Telstra Limited: Supply Chain Management

This assignment requires you to analyze Telstra Limited's approach to supply chain management. The focus is on how they create value within their supply chain and achieve a competitive edge in the market. You will need to demonstrate an understanding of key concepts like knowledge value chain, performance measurement, and sustainable value chain management.

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VALUE CHAIN ENGINEERING
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Table of Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................4
PORTERS VALUE CHAIN ANALYSIS...................................................................................................4
Primary activities.........................................................................................................................................4
Inbound logistics.....................................................................................................................................4
Outbound logistics...................................................................................................................................5
Operations...................................................................................................................................................6
Support activities.....................................................................................................................................6
Marketing and sales.................................................................................................................................6
Services...................................................................................................................................................7
Support Activities........................................................................................................................................8
Human resource.......................................................................................................................................8
Technology............................................................................................................................................10
Procurement..........................................................................................................................................10
Infrastructure.........................................................................................................................................11
Strategic approaches to optimize value chain............................................................................................12
Strategy 1.Core competence and outsourcing other services...............................................................12
Strategy 2. New business growth...........................................................................................................13
Strategy 3. Studying the market and forecasting to improve the customer experience..........................13
Risks in value chain management of the firm........................................................................................14
Chain optimization.................................................................................................................................14
Analysis using porters five forces..............................................................................................................15
Strategy 1.Core competence and outsourcing other services.................................................................16
Strategy 2. Business growth..................................................................................................................16
Strategy 3. Studying the market and forecasting to improve the customer experience..........................17
Conclusion.................................................................................................................................................17

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Executive summary
The paper describes the value chain management in details considering Michael porter
who is among those business men who gave a true in definition of the chain. Although different
people gave it different meaning this paper justifies definition according to Michael porter. It
further describes the importance of an organization to get into a value chain management system
and a representation of diagrams is evident to enhance the understanding of the students. Risks
involved in supply chain systems and how to identify them is well covered and fairly, we will see
how the value chain system can be optimized and appropriate procedures in achievement of the
same. Telstra limited in Australia is a company that deals entertainment and communication. The
company use the value chain systems in development, production and supply of the commodities
.the high revenues of about 70% generated by the company are as a result of the adoption of the
porters value chain analysis principles, this principle create value to the products which
ultimately results in competitive advantage over other companies and also maximizes the profits
for the company. According to porter chain analysis, an organization is mandated to concentrate
on systems and natural process and committing to customer needs fast since customers are the
central principle on business rather than departments and reporting expense categories.

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Introduction
Telstra is one of the leading telecommunication companies in Australia. It was founded in
June 1975 under Australian Telecommunication commission .The name Telstra comes from the
word telecom Australia which was used domestically when trading while internationally the
company used Telstra. A uniform branding was established to Telstra in 1995. They have
concentrated their business on entertainment and Telecommuinicaion.The Company ensures
customer satisfaction at the same time reducing operation cost. Michael porter came up with the
best definition of Value chain management (Gereffi 2014). According to his definition he
referred it as a whole series of activities that is involved in creation and building of value at each
single step.
PORTERS VALUE CHAIN ANALYSIS
Michael porter’s value chain consist of several activities which include inbound logistics,
outbound and sales and marketing Telstra have retained their market share by optimizing on
marketing the products and services. They have a large network hence they are able to reach as
many potential customers as they can. Telstra value chain management have followed porter
laws of value chain management to ensure they have increased sales.
Primary activities
Inbound logistics
Inbound logistics is the process that unstintingly incorporates the steps of receiving,
storing and the internal distribution of raw stuff or primary ingredients to a service or product.
With Porter this an essential process to the creation of value for a product. It involves arranging
the movement of materials from suppliers to assembly plants or the manufactures. The

