Strategic Information System Analysis of Telstra Telecom Industry

This report provides an analysis of the internal and external environmental factors affecting Telstra telecom industry. It includes PESTEL and Porter’s Five Forces analysis, VRIO analysis, and proposal for an efficient information system.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
Name of the Student
Name of the University
Author note

1
STRATEGIC INFORMATION SYSTEM
Executive Summary
The report has helped in the entire analysis of the different kinds of internal and external
environmental analysis of the Telstra telecom industry. The PESTEL and Porter’s Five Forces
analysis have been conducted which helped in understanding the different kinds of risks and
taking corrective actions in solving the same. Furthermore, the VRIO analysis has been
conducted which assisted in managing the different issues as to improve the overall condition of
the firm.

2
STRATEGIC INFORMATION SYSTEM
Table of Contents
Part 1 – External analysis................................................................................................................3
1. Overview of Telstra.................................................................................................................3
2. Analysis of Telecommunication Industry................................................................................3
3. General Environment Analysis................................................................................................3
4. Industry Environment Analysis...............................................................................................5
5. Competitive Environment Analysis.........................................................................................6
6. Threats and Opportunities of Telstra.......................................................................................7
Part 2- Internal Analysis and Proposal............................................................................................7
1. Tangible and Intangible Resources of Telstra.........................................................................7
2. Identification of Different Capabilities....................................................................................8
3. Core Competencies Analysis...................................................................................................8
4. Proposal of Efficient Information System at Telstra...................................................................9
5. Evaluation of Proposed System and Recommendations.......................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

3
STRATEGIC INFORMATION SYSTEM

4
STRATEGIC INFORMATION SYSTEM
Part 1 – External analysis
1. Overview of Telstra
Telstra is one of the Australian companies which is operating as the telecommunication
industry in the entire Australian market. The main and purpose of the company is to provide the
customers with different kinds of access to internet, television along with providing other
telecommunication networks as well (Telstra.com.au. 2018). The company tried to develop
history in the entire Australian telecommunication market over a long span of time. There was an
effective program for change management in the organization which was done by CEO David
Thodey and this has helped the company in becoming successful in the market as well.
2. Analysis of Telecommunication Industry
The entire growth prospects are being taken care by the government of Australia which
has helped the company in becoming successful in nature. There are different kinds of legal
aspects and regulations which helped the company in becoming famous in the entire competitive
industry. The first and foremost telephone company which was launched in Australia was by
providing the connection between Melbourne and South Melbourne offices which was started in
the year 1879. The industry related to telecommunication earned huge growth in the present era
and this helped them in becoming successful as well. Telstra is one such company which gained
huge competitive advantage in the market with the affect of long term operations.in Australian
market.
3. General Environment Analysis
Economic Factor is the first aspect which this has been seen that the macro
environmental aspects have created huge impact on Telstra (Dwivedi et al. 2015). There is huge

5
STRATEGIC INFORMATION SYSTEM
economic stability which can be a huge factor for Telstra in improving their business effectively.
The rate of inflation and foreign exchange rate can be taken into consideration which helps in
managing the firm’s effectiveness.
Physical factor includes that the shares of Telstra are being affected by different
operations of Telstra and there are various physical stores which helps the company in driving
the prices of the share in an efficient manner. There are different physical stores which will help
Telstra in managing the different operations in the entire world.
Socio-cultural factor is the other aspect wherein population of the country has the ability
to affect the profitability of the company of Telstra in an efficient manner. The different needs
and wants of the consumers is required to be taken into consideration which will assist Telstra in
managing the different operations in an appropriate manner.
Global factor is the other aspect which is the economic turbulence which is affecting the
telecommunication industry. Telstra is being affected by the different economic changes which
are inclusive of the different kinds of global operations and this will impact the overall
profitability of the firm in an efficient manner (Dwivedi et al. 2015).
Technological factor is the aspect wherein this has been noticed that there is huge
technological advancements which is efficient in the telecom industry which will help in
impacting the cost structure of the company appropriately.
Legal or Political Factor is the aspect in which this has been seen that there are different
kinds of political pressures which can affect the operations of the company Telstra. There can be
huge level of corruption and other political issues which will impact the overall profitability of

