Environmental Analysis of Telstra Corporation in the Australian Telecommunication Industry

This report performs an environmental analysis of Telstra Corporation in the Australian telecommunication industry, using PESTLE and SWOT analysis. It identifies the forces influencing Telstra's performance and provides recommendations for improvement.

Running head: PRINCIPLES OF MANAGEMENT
Telstra corporation
Principles of Management
3/30/2019

PRINCIPLES OF MANAGEMENT 1
Executive Summary
The intent of this paper is to perform the environmental analysis of the telecommunication
industry to identify the forces that are influencing the performance of Telstra Corporation in
the Australian telecommunication segment. The report is comprised of different
environmental analysis theories such as PESTLE Analysis and SWOT Analysis. The
PESTLE analysis has identified that the company is experience threat from the Next G
Network that is affecting its profitability in the market. The report has recommended that the
company needs to invest in the research and development to identify the new trends and
development in the industry. In addition to this, SWOT Analysis has identified that the
customers of the company are unsatisfied due to incapable customer service of the company.
In order to resolve this, the report has suggested the company to train its employees and add
new services for the customers in order to improve their experience with Telstra.

PRINCIPLES OF MANAGEMENT 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Telstra Corporation...........................................................................................3
Internal Environment Analysis..............................................................................................3
SWOT Analysis.................................................................................................................3
External Environment Analysis.............................................................................................4
PESTLE Analysis...............................................................................................................4
Recommendations..................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

PRINCIPLES OF MANAGEMENT 3
Introduction
A managerial principle in a wide term is the normal guidelines that control behavior and
support in making a decision in the organization. These principles are followed by businesses
by applying different theories that support business in different aspects (Nwankwo and
Gbadamosi, 2010). To support Telstra Corporation, this report is being designed to recognize
its external and internal environment forces that influence its performance in the Australian
market. The report is making use of PESTLE Analysis and SWOT Analysis as theories to
analyze the external and internal market of the company. From the analysis, some of the
recommendations are being highlighted such that the company can take benefit of this while
operating its business in the market.
Overview of Telstra Corporation
Telstra Corporation is the largest company of telecommunication operates with head office in
Australia. The company specializes in operating and building networks of telecommunication
and mobile, pay television, market choice, internet access, etc. In Australia, the company has
a long history and has a private ownership structure in the market (Telstra Corporation
Limited, 2019). Besides this, the company has gone under a change program in order to be
customer-centric.
Internal Environment Analysis
SWOT Analysis
Strength
 Telstra company is presently has a strong infrastructure network that supports it in
successfully operating its business in the market.

PRINCIPLES OF MANAGEMENT 4
 The company has a strong base of expertise and a skilled workforce that enables the
company to attain growth in the telecommunication industry (IBIS World, 2018).
 A broad variety of service portfolio
Weaknesses
 The unsatisfied customer base is one of the weaknesses of the company as it has
experienced a number of complaints from the customer side (Bloomberg, 2018).
 High prices services in comparison to competitors
Opportunities
 Telstra Company can expand its operations in China, and Asia Pacific countries. The
company can also try to improve the customer experience by focusing more on the
customer service department (Penn, 2014).
Threats
 The telecommunication market in Australia is reaching its saturation which is
resulting in increasing completion for the key players in the market. The regulations
of the government are also becoming complex (Fern Fort University, 2018). Besides
this, the rapid advancement in the technology in the industry limits the company’s
operations such as Next G Network Issue (Telstra, 2019).
External Environment Analysis
PESTLE Analysis
Political Forces
Political force works as the key factor in affecting the profitability of Telstra Corporation in a
few of the nations. Telstra is operating its business in many countries and uncover itself to
diverse kind of political system risks. The factors like the introduction of new tax duty by the

PRINCIPLES OF MANAGEMENT 5
government of Australia have a major influence on the practices of the company. Alterations
in the trade policies and fiscal policy influence the strategic business process of Telstra
(Australian Competition Consumer Commission, 2016).
Economic Forces
The economic performance of the country is taken as an essential factor in the
implementation of trade practices. The increasing rate of inflation generates high impact on
the operations of Telstra. Furthermore, it becomes essential to know customer demand in
order to keep a balance between supply and demand.
Social Forces
The culture of the society and manners of performing activity influence the organizational
culture. The attitude of the people and shared beliefs perform a major part in the way markets
of the Telstra understand the consumers in the market and the way they will design the
message of the market for the available consumers in the telecommunication industry (Katz,
2009).
Technological Forces
Technology has worked towards decreasing the life cycle of the product and has allowed
suppliers to create and bring new products in the market. This has increased the pressure for
the marketing department of Telstra to entice suppliers by introducing a different variety of
products (Economy Watch, 2010). It has resulted in increasing the company's operational
cost.
Legal Forces
The legal structure of Australia is very strong, which provide planned rules and regulations
required to operate the business in the market. But in some nations legal structure is not

