Strategic Information Management System for Telstra: External and Internal Analysis

This report provides an external and internal analysis of Telstra Corporation Limited, an Australian telecommunications company. The report includes analysis of the general, industry, and competitive environment, as well as the company's resources, capabilities, and core competencies. A proposal for a suitable information system is also provided.

Running head: STRATEGIC INFORMATION MANAGEMENT SYSTEM
STRATEGIC INFORMATION MANAGEMENT SYSTEM
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is built on the external and internal analysis of the company named Telstra. The
different models which have been used for the analysis of external environment mainly
include, the PESTLE framework and the Porter’s five forces framework. The competitive
environment of the firm had been analysed in the report in a detailed manner. The second part
of the report is thereby analysed with the help of its core competencies and resources that are
possessed by Telstra in the environment. The report has been concluded by the proper
recommendation of an information system that can be used by the company in order to
operate in the industry.

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Table of Contents
Part 1 – External analysis...............................................................................................3
1. Background of Telstra............................................................................................3
2. Industry in which Telstra operates.........................................................................3
3. Analysis of general environment...........................................................................4
4. Analysis of the industry environment....................................................................5
5. Analysis of the competitive environment..............................................................7
6. Opportunities and threats provided to Telstra........................................................7
Part 2 – Internal analysis and the proposal.....................................................................8
1. Resources of Telstra – intangible and tangible......................................................8
2. Identification of the capabilities.............................................................................8
3. Analysis of the core competencies.........................................................................9
4. Proposal of a suitable information system for Telstra.........................................10
5. Evaluation of the proposed system to provide suitable recommendations..........10
Conclusion....................................................................................................................11
References....................................................................................................................12

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Part 1 – External analysis
1. Background of Telstra
Telstra Corporation Limited is an Australian organization which operates in the
telecommunications industry. The organization mainly builds and also operates different
telecommunications based networks, mobile access, internet access, television based services.
The organization has been able to develop a history in the Australia telecommunications
industry for a long time. Telstra became a totally privatised organization after a few years of
its operations in the telecommunications industry. The company further went through an
effective change program under the previous CEO David Thodey. The current CEO of the
company is however struggling in order to continue the processes of the firm in an effective
way in the telecommunications based industry (Telstra.com.au., 2018).
2. Industry in which Telstra operates
The telecommunication industry in Australia and its growth is hugely driven by the
government of the country. The regulations which are faced by the industry have been
developed in an effective manner by the government of Australia. The telephone services
were first started in Australia by providing connection between the South Melbourne and
Melbourne based offices of the Robinson Brothers in the year 1879. The first telephone
exchange was thereby developed in the year 1880. The telecommunications industry of
Australia has however depicted huge amounts of growth in the recent times. The
competitiveness in the industry has increased in a huge manner. This has further led to the
reduction of the competitive advantage and revenues of companies which operate in the
industry. Telstra has however been able to gain a competitive place in the Australian retail
industry with the help of its long term operations (Barros, Hernangómez & Martin-Cruz,
2016).

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3. Analysis of general environment
Economic factors – The macro environmental factors of Australia are able to
influence the processes of Telstra Corporation in an effective manner. The diverse macro
environmental aspects that are thereby able to affect the organization mainly include, savings
rate, inflation rate, economic cycle and foreign exchange rate. The economic stability of the
country can be used by Telstra in order to increase its revenues in an effective manner (Daspit
et al., 2017).
Physical factors – The shares of Telstra are affected by the operations of the
company in the telecommunications industry of Australia. The macro economic factors are
able to drive the share prices of the company. The physical stores of the company are thereby
an important part of the revenues and profitability of Telstra.
Sociocultural factors – Social condition of Australia and culture is thereby able to
affect the operations of Telstra in the modern business environment. The population of the
country is able to affect the profitability based levels of Telstra. The understanding which is
required by the company of the needs and demands of consumers is an important part of the
social factors of Australia. The demographics and skill based levels of people are important
factors which need to be considered by Telstra (Demir, Wennberg & McKelvie, 2017).
Global factors – The economic turbulence that had taken place on a global basis was
able to affect the telecommunications industry. Telstra is also affected by changes that have
taken place in the industry of its operations. The global policies are thereby able to influence
the prices of services that are charged by the firm.
Technological factors – The fast disrupting industry of technology is able to affect
the operations of large organizations like Telstra. The recent developments which have been
made in the technological industry are able to affect the revenues of Telstra in a significant

