Market Entry Strategy Report for Telstra in Singapore and United Kingdom Markets

This report analyzes the geopolitical and macro-environmental factors affecting the United Kingdom and Singapore markets and assesses the best market for entry by Telstra. It also assesses the potential dangers, risks, and opportunities in the current or short term policies of UK and China.

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MARKET ENTRY STRATEGY REPORT FOR TELSTRA IN SINGAPORE AND
UNITED KINGDOM MARKETS
Name
Institutional affiliation

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Executive Summary
Many macroenvironmental factors affect managers’ decisions in their organization.
Changes in tax, government policy changes, demographic change, trade barriers, and new laws
are all macro-change examples. To assist in the analysis of the factors, managers can put them
into categories using the PESTEL model. In organizations, the process of assessing internal and
external factors is important for the management’s function in planning. While the external
analysis deals with the examination of the threats and opportunities in the environment, the
internal analysis is focused on the aspects of assisting the organization in meeting the needs of
customers. The target market for any organization changes and therefore it does not depend on
the type of products produced by an organization, with organizations having to adapt to the
changing environment in order to maintain its customers. Therefore, the paper analyses the
geopolitical and macro-environmental factors which affect the United Kingdom and Singapore
markets and assesses the best market for entry by Telstra.

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Table of Content
Executive Summary.......................................................................................................................2
1. Introduction............................................................................................................................4
2. Countries Selected for Market Entry...................................................................................4
3. The Current Macro-Environmental and Geo-Political Forces Impacting UK................5
4. The Current Macro-Environmental and Geo-Political Forces Impacting Singapore.....7
5. Development of UK and Singapore Trade and Business Policy........................................9
6. An Assessment of the Potential Dangers, Risks, and Opportunities in the Current or
Short Term Policies of UK and China.......................................................................................10
7. Conclusion.............................................................................................................................10
References.....................................................................................................................................11

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1. Introduction
Telstra Corporation Limited is a full-service Australian company dealing in network
platforms, information services, and telecommunication services, throughout Australia. The
monopoly organization was formerly state-owned and provides mobile telecommunications,
local and long-distance services, traditional telephone services to businesses and residences, and
data services including online internet services. Basically, the company is the largest Internet
Service Provider (ISP) in Australia. Additionally, Telstra provides wholesale services to mobile
service providers and carriers in Australia, offers pay-television services, and maintains and
creates telephone directories (Raskutti & Kowalczyk 2011, p.150). From major cities like
Canberra, the company extends its services to the rural outback. Moreover, the company has
developed several delivery platforms for the provision of services including digital data and
transaction networks, access to international satellite infrastructure, internet protocol networks,
and broadband network for hybrid fiber coaxial cables.
2. Countries Selected for Market Entry
United Kingdom (UK) is one of the selected countries for market entry. The country is
located in the European continent. The government of the UK is taking its measures in
strengthening the economy including fiscal initiatives and monetary mix. In 2009, the
government announced new measures, which can help in restricting unemployment growth and
helping in reviving of ailing banks (Verick 2009, p.1).Furthermore, the rates of taxation were
revised on highest income from forty-five percent to fifty percent that has assisted the nation in
reviving its economy.
Singapore is another country selected for market entry, with the county being located in
southern Asia. Over the last decades, the country has experienced extraordinary economic

