Organizational Strategy And Leadership

This report discusses about where the IT industry are now in relation to the external environment and industry structure currently facing. For this report, “Atlassian” company is chosen. This report covers how profitable the Atlassian Company currently is and what are the factors driving that profitability.

Organizational Strategy And Leadership
ORGANIZATIONAL STRATEGY AND LEADERSHIP
System04116
4/1/2019
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ORGANIZATIONAL STRATEGY AND LEADERSHIP
Contents
Introduction......................................................................................................................................2
Background of an organization........................................................................................................2
Porter’s five forces analysis.............................................................................................................6
Threat of new entrants..................................................................................................................6
Bargaining power of suppliers.....................................................................................................6
Bargaining power of buyers.........................................................................................................7
Threat from substitute products...................................................................................................8
Rivalry among the existing players..............................................................................................8
SWOT analysis................................................................................................................................9
Strength........................................................................................................................................9
Weaknesses................................................................................................................................10
Opportunities..............................................................................................................................11
Threats........................................................................................................................................12
Future expectation of information technology industry................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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ORGANIZATIONAL STRATEGY AND LEADERSHIP
Introduction
This report discusses about where the IT industry are now in relation to the external environment
and industry structure currently facing. For this report, “Atlassian” company is chosen. This
report covers how profitable the Atlassian Company currently is and what are the factors driving
that profitability. It is also discussed how will these factors change in the future and what will be
the effects of these changes on profitability of Atlassian.
The various frameworks such as PESTEL analysis, Porters five forces analysis and SWOT
analysis is used to find the key variables within the industry and its impact on the performance
and profitability of the Atlassian. PESTEL analysis is the best method for analyzing and
evaluating the variables within external environment and the impact of these environments
within the industry. The factors, which are involved in PESTEL analysis, are political, economic,
social, technological, environmental and legal.
Another framework is Porters five forces model that is also used for situational analysis of an
Atlassian IT industry. This porters five forces model consists of fears of new entrants, supplier’s
bargaining power, buyer’s bargaining power, fear of substitute and competition. These forces
help in identifying the key factors that are most expected to have effect on the Information
Technology industry’s profitability.
It is mandatory that every company needs to do SWOT analysis to know their company and its
capabilities. The SWOT analysis of Atlassian is done for knowing the strength, weaknesses,
opportunities and threats of this company. The helps in improving the performance and achieve
goals in an efficient time with more effectiveness (Rees, 2015).
Background of an organization
Atlassian is one of a leading Australian Information Technology and software Company that
develops items for software developers, content management and project managers. It is famous
for its Jira, problem tracking application and its team collaboration, Hipchat, Bitbucket, wiki
product confluence and JIRA. It attends over 1,35,000 clients. It has their global offices in seven
countries across the world. they have 4000+ applications in their marketplace. The company also
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provides additional tools for software developers such as Fisheye, clover, crowd, bamboo, source
tree. The company conducts its business through its subsidiaries including Atlassian Pty Ltd and
Atlassian, inc.
PESTEL analysis
The analysis of PESTEL is a tactical tool to identify or evaluate an external situation of the
company. The variations in an external environment factors have direct effect on Atlassian
Corporation Plc and other players in the information technology services.
1. Political: political factor play an important role in identifying the factors, which can
affect the Atlassian corporation Plc’ effectiveness for long period in a definite market.
Atlassian corporation plc is functioning in IT and software industry in more than 12
nations and represent itself to various kinds of political system risks and political
environment. Conflict within Australia ruling liberal general coalition will increase
labor’s popularity in future of the 2019 voting that has impact on the Australian IT
industry. The government has unrestrained its corporate taxes cuts and they are extremely
improbably to be invigorated ahead of 2019 voting (Santander, 2019). The risk score in
IT industry of Australia is 1.5 moderate over the coming year that affect the IT industry.
