Strategic Thinking in Supply Chain Management

This assignment delves into the critical role of strategic thinking in optimizing supply chain management. It examines how effective problem-solving and strategic decision-making contribute to increased efficiency and competitiveness within supply chains. The provided research papers offer diverse perspectives on aligning business and IT strategies, integrating non-market and market strategies, and achieving sustainable green supply chain management.

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Executive Summary
Telstra is one of the leaders in telecommunication and technology industry in Australia.
The company is known for its wide range of services that it offers such as communication
services. Telstra Corporation Limited provides mobile services to more than 17 million
subscribers in Australia. Among these services, it gives six million services in fixed voice and
over three million in broadband services. The company’s mission aims at ensuring that many
people are connected and as a result, they create more opportunities. The company is said to
develop technology and solutions that are not only easy but also simple to use. Telstra Limited is
ranked as Australia’s fastest and most extensive mobile network company.
The company has positioned itself in the market by trying to understand the needs and
preference of their customers to offer the best services related to digital content and connection.
The company not only serves citizens of Australia but has branches in more than 20 countries
across the globe. The company believes that opportunities arise to those businesses that are
connected including individuals, communities and governments. To analyze the value chain for
Telstra Corporation Limited, Porter’s value chain analysis description of the company will be
investigated. Porter’s five forces model for analyzing value chain was developed and named after
Michael Porter.
The model works through recognizing and examining five competitive forces that
determine the strategies that companies use in particular industries. These five forces play a
significant role in determining Telstra strengths and weakness as well as providing an avenue to
mitigate the weaknesses and improve on the strength for purposes of growing the business (Wu
2011). The Porter's five forces include competition in the industry, new entrants to the industry,
power of suppliers, the power of customers and threats to substitute products. These aspects of
five Porter’s model can be applied in many segments and are commonly used to identify the
structure of a particular industry for purposes of developing a corporate strategy.
The primary objective of this model is to look for areas that are attractive and profitable.
The competition aspect of the model focuses on determining the number of competitors and how
well they are positioned in the market to threaten an existing company such as Telstra. The

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significance of a firm is defined by a larger number of competitors that offer similar products and
services. Suppliers in a particular industry often inquire about the competition of the company in
situations where it is challenging to obtain a preferable deal (Aguirre-Milling & Parhizgar 2014).
The potential of new entrants can weaken an existing company if it takes less money and time
for a competition to set up and gain a market share in a particular industry. The power of supplier
is a crucial element in Porter's five forces where the fewer the suppliers and more a company is
dependent on them, the more the power of supplier holds.
This power is determined by other factors such as the price of goods and service,
distinction of the services and products and the ability to switch from one supplier to another.
The power of customers holds in a situation where there is a smaller and robust customer base.
This power is motivated by the ability of the client to influence prices (Brunsman, DeVore &
Houston 2011). The threat of substitute implies that if there are more company’s similar
products or services in the industry, then it threatens the sustainability of an existing
organization. Porter’s five force model focuses on how Telstra Corporation Limited can be able
to develop a sustainable business strategy that can give them a competitive advantage in the
telecommunication industry both in Australia and internationally.
Threats to new entrants
New companies in the telecommunication industry threaten Telstra Corporation Limited
as a result of innovation and better strategies that put Telstra under pressure. The change and
new approach of operation by new entrants can be determined by reducing prices, costs and
offering a better value proposition to existing clients. For Telstra to be able to maintain the
competitive advantage, it should mitigate such challenges through developing countermeasures
aimed at safeguarding their interests. However, there are strategies that Telstra can implement to
tackle the threats of new entrants. Among these approaches include innovation of new products
and services which will increase customer loyalty as well as attract new clientele (Lambert
2015). Telstra should also build an economy of scale to lower its cost of operation and maximize
returns. Besides, Telstra should focus on building capacity by setting funds aside for facilitating
research and development.
Bargaining power of suppliers

