Comprehensive Business Analysis and Management Report for CSG

This report provides a comprehensive business analysis of CSG Technologies, an Australian technology solutions provider. It examines both internal and external factors affecting the company, utilizing frameworks such as SWOT, PESTLE, Porter's Five Forces, VRIO, and McKinsey's 7S model. The analysis identifies key issues, including declining profitability and internal management gaps, particularly between employees and upper management. External factors such as political, economic, social, technological, legal, and environmental influences are assessed, along with an industrial analysis evaluating competitive forces. Internal strengths, weaknesses, opportunities, and threats are evaluated via SWOT and VRIO analyses. The McKinsey 7S framework is used to identify areas for improvement in internal management. The report concludes by highlighting the critical need to address the communication gap between employees and upper management to improve overall performance and competitiveness.

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Executive summary
This aim of this report is to discuss about the internal and external business factors relevant for
the business operation of CSG. In doing so, different models and framework such as SWOT,
PESTLE, Porter 5 forces and VRIO analysis is being done. There are number of positive as well
as negative factors for CSG are being identified. Moreover, McKinsey’s 7s model is also being
used to identify the gaps in the internal management of CSG, which should be mitigated in the
further stage. This report concluded that the gap between the employees and the upper
management level is the major gap identified for CSG.

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Table of Contents
Introduction......................................................................................................................................3
Identification of the problem...........................................................................................................4
External environmental analysis......................................................................................................4
Political factors............................................................................................................................4
Economical factors......................................................................................................................5
Social factors...............................................................................................................................7
Technological factors...................................................................................................................7
Legal factors................................................................................................................................8
Environmental factors..................................................................................................................9
Industrial analysis..........................................................................................................................10
Bargaining power of the buyers.................................................................................................10
Bargaining power of the suppliers.............................................................................................10
Threat of new entrants...............................................................................................................10
Threat of substitutes...................................................................................................................11
Competitive rivalry....................................................................................................................11
SWOT analysis..............................................................................................................................11
Strengths....................................................................................................................................11
Weaknesses................................................................................................................................12
Opportunities.............................................................................................................................12

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Threats.......................................................................................................................................12
VRIO analysis................................................................................................................................12
McKinsey’s 7s framework.............................................................................................................14
Conclusion.....................................................................................................................................15
Reference.......................................................................................................................................16

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Introduction
There are number of issues being faced by the contemporary business organizations in
terms of their operations in the current business scenario. This is due to the reason that the
current business state of affairs is complex in nature and can be judged from different
perspectives. Thus, it is important for these business entities to have the continuous process of
determination of the external and internal business environments and review their internal
effectiveness accordingly (Prajogo 2016). This will help them to identify their weaknesses in
timely manner and design their practices and policies in coping up with the change in the
business environment. However, this entire process should be done in a sequential manner in
order to have the maximum outcome for the business.
One of the business entities in Australia, which is facing complex issues in their business
operation, is CSG technologies. They are leading Australian entity in providing technology based
solutions to the businesses and thus operating in the business to business sector. It is also
identified that they are having tie up with number of global leaders such as Samsung and Canon
with whom they are offering holistic solutions to their clients. Currently, they are having their
presence in New Zealand outside of their home country. However, recently it is reported that
CSG faced loss of more than one percent of their profit in 2018 as compared to 2017. Moreover,
it is also identified that recently CSG went through change in the leadership and former general
manager of IBM in Australia and New Zealand is being taken on board. Thus, a few internal
issues can get identified for them.
This report will discuss about the internal and external business factors relevant for CSG
using the PESTLE analysis. Industry analysis will be done by suing Porter 5 forces and internal

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analysis with the help of VRIO and SWOT analysis. The internal effectiveness of CSG will also
be identified on the basis of McKinsey’s 7s framework.
Identification of the problem
One of the major problems for CSG being identified is their reduction in profitability
between 2017 and 2018. Thus, it can be concluded that internal management issues are also
responsible in reduction of their profitability. One of the major probable reasons is the change in
their leadership roles. This is causing the gap between the vision of the new leadership and the
existing lower level internal stakeholders. Moreover, lack of determination of the issues and
challenges being faced by the employees by the upper level management can also be considered
as one of the major problems for CSG (Cania 2014). This should also be noted that with the
increase in the business operation of CSG, the diversity in the workforce is also increasing. The
upper level management should manage the diversity in the workforce in order to prevent the
lack of coordination and cooperation among the employees. Differences in the needs and
expectations of the employees can also be considered one of the major characteristics of the
problem for CSG. This is due to the reason that with the increase in the workforce, the needs and
expectations of the employees are also getting diversified and it is more challenging for the
managers to meet these expectations (Brewster 2017).
External environmental analysis
Political factors
CSG is predominantly operating in the Australian market and thus the political factors
relevant in Australia will be considered. Australia is having capitalist and democratic type of
government with open market approach. Thus, the probability of government interference in the

