Analyzing NEXTDC's Strategy: Development, Management, Implementation

This report provides an analysis of NEXTDC's strategies for managing, developing, and implementing effective business operations within the ICT and communications industry in Australia. It utilizes Porter's Five Forces, PESTLE analysis, and SWOT analysis to assess the external environment and identify key factors impacting the business. The analysis covers the company's overview, anticipated growth, rivalry, profitability, and key success factors. Major findings indicate that NEXTDC delivers high-quality products and services, manages flexible solutions within a multi-cloud environment, and facilitates communication and connectivity networks. The report concludes that NEXTDC has successfully implemented effective strategies by managing external forces, ensuring data security, and fostering specialization in partnership working to gain a competitive advantage.

Running head: MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
Managing, developing and implementing strategies
Name of student
Name of University
Author note

1MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
Table of Contents
Introduction......................................................................................................................................3
Company overview......................................................................................................................3
Porter’s five forces...........................................................................................................................3
PESTLE analysis.............................................................................................................................4
SWOT analysis................................................................................................................................4
Anticipated growth, rivalry and profitability within the industry....................................................5
Key success factors within the industry...........................................................................................6
Major findings based on the analysis...............................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................7

2MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
Introduction
The report is prepared to discuss about the ways of managing, developing and
implementing effective strategies for ensuring that successful business functioning can be
achieved with the consideration of the business organization named NEXTDC in Australia. The
business organization falls under the ICT and communications industry and thus the assignment
will focus on utilizing various processes and strategic external environment analysis techniques
to describe the size of industry along with assessment of various factors impacting business
effectively (Nextdc.com 2018).
Company overview
The business organization named NEXTDC is one of the major data centers providing
cloud based services and solutions and act as a link the enterprise based information technology
and cloud based services. The company is assumed to be one of the major data centre operators
and is currently a major growing technology based company n Australia (Epstein 2018). The
organization has been operating in more than 8 data centers all over the world and the major
facilities are located in Sydney, Melbourne, Brisbane, Canberra and Perth, all of these operating
at different Tier standards including Tier III and Tier IV.
Porter’s five forces
The strategic external environment analysis has been done by assessing the various forces
affecting the business and this could be done with the use of Porter’s five forces analysis
technique that is considered as a holistic strategy framework to assess the competition. This
could benefit the organization by understanding the forces affecting business and develop a

3MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
sustainable strategy to attain competitive advantage in business within the Software and Services
industry (Parmenter 2015).
The threats of new entrants are common, though it creates new scopes for managing
innovation through adoption of low pricing strategy, cost reduction or leadership strategies and
enabling value proposition techniques to ensure value creation to the customers. The threats of
new entrants are low, because NEXTDC has not only innovated its products and services, but
also has developed economies of scale along with investments on research and development
activities to emerge as a successful player within the industry by safeguarding its competitive
edge.
The bargaining power of suppliers is medium, because though they hold a dominant
position in providing raw materials and supplies to negotiate power and extract higher prices,
still due to immense distribution channels, the company has access to multiple suppliers and
often shifts from one to another conveniently (Eden and Ackermann 2013).
The purchasing power of customers is high, because the success of company depends
mostly on customer satisfaction. Customers demand best quality services are reasonable prices
and thus to form a larger customer base, NEXTDC should provide discounts and offers for
keeping customers engaged altogether.
The threat of substitute products is moderate because NEXTDC has met the requirements
of clients effectively by remaining service oriented and through increase in switching costs of
customers.

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The rivalry among the competitors is quite intense and thus the prices should be lowered
to remain competitive within the industry and thus has allowed NEXTDC to build economies of
scale along with product differentiation to influence clients purchase those from NEXTDC and
not from anywhere else (Galliers and Leidner 2014). This has helped in developing a strategic
position with in Software & Services industry and created various profitability opportunities to
sustain in the marketplace.
PESTLE analysis
The political factors including the political stability and corruption within the country can
affect the long term profit of the organization and at the same time, manage diversification of
systematic risks associated with the political environment. There are legal frameworks for
enforcing contracts while the protection of intellectual property and managing trade regulations
and tariffs are essential for setting right prices for the services delivered (Laudon and Laudon
2016).
The economic factors are rate of growth, inflation rate and tax rates are considered along
with the Government intervention within the free market to manage successful business
functioning. The rates of exchange, financial market effectiveness, costs of labor at NEXTDC
are responsible for managing human resources while the rate of unemployment must be
overcome by creating good scopes for ensuring consistent business process management.
The social factors include the culture adopted by NEXTDC and assessment of
demographic conditions to understand the preferences of clients in different market segments (E.
Dobbs 2014). The educational level of people, gender, buying behaviors, income, etc. are other