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growth and currently is considered the high-income economy. Furthermore, several factors such
as external and internal demand, investments and private consumption expenditures have
contributed to the growth of the country.
3. The Current Macro-Environmental and Geo-Political Forces Impacting UK
In terms of the political environment, United Kingdom has been a successful nation
when it comes to corruption control, application of the rule of law, regulatory control, and
effectiveness of the government. The nation is ranked high in political stability hence becoming
an ideal country for doing business.
In the economic environment, the GDP growth of the country was high from 2000 to
2006 with the country recording 3.8 % in economic growth (Turner 2009, p.5). However, after
the economic recession that was experienced in the country in 2008, the GDP growth rate
declined significantly, with the country experiencing a negative growth of 2.8 percent in 2009.
(Ahmad 2009 p.963) .Currently, the economy of the UK has grown significantly with most of the
growth occurring in South East and London. Traditionally, the southeast has been driven by the
service sector while industrial activities have been concentrated in northern parts of the United
Kingdom. As a result, the country has been having a decline in the industrial sector with the
south-east developing fast and the North much slower. Currently, the service sector is accounting
for seventy-six percent while thirty-four percent stands for agriculture.
Interest rates of the UK follow an inflation-targeting system whereby the consumer
price index increase is maintained at two percent. Furthermore, interest rates changes in the UK
are a basic measure control used by banks in the country to make sure inflation is at the desired
level. Currently, the interest rate of the UK is low with the central bank cutting interest to 0.5
percent (Altavilla et al. 2018, p.55). The cut in the interest rate has an expectation of expanding

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money supplies and boosting lending banks with central bank increasing the pound and money
supply and resorting to quantitative easing.
The inflation rate in the UK has increased rapidly since 2009. In 2006, the inflation
rate was 3.19 percent and increased to 3.72 in 2008 (Halunga, Osborn & Sensier 2009 p.30).
However, in 2008, inflation declined to 3.72 percent and the trend continued up to March. The
fall in inflation was experienced because of lower oil prices, food, beverage, and transportation.
Currently, the country has a Consumer Prices Index (CPI) at 2.4 percent with inflation expected
to rise to 2.6 percent due to rise in global oil prices (Petrella, Santoro & Simonsen 2018, p.1)
The economic slowdown in the UK has affected job creations leading to
unemployment. In 2008, the unemployment rate in the country was 5.7 percent and increased to
6.5 percent in 2009 with nearly two million people being unemployed. However, as the country
experienced economic growth, the unemployment rate has fallen significantly to 4.1 percent in
2018 as compared to 5.7 percent in 2008 (Barr et al. 2012, p.5142)
In terms of social aspects, the working age population ranging from 65 to 15 years
accounts for sixty-seven percent of the total population while 15.8 percent are over 65 years old
and 17.2 percent of the populations are minors between 0-14 years old (Singleton 2018, p.105).
The dependency ratio has risen with the government facing a great challenge of balancing social
welfare system. Therefore, if a company decides to invest in this nation it will face
unemployment challenges. The level of education in the country is very high with the national
tradition of education evolving constantly. In terms of income, the government has been facing a
challenge of disparity with an increase in relative inequality. Furthermore, the government has
failed to reduce poverty significantly especially in children.

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In terms of technology, the UK has the most advanced telecommunication
infrastructures in the world. The technology has increased productivity in industries and reduced
human labor. In legal aspects, the UK permits a maximum of 48 hours in seven days with a
minimum wage for all employees (Bell & Machin 2018, p.159)
The geo-political forces have significantly boosted the economy of the country. The
country experiences warm summers and cold winters. The UK also has a variety of natural
resources like natural gas, coal, and petroleum that have boosted the trade with the country also
having arable land for agriculture (Bridge et al. 2013, p. 331)
4. The Current Macro-Environmental and Geo-Political Forces Impacting Singapore
For the success of any business, the government plays a critical role. In the late 1980s,
Singapore was a single-party state which was effective (Tan 2013, p.632). The People’s Action
Party (PAP) which was ruling has since dominated the country since 1959. PAP’s main function
was for the formation of a new party which was called the BarisanSocialis. The political stability
of Singapore has led to the government adopting through the formulation of many policies for
the support of businesses through the provision of an economy which is stable, offering low rates
of interest to banks and having a competitive tax system.
The government of Singapore does not restrict the management of foreign exchange, with
the conversion of the Singapore dollar being easy hence making it easy for the transfer of
capitals in and out of the country by foreign investors. The government of Singapore does not
restrict investors from foreign countries for the protection of local industry. Therefore, foreign
companies seeking to invest in Singapore feel secured while expanding and growing their
businesses in Singapore.