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Majority of players in the telecommunication industry acquire their raw material from a
wide range of available suppliers. These suppliers have the power to decrease Telstra profit
margin. The suppliers can negotiate and guarantee higher prices among companies in the
telecommunication industry such as Telstra Corporation (Spiler, Kvrgic & Vujadin, 2016). This
power of suppliers is a threat to the sustainability of a Telstra since it reduces the profit margin of
the corporation.
Bargaining power of buyers
Consumers in most industries are often driven by the urge to satisfy their needs.
Consequently, buyers will demand the minimum price for the same products and services. This
will put pressure on Telstra Corporation to reduce its rates which will affect their profit margin.
This implies that the higher the bargaining power of buyers the higher they are likely to receive
discounts among other offers (Young, Tsai, Wang, Liu & Ahlstrom 2014).
Threats to substitute goods and services
The risk of substitute products and services is often high especially when the value
proposition is uniquely different from similar products and services offered in the market. Telstra
Corporation is bound to suffer from substitute services if it fails to innovate products that are
needed in the market and its main competition does. Telstra can overcome this threat by
becoming service oriented and understanding the needs of its customers (Xie, Li & Xie 2014).
Rivalry among the existing players
Telstra Corporation conducts its business in a very competitive industry where the intense
rivalry is bound to drive the prices of their services down which will, in turn, reduce the overall
profitability margin. If the revenue for the company is reduced drastically, the Corporation is
likely to close some of its businesses to increase profit margin. However, the company can build
a sustainable differentiation marketing strategy as well as capacity to have a competitive
advantage (Vrontis, Thrassou, Chebbi & Yahiaoui 2012). Besides, the company can collaborate
with its competitors to increase market share. Telstra management should carefully consider
Porter’s five forces and modify every aspect that threatens the existence of their business for
sustainability and profitability of the company.

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Fig 1. Porter’s Five Forces Framework
Three scenarios for optimizing value chain
Scenarios play a significant role in the value chain process that is not aimed at predicting
the future but facilitating better decision making process in the business at present. The decision-
making process involves three main areas which include the policy makers, individuals and
companies. Scenarios are mainly developed for purposes of making the decision conscious,
articulating the current mindset and developing knowledge and solid instinct. There are three
different scenarios where Telstra Corporation value chain can be optimized which include
making Telstra Corporation more sustainable, optimizing the shared supply chain and engaging
with technology-enabled consumers (Sarfaraz, Jenab & Bowker 2015).

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Making the Telstra more sustainable
There is an urgent need to ensure that Telstra becomes a more sustainable business
concerning changing consumer trends in the telecommunication industry. The growth of large
economies and developing ones are going to limit the natural resources which will result in a
more careful consideration of the actions people take (Kruehler, Pidun & Rubner 2012). This
will force people to shift their analogy of sustainability form general but a requirement. In the
wake of such an environment, multinational companies such as Telstra will be forced to take
responsibility. This implies that there is going to be a significant change in the working
environment that requires firms like Telstra to start taking the initiative. The most prominent
change in this scenario will be manipulating consumer behavior if a company is looking to make
the change.
The radical change will force consumers to put more trust on the industry buy trusting
their general stores that they interact with on a daily basis. This objective can be achieved where
all the stakeholders in the industry work together for purposes of solving problems collectively
(Kuchař & Vondrák 2016). He consumers, retailers and manufacturers should be able to
understand the role they play and how significant the roles are to both their environment and
lifestyle. The cooperation among these entities is inevitable and has been done before where the
consumer goods forums were able to identify areas that emitted the most carbon to the
environment.
This collective approach is not only focused on making the consumer to understand the
role they play but also helps them to make the right decision (Nuntamanop, Kauranen & Igel
2013). This new framework that is aimed to make Telstra sustainable does not limit opportunities
have a competitive advantage over others since the innovation holds the key to improve
performance and make the business more sustainable. Besides, for Telstra to offer a value
proposition for its customers, it has to create a transparent environment where it must come out
and educate the consumers on the impact of their brands. This means that Telstra will have to
partner with firms that share similar policies.
Optimize a shared supply chain

