Global Business Management: Analysis of External Factors for Telstra's Expansion Plans in Japan and the United Kingdom

This report helps in analysing the external environment based factors that are able to affect the international expansion based plans of the organizations. The company which has been taken into consideration for this analysis is Telstra which is telecommunication provider in Australia. The countries which have been considered for analysis are the United Kingdom and Japan. The different macro environmental factors of the analysis have been analysed with the help of PESTLE framework. The risks and the opportunities which have been provided by the two countries are also analysed in the report. The country which has been chosen for expansion after the analysis is Japan based on the huge rates of growth shown by the country.

Running head: GLOBAL BUSINESS MANAGEMENT
GLOBAL BUSINESS MANAGEMENT
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Executive Summary
This report helps in analysing the external environment based factors that are able to
affect the international expansion based plans of the organizations. The company
which has been taken into consideration for this analysis is Telstra which is
telecommunication provider in Australia. The countries which have been considered
for analysis are the United Kingdom and Japan. The different macro environmental
factors of the analysis have been analysed with the help of PESTLE framework. The
risks and the opportunities which have been provided by the two countries are also
analysed in the report. The country which has been chosen for expansion after the
analysis is Japan based on the huge rates of growth shown by the country.

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Table of Contents
About Telstra......................................................................................................3
Identification of the countries where Telstra can enter......................................3
Analysis of the countries....................................................................................4
Macro-environmental analysis of Japan............................................................4
Geo-political analysis of Japan..........................................................................5
Development of the business and trade based policies of Japan.....................6
Risks and opportunities provided by Japan.......................................................6
Macro environmental analysis of the United Kingdom......................................6
Geo-political analysis of the United Kingdom....................................................7
Development of the business and trade based policies of the United Kingdom
......................................................................................................................................8
Risks and opportunities provided by the United Kingdom.................................8
Conclusion.........................................................................................................8
References.........................................................................................................9

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About Telstra
Telstra Corporation Limited is the biggest telecommunication based
organization that operates the network in Australia. The organization mainly operates
mobile, voice and telecommunications network in the country. Telstra also provides
various other services to the customers which include, the pay based television,
internet access and other services and products. The company has developed a
extensive history in the country along with the Australia Post. Telstra is a completely
private organization and has gone through huge number of changes the in order to
increase its focus towards the customers. The current CEO of the company has
been struggling in the industry in order to increase the value of Telstra in the
telecommunications industry (Telstra.com.au 2018).
The telecommunications industry of Australia has been controlled by the
organization named Postmaster-General Department (PMG) which had been formed
in the year 1901. The different colonies were responsible for the operations of this
industry before the year 1901. The major accountability for different postal services
was thereby relocated to the Australian Postal Commission. The Australian
Telecommunications Commission (ATC), which had traded in the name of Telecom
Australia. Telstra had started its operations in the year 1993 which was renamed
based on the organization Telecom Australia. The branding of Telstra was thereby
completed in the year 1995. The report will be based on the expansion based plans
of Telstra in countries of Europe and Asia. The two countries which have been
selected for the analysis are Malaysia and the United Kingdom (Telstra.com.au
2018).
Identification of the countries where Telstra can enter
Telstra has its operations in more than 20 countries all over the world and
operates with an employee base of 3000 people. The company operates in some of
the countries in the Asia-Pacific region. Telstra does not have its operations in the
two countries namely Japan and the United Kingdom which have been selected for
the analysis. The network has also been able to become a high-value based
communications partner for companies which operate in Asia-Pacific based region.

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The company can increase its profitability with the help of proper expansion in these
two countries (Beamish and Lupton 2016).
Analysis of the countries
Macro-environmental analysis of Japan
The PESTLE framework can be used for the purpose of analysing the
external environment based factors that are able to affect the operations of an
organization. Telstra can thereby use this framework in order to analyse the external
environment based factors of Japan in order to plan its expansion.
Political factors – Japan is considered to be a monarchy. However, the
current developments in the political condition of the country are based on the
Democratic Party of Japan or DPJ. The Prime Minister of the country plays an
important role in the ways by which regulations are developed based on different
issues. The relationship which is shared with the other countries are like, Russia,
South Korea, Taiwan and China are not quite effective in nature. The major disputes
are thereby based on the different resources like, oils, natural gas and different
marine resources. The stable political condition is an opportunity for Telstra to
operate in a profitable manner (Buckley 2016).
Economic factors – Japan has a strong economy and the country has
acquired the topmost position in the world in terms of the size of its economy. The
government of the country has placed huge emphasis on the education based
system. The contribution that can be provided by the people to the society of the
country is an important part of the Japanese culture. The strong economy will be
able to provide huge growth based opportunities to Telstra.
Social factors – Japan is considered to be quite open in case of social and
religious activities as well. The choices and preferences of the people are influenced
by the society and the ways by which the people are managed. Culture plays a
significant role in affecting the choices and preferences of the people. Telstra
thereby needs to consider the working culture which is followed in the country in
order to set up its operations. The phenomenal rates of growth of Japan can act as a
major opportunity for the company to increase its revenues (Buckley, Burton and
Mirza 2016).

