Strategic Finance Analysis

This document provides an analysis of strategic finance, focusing on macroeconomic factors, governance, and ethics. It discusses the impact of central bank policies, Australian consumers, and the Chinese economy on Telstra. It also includes a competitive analysis of Telstra and explores the governance framework and ethical considerations. The document offers valuable insights for students studying finance and related subjects.

Running Head: Strategic Finance Analysis
STRATEGIC FINANCE ANALYSIS

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Strategic Finance Analysis
Table of contents
1. Macroeconomic factors and strategy 3
1.1 Influential macroeconomic factors and their impact on Telstra 3
1.2 Competitive analysis of Telstra 4
2. Governance 5
3. Ethics 7
References 9

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Strategic Finance Analysis
1. Macroeconomic factors and strategy
1.1 Influential macroeconomic factors and their impact on Telstra
Central bank policies: After the global financial crisis, the central banks had taken certain
steps that were necessary to support the economy of the country by slashing the interest rates
as well as injecting high levels of liquidity. The policies undertaken by the central banks are a
reflection of the Global economic environment and hence it is very important to adjust the policy
settings instead of taking an aggressive stance to properly reflect the economic condition
improvements (Marcussen, 2017). When the stimulus is removed it drains liquidity from the
market which means that the primary issue that should be considered is whether the earnings of
a company in complement to the economic growth able to offset the liquidity reduction. Telstra
even though is not directly affected by the central bank policies, needs to consider the possible
impact of the central bank policies as it affects the stakeholders of the company.
Australian consumers: The state of the Australian consumers and their economic position has
a significant impact on the broader economy of the country (Seid, 2018). The fiscal health of the
Australian consumers is fragile irrespective of the fact that the Global economic growth is steady
and increase in the frequency of full-time jobs complemented by Low unemployment rates give
a positive Outlook of the market. The Australian consumers enjoy a certain standard of living
and this means that they have a wide number of options to choose from.
Chinese economy: China has been recognised as Australia’s biggest trading partner and the
fact that it is the second largest economy in the world makes the Chinese economy critical
through the growth as well as the financial viability of the Australian economy
(Worldfinance.com, 2019). Telstra has been investing a lot to buy shares of Chinese firms which
makes it clear that any variation in the growth and development of the Chinese economy will
have a significant impact on the operations as well as financial performance of the company.
1.2 Competitive analysis of Telstra
Threat of substitutes: In order to minimise the threat due to substitution, the Telstra
Corporation has to take steps in order to continuously invest in research and development
activities or risk itself losing out on profits due to the emergence of substitute products and
services in the telecommunications industry. This is a very strong force (Papakonstantinidis and
Jurčić, 2018).
The threat of industry Rivals: The Australian market is inundated with several major
communication service providers. In case the competition amongst the Rival companies stocks
to get intense it will become immensely difficult for Telstra Corporation to make sure that they
earn sustainable profits (Lozano, 2015). This can be also regarded as a strong force.

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Strategic Finance Analysis
Bargaining power of consumers: The consumers can exploit the bargaining power that they
have to minimise the pricing strategy which prohibits the Telstra Corporation to enjoy significant
profit margins (Prawindra, 2017). The bargaining power of the customers is the strongest force.
Bargaining power of suppliers: In case the suppliers have dominant bargaining power, they
will make use of it to extract a high price for the services provided to Telstra corporation and this
intern will result in the day to day operations of Telstra Corporation making it difficult to maintain
the profit levels in the communication service industry. The bargaining power of the suppliers is
a weak force.
The threat of new entrants: If a new entrant gives a strong threat in the communication in it is
very likely that the existing market players will accept the proposition of lowering the profits in
order to reduce the threat from new entrants (Gregory, 2018).
2. Governance
The corporate objective of Telstra Corporation is the creation of long term shareholder value by
providing services like integrated communication, entertainment and information and Solutions
focused on customers. The framework of corporate governance at Telstra Corporation includes
activities like conducting open, timely as well as clear communication with the shareholders,
have an independent, skilled, diverse as well as experienced board wherein the structure of the
board committee is suited to the needs of the shareholders. The corporate governance also
focuses on delegation, decision making as well as accountability (Soltani and Maupetit, 2015).
The Framework also takes into consideration the need for utilising robust risk management
systems for Quality Assurance.
The corporate governance framework highlights the values, policies as well as the code of
conduct that is necessary for explaining the position of the company as well as provides the
Employees with the guideline to conduct themselves when working together in order to achieve
the set goals and deliver the results. The governance framework is a very integral part of the
operations of Telstra Corporation as it helps in supporting the business as well as delivering on
the strategies that have been formulated. The corporate governance Framework is also utilised
for giving structure for strategy making and setting of business objectives (Tricker, 2015).
It also takes into consideration how the performance is to be monitored and the risks to be
managed. Understandably the clear framework helps Telstra Corporation in the decision making
process emphasis on accountability across the business. It also helps in highlighting the
behaviour standard that is to be expected from an employee of Telstra Corporation. Telstra
Corporation uses the corporate governance strategy for transparency as well as accountability