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operations are concern of management in three process of conversion from raw materials to
finished goods (Kannegiesser 2008).
Telstra limited applies this process through to acquisition and exploration of materials for
the production process of the product, this is exerted through the adoption of a disciplined
advance to coping with risk at the same time increasing stockholder value. The exploration
process itself is centered on establishing a material parity global portfolio to allow a growth in
the future opportunities to the business.
Outbound logistics
Outbound logistics. This is concerned with movement of products or finished goods and
their storage. Sales and marketing entails the process of selling services or products in exchange
of offerings that is valuable for clients, customers and the community at large. To make their
exploration process easier the company has segmented the cognitive process into different areas
marketing, telecommunication, data and IP networks managing and unifying networks. Telstra
exploration apart from Australia like Canada, Asia, and Indonesia. The company has laid down
exploration strategies to facilitate this process which include among them growing portfolio
profundity and optionality, detection of other commercial entertainment areas together with
consistency in expatriate and commercial excellence. Finally service entails all activities which
are essential to be put in place for effective working of the product (Poirier 2009).
Operations
Support activities
This involves Infrastructure, legal, financial, quality assurance, public relations, general
statistics and quality assurance. Technological development which comprises of hardware,

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procedures, software and knowledge in transformation of inputs and outputs of affirm. Human
resource management which comprises activities of hiring, firing, training recruiting and
compensation and where necessary dismissing personnel. Lastly procurement involving
acquisition of goods work or services from external sources.
It is clear that the essence of supply chain management is definitely a representation of
Telstra network of organization s involved through downstream and upstream of linkages, in
process of making quality value of products to the customers. A supply chain can also be
referred as inter organizational supply chain, in broad sense we can say it is an interlink of more
than one companies. The activities of generic value adding in an organization can be further be
categorized into two main category of activity sets (Beamon 2009).
Traditional or physical value chain they are activities performed with an aim of enhancing a
product. This leads to achievement of goals by a company. Virtue value chain-they are computer
based systems that has led to totally new horizons of market space kin today’s business. Also
known as cyber market space.
Marketing and sales
The company is constantly coming up with new trends and adopting technology in order
to boost sales in the market. Customer trends and the ever changing environment is a constant
problem to the company. Competition has also affected the sales of the company services around
the globe. In the last financial year the company the company had a total revenue of 27.1 billion
dollars and a total profit of 5.8 billion dollars in all its products which include fixed line, internet,
and network services, pay TV and data services.

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Marketing, trading, and shipping is another value chain according to Porters, which is the
process of ordering products and services into commercialization involving management of
customer relationships. Telstra bolsters their trading and marketing capabilities plus establishing
their reputation as the dependable supplier. The process has been successfully through
transitioning of seller based portfolio, their strong relationship with customers from Asia also
based on established track record of authentic delivery. For example in 2011, Telstra limited
established a merchandising group in Asia to extend marketing, shipping, trading capabilities.
The objective which is in control of all undevout in a chain management is always
regarded increasing competition. The reason behind it is the competition of the services and
products in eyes of the coustomers.in real sense to convince an independent company to join a
supply chain needs a win-win situation for the companies which belong to the supply chain in the
wrong run whereas in the short run this may not be possible in all the entities. There are two
wide means of improving competition in a chain management. Integration of organizations
involved material coordination, financial flows as well as information.
Services
Telstra has operation all around the world. Some of their services run 24 hour a day the
whole week especially the network systems. The company owns and maintain most of the public
telephones in Auatralia.The Company owns 7,400 base station worldwide.
This illustrates the house of supply management. The roof lays for the extreme objective
of the SCM-Competitiveness. Competitiveness van be improved in various was such as reducing
the price of the products, increasing the flexibility in the same proportion as the changes in the
demands of the customers or availing a product that is superior quality of goods and services.

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The two major parts incurring some degree of novelty shall in this text be broken down to a
certain degree of building blocks. To start, forming a partnership demands that selection of
suitable partner be made for an average partnership. Then, becoming a successful and effective
organization in the networking requires that there is a lot of collaboration between the
organizations.
Supply chain optimization is the use of a tool and other related processes to facilitate that
the optimal returns are realized from the methods that is being used in the supply of the products.
In Telstra it involves optimal allocation of the inventory between the supply chain and the costs
of operation such as the transportation cost, manufacturing cost and the cost of distribution. In
most cases the new techniques involve simulation using a computer aided program. The main
concern in this process is to ensure that the nosiness is run and the model used in the supply of
the goods is as effective as possible, also creating a reliable process where the supply is made as
soon as possible without unnecessary delays.
Support Activities
Human resource
Human resource management in Porters activities entails the support activities where the
key element is the development of the manpower within an organization examples of the
activities are training, recruitment of staff and coaching staff, Telstra limited protects people,
their reputation livelihood by continuously amending their full-bodied security and response
capabilities emergencies. The human resources are very key to the performance of an
organization, it is well understood that human resource work on the final products delivered to
customers. The value chain systems which involves a set of organization activities their success
rest upon the performance of the individuals within the supply chain. Human resource functions

