legislation
will state that Telstra will progressively sell its HFC and Copper networks to the NBN and
this eliminates the entry barriers for new players in the business. Telstra has been largely
benefitted from the diplomatic relations of Australia with other countries. Geographical
location advantage of Australia has allowed Telstra to establish the infrastructure for the
largest network of cables in the Asia Pacific that is accounting for 30 percent of active intra-
regional capacity.
Economic factors: Commodity prices are falling in Australia and also in Newzealand. This
has also impacted the growth of the telecom sector in Australia and Telstra is also a part of
this degrowth. Exports of Iron ore and coal have been decreased. All these have impacted the
Telstra’s growth (Sigvaldadóttir and Taylor, 2016)
Social factors: This is the crucial factor in the context of the Australia telecom sector as well
as for Telstra. The young population is currently expatriating outside Australia and they are
using the services of Telstra and it is increasing the growth of Telstra.
Technological factors: Telstra is investing in digital infrastructure to enhance their service
offerings as well as customer experience. Telstra is currently leasing their telecom
infrastructure as well as a network because their technology is better than other new players
in the telecom sector.
Legal factors: Telstra has been impacted because of the regulatory changes are done by
ACCC. Telstra has widespread their operation s in the several other countries globally they
have to face the complex telecom regulatory compliance laws prevailing in the several
countries (Sigvaldadóttir and Taylor, 2016).
Environmental factors: Telstra is providing solutions for environmental sustainability. They
have entered and promoted the environment affable battery storage mechanism.
5
SWOT analysis on Telstra Corporation Ltd
Strengths: Telstra is enjoying the dominant market position in the telecom sector in Australia
as well as globally. It is also making their services differentiated strategically from other
leading players of the globe. Telstra is making advancement in their technology to provide its
users with exceptional voice quality and making a regular investment in their technology.
They are planning to expand their business in the global market and maintaining the cordial
relations with several regulatory bodies (Zafar, et. al., 2013).
Weaknesses: It has been observed that Telstra has certain operational inefficiencies in their
business functions globally. They are suffering from latency problems if compared with other
competitors such as Optus and Vodafone. Also, it has been observed their services are priced
significantly higher than their competitors.
Opportunities: There are several unexplored or untapped markets are present for Telstra such
Asia- Pacific and China etc. Also, there are new business opportunities such as cloud
computing, fiber high-speed internet services are cropping up and this will be key for Telstra
to venture into new business opportunities or projects. In addition, Telstra should also focus
on their services improvement on remote locations to make them ahead of the competition
(Zafar, et. al., 2013).
Threats: Currently the mobile market is passing through a saturation phase in Australia due
to excessive competition from big and small players. Telstra is also facing complex
compliance laws for telecom as they planned to enter in different nations globally. Also,
Telstra is facing threat from a new player who is venturing into this sector with more
upgraded technology.
6
Strengths: Telstra is enjoying the dominant market position in the telecom sector in Australia
as well as globally. It is also making their services differentiated strategically from other
leading players of the globe. Telstra is making advancement in their technology to provide its
users with exceptional voice quality and making a regular investment in their technology.
They are planning to expand their business in the global market and maintaining the cordial
relations with several regulatory bodies (Zafar, et. al., 2013).
Weaknesses: It has been observed that Telstra has certain operational inefficiencies in their
business functions globally. They are suffering from latency problems if compared with other
competitors such as Optus and Vodafone. Also, it has been observed their services are priced
significantly higher than their competitors.
Opportunities: There are several unexplored or untapped markets are present for Telstra such
Asia- Pacific and China etc. Also, there are new business opportunities such as cloud
computing, fiber high-speed internet services are cropping up and this will be key for Telstra
to venture into new business opportunities or projects. In addition, Telstra should also focus
on their services improvement on remote locations to make them ahead of the competition
(Zafar, et. al., 2013).
Threats: Currently the mobile market is passing through a saturation phase in Australia due
to excessive competition from big and small players. Telstra is also facing complex
compliance laws for telecom as they planned to enter in different nations globally. Also,
Telstra is facing threat from a new player who is venturing into this sector with more
upgraded technology.