The Atlassian corporation plc strictly analyzed the subsequent factors before coming or
capitalizing in a specific market:
 Risk of military attack in Australia
 Level of exploitation especially the regulations in technology industry
 Trade regulations and trade tariffs related to technology
 Government and intervention in industry of information technology and software
by Australia government
 Work week regulation for Australian IT industries
2. Economic: Atlassian corporation plc use nation’s economic factor for example; inflation,
growth rate and economic indicators of industry such as information technology industry
growth rate, consumer expenditure etc. to estimate the growth path of IT segment but also
that of the company. The economy of Australia is a big mixed market economy which is
not favorable for the IT sectors and affect the business operations of IT I industry. The
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GDP of Australia is $1.69 trillion as of 2017 (Atlassian, 2017). The inflation rate was 2.2
in 2018 and it is about 2.3% in 2019 and 2.5 in 2020 which may have large impact on IT
sectors as they play vital role in the country for the development of growth of the country
(AIG.COM, 2018). The following economic issues in Australia affect the IT industries
specially Telstra:
 The tax rates which is 30% on corporations
 Government raises the taxes on rich
 There are more restrictions on current welfare benefits
 No tax incentives to private companies by government
3. Social: the culture of society and manner of doing activities has effect on culture of the
Telstra in an Australian business environment. The shared belief and attitude of the
people play a big role in in what way atlassian corporation plc dealers will know the
customers of a specified market and in what way they designed marketing note for IT
industry customers. Three future themes developed that is immigration, religion, and
human rights issues were stated over 13% of Australians. These affect the IT industries in
Australia and especially Telstra is affected widely with this 3% up in social issues (Frue,
2018). There are various social factors which generally affect the information technology
industry:
 Interests of Leisure
 Attitude, that is environmental consciousness, health etc.
 Culture, which consists of gender roles, social conventions etc.
 Education level and education standard in information technology and software
industry
4. Technological : technology is rapid disrupting many industries across the country. As a
result of changes in policy, the rollout has been considerably delayed, which results in
leaving Australia technology infrastructure continuing to trail of its global peers. The
artificial intelligence may be technology’s Holy Grail but Australia’s human right
commissioner Edward Santow has advised about the necessity for liable innovation and
an acceptance of the challenges new technology poses for simple human rights. These
widely affect the information technology industry in Australia as they have to innovate
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the product and faces those challenges occurs from new innovations and technology.
following are technological factors which affects the information technology and
software industry:
 Present technological developments by competitors of Atlassian corporation plc
 Impact of technology on product offerings
 Impact on cost structure in information technology and software industry
 Impact on structure of value chain in area of technology
 Rate of technological diffusion
5. Environment: many markets in Australia have various standards or environmental
principles that affect the Atlassian’s profitability in those competitive markets. Even
within Australia, often states and cities have various environmental laws and legal
responsibility laws. Before coming into new market, Atlassian has to carefully assess the
environmental standards that are essential to operate in those markets. These factors
which, affect the Atlassian an IT industry widely in Australia such as:
 Attitude towards and support for renewal energy
 Waste management in technology sector
 Water and air pollution rules in information technology industry
6. Legal: the Australia has a local statutory outline to ensure that dealing is fair for
consumers and businesses. This framework affects the Atlassian corporation plc in
Australia as these IT industries have to focus on the trading activities of proving
information related to technology. These standards are considered to ensure harmful
products are not promoted in Australia. These affect the business strategies and
operations of Atlassian as they have to work according to these laws. Common Legal
factors that affect information technology industries are:
 Anti-trust law in information technology industry
 Employment law
 Discrimination law
 Copyright, patent or intellectual property law
 Data security
 Health and safety law
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 Consumer protection and E-commerce
Porter’s five forces analysis
Porter’s five forces model is a planned management tool to examine company and know
fundamental levels of effectiveness in Atlassian corporate plc. The managers of Atlassian
corporation plc use porters five forces to know in what way the five forces affect profitability
and make a tactics or strategies for increase Atlassian corporation plc reasonable benefit and
extensive period effectiveness in IT and software industry. The porter five forces are:
Threat of new entrants
New entries in IT and software industries come up with innovation, different techniques of doing
work and put burden on Atlassian corporation plc by using strategy of decreasing pricing,
decreasing costs and give customers the new price propositions. Atlassian corporation plc has to
accomplish all the tasks and form effective hurdles to protect the competitive edge.
Atlassian corporation plc hold the threats of new entries by:
 By inventing the new products and new services; these product not only attracts new
clients to the fold but also provide a reason to old consumer to buy products of Atlassian
corporation plc.