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Strategic Finance Analysis
as this is very critical as well as essential in long-term performance and company sustainability
why protecting as well as increasing the interests of the stakeholders and shareholders.
The corporate governance framework of Optus Limited helps the company to attain the high
level of standards in terms of business practices as well as sustainability integration across the
organisation. Sustainability is the key point of governance in the case of Optus Limited and the
organisation believes that this will result in a significant difference for the employees as well as
customers and society (Optus.com.au, 2019). The corporate governance framework is utilised
for developing a resilient business which not only delivered on the set goals and objectives but
also delivers values. In order to help the company with their corporate governance, a corporate
responsibility steering group was established in the company in the year 2010 that provides
approach oversight, strategic leadership as well as governance.
The primary function of the group is to assist the board members in order to fulfil the
commitment of the company to conduct the businesses in a response as well as ethical manner.
This also helps to ensure that the business priorities are actually aligned with the business
strategy. The key parts of the business report are represented by the corporate responsibility
task force and this enables the corporate responsibility in steering loop for implementing the
priorities as well as implementing the corporate Responsibility in the business practices
(optus.com.au, 2019).
3. Ethics
The authentication, authorisation and accounting framework that is used for controlling the
access to computer resources, auditing usage, enforcing policies as well as providing necessary
billing information for the services (Downe, Cowell and Morgan, 2016). The combination of the
processes mentioned above is very important for effectively managing Network and security. It
is also used for undertaking ethical decision making by following a seven-step process that
takes into consideration the ethical issues.
Establishing the case; The consumer has been paying a certain amount of fees for existing
superannuation account for products that the accounting practice actually promotes. Option A
will cost the client less in continuing with the fees and when consulted with the senior
accountant, directives are given to provide the client with option B without giving any reason.
Identifying the ethical issue in the case; Option B that has been suggested by the senior
accountant offers higher commissions in return for reference to the accounting firm
Identification of principles, values and norms related to the case; Accounting mainly makes
use of information generation for stakeholders for identifying a valuable source of income. Bad
accounting practices lead to defrauding of the financial statements that destroy the reality of the

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Strategic Finance Analysis
company's economic condition. Going with the Directive of the senior accountant will violate the
promise of an accounting firm to minimize wasting of money for the client. It will also mean that
the customer is being conned by the accounting firm in return for high commissions.
Identification of alternative course of action; Disclose the Misinformation to the client and
offer them option A
Overlapping the norms principles as well as values to the alternative actions; This will
discredit the trustworthiness of the company in the market and future operations in the concern
of accounting firm will be ceased. However, this action will mean that the accounting firm has
realised the value of ethical response and will try to minimise the damage caused to the
consumer.
Consequences of the actions; Disclosing the Misinformation to the client main result in legal
actions to be taken against the accounting firm.
Decision making; Notify the client to switch to option A by getting a written approval of the
senior accountant even if they are unwilling to consent to it.

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Strategic Finance Analysis
References
Downe, J., Cowell, R. and Morgan, K., 2016. What determines ethical behaviour in public
organizations: Is it rules or leadership?. Public Administration Review, 76(6), pp.898-909.
Gregory, M.A., 2018. Australian wholesale telecommunications reforms. Australian Journal of
Telecommunications and the Digital Economy, 6(2), p.1.
Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social
Responsibility and Environmental Management, 22(1), pp.32-44.
Marcussen, A.A.C.G.M., 2017. Central Banking Reform across the World: Only by Night Are All
Cats Grey. In Transcending New Public Management (pp. 147-166). Routledge. London
optus.com.au, (2019) OPTUS Available from http://www.optus.com.au/aboutoptus/About
%20Optus/Corporate%20Responsibility/Our%20Responsibility/Governance/Governance
Accessed on 24 March 2019
Optus.com.au, (2019) OPTUS Available from http://www.optus.com.au/aboutoptus/About
%20Optus/Corporate%20Responsibility/Our%20Customers%20&%20Society Accessed on 25
March 2019
Papakonstantinidis, L.A. and Jurčić, I., 2018. „Eight Key Fields analysis (EKF) and the 3-pole
(win-winwin) challenges for mobile telecommunication.
Prawindra, M.S., 2017. Usulan strategi PT. Telekomunikasi Indonesia Internasional (Telin)
dalam mengembangkan bisnis Content Delivery Network (CDN) di Indonesia.
Seid, S.H., 2018. Global regulation of foreign direct investment. Routledge. London
Soltani, B. and Maupetit, C., 2015. Importance of core values of ethics, integrity and
accountability in the European corporate governance codes. Journal of Management &
Governance, 19(2), pp.259-284.
Tricker, B., 2015. Corporate governance: Principles, policies, and practices. Oxford University
Press, USA. California
Worldfinance.com, (2019) WORLDFINANCE Available from
https://www.worldfinance.com/markets/chinas-transitioning-economy Accessed on 19 March
2019