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Another scenario that could be optimized is a common supply chain. This is because
trends in market signal for the need of a collaborative and compete differently. Among these
trends include increasing urbanization which will force local governments to increase
regulations. To meet sustainable demands, the consumers need to be made aware of carbon-
friendly product and services (Stadtler, Kilger & Meyr 2015). Telstra corporations should aim at
manipulating consumer behavior through encouraging increased adoption of consumer
technologies. Other factors that will change consumer behavior include an aging population and
significant growth in urbanization.
Through encouraging adoption of a supply chain, more transparency and visibility will be
experienced. Advanced IT solutions are necessary for supporting collaborations and exchange of
knowledge among partners in the value chain. In a scenario where information is shared among
partners, the distribution channel will likely to lose its competitive advantage. The consumers
will play a significant role in an optimized supply chain as a result of acting as signals depending
on where they are located (Waters 2007). For Telstra to achieve an optimized supply chain, it
will have to synchronize its production with actual feedback from the consumers. This will mean
that they have to distribute their services from a localized network that is accessed by all their
collaborating partners. In companies that produce tangible products, after the production phase,
the goods will have to be stored in a common store that is shared by other users.
After, the goods will then be transported to a regional location before they can be
channeled to different locations for consumers to access. Telstra Corporation should aim at
ensuring that consumers have easy access to their services through structuring locations around
consumer residential where in case of any emergencies, there is a team that will be able to
respond quickly and offers the services thus increasing their consumer's value proposition
(Manuj & Sahin 2011). The advantage of having a collaborative supply chain is to improve
effectiveness, and previous examples that can attest to this scenario include increased in-stock
availability in the retail industry, reduction of carbon emission, improved procedures, better
customer services as well as the reduced time a company takes to generate new leads. The
collaborative supply chain is also significant in improving efficiency measures such as
minimizing the cost and cutting down on middlemen which increase profit margin. The value

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chain in telecommunication industry is influenced by content suppliers and application providers
(Naude & Badenhorst-Weiss 2011).
Engage with technology-enabled consumers
The need to interact differently with technology-oriented customers is brought about by
the increase in technology adoption across the world (Ittmann 2015). Consumer behavior is
largely influenced by the trends that show an integrated use of all kinds of technology in their
day to day life. Consumers are said to become increasingly knowledgeable regarding the
products and service that they need as well as the ones they use. This means that the consumers
will take back the control of their purchasing patterns and more encouraged to become loyal
consumers of products and brands that they find value in them.
This means that companies like Telstra Corporation will have to adapt to new business
technologies that enable them to easily connect with shoppers and consumers of their services.
The value proposition that Telstra will offer will change from the analogy of taking things
services to the consumers but engaging with those consumers for purposes of offering the best
services that meet the needs of the consumers (Reynolds & Yetton 2015). This means that the
consumers and the service providers will have to interact together where the service provider has
to educate the consumer on the importance and significance of their services for them to
purchase.
The growth in technology will empower the consumers to share information with others
through making comparisons with other products for purposes of getting the best value for their
money to satisfy their needs. This means that Telstra should be able to innovate systems that can
analyze the customer’s consumption patterns and be able to deliver or supply them adequately.
Since people have different consumption patterns, future telecommunication companies should
be able to tap into each consumer’s database and individually analyze how they can improve the
services to make the client satisfied. Technology is going to have a considerable impact on the
consumers since it helps increase awareness and experience in shopping a variety of products
and services for purposes of getting the best value. Telstra Corporation should facilitate
efficiency buy innovating technologies that will guarantee ability in communication among its

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service providers for purposes of improving their experience in shopping as well as sourcing for
information that will influence their decision-making process.
Fig 2. The Future Value Chain
Benefits and risks of the scenarios
Making the Telstra more sustainable
Porter’s five forces is a model that is used to describe the benefits and risks of the above
three scenarios from the context of benefits as well as risks for Telstra Corporation Limited
(Grunig, Kuhn & Clark 2010). In the first, situation, Making Telstra more sustainable, Porter
outlines three pertinent benefits that are capable of increasing the benefits to the firm. The three
frameworks include a hierarchy of source where Telstra ought to lower the labor costs and
increase technology, brand reputation and customer relationships. Other aspects focus on some
sources and constant improvement and upgrading of the company services (Executive Education
Stimulates Strategic Thinking and Action 2012).