 Through developing economies of scale by which they can less the static cost per unit.
 Making capabilities and spending cash for research and development. The entries of new
player are not as much of expected to come in an active business where the Atlassian
corporation plc keeps regularly outlining the standards. It expressively decreases the
window of unusual earnings for the new companies hence dishearten new market players
in the information technology and software industry (Lorette, 2019).
Bargaining power of suppliers
Almost every company in the information technology industry buys its raw material from
various suppliers. The Suppliers in leading position reduce the limits Atlassian corporate plc can
make in the Australian market. The Influential suppliers in division of technology use its
transferring power to remove higher rates from the companies in information technology and
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software industry (Telstra, 2013). The complete effect of higher suppliers bargaining power is
that it drops the entire profitability of IT and software industry.
Atlassian corporation plc hold supplier’s bargaining power through:
 constructing effective supply chain with number of suppliers;
 trialing using design of product by means of various resources so that if the rates hike
single raw material at that time Atlassian can move to another;
 Increasing devoted providers whose business depends on the Atlassian. The lower
Atlassian corporate plc acquire from the Wal-Mart and Nike is recently in what way
these businesses established third party producers whose business individually hinge on
them therefore making a situation where these third parties manufactures have
considerably low power of bargaining in comparison to Nike and Wal-Mart.
Bargaining power of buyers
Often consumers are demanding a lot. The consumer are desire to purchase the better offerings
made available by giving the low rate as possible. This laid force on the Atlassian corporate plc’s
profitability in the extensive term. The tiny and extra stronger the customer base is of Atlassian
corporation plc the greater the customer’s power of bargaining and greater their capability to
look for collecting the offers and discounts.
Atlassian corporation plc hold the buyer’s power of bargaining by:
 By making a huge base of consumers, this will be useful in dual ways. It will decrease the
buyer’s power of bargaining and it will offer a chance to the Atlassian to modernize their
process of production and sales.
 By inventing new items rapidly, consumers often look for offers and discounts on the
developed items so if Atlassian corporation plc keep on arriving with different items and
techniques then they can bound the buyer’s power of bargaining.
 New products will decrease the defection of present consumers of Atlassian corporation
plc to their rivalries.
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Threat from substitute products
When a fresh product and service fulfill same needs of consumer in diverse manner, the
effectiveness of industry suffers. For instances, service such as Google drive and Dropbox are
supernumerary to storing hardware drive. The risk of a service or product substitute is maximum
if it provides a value offer that is exclusively varied from the current Atlassian corporate plc’s
offerings (Magretta, 2012).
Atlassian corporation plc hold the threat of substitute products or service by:
 By being, service focused instead of just product focused.
 By knowing, an important needs of the buyers rather than what buyers is purchasing.
 By raising the substituting cost for consumers.
Rivalry among the existing players
If the competition among present companies in an information technology and software company
is strong then it will drive down the prices and lower the complete profitability of the
information technology and software industry. Atlassian corporation plc works in a competitive
software and IT industry. This rivalry takes peal on entire long period Atlassian’s profitability.
Atlassian corporation plc hold strong competition between the present competitors in software
and information technology service industry:
 By making the sustainable diversity
 By making scale so that they can compete effectively in comparison to other companies
 Team up with rivalries to enhance the size of the market instead of just competing for the
small markets (McLean, 2018).
Suggestions of porter 5 forces on Atlassian corporation plc:
Through examining the porters 5 forces Atlassian corporate plc strategies can achieve a
comprehensive image of what affects profitability of company in information and software
industry. They can recognize or evaluate trends of game changing previously and can quickly
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react to feat the developing opportunity. Through knowing the porter’s 5 forces model in big
aspect the manager of Atlassian corporation plc shaped those forces in their favor.
SWOT analysis
SWOT analysis is the main strategic planning tool which is used by the Atlassian corporation plc
leaders for a situational analysis of the company. It is a method to find out the current strength,
weakness, opportunities and threats Atlassian corporation plc is facing in their present business
situation (Woodruff, 2019).
Strengths
As one of the foremost organization in its field, Atlassian corporation plc has number of
strengths that enables them to succeed in the market. These strengths not merely assist it to keep
the share of market in present markets but assist in penetrating the new markets. Those strengths
are:
 Better capital expenditure return: Atlassian corporation plc is effective at new projects
implementation and generation of better capital expenditure return by forming new
profits streams (Phadermrod, et al, 2019).