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manner. The cost structure that has been developed by the industry is also influenced by the
technologies (Durand, Grant & Madsen, 2017).
Political or legal factors – The political factors are able to affect the long term
profitability of Telstra Corporation Limited in the industry. The operations of the company in
industry are thereby affected by policies and regulations which have been developed by the
government of Australia. The different political issues which need to be analysed by Telstra
in order to operate in the industry include, the stability of the area in which it operates, levels
of corruption in the government and various other factors (Dyer et al., 2015).
Demographic factors – The demographic factors are able to play a key part in the
proper processes of Telstra in the telecommunications based sector. The analysis of
demographics is based on different factors that include, the age of consumers, the income
levels and their occupation as well. The demographic factors need to be analysed by the
company in order to decide the products or services which can be offered to the consumers
(Engert, Rauter & Baumgartner, 2016).
4. Analysis of the industry environment
Power of the suppliers – The organizations in the telecommunications based services
industry is mainly known for buying their raw materials from different types of suppliers.
The suppliers who are able to develop a dominant position in the industry are able to decrease
the levels of profitability of the companies which operate in these areas. Telstra Corporation
can increase its revenues in the market with the help of the reduction of supplier power. The
development of an effective supply chain is thereby an important part of the operations of
Telstra. The power of the suppliers in telecommunications industry is high (Dobbs, 2014).
Power of the buyers – The buyers in modern business environment are quite
powerful in nature. The pressure is thereby created on the profitability of Telstra in the

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telecommunications industry. The powerful customer base of the company is a significant
role of the proper processes of Telstra in the telecommunications industry. Telstra has been
able to develop its customer base in the industry with the help of its active customer base.
The power of the buyers of Telstra is moderate (Ethiraj, Gambardella & Helfat, 2018).
Threats based on the substitute products – The needs of customers can be fulfilled
in an active way with the help of products that are presented by the company. The companies
which are able to offer similar or substitute products to Telstra can provide tough competition
to Telstra in its operations in the telecommunications industry. The service oriented operating
process of an organization can affect the operations. The threats from substitute products to
Telstra in the telecommunications industry is moderate (Frynas & Mellahi, 2015).
Threats from the new entrants – The entry of new organizations in the
telecommunications industry has been able to introduce innovations in an effective manner.
The lower pricing based strategy which is implemented by new organizations are thereby
able to influence the prices of the products that are offered by existing companies. Telstra has
however been able to develop a competitive advantage in order to function in a cost-effective
manner. The threats that provided to the company by entry of new companies is low (Galliers
& Leidner, 2014).
Rivalry among the competitors – The stages of rivalry which are present in the
industry are quite high. The telecommunications industry is highly competitive in nature and
this is able to affect the levels of profitability and the revenues of Telstra. The competitive
levels between the companies in telecommunications industry is quite high (Hill, Jones &
Schilling, 2014).

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5. Analysis of the competitive environment
The competitive environment which has been developed in the industry is quite high.
The different organizations are thereby able to provide tough levels of competition to Telstra
Corporation. Telstra has been able to create an effective position in the telecommunications
industry with the help of its long term operations in Australia The place which has been
developed by the firm in the industry has been affected by the two major organizations which
also operate in the Australian telecommunications industry named Vodafone and Optus. The
market share of Telstra has been increased from 42 percent to 53 percent from 2010 to 2014
(Theaustralian.com.au., 2018).
The mobile division of the company had been on track with more than 10 billion
Dollars. The number of subscribers of Optus had been reduced to around 9.4 million and the
revenues of Vodafone has decreased to 5.3 million. The major threats which are provided to
Telstra are based on the services which are provided by companies like Optus and Vodafone
and their similarity with those provided by the company. The major capabilities that have
been gained by the company are based on their financial and human resources which can be
used by Telstra (Theaustralian.com.au., 2018).
6. Opportunities and threats provided to Telstra
Opportunities – The decrease which have been experienced in the transportation
based costs have been able to provide major opportunities to Telstra. The customers who
have been gained by the company from different online channels have been able to play a
major role in creating opportunities for the company. The lower rates of inflation are
important opportunities provided to Telstra. New trends have been developed by the
variations which have taken place in the behaviour of the consumers which is an opportunity
for the operation of Telstra. The emerging markets will thereby play a major role in
increasing the revenues and profitability of Telstra (Kasemsap, 2014).