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array from development of Human resource schemes, recruitment to selection compensation and
benefits to workforce and lastly management change and the relationship within the organization
(labor relations) when all activities are applied to value chain management it results into lots of
benefits; identification of training objectives and needs precisely for value chain office and
formulation of blueprint to align the needs, identification and training staff to meet the positions
skills and lastly human resource practices being a vital value chain factor can be used to unify
the supply chain , because of business environment complexities consisting of product life
oscillations , outsourcing and globalization the practices can be implemented to motivate value
chain partners to establish valuable relationships between firms. The outcome enhances
competitive advantage.
The company operates beneath all peril emergence model which enables worldwide
practical responses, in place they also hold effective controlled security and risk management
strategies which acts as a form of preparedness in responding cases of hydrocarbon spillages.
Lastly, the company furnishes leadership in the barring and detection to and responding to the
corruption of fraud.
Michael Porter, in his analysis he explains a value chain contains a collection of all the
elements illustrated in the paper to be the ones to establish a value for the customers.
The prosperity of any business requires full optimization of key-value chain areas by exhausting
all the resourceful areas. The specific areas help a business to target the most beneficial areas.
The most strategic factors Telstra limited can base on in optimizing value chain could be science
and technology, marketing trading and shipping together with Human resource factors.

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Technology
Telstra limited are adopting measures all-around value chain to modify investment in the
development of network applications. This operational technology aims to affirm operational
success and curb exploration, production and development costs. Advanced analytics procedures
hare to be built of statistical tools which are updated with data from live streaming connecting
people from all over the world. This program aids in making decisions in operations and
engineering teams in a dimension of initiatives among them optimization, planning, surveillance
and processes of control and maintenance. Technology also facilitates a reduction in operational
cost for existing business by through innovation of solutions, for example, the invention of 3D
printing program which has the capability to minimize operating costs by ensuring the spares on
demand are printed. The 3D program in a speedy manner reproduces parts by inducing the
prototyping, deployment, and testing of the new gas litigated technology. The science and
technology has helped Telstra limited to inquire exploration and development of economical
offshore among the technologies include development in network application technologies, e-
health care services ,online sales, software and video delivery. To ensure consistency in
innovations Telstra limited in 2011 the set aside a future lab to actively strengthen the
environment of scientific and innovation technology by collaborating with institutions of
research.
Procurement
Procurement is the process of acquiring raw materials, supplies and assets. The move to
global market has helped the company to cut cost on acquiring raw material and supplies. They
have also outsourced their network maintenance and installation to companies like ABB
communications and Siemens (STCJV).

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Another factor to be fully optimized is the marketing, trading and shipping of products
and services. Marketing implicates strategies on the overall product portfolio and customers
operative orientations. Marketing research acquires an increasing importance due to changes in
seller markets to buyer markets (Wohe 2008). Markets have shifted from extra demand of
insufficient supply to excess supply in the competition of saturated markets. Marketing is an
organizational function and a set of processes for creating, communicating and delivering value
to customers and for managing customer relationships in ways that benefit the organization
(Kotler et al. 2005).To increase the performance of the company marketing can be integrated
along the five-piece of marketing which are the product, promotion, price and place (Kotler et al.
2008). Therefore marketing structure which is an interface to customers determine the product
function together with pricing above all the place strategy with regard sales channels, for
example, Telstra could implement the marketing strategies through web-based shops,
wholesalers and direct sales. Lastly marketing structures the channeling function to distribute
products to customers.
Infrastructure
Science and technology this activity relate to establishing of the services and products
some externally and internally. For example, IT, development of modern products grounded on
current technology, technological innovations according to Porter all this value is created
through optimization and innovation. Now Telstra limited, claims problems in business are
lowered by innovation solutions which then reduces their cost of supply thereby resulting in
growth and optimization of their broader strategy. Telstra activities have therefore been
strategized into four categories; upstream technology, subsurface technology, downstream
technology and lastly disruptive and innovative technology. These strategies help the company to