6
STRATEGIC INFORMATION SYSTEM
the firm and this will impact their operations in a negative manner as well (Hill, Jones and
Schilling 2014).
Demographic factor is the last aspect which is required to be taken into consideration as
this is the crucial element in this respective industry. The different factors is inclusive of the age
of the consumers along with the different demands and income of the consumers which will
impact the decision making process of the company to gain competitive advantage (Dwivedi et
al. 2015).
4. Industry Environment Analysis
Power of the different suppliers is the first element in which this has been seen that the
different suppliers in the market have a dominant kind of position in the market and this is able
to decrease the profitability of the firm. The company can increase the overall revenues with the
help of the reduction in the power of the suppliers. The supply chain development is essential
part of the different operations in the Telstra Company.
Power of the buyers is the other aspect wherein they have a huge role to play in the entire
market. The pressure is created by the Telstra communication industry and this can help the
company in developing strong customer base in the company in an efficient manner. The service
oriented approach of the organization can affect the operations of the company and this affects
the overall profitability of the company (Dwivedi et al. 2015).
Threats of the substitute products is the aspect in which the threat is medium for Telstra
wherein this can be seen that there are different kinds of substitute products in the market which
will attract the customers in the market and this will be unprofitable for the organization as well.

7
STRATEGIC INFORMATION SYSTEM
Threats from the new entrants are low as Telstra is one of the largest telecom industries
and this does not affect the reputation of the company as well. Furthermore, this can be analyzed
that the company is gaining competitive advantage in the market which will be helpful for
Telstra in developing cost effective aspects which will be helpful for the company as well.
Rivalry among the different competitors is high as the entire telecom industry is highly
competitive in nature and this affects the level of profitability of the company in the market as
well. The competitive level of the telecom industry is quite high and this helps the company in
becoming successful by gaining competitive advantage (Dwivedi et al. 2015).
5. Competitive Environment Analysis
The entire competitive environment developed by telecommunication industry is high in
nature in comparison to the other industries. There are various other companies in the
telecommunication industry which is affecting the productivity of the Telstra company and this
is affecting Telstra’s growth. However, Telstra has been able to make their competitive position
in the market by their long term growth and operations in the entire telecommunication industry
in the entire Australia. The two major competitors of Telstra in the entire Australian market are
Vodafone and Optus, however from the past scenario, this has been observed that the growth rate
of Telstra has increased from 43% to 54% till the year 2015 and this has helped in the growth of
the firm effectively.
Furthermore, the mobile division of the Telstra company has been with more 10 billion
dollars and this has been seen that the market share of Optus is low and Vodafone has even
reduced their sales growth in an ineffective manner. There are major kinds of threats which can
be provided to the respective Telstra Company is the services which are being provided by the
other companies in the market. This is inclusive of the services which are being provided by the

8
STRATEGIC INFORMATION SYSTEM
other competitors and this is a huge threat and they are being based on human and financial
resources which are utilized by Telstra.
6. Threats and Opportunities of Telstra
There are different kinds of opportunities which can be taken into consideration which is
inclusive of the following:
 Strategic kind of growth initiatives which can be applied by Telstra
 There is increase in the entire demand for the different telecom services
 There is growth in the information technology services market
 4G mobile broadband along with launch of the network (Galliers and Leidner 2014)
On the other hand, there are different threats of the Telstra Company which is inclusive
of the following:
 There is rapid changes in the technology and this can affect the overall growth of the firm
 There are different stringent kind of regulations which will be affecting the overall
growth of the firm
 There is increase in the competition which will affect the overall growth of the firm
Telstra and this will become more ineffective
Part 2- Internal Analysis and Proposal
1. Tangible and Intangible Resources of Telstra
The different kinds of mining resources of Telstra is one of the major operational part of
Telstra and the entire boom that has been experienced by powerful ICT in the telecom industry
which is based on enhancement of the different resources has been able to enhance the overall

9
STRATEGIC INFORMATION SYSTEM
productivity of the firm (Hanseth and Lyytinen 2016). Furthermore, the automation of the
different resources and capabilities along with streamlining of the data helped the company in
achieving the different kinds of operations in an effective manner.
Furthermore, the human resource activities along with the employees of the organization
Telstra has been able to improve the process of the company in a much more appropriate manner
to gain competitive advantage (Laudon and Laudon 2016). The different employees who are
working at Telstra are being able to provide their best efforts as to improve the efficiency of the
firm. The training and development resources have a huge role in the growth of the firm which
will improve the competitiveness of the firm.
2. Identification of Different Capabilities
The different culture along with capabilities of the firm has been able to improve the
overall productivity of the firm in an efficient manner. The different advancement of the
technology has been able to improve the different activities of the company as this helps in
satisfying the different needs of the customers effectively (Robson 2015). The entire operating
environment of the company was developed with the best kinds of skills and capabilities which
helps in bringing simplicity in the different operations. The different individual employees in the
organization have been able to improve and foster the different skills in an efficient manner.
3. Core Competencies Analysis
Particulars Valuable Imitability Rarity Organization
Specialized
Mobile Services
Yes Yes Yes Yes
Highly Trained Yes No No Yes