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Threats – The lack of regularity of the supply of different innovative products is a
major threat to the operations of Telstra. The development of new and improved technologies
which have been created by the competitors is a major threat which has been faced by Telstra
in the telecommunications industry (Meyer, Neck & Meeks, 2017).
Part 2 – Internal analysis and the proposal
1. Resources of Telstra – intangible and tangible
The mining and resources of Telstra is a major part of the operations of the company
in telecommunications industry. The boom which has been experienced by powerful ICT
based resources of Telstra is able to enhance the productivity with the help of proper
automation of the processes and streamlining of the operations in order to achieve high levels
of visibility. The company is able to deploy the effective solutions in order to become more
cost efficient in nature (Morschett, Schramm-Klein & Zentes, 2015).
The human based resources or employees of the company are able to affect the
processes of the firm in an effective way. The employees of the company are able to provide
the best level of services to the company in order to satisfy the consumers. The training and
development based resources of the firm have thereby played a main part in the methods by
which Telstra is able to develop its place in the industry (Michael, Storey & Thomas, 2017).
2. Identification of the capabilities
The culture and the capabilities which have been developed by Telstra are based on
the technologies which have been gained in the industry. The technologies are thereby able to
transform the workplace in an effective manner. The operating environment of the
organization is developed in an effective manner with the help of career based directions and
fresh sets of skill sets as well. The workplace is thereby reshaped with the help of proper

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opportunities and capabilities. The key capabilities of the company are thereby focussed in an
effective manner towards greater levels of simplicity in the operations (Peltier, 2016).
The evolution of the roles of different employees are thereby affected by the
capabilities that have been gained by the organizations. The company thereby aims at
creating an effective environment which is supportive and inclusive in nature. The changes
that can be made in the workplace environment help the human resources or the employees to
shine in an effective way. The individual leaders are thereby able to foster high levels of
flexibility and fairness within the teams (Sakas, Vlachos & Nasiopoulos, 2014).
3. Analysis of the core competencies
First competency - The telecommunications industry has been able to experience
high levels of growth and the traffic in the network is also growing in an effective manner.
The digital technologies have been able to change the world and operations of different
organizations in the telecommunications industry. Telstra has been able to develop its
position in heart of the changes which have taken place in the industry. The major purpose of
the company is thereby to develop the technologies in such a manner which is helpful in
developing a bright future. The values which have been possessed by the company are also
based on the services which are offered to the consumers in an effective manner (Soomro,
Shah & Ahmed, 2016).
Core competency test - Valuable – Moderate, Imitability – Moderate, Rarity – Low,
Organization – Moderate
Second core competency - The core competencies which have been developed by
Telstra are based on the major activities that are performed for providing basic access based
services to the businesses and homes in the country. The mobile telecommunication services
that are provided to the company are also based on the core competencies of Telstra. Telstra

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is also considered to be a leading provider of services of telecommunication based services.
The wholesale based services which are provided by the company are based on the various
competencies that have been gained by Telstra (Morschett, Schramm-Klein & Zentes, 2015).
Core competency test - Valuable – High, Rarity – High, Imitability – Moderate,
Organization - High
4. Proposal of a suitable information system for Telstra
The changes which have taken place in the external environment have led to the high
levels of importance of the information systems. The information systems are able to play an
significant part in the proper management of data. The data that needs to managed by the
organizations are mainly based on the customers and other resources which are developed in
the industry. The usage of technology has also played a main part in developing the
importance of information systems. Telstra will also require an effective information based
system in order to operate in the industry. The implementation of management information
system will be the most effective for the managers who are a major part of Telstra (Soomro,
Shah & Ahmed, 2016).
The major stages that will thereby be addressed with the help of proper management
information system include, problem identification, implementation, search information,
system need, system design, documentation and testing. The Oracle software can be used in
an effective manner by Telstra in order to implement proper management information
system. The major usage of the management information system is based on the sales and
marketing based activities, accounting activities and the human resource management based
activities (Peltier, 2016).

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5. Evaluation of the proposed system to provide suitable recommendations
The implementation of Oracle based management information system can play an
important part in the methods by which the data of consumers can be maintained in an
effective manner. The human resource of the organization can also be maintained in an
effective way with the help of proper implementation of the proposed management
information based system in Telstra.
Conclusion
The analysis in the report can thereby be settled by stating that the external and the
internal environment analysis of Telstra has played a major part in the development of proper
strategies. The resources that have been developed by the organization are also an important
part of the effective processes of Telstra in the telecommunications based industry of
Australia. The report has been able to offer an effective recommendation based on the
management information based system that can be implemented by Telstra in an effective
manner. The information system can play a key part in the management of human resources
and the customers as well.

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