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Geopolitical factors of Singapore are suitable for investment into the country, with the country
experiencing a political stability for decades. Furthermore, Singapore leads in the petroleum
refining and pharmaceuticals production; hence, the country has the potential to attract foreign
countries for investment. The country, being situated near the equator, has a tropical climate with
abundant rainfall and uniform high temperatures.
Singapore is infamous for being highly developed. For the success of organizations in a
particular market, having an existing economy, which is free from the effects of fluctuations and
inflation, is critical. The latest World Bank’s report concerning the business environment
assessment presents the economy of Singapore as being considered a much-uncomplicated
economy for investment and the conduction of business. The Gross Domestic Product (GDP) of
Singapore accounts for a percentage of 0.29, which is about one hundred and eighty-two dollars
of the economy of the world. The country’s inflation rate (CPI) is –0.5% and has an
unemployment rate of 1.8% (Ang & Goh 2018, p. 105).Higher developed economies positively
affect consumer expenditure in terms of shopping for goods and services, which is favorable for
markets planning on venturing into the market of Singapore.
The location of Singapore which is at the center of countries of South East Asia, which
are central to the economics and trade, has brought a lot of diversity for the cultural and social
life of people living in Singapore. Based on demographics, the country is infamous for its
people’s culture and ethics. The Singaporean total population was around five million in June
two thousand and nine (Jonker & Robinson 2018, p. 191) The mixture of Singapore nationality
directly impacted the country’s habits and culture. In the country, the tradition of family values
has been conserved continuously, with the younger generation slowly adapting to Western
Europe’s lifestyle and culture. Therefore, organizations planning to venture into the Singaporean

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market can effectively succeed especially if they are meeting the young people’s needs with
attractive and usable designs of products.
Information Technology (IT) development has impacted Singapore's strategies for
distribution and the media. According to Wu (2018, p.1) the total number of internet users in
Singapore is 3,370,000 which were about 77.8% of the population. In this regard, therefore,
organizations planning to venture into the Singapore market can effectively use online
advertising to market their business through social sites and the company’s website, banner
advertising, or link marketing.
5. Development of UK and Singapore Trade and Business Policy
The UK has an economic freedom of seventy-eight and its economy is 8th most free in
2018. Trade is significant in the country with a combination of imports and exports equalling to
58% of GDP and applied tariffs of 1.6 %. (Ottaviano , Peri &Wright 2018, p.88). Generally,
government policies in the UK do not interfere with foreign investment with both domestic and
foreign investors are treated equally under the law. Furthermore, the highly competitive banking
sector offers cheap, reliable and wide ranges of financial services. The country also has few price
controls although it regulates rates for most of utilities and prices of drug prescription. On
another hand, Singapore has economic freedom of 88.8 hence its ranked 2nd most free in 2018.
Trade policies are lenient for investment with the nation having a combined value of imports and
exports of 318% of GDP (Bahmani-Oskooee & Harvey 2018 p.165).There is no tariff with the
government opening the domestic market for foreign banks. Furthermore, Singapore’s business
policies are transparent and efficient with the nation having effective labor laws.

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6. An Assessment of the Potential Dangers, Risks, and Opportunities in the Current or
Short Term Policies of UK and China
In Singapore and the UK, the short-term policies on tariffs have created a good
opportunity for the foreign investor with companies being charged low taxes and licenses fees.
Furthermore, government policies allow for the investment of foreign countries in the market.
However, there is a potential risk and danger of stiff competition from existing companies with
higher experience in particular markets. The monopoly policies protect foreign investors
venturing into the market from local companies.
7. Conclusion
Telstra should invest in the United Kingdom since the country has high technology, with
high unemployment rates of 4.0% as compared to Singapore’s 1.8%. Additionally, the education
system of the United Kingdom is highly developed hence there is enough skilled personnel in the
market which the organization can employ. Free trade policy in the UK whereby the government
does not restrict foreign organizations from investing in the country would positively impact
Telstra. Additionally, the UK has strong business ties with the neighboring countries that may
boost trade for Telstra. Moreover, the country’s strong and well-established army offers security
from external attacks which results in a high level of security from external threats including
terrorist attacks that may lead to the company incurring extensive losses.

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