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business affairs is less for CSG. According to the global economy, political risks in doing
business in Australia are low, which denotes that CSG is having favorable condition in operating
in the country. However, as per the global competitiveness index, it is identified that inefficient
government bureaucracy is one of the major problematic factors of doing business in
Australia(weforum.org 2019). This is a major challenge for the managers at CSG to the initiate
the change in the organization in minimal time.
Economical factors
Tax rates are the second most problematic factors of doing business in Australia. This is
also posing challenges for CSG because higher tax rates are increasing the end price of their
services and reducing the potential clients for them. This is also reflecting in their reduction of
profit margin in 2018. Labor participation rate in Australia is fluctuating in nature. According to
the global economy, labor participation rate of Australia is standing at 64.81 percent as of 2017
and it is showing downward trend(theglobaleconomy.com 2019). Thus, it is posing challenge for
the managers at CSG to have the seamless supply of human resources in the organization for
different job roles.

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Figure: 1
Most problematic factors of doing business in Australia
Source: (weforum.org 2019)

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Figure: 2
Labor participation rate in Australia
Source:(theglobaleconomy.com 2019)
Social factors
Australia is having upward trend in terms of social globalization in the country and this
denotes that intensity of globalization in the country is increasing. However, in the case of CSG,
the organizational change process should be more rapid and frequent in line to the global trends.
Moreover, the issues in relation changing of employee trend due to globalization is also
challenging for CSG in maintaining the uniformity of their management approach. Moreover,
according to the global competitiveness index, poor work ethic among the national labor force is
also considered as a major problematic factor of doing business in Australia(weforum.org 2019).
Thus, it is also a major challenge for managers at CSG to manage the ethical practices and
principles in the workplace.
Technological factors
CSG is offering technological solutions and thus the impact of technological factors is
more for them. According to the innovation index, the ranking of Australia is gradually
decreasing from 2015. This denotes that the intensity of innovation in the country is reducing and
CSG will face the problem managing their competitive advantages by means of generating
innovations.

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Figure: 3
Innovation index of Australia
Source: (theglobaleconomy.com 2019)
According to the global competitiveness index, Australia is having the ranking of 27 in
terms of availability of latest technologies(theglobaleconomy.com 2019). This denotes that CSG
will have the access to latest technologies to be used in their process but the employee
management will be important in this case. This is due to the reason that resistances from the
side of the employees will cause failure of the technology implementation.
Legal factors
Australia is scored at the higher end in terms of rule of law even though the scoring is
gradually reducing. However, the higher level of rule of law in the country denotes that CSG

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should have to adhere to more legal complexities in their business operations. This may create
hindrances in their internal workplace management along with managing the employees.
Figure: 4
Trend of rule of law in Australia
Source:(theglobaleconomy.com 2019)
Restrictive labor regulations are another challenge being faced by the managers at CSG
and it is considered as the most problematic factor in doing business in Australia(weforum.org
2019). Thus, there are number of legislations and legal standards to be faced by the managers in
managing their employees. This will bring complexities as well as involve more cost in the
process.
Environmental factors

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CSG is not directly involved in any environmental aspects and thus also do not have any
direct impacts on the environment. Moreover, the technological solutions being offered by them
is more environmental friendly and can help the business in further enhancing their sustainability
in the long term.
Industrial analysis
Apart from the external factors analysis, it is also important to initiate the industrial
analysis in order to determine the competitive factors. The following sections will discuss the
major competitive forces.
Bargaining power of the buyers
Bargaining power of the buyers of CSG is high due to the reason that there are other
options available to them. Customers will look for cost effective options and thus the service cost
is determined by the market forces.
Bargaining power of the suppliers
Bargaining power of the suppliers is low due to the reason that majority of the services
are being developed in-house by CSG. Thus, the impact of the suppliers in the business decisions
of them is low.
Threat of new entrants
Threat of new entrants is moderate for CSG due to the reason that new entrants will
require huge capital for investment and expertise and infrastructure for competing with the
established players. However, on the other hand, the established players from other countries can
enter the Australian market easily and they will be able to compete effectively with CSG.