6
Five forces strategy on Telstra Corporation Ltd
Threats of New Entrants: New entrants in the telecommunication sector will bring
innovation in this sector and is putting pressure on the operations of the operations of Telstra
by providing services at lower prices. It is essential for Telstra to build economies of scale to
deal with the increasing competition. It is also necessary for the Telstra to define the
standards on frequent to discourage the entry of new players in the already cluttered market.
Bargaining Power of Suppliers: All the companies in the telecom sector in Australia will
procure their raw material from the several suppliers (Campbell, 2017). A supplier who is
major suppliers is putting pressure on the profitability of the Telstra by using their negotiation
capability to extract high prices from Telstra. It is necessary for the Telstra to develop
effective supply chain with several suppliers to eliminate the monopoly of only a few
suppliers.
Bargaining Power of Buyers: users of Telstra are always demanding and seeking services at
a minimum possible price. This is putting huge pressure on the Telstra in the long run as the
users are always seeking for offers and discounts. It is essential for the Telstra to develop a
large base of customers to tackle this problem. Also, it is necessary to develop new offerings
that will provide a unique proposition to their customers (Grant, et. al., 2014).
Threats of Substitute Products or Services: Telstra is also getting threat from the alternative
products and services like Dropbox and Google drive that is a substitute for the storage
options provided by Telstra. Also, fiber cable technology is also cropping up in this sector
and providing enhanced voice quality at low investment in infrastructure. Telstra should
develop the loyalty benefits for its users and increase the migration cost for its users so that
users will remain with them only.
Rivalry among the Existing players: Intense Competition in the telecom industry will impact
the prices and decrease the profitability of the company. Telstra is operating in a very
competitive business environment. Telstra can tackle this situation by collaborating with
other small or big players to make their position strong in the telecom sector (Pehrsson,
2013).
7
Threats of New Entrants: New entrants in the telecommunication sector will bring
innovation in this sector and is putting pressure on the operations of the operations of Telstra
by providing services at lower prices. It is essential for Telstra to build economies of scale to
deal with the increasing competition. It is also necessary for the Telstra to define the
standards on frequent to discourage the entry of new players in the already cluttered market.
Bargaining Power of Suppliers: All the companies in the telecom sector in Australia will
procure their raw material from the several suppliers (Campbell, 2017). A supplier who is
major suppliers is putting pressure on the profitability of the Telstra by using their negotiation
capability to extract high prices from Telstra. It is necessary for the Telstra to develop
effective supply chain with several suppliers to eliminate the monopoly of only a few
suppliers.
Bargaining Power of Buyers: users of Telstra are always demanding and seeking services at
a minimum possible price. This is putting huge pressure on the Telstra in the long run as the
users are always seeking for offers and discounts. It is essential for the Telstra to develop a
large base of customers to tackle this problem. Also, it is necessary to develop new offerings
that will provide a unique proposition to their customers (Grant, et. al., 2014).
Threats of Substitute Products or Services: Telstra is also getting threat from the alternative
products and services like Dropbox and Google drive that is a substitute for the storage
options provided by Telstra. Also, fiber cable technology is also cropping up in this sector
and providing enhanced voice quality at low investment in infrastructure. Telstra should
develop the loyalty benefits for its users and increase the migration cost for its users so that
users will remain with them only.
Rivalry among the Existing players: Intense Competition in the telecom industry will impact
the prices and decrease the profitability of the company. Telstra is operating in a very
competitive business environment. Telstra can tackle this situation by collaborating with
other small or big players to make their position strong in the telecom sector (Pehrsson,
2013).
7
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Ansoff Matrix model on Telstra Corporation Ltd
Market Penetration: This is the first quadrant of the matrix. This is the strategy that is
usually adopted when the company has the existing product range and already established in
the market and required to grow in that market. In order to grow the Telstra has to penetrate
the untapped market as there is intense competition is already prevailing in the existing
market (Smartdraw.com, 2018).
Market Development: This is the second strategy of the matrix and has been used when the
firm will target the new market with present products. Telstra will do this strategy by entered
in New Zealand. Telstra should also need to explore markets like Asia- Pacific, and China for
developing their market.
