Telstra Corporation Limited Competitive Strategy and Value Chain Model

Management 1
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Management 2
Telstra Corporation Limited was founded in 1975 is the biggest telecommunications company
that operates and creates markets, voices, networks, internet access for mobiles and other
services and products within Australia. Its headquarters are found in Melbourne and employ
about 32000 persons with around 150 subsidiaries within Australia. Telstra Corporation Limited
mission statement is, "We build technology and content solutions that are simple, easy to use and
valued by our customers." In regards to its mission statement, Telstra aims at serving and
knowing its clients more than any other rival firms in the telecommunications industry
(Schenkel, 2014). Telstra has the following objectives that help to shape its operations towards
serving its clients within Australia.
i. To thoroughly simplify all the product offerings, address customer complaints, and create
experiences in the digital world.
ii. To significantly easy its structure and methods of operation so that its employees and
clients can be empowered
iii. To be the industry's primary program for cost reduction as well as portfolio management
Micheal Porter developed the value chain concept in 1985 as a tool for facilitating analysis of an
entity's value and relative costs in its operations. It is mainly used to comprehensively analyze
necessary actions of an entity to depict information on the available source that can give an entity
a tremendous competitive advantage over its rivals. Porter hints that competitive advantage is an
element which should be fully understood by considering the level of rivalry that exists in a
given industry (Porter, 2010). As such, the value chain is a useful tool for strategic management,
which can be utilized by leaders at Telstra Corporate limited to breakdown and organize its vital
operations. More so, the analysis and organization of strategic operations should be in a manner

Management 3
that delivers Telstra's competitive advantage within the Telecommunications industry either by
lower costs or higher prices.
Competitive strategy of Telstra Corporation Limited
Telstra competitive strategy is centered on cost leadership and differentiation that has
helped to maintain its competitive advantage within Australia's telecommunications industry.
Cost leadership has been mainly in the form of lower costs incurred during the development of
its products as compared to its rivals like Vodafone and Optus. The lower costs in product
development have been due to Telstra’s effective supply chain management which has identified
and utilized cheap quality raw materials from various supply units like Zen and Advantra Pty Ltd
(Roberts 2011, p. 150). The above supply units own scare and quality resources like switching
systems, wireless transmission systems as well as wired transmission systems, which are the
rivals have not effectively utilized.
Additionally, Telstra has also made use of a differentiation approach as a way of boosting
its competitive advantage. Differentiation approach has been in the form of production and
offering of a variety of products to its clients, which is not the case with Optus and Vodafone.
Some of the full range of products offered by Telstra Corporate Limited include; cable internet,
mobile broadband, low-cost internet, satellite internet, network services, among others. The
above wide range of services offered by Telstra has maintained customer loyalty due to enhanced
customer experience, thus boosting its competitive advantage (Young, 2010). From the above
discussion, Telstra is realizing significantly lower costs in production and fetching higher prices
for its premium services, which are boosting its competitive advantage at the expense of its rivals
like Optus and Vodafone.