10
STRATEGIC INFORMATION SYSTEM
and qualified
employees
Global Telecom
Brand
Yes No Yes Yes
Infrastructure of
Telstra
Yes Yes No No
From the above VRIO analysis, this can be analyzed that there are different resources in
the organization which have helped Telstra in gaining competitive advantage in comparison to
the different other competitors in the market (Theaustralian.com.au. 2018). Lastly, the training
and development opportunities of the company have been not successful which will be
ineffective in nature as to become most effective telecommunication industry in the entire
competitive market.
4. Proposal of Efficient Information System at Telstra
There are various changes which can be implemented by Telstra in order to become more
successful in the entire competitive advantage. The efficient information system will be able to
play an important role in data management at Telstra (Wheelen et al. 2017). The customers of the
company need to understand and analyze the different kinds of data in such a manner which will
improve the overall appropriateness and this will help in managing the different kinds of
resources efficiently. The technological advancement will play a major role in managing the
different kinds of telecom activities efficiently.

11
STRATEGIC INFORMATION SYSTEM
The different stages which will be inclusive of the implementation of the efficient
information system is inclusive of the following:
 Identification of the problem
 Implementation of different technological advancements
 Search information along with system needs (Wu, Straub and Liang 2015)
 Design of the system and documentation and testing
5. Evaluation of Proposed System and Recommendations
The oracle based information system at Telstra will help the company in becoming more
competitive advantage in the entire competitive telecommunication industry. Proper
implementation of the information technology is required to be identified by the company which
will assist them in understanding the position of the different competitors in the market
(Pearlson, Saunders and Galletta 2016).
This will help Telstra in understanding their weaknesses and make them their
opportunities to become more powerful. This will furthermore increase the overall market share
and growth of the company in such a manner which will improve the revenue and growth of the
sales as well (Hill 2017).
Conclusion
Therefore, this can be concluded that the strategic information system of Telstra is
required to be analyzed in an effective manner which helped in improving the overall condition
of the company. This can be seen that there are different external and internal environmental
factors which have affected the growth of the firm and this has reduced the overall efficiency of
the firm as well.

12
STRATEGIC INFORMATION SYSTEM
Furthermore, the competencies along with capabilities have been analyzed which has
helped the company in being ahead of the different other competitors in the market to gain more
competitiveness in comparison to Optus and Vodafone.
Lastly, this can be analyzed that the resource and capability analysis have been able to
improve their competitiveness by managing the external environmental factors along with threats
and opportunities as to become the best companies in the world.

13
STRATEGIC INFORMATION SYSTEM
References
Dwivedi, Y.K., Wastell, D., Laumer, S., Henriksen, H.Z., Myers, M.D., Bunker, D., Elbanna, A.,
Ravishankar, M.N. and Srivastava, S.C., 2015. Research on information systems failures and
successes: Status update and future directions. Information Systems Frontiers, 17(1), pp.143-157.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Hanseth, O. and Lyytinen, K., 2016. Design theory for dynamic complexity in information
infrastructures: the case of building internet. In Enacting Research Methods in Information
Systems (pp. 104-142). Palgrave Macmillan, Cham.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Robson, W., 2015. Strategic management and information systems. Pearson Higher Ed.
Telstra.com.au. 2018. Telstra - mobile phones, prepaid phones, broadband, internet, home
phones, business phones. Retrieved from https://www.telstra.com.au/

14
STRATEGIC INFORMATION SYSTEM
Theaustralian.com.au. 2018. Rivals close on Telstra mobile might. Retrieved from
https://www.theaustralian.com.au/business/technology/telstras-mobile-might-faces-stiff-
competition-from-rivals/news-story/0dcfaa082af868876e7f240d33be4e36
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management
and business policy. pearson.
Wu, S.P.J., Straub, D.W. and Liang, T.P., 2015. How information technology governance
mechanisms and strategic alignment influence organizational performance: Insights from a
matched survey of business and IT managers. Mis Quarterly, 39(2), pp.497-518.