Strategic Management of Telstra: Company Brief, Environmental and Industry Analysis, Resources, Capabilities and Core Competencies

Strategic Management
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Contents
Part-1................................................................................................................................................3
1. Company Brief.........................................................................................................................3
2 Industrial Background-.............................................................................................................3
3 General Environmental Analysis of Telstra.............................................................................3
4 Industry Environment...............................................................................................................5
5 Competitive environment.........................................................................................................6
6 Opportunities and threats..........................................................................................................6
Part -2...............................................................................................................................................7
1.Resources of Telstra.................................................................................................................7
2 Capabilities identification.........................................................................................................7
3 Core competencies....................................................................................................................8
4 Information system for Telstra.................................................................................................9
5 Evaluation of proposed system and Recommendations...........................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Part-1
1. Company Brief
Strategic management involves setting up goals and objectives to give directions to business
firms. It also assists in formulating plans and strategies to achieve goals (Aaker & McLoughlin,
2010). Strategic management also involves understanding the environment in which a firm
functions, so that plans can be formulated to conduct business in the given environment.
Telstra is an Australian company functioning in the telecommunication sector. The company
specialises in telecommunication products like voice, internet data and pay television (Telstra,
2018). Prior to 1975 telecommunication sector in Australia was controlled by the Government
and was run by Australian telecommunication commission (Telstra, 2018). However, post 1989
the commission was renamed Telstra and was fully privatised by 2006.
2 Industrial Background
Telstra functions in the telecommunication industry which is highly competitive and
technologically intensive (Telstra, 2018). Telecommunication industry has a high growth
potential as most of the population uses telecommunication services (Telstra, 2018). Therefore,
Telstra also has a high growth rate with a 51% market share.
3 General Environmental Analysis of Telstra
An assessment of the general environment in which a firm functions helps in ascertaining the
factors which influence business (Hoffman & Bateson, 2010). This also helps in planning
strategies. (Bamford & West, 2012). Following is the assessment of general environment of
Telstra.
Political/ Legal- telecommunication sector is promoted by the political system in Australia and
was earlier Government controlled (Telstra, 2018). Now the sector is privatised but Government
clearance is required to set up a new business (Government of Australia, 2018).
Telecommunication sector and hence, Telstra’s business is regulated by Australian
Communications and Media Authority (ACMA) (Government of Australia, 2018). The authority
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has regulations in place for restriction on spam and promotional calls along with do not disturb
system (Government of Australia, 2018). Other regulations affecting the business are customer
safety and privacy norms and labour acts like anti-discrimination and work health and safety
regulations (Telstra, 2018). Hence, political and legal system offers good growth opportunity to
the company.
Economic –Telecom services have a huge and growing demand due to large innovation in
information and communication services (Robbins, 2013). Customers and businesses alike
require telecom services. Therefore, there is huge growth potential in the economic sense in this
sector for Telstra. (budde.com.au, 2017).
Sociocultural-digital devices have become a thing of fashion and a status symbol for the youth
and the young professionals. This is increasing the need for better and effective
telecommunication services. (Telstra, 2018). Moreover, there is peer group influence for brand
choice of data services. Therefore, Telstra needs to pitch its product in an appealing way to the
youth.
Technological- telecommunication industry is highly driven by technology (Telstra, 2018).
Sophisticated technology is required by Telstra for setting up new communication towers,
hosting servers and further innovation and research (Robbins, 2013). Therefore, investment in
new technology is essential for the firm.
Global- Telecommunication industry is expanding globally. There is large scale global demand
for telecom services. This industry is growing a at a huge pace which is a good sign for a lot of
companies in this sector (Aaker & McLoughlin, 2010). Telstra also has the ability and
technology to cash in on the global demand for telecommunication network.
Physical environment- physical environment comprises of all tangible elements of a business
(Payne, 2012). Telstra provides services. Therefore, its product is intangible and inseparable
from the service provider (Lovelock, 2012). However, in terms of physical elements it has
servers, communication towers, offices and galleries from which it sells its product (Telstra,
2018). The firm has a powerful and well-connected infrastructure which forms its physical
environment.
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