PRINCIPLES OF MANAGEMENT 6
strong enough to protect the organization's intellectual property rights. The company must
carefully analyze the legal structure before taking entry in the market.
Environmental Forces
There are some of the factors on the environment that influence the business such as climate
change, geographical change, and global change. Hence, in order to successfully run the
business company needs to enhance its services to maintain a competitive advantage in
comparison to its rivals.
Recommendations
It is known that Telstra is the leading telecommunication company of Australia, which has
expanded its operations at the international level. But, few issues have influenced its
performance like decreasing customer satisfaction. The company must work in its customer
service area and try to provide better services to its customers. The company can conduct
different surveys to understand the problem of the customers and try to solve it with the
support of its management team.
The biggest threat for Telstra is Next G Network, introduced by different companies in the
industry. To cope up with this, the company must upgrade its technology and must work to
provide new services to the customers.
The low customer satisfaction is the cause of incapability of the company's management to
handle its customers. In order to resolve these issues, the company is suggested to provide
training programs to its employee such that they can learn to solve the issues of their
customers.

PRINCIPLES OF MANAGEMENT 7
Telstra Company must also invest in the research and development in order to identify the
upcoming trend in the market or next G, such that it can adopt it and give strong competition
to the competitors and provide advanced services to the customers.
Conclusion
The above report has provided a brief analysis of the Telstra Corporation and the
environment in which it is operating. From the analysis, it has been identified that quick
advancement in the technology is reducing the life span of the product and resulting in the
introduction of new product in the market, which is affecting the profitability of the company.
In order to cope up with this, Telstra needs to invest in the research and development to
recognize the new trends and adopt the developments to improve its performance in the
market.

PRINCIPLES OF MANAGEMENT 8
References
Australian Competition Consumer Commission (2016) Competition in the Australian
telecommunications sector [online]. Available from
https://www.accc.gov.au/system/files/ACCC%20Telecommunications%20reports
%202014%E2%80%9315_Div%2011%20and%2012_web_FA.pdf [accessed 30 March
2019]
Bloomberg (2018) Company Overview of Telstra Corporation Limited [online]. Available
from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=91774
[accessed 30 March 2019]
Economy Watch (2010) Telecommunications Industry [online]. Available from
http://www.economywatch.com/world-industries/telecommunications [accessed 30 March
2019]
Fern Fort University (2018) Telstra SWOT Analysis / Matrix [online]. Available from
http://fernfortuniversity.com/term-papers/swot/1433/1086-telstra.php [accessed 30 March
2019]
IBIS World (2018) Telstra Corporation Limited - Premium Company Report Australia
[online]. Available from https://www.ibisworld.com.au/australian-company-research-
reports/information-media-telecommunications/telstra-corporation-limited-company.html
[accessed 30 March 2019]
Katz, R.L. (2009) The Economic and Social Impact of Telecommunications Output [online].
Available from https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/3254/041-
048-Katz[1].pdf [accessed 30 March 2019]

PRINCIPLES OF MANAGEMENT 9
Nwankwo, S., and Gbadamosi, T. (2010) Entrepreneurship Marketing: Principles and
Practice of SME Marketing 1st ed. U.S: Routledge.
Penn, A. (2014) Growth opportunities in Asia and beyond [online]. Available from
https://exchange.telstra.com.au/growth-opportunities-in-asia-and-beyond/ [accessed 30
March 2019]
Telstra (2019) Telstra Internet Protection [online]. Available from
https://www.telstra.com.au/content/dam/tcom/business-enterprise/security-services/pdf/
telstra-internet-protection-datasheet.pdf [accessed 30 March 2019]
Telstra Corporation Limited (2019) Our History [online]. Available from
https://www.telstra.com.au/aboutus/our-company [accessed 30 March 2019]