 Strong community of dealer: the company has built among dealers and distributors a
culture where those dealers not only support its produces but also spend in team of sales
training to describe to the customers in what way they can excerpt the extreme advantage
from the product (Atlassian, 2016).
 High level of satisfaction of customer: Atlassian with their target customer relationship
management segment has capable to attain a high level of gratification of customer
among existing customer and best brand equity amongst those prospective customers;
 Best performance in different markets: it has made capability at arriving new markets and
creating success of those market. The growth has assisted the company to construct new
profits stream and economic phase threat diversification in the market Atlassian works in;
 Strong distribution of network: over the years it has made a reliable distribution of grid
which can spread at large of its prospective market (Boje, et al, 2011).
 Atlassian is highly successful in strategies of Go To Market for its products;
 Innovation of production as they have successful record of developing the new products;
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 Highly skilled employees through successful programs of learning and training.Atlassian
corporation plc is capitalizing many means in development and training of its staffs
which bring about in an employee that is not only extremely skilled but inspired too to
attain or succeed more (Speculand, 2017).
Weaknesses
Weakness is the area where Atlassian corporation plc can improve upon. Weaknesses can be
improved by an organization by SWOT analysis tool and made on its competitive benefit and
considered positioning. Weaknesses are:
 Net contribution percent and profitability ratio of Atlassian corporation plc are lower the
average of industry.
 They require additional investment in new technologies. The balance of growth and
different characteristics the Atlassian is preparing to grow into.
 Atlassian corporation plc requires to put additional investment in technology to add the
processes throughout the board. Currently, the money in technologies is not at equality
with the vision of company.
 The product marketing left much to be wanted. However a product is the achievement in
regards of sales but Atlassian’s unique selling proposal and positioning is inaccurately
stated that may lead to the occurrences in this section as of the rivalries.
 Research and development investment is lower the rapidly increasing players in the
market. However Atlassian corporation plc is investing higher the average of company on
research and development, it has not stayed capable to beat the primary players in its field
in terms of an inventions. Atlassian has come through as a strong company which are
viewing ahead to take out products based on verified features in the competitive markets
(Earl, 2013).
 The structure of an organization is only well-suited with the current model of business
therefore restricting growth in end-to-end product segments.
 High attrition rate in employee: compare to other companies in their field, Atlassian
corporation plc has a high rate of attrition and have to invest a more in comparison to its
players on development and training of their staffs (Carlson, 2017).
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 The Atlassian has not stood capable to hold the challenges presents by the entry of new
companies in the section and has missed small share of market in the classes of niche. It
has to made internal mechanism of feedback rightly from the players of sales on ground
to face these problems or challenges (Wroblewski, 2018).
Opportunities
There are various opportunities which Atlassian corporation plc has based on the research. The
opportunities are:
 Increase in spending of customers and economic uptick after years of downturn in
Australia and sluggish expansion rate in a business is the opportunity for Atlassian
corporation plc to target fresh customers and increase share of market.
 Government green ambition in Australia also create an opportunity for arrangement of
Atlassian corporation plc by the state as well as central government contractors.
 New rules of environment: the new opportunities will make a platform for every
company in the industry. This signifies the good opportunities for Atlassian Corporation
to drive home their benefits in innovative technology and increase share of market in the
line of new product (Aiello, 2018).
 Constant free cash flow make available an opportunities to spend in adjacent sections of
product. With additional money in bank the Atlassian can spend in new technologies and
in new categories of products. This opens an opportunity window for Atlassian
corporation plc in other classes of product (Taylor, 2019).
 Introductory of new markets because of agreement of government: the acceptance of new
technology standards and government free agreements of trade has given Atlassian
corporation plc the opportunities to come into a fresh growing market (Ross, 2016).
 Lower rate of inflation: the low rate of inflation bring more stability in the market, it
enables customers of Atlassian corporation plc the credit at lower rate of interest.
 New consumers from online channels: over the previous few years, the Atlassian
corporation plc has spent large amount of money into the accessible platform. The
invested amount has opened new network of sales for Atlassian corporation plc. In the
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subsequent years, they can influence this opportunities by understanding its target
customer better and attending their requirements using big analytics of data (Atlassian,
2019).