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reduce lifting cost while protecting eminent reliability, they have 3D machines for printing
programs which get rid of operating costs by providing spares when on demand and also their
cognitive computation capacity save time, reduce cost and drive efficiency (Cox 2009).
Strategic approaches to optimize value chain
Strategy 1.Core competence and outsourcing other services
Telstra has managed to improve it relationship with other global supplier to boost its
business growth and performance. The core competence of Telstra are using new innovations
and technology , improving suppliers relationship by improving supplier relationship
management(SRM) and expanding to global market to attract more customers.
Telstra has managed to acquire supplier relationship management team to expand sales
and growth revenues. The main aim of this is to develop new products and services. Maximizing
the relationship with the suppliers will enable the company to meet customer’s expectation. The
company has cooperated with both local and international suppliers to meet the customer’s
expectation.
Telstra has gone to the international market to expand it business and to attract more
customer. This has enabled the company to acquire more customer and to boost the revenue. The
global market has put the company at a competitive advantage over the other companies due to
the new markets. It has also enabled the company to improve its services due to the high demand
and competition.

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The company has adapted new technology to deliver high quality services to the
customers. The new technology has improved communication and the also the customer
experience .This has resulted into the company acquiring new market and increase in sales.
Strategy 2. New business growth
Primary activities are considered to have a prompt effect on the production, sales,
maintenance and supporting of services or products supplied. Telstra limited value chain consists
of exploring the materials, developing the product, producing a refined product and lastly
supplying the product to the target market. According to Porter, the primary activities entails a
list of elements as follows;
The second activity is the production process, this is founded on production floor
operating from the production line, and it changes over inputs of services and products into
semifinal or almost completed products. It is considered that operational systems are the
channeling principle to the conceptualization of value. The expansion of the company to other
global market has enabled the company to increase sales and get a bigger portion of the market
share. This has increased revenue of the company. The expansion has also enabled the company
to create employment increasing the number of employees to 13000.This has boosted the
economy of the new region.
Strategy 3. Studying the market and forecasting to improve the customer
experience
Telstra limited is the largest entertainment company in Australia and the company
accommodates customers around the globe enabling production process through closely working

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cropped and other articulated venture participants, governments, suppliers and communities to
achieve the chance across the lifecycle development. Having such services within the
organization they get an upper hand it is required of them to have a well efficient value chain
Therefore for the process to be carried on, it requires approval thereafter for the materials to
move into product execution. Telstra limited has expanded its network application services to
Asia-Pacific region which has contributed to increased opportunities. As the largest distributer of
network application services, it's considered one of the best world facility. The project supplies
entertainment and network services to international markets and Australia generally from vast
enterprise as well as the global market. Underneath the Telstra functioning, the project bears a
maintained record to reliable production and delivery for a period of 30 years and more.
Risks in value chain management of the firm
In a research conducted by Deloitte two thirds of the respondents identified risk in supply
chain management this is equivalent to 63 percent. The global research revealed that the supply
chain management has become costly over the past three years. In the Telstra, while identifying
risks in supply chain it is important to consider the two types of risks and include them in a risk
management plan. These are; internal risks which are in reach of your control and external
controls which are not in reach of your control.
Chain optimization.
It is briefly the use of tools and processes in ensuring optimal operation in making and
distribution in a supply chain .According to Telstra records it entails placement of stock in the
chain reducing cost of operations.it entails use of computer software while applying techniques
of mathematics model. Most importantly the supply has been manager’s aim is to maximize