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Technological factors – Japan is considered to possess one of the most
telecommunications based systems which are able to affect the mobile devices. The
technological environment of the country is an important advantage that can be
effectively provided to Telstra. Many technological advancements have been
experienced in the country based on VoIP growth. The automation systems which
have been implemented in different organizations are important for the successful
expansion based plans of Telstra (Cavusgil et al. 2014).
Legal factors – The Japanese business laws will play a major part in the
ways by which organizations are able to operate in the environment. The Japanese
laws can thereby differ in a considerable manner from that which are followed in the
other countries. The business organizations which thereby wish to enter the country
need to consider the laws which have been developed in order to operate in an
effective manner. Telstra thereby needs to consider the business based laws in
order to operate in the country effectively.
Environmental factors – The large population of the country is concentrated
in specific areas of Japan. Some of the areas in the country are inhabitable and has
further reduced the development of Japan in an effective manner. The land in Japan
is totally susceptible to the earthquakes and tsunamis which can cause huge
damage to the organizations. Telstra needs to analyse these issues in order to start
its operations in the country (Cumming and Zahra 2016).
Geo-political analysis of Japan
Japan is considered to be a major geographic analogue related to the
situation in Great Britain. The geopolitical future is also considered to be highly
favourable in nature. Japan is considered to be a quiet place from the geopolitical
standpoint. The country thereby makes few demands on the other nation which are
related to it. Japan is not able to maintain any military force according to the Article 9
of the constitution which has been developed by the government. Japan has faced a
huge financial crisis in the 1980s and the 1990s as well (Kolk 2016). The financial
crisis has been able to create a huge domestic upheaval. Japan is a major part of
the G8 and the ASEAN groups. The political crisis which was created in the country
was based on limiting the exports based on Japanese goods to different parts of the
world. The American markets were later dominated by the Japanese products in an

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effective manner. The political relationships of the country will play a major role in the
operations of Telstra and its expansion based plans in Japan (Forsgren and
Johanson 2014).
Development of the business and trade based policies of Japan
The Ministry of Economy is Japan has been organised and further divided into
many different bureaus. The international investment and trade based policies of the
country are based on the conducive type of business environment for the
sustainability of organizations in Japan. The goods which are used in the country do
not need any particular import license. Some of the goods which include, the
animals, plants and the dangerous materials require license in Japan. The import of
some items are however highly prohibited in Japan. The tariffs based on certain
products are quite low and Japan has also been a signatory to WTO Information
Technology Agreement which has been based on the reduction of tariffs. These
business policies will provide huge chances for the development of Telstra (Leonidou
et al. 2015).
Risks and opportunities provided by Japan
The major risks which can be faced by Telstra in Japan are based on the
political crisis and financial crisis based activities. The company will be able need to
develop the policies in an effective manner based on the political environment in
order to rise the profitability.
The opportunities that are provided to the organization are based on the
technological developments that have been made in Japanese environment. The
most important part of the opportunities is based on the huge population growth of
the country which can further increase the customer base of Telstra (López‐Duarte,
Vidal‐Suárez and González‐Díaz 2016).
Macro environmental analysis of the United Kingdom
Political factors – The government of UK has taken major steps in order to
address deterioration which had occurred in the economy. The government had
thereby introduced many fiscal and monetary initiatives in order to reduce the rates
of unemployment in the country. The UK government is also quite stable in nature

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and has been able to control the rates of corruption in an effective manner (Luthans
and Doh 2018).
Economic factors – The GDP growth rate of the United Kingdom has been
quite robust in nature within the years 2000 to 2006. The high growth rate of the
country which had been recorded in the year 2007, had been affected in an adverse
manner by the global economic crisis which had occurred in the year 2008.
However, the economy of the country has been able to remain stable and has
enjoyed huge growth as well.
Social factors – Around 67% of the total population of the United Kingdom
accounts for the working group. The major problem is mainly based on the ageing
population of the country. The healthcare based system of UK is also considered to
be highly successful in nature. The working population of the country will be
beneficial for the operations and expansion based plans which have been made
Telstra (Morschett, Schramm-Klein and Zentes 2015).
Technological factors – The high availability of internet is an important factor
which is helpful for the operations of modern organizations. The efficient
telecommunications based network is also an important part of the successful
operations of Telstra in the country.
Legal factors – The EU labour law is strict in nature which is able to affect
the work based process of employees. The changes that have been made in the
labour laws need to be analysed in an effective manner by Telstra in order to set up
its operations in the country (Perri and Peruffo 2016).
Environmental factors – The department of the government which is totally
responsible for the environmental regulations in UK is Defra. The organization mainly
aims at empowering people so that they are able to live based on the environmental
means.
Geo-political analysis of the United Kingdom
The geo political environment of the United Kingdom had gone through many
changes following its exit from the European Union. The response which has been
provided to the withdrawal of UK from the European Union is an important part of the
geo political stage which has been effectively developed by the United Kingdom. The

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United Kingdom had been an important part of the alliance that had been formed
between different European countries. The exit has further affected the relationships
which had been developed effectively with the other countries. The transatlantic
relations of the country have been affected in an adverse manner by this exit. This
can have an adverse effect on the expansion based plans that have been made by
Telstra in the United Kingdom (Reiche et al. 2016).
Development of the business and trade based policies of the United Kingdom
The policies based on overseas trade which have been made by the United
Kingdom have aimed at helping the business organizations to succeed in the
expansion based plans. The investment and trade based barriers in the country are
low which can facilitate the entry of Telstra (Tüselmann, Sinkovics and Pishchulov
2016).
Risks and opportunities provided by the United Kingdom
The major risks which can be faced by Telstra in the country are based on the
drastic changes and economic downturn which has taken place in the country after
Brexit.
The opportunities in the other hand are mainly provided by the different
technological advancements which have taken place in the United Kingdom in an
effective manner (Zander, McDougall-Covin and Rose 2015).
Conclusion
The analysis can be concluded by stating that the expansion of Telstra will be
more favourable in Japan. The major reason being that the growth opportunities
which have been provided to the company by the country is the highest. The huge
population and technological advancement of the country will prove to be important
factors that can improve the revenues and profitability of the company.

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References
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