 Decreasing transportation cost because of lesser shipping rates can also carry down cost
for products of Atlassian corporation plc therefore providing the chance to the company
whether to increase its effectiveness or pass on the advantages to the consumers to take
share of market.
Threats
There are many threats which Atlassian company facing such as:
 Increasing strengths of local suppliers in Australia presents the threat in Australian
market as the rivalry is paying margin of high to the local suppliers (Denis, 2019).
 Development of new technologies by the competitors of Atlassian company or market
disruptor is a major threat to the software and IT industry in average term to long term
future.
 The plea of products which are extremely profitable is cyclical in nature and any
uncertain events during the peak period might affect the profitability of Atlassian in short
term to medium term (Atalssian corporation plc, 2017).
 No daily distribution of innovative products: over the year, the Atlassian corporation plc
has developed many products but those are frequently result to the developments by other
companies in the market. The distribution of new products is not on daily basis therefore
primary to high and low fluctuate in the quantity of sales over the time (Ray, 2017).
 New environmental regulation under Australia agreement 2016 could be threat to definite
present categories of product (Farquhar, et al, 2012).
 Liability law in various countries are different and Atlassian corporation plc may be
uncovered to several claims of obligation given policies modification in those markets of
Australia.
Future expectation of information technology industry
There are various future expectations of information technology industry in Australia such as:
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1. The developing world of IT is one in which data is most important, they expect social
platforms develop as a new basis of business intelligence and cloud computing which
results in business growth according to the new report of Atlassian
2. In the future, they expect the lives like the people of science fiction movies did
(Falcon, 2019).
3. They expect to get ready to print their own creative physical products and dive into
the virtual world and interact with them.
4. They also expect to put an application into production that elated customers and
alternatively working countless hours on code to find it fell flat (Rich, 2018).
5. Cyber safety is one and only movements driving information technology’s future.
Constant observance will be required to keep up with the new technologies being
established (Miller, 2018).
6. Making objects through affluence as of a digital file gives countless advantages to
any corporate environment. However, their non-technology average Joes will begin to
learn in what manner to navigate computer aided design software, changing the face
of product creation and permitting for greater customization in the development of
product.
7. They expect mobile technology to be composed to develop the main platform of
association in the company through new software make it progressively easier to
participate on tasks from outside of the old timeslot of nine to five, when they can
exchange data with their team members from a hotel halfway throughout the world in
a matter of seconds. This will have influence on the future of IT (Evershed, 2019).
8. Use of Google wallet, which will enable them to use any smart mobile to buy
products online. It support all debit and credit cards,
9. Use of square up, this technology will allow customers to make transaction online by
mobile phones as customers will only pay or give 2.75% per swipe and there will be
no extra fees and next day payments (Delisle, 2016).
10. Uses of flexible consumption model to organization’s competiveness.
11. Increase business agility and democratization of innovation in industry this will result
in cloud’s value proposition (Arconati, 2010).
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12. Uses of mobile technology to transform the workplace; Employers can recognize the
office is just one of the places employee work not only the place (Pollock, 2016).
13. Use of Workplace connectivity software to bring all pieces together.
All above points covers the future expectations of information technology and software industry.
These points clearly shows that what IT industries expects in future for the greater development
and growth of the country as well as their IT industries.
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Conclusion
From the above analysis, it is concluded that every organization needs to do PESTEL, SWOT
and Porter five forces analysis for continuing their business operations in an effective and
efficient manner. In this report Telstra is selected which is an IT and software industry to know
the organizational strategies and leadership for managing those issues in the business
environment. The purpose of PESTEL analysis was to know the factor that affects the
profitability of the Telstra. The purpose of Porters five forces analysis was to know the
competition that Telstra is facing in current days and effects of buyers and suppliers on the
productivity. The purpose of SWOT analysis was to know the strengths, weakness, opportunities
and threats of the Telstra in the competitive market in Australia. It is important to identify and
analysis these model for better working of industry and meet the future expectations of the
industry. Information technology and software industries have various expectations for future to
have definite growth in their field and increase development of the country as information
technology industry play a vital in every country’s growth and stability.
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