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profit in both the manufacturing and distribution supply chains. Thus they must include measures
such as maximizing gross margin return on stock or inventory invested, minimizing operating
expenses, or maximizing GP. Of the finished products supplied through the supply chain.it also
addresses the problem that may occur in delivering of product at a lower cost but at high profit.
Among the most effective way of saving money in distribution is by optimizing transportation
and storage cost by means of packaging size.it is evident that optimization of supply chain is
applicable in all industries distributing and manufacturing including industrial products, retail,
and etcetera (D'heur 2015).
During the optimization the techniques used are said to be credible academically.in
relation to that several companies has been adopted from academic research projects or
consultants.
The techniques are commercially effective since significant and measurable benefits are
evident. This comes from lower logistics and reduced inventory costing levels. Various routines
in supply chain management allows gain of competitive advantage by companies through
increasing effectiveness as well as measurable savings.
Big data analytics for data driven forecasting
In summary, the ability to manipulate larger data bases in speed has contributed to a new
breed of optimization solutions. The algorithms applied equivalent to those that make decisions
concerning financial investment; the analogy becomes simple since the inventory is termed as an
investment of the forthcoming return on sales. Most vendors offer chain optimization as a
solution and also run for their clients as application service providers. Telstra Company, is the
leading company in telecommunication.

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Analysis using porters five forces
Porter’s five forces is a model that describes the understanding of competition forces for
work within an industry and also illustrate the economic value division between industry actors.
The five competitive forces include the threat by substitute services and products, the bargaining
ability of suppliers, threat of new entrants, the bargaining ability of buyers and lastly competitors
between existing competitors. The five forces of porter have benefited much value chain
management systems;
Strategy 1.Core competence and outsourcing other services
The core competence has enabled the company to among the leading in
telecommunication all over the world. The involvement of the company with the supplier
management team has resulted into low bargaining power which has given the company a
competitive advantage. The competitive advantage has enabled the company to provide better
services to the client in region.
The expansion of the company to the global market has increased productivity and the
customer base has resulted into low threat of substitute products and services. The company has
utilized the use of new technology to improve the services which has narrowed down entry of
new companies into the market. The new technology which is also expensive has enabled the
company to provide better services for the customers and also has reduce the entry of new
companies in the market.
The use of supplier management team has also accumulated its own problems in that the
team may delay in delivery of goods or services. The shortage will results into competitive

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disadvantages. This will also affect the delivery of services to the customers which may result in
high bargaining power of the clients due to the availability of a close substitute.
Strategy 2. Business growth.
Telstra has expanded into other global territories which has it advantages and
disadvantages. The new territories had other established network owners such as Vodafone,
Virgin mobile and Optus. This will trigger high competitive rivalry due to the crumble of
customers in the region. High competition results into high threat of substitutes. Some of the
customers will remain loyal to their previous providers hence the bargaining power of customer
will be high. Telstra improving their technology will help reduce the rivalry among the
competitor since they will be on another level than the competitors which will reduce the
bargaining power of the users.
Strategy 3. Studying the market and forecasting to improve the customer
experience
The company has team which studies the market and comes up with new innovations and
technology to increase sales and to attract more customers. Using new technology will enable the
company to have a more competitive advantage over the rival companies and will reduce the
bargaining power of the consumers as they offer better services than the other companies. The
entry of new markets means the company has little information about the new consumer hence it
will take time for the company to get enough customer share as other rival companies in the
market hence the other companies will have a higher competitive advantage over Telstra. The
competition will enable the client to have a high bargaining power due to the availability of
multiple close substitutes.

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Conclusion
Telstra value chain activities are the guiding principles to the formulation of strategic and
operational decisions within an organization. It is the one of the largest telecommunication
companies, besides that it is listed in Australian security exchange and its headquarters are in
Melbourne. Telstra has operating activities in a number of international regions including
Indonesia, Asia-pacific, Europe and America. The company is involved in sale and distribution
of network application, software, online sales, video delivery and business solutions such as data
and IP networks, cloud, industry solutions and integrated services. This has contributed very
much to its success because their constant supply which has created loyalty among its customers.
Most considerably, the company has created confidence to their customers by becoming the most
reliable company in Australia as far as petroleum is concerned. Over years it has thrived in the
market and it has remained steady up to date. Generally, supply in both manufacturing and
distribution industries since customer’s attention is always attracted by constant availability of
the products. Telstra limited achieves the workflow in the organization by linking system actions
with each other and demonstrating the on cost and benefits, therefore it clearly indicates the
source of value and amounts loss is ascertained within the organization (Sabri 2010).

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References
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Cox, A., 2009. Power, value and supply chain management. Supply chain management:
An international journal, 4(4), pp.167-175.

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Cox, Andrew. "Power, value and supply chain management." Supply chain management:
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