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When focusing on entry Barriers, Telstra’s primary aim should be to improve its brand
identity, switching costs and economies of scale. This can be achieved through innovation of
new product and services. Innovation will play a significant role in for Telstra Corporation
regarding attracting new customers to the business and also ensuring that it creates loyal
customers. The risk of threats to the new entrant is pegged on losing customers and the business
lacking competitive advantage. The rivalry among existing competitors is determined by similar
factors such as brand identity, switching cost among others like product differentiation. The
benefit of this aspect is that Telstra ought to make its products different from those existing in
the market which is based on the generic strategy where it emphasizes the structure if the
industry and positioning of the business.
The risk arising from this strategy is an increased competition that threatens the
sustainability of the business. The bargaining power of supplier benefit is related to the
differentiation of inputs, the role of many suppliers and availability of substitutes which aims at
benefiting Telstra in building on dedicated suppliers who depend on the firm. The risk for Telstra
based in power of suppliers is that it will lower their profit margin. The bargaining power of
buyers has its benefits for the company which includes increasing customers and innovative new
services and the risk associated is huge discounts and offers. The threat to substitute is often
determined by price and the benefit relates to Telstra being service oriented while risks include
stiff competition (Skalik 2016).
Optimize a shared supply chain
The second scenario is optimizing a shared supply chain which uses the game theory
strategy through anticipating the reactions of key players in the supply chain process. The main
areas of this approach are pricing, marketing and regulation (Lo 2014). The threats to new
entrants benefits are determined by the access to distribution, absolute cost advantage and
government policies which play a critical role in planning and scheduling as well as improved
responsiveness to the supply chain. The risk associated with this force is losing the competitive
advantage that Telstra has in the industry.
The rivalry among existing competitors is determined by factors such as existing barriers,
fixed costs and intermittent capacity which benefits the firm through enabling a supply chain

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execution in real time as well as collaborating with competitors to increase market size while the
risk associated with this force is increased competition in the supply chain that threatens the
profitability of the business. The bargaining power of suppliers in this scenario is determined by
determinants such as switching costs of suppliers and firms in the industry, the significance of
volume of suppliers and the value relative to total purchases in the industry.
Therefore, the benefits include a dedicated supplier whose business depends on the firm
which Telstra should emulate (Singh & Trivedi 2016). The risk for Telstra Corporation in this
scenario is selling at lower prices which will affect their profit margin. The bargaining power of
buyers is influenced by factors such as buyer concentration, buyer volume and buyer switching
costs relative to a firm which contributes to benefits such as maintaining existing customers
through innovating new products to reduce defection. This scenario has risks that are associated
with profitability margin and market share for the company. The threat to substitute products and
services is pegged on the propensity of buyers to change products and relative price performance
where the benefits that can be drawn include order optimization as well as improved demand
planning. Telstra should benefit from increasing the switch cost for its consumers the risk
associated of Telstra fails to leverage the benefits is decreased profits that will have a negative
impact on the business (Trzuskawska-Grzesinska 2017).

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Fig 3. Value Chain
Engage with technology-enabled consumers
Engaging with the technology-enabled consumer is the third scenario which is proposed
based on core competencies and capabilities where Telstra business structure will succeed only
when the markets, products and customers are durable and well defined (Chu, Krishnakumar &
Khosla 2014). Here, the threat of new entrants is determined by factors such as proprietary
product differences, brand identity and expected retaliations. For Telstra to benefit, it has to build
capacity and spend money on research missions which are aimed at identifying the needs of
customers through engagement rather than taking the products to them. The risk associated with
this scenario is developing products that have no use in the market. Rivalry among existing
competitors is determined by factors such as brand identity, corporate stakes, informational
complexity and growth in the industry. The benefits that Telstra can reap from this force is
building scale where it innovates products that help them to get feedback from the customers and
developing products and services based on the needs of the customers (Maria et al 2013).
The risk Telstra is bound to suffer is losing their profitability and competitive advantage
to competitors who have improved engagement with their customers. The bargaining power of
suppliers tends to benefits Telstra understands where and how to distribute the products and
services through increased communication with the suppliers as well as customers. The risk in
this scenario is higher supplier power which threatens the profitability of the business. The
bargaining power of buyers concerning engagement is based on decision making where Telstra
stands to benefits from quality performance as a result of a buyer being informed about the
products they seek and the risk associated is buyers failing to understand the need for their
products. The threats to substitute for products and services is based on buyers propensity to
replace which will benefit Telstra through clearly informing the buyer uses of their products or
result in risk of customers seeking other products that are defined by them.
Conclusion
Based on the above findings, the future of companies is determined by their future value
chain process which is dependent on trends in the supply chain management, global logistics and
process-based strategic planning. The effectiveness and implementation of these strategies plays

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a crucial role in improving the sustainability of a company and give it competitive advantage in
the industry.

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