Product Development: This strategy has been used when the market penetration and the
market development strategy are not going to be used. Telstra is operating in the market and
already passing through saturation. So, they needed to explore a new product or service
development opportunities.
Diversification: This strategy is not specifically used in the telecom sector. Telstra is not
doing any product development so this strategy is not used. In order to diversification, they
needed to develop new product development.
8
Market Penetration: This is the first quadrant of the matrix. This is the strategy that is
usually adopted when the company has the existing product range and already established in
the market and required to grow in that market. In order to grow the Telstra has to penetrate
the untapped market as there is intense competition is already prevailing in the existing
market (Smartdraw.com, 2018).
Market Development: This is the second strategy of the matrix and has been used when the
firm will target the new market with present products. Telstra will do this strategy by entered
in New Zealand. Telstra should also need to explore markets like Asia- Pacific, and China for
developing their market.
Product Development: This strategy has been used when the market penetration and the
market development strategy are not going to be used. Telstra is operating in the market and
already passing through saturation. So, they needed to explore a new product or service
development opportunities.
Diversification: This strategy is not specifically used in the telecom sector. Telstra is not
doing any product development so this strategy is not used. In order to diversification, they
needed to develop new product development.
8
Conclusion
This has been concluded from this essay that the strategies mentioned above are a proven
strategy for the business context. The competitive strategy can be achieved in the business in
various ways. The most primary aim of the competitive strategy is to obtain a competitive
edge in the business. In the context of Telstra is very important to develop the competitive
edge to survive in the already cluttered and saturated telecom market.
9
This has been concluded from this essay that the strategies mentioned above are a proven
strategy for the business context. The competitive strategy can be achieved in the business in
various ways. The most primary aim of the competitive strategy is to obtain a competitive
edge in the business. In the context of Telstra is very important to develop the competitive
edge to survive in the already cluttered and saturated telecom market.
9
References
Campbell, I., 2017. Telstra's Future Mode of Operation-the transformation of the Telstra's
Network-1992/93. Australian Journal of Telecommunications and the Digital
Economy, 5(4), pp.18-69.
Grant, R., Butler, B., Orr, S. and Murray, P.A., 2014. Contemporary strategic
management: An Australasian perspective. John Wiley & Sons Australia, Ltd.
Pehrsson, A., 2013. Strategy in emerging markets: telecommunications establishments in
Europe. Routledge.
Sigvaldadóttir, A. and Taylor, A., 2016. Rethinking Competitive Strategy in Mature
Industries: An externally-focused in-depth study into how companies in mature industries
can rethink their competitive strategies.
Smartdraw.com, 2018. Ansoff Matrix - Learn Everything About Ansoff Matrix Models.
[online] Available at: https://www.smartdraw.com/ansoff-matrix/ [Accessed on: 21 Aug.
2018].
Zafar, F., Babar, S. and Abbas, H., 2013. The art of strategic management–a key to
success in corporate sector. European Journal of Research and Reflection in Management
Sciences, 1(1), pp.15-24.
10
Campbell, I., 2017. Telstra's Future Mode of Operation-the transformation of the Telstra's
Network-1992/93. Australian Journal of Telecommunications and the Digital
Economy, 5(4), pp.18-69.
Grant, R., Butler, B., Orr, S. and Murray, P.A., 2014. Contemporary strategic
management: An Australasian perspective. John Wiley & Sons Australia, Ltd.
Pehrsson, A., 2013. Strategy in emerging markets: telecommunications establishments in
Europe. Routledge.
Sigvaldadóttir, A. and Taylor, A., 2016. Rethinking Competitive Strategy in Mature
Industries: An externally-focused in-depth study into how companies in mature industries
can rethink their competitive strategies.
Smartdraw.com, 2018. Ansoff Matrix - Learn Everything About Ansoff Matrix Models.
[online] Available at: https://www.smartdraw.com/ansoff-matrix/ [Accessed on: 21 Aug.
2018].
Zafar, F., Babar, S. and Abbas, H., 2013. The art of strategic management–a key to
success in corporate sector. European Journal of Research and Reflection in Management
Sciences, 1(1), pp.15-24.
10
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