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factors contributing to the management of business, which has allowed NEXTDC to design
marketing techniques for keeping clients informed about the services delivered, furthermore
facilitate leadership strategies to maintain an entrepreneurial spirit and broader nature within the
community.
The technological advancements have brought innovation and with technological
diffusion, the value chain network is influenced positively and the cost structure has been
managed properly too. The automation systems have further created convenience to reduce the
costs of manufacturing and production along with connecting physical and virtual world and
transform business (Gomes et al. 2013).
SWOT analysis
Strengths
 Dedicated CRM department to meet
clients’ expectations and positive brand
equity
 Strengthening brand portfolio to create
diverse range of software solutions and
services
 The automated services have created
supplies efficiently to meet clients’
demands
 Great flow of cash
 Highly skilled workplace due to proper
Weaknesses
 High rate of attrition within the
workplace
 The net contribution percentage to
economy is comparatively lower than
the industry average
 The threats of new entrants have caused
barriers and due to this, market share
has been lost

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motivation and engagement through
training sessions
 Great rate of return on investments
Opportunities
 Implementation of environmental laws
and policies has created opportunities
to manage sustainable practices along
with gaining market share in new
product category
 Green initiatives are undertaken
 The rate of inflation is low, which has
brought higher stability in market
conditions (Alias et al. 2014)
 Cresting employment scopes for
enhancing workforce efficiency
Threats
 Lack of skilled workforce and constant
change in consumers’ needs and buying
behaviors
 Increased prices of raw materials and
resources
 Currency fluctuations have affected the
company’s functioning and prices set
for the products

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Anticipated growth, rivalry and profitability within the industry
The rivalries or competitors are the 365 Data centers, QTX, Cologix, ByteGrid, etc. The business
organization has experienced good revenue generation and the shareholders are interested in
making investments, which ensures a bright future for NEXTDC in Australia. The market
analysts’ consensus looks positive and with the increase in earnings, there should be higher
growth and expected to reach AU$25m by the year 2021 (Cserháti and Szabó 2014). The
anticipated growth could be achieved by managing the financial statements such as balance
sheet, cash flow statement, income statement properly along with management of market
conditions to pursue high growth alternatives and gain sustainable competitive edge over its
competitors.
Figure: Profitability margin (Cserháti and Szabó 2014)

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Key success factors within the industry
Figure: Strong growth in customers (Cserháti and Szabó 2014)
The major success factors are based on the cloud based solutions used focusing on the
data center by leveraging partners of choice and ensure proper IT communications and cloud
based learning. This has not only facilitated management of a healthy ICT ecosystem, but has
even collocated the private data and information to streamline costs and simplify the business
operations and processes perfectly (Tarhini, Ammar and Tarhini 2015). The success factors are
also dependent upon the services provided by the company such as cable patching network
connectivity, management of increase in bandwidth requirements and multi-socket services too.
The data cabling plan includes linking the various standards and maintaining the positions of
racks properly to make sure that the servers are maintained properly and bandwidths are raised as
well. The management of project is done by NEXTDC with the use of proper planning and

9MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
implementation and with the presence of highly skilled workforce; the gaps between success
factors and drivers of success are minimized too (Sigalas, Pekka Economou and B.
Georgopoulos 2013). Gaining positive outcomes during the stages of design, procurement,
development, testing and commissioning has helped in managing the projects delivered within
the allocated time and this has also resolved the risks associated with the mitigation strategies
and facilitated the packaging and distribution of equipments and machineries too.
Major findings based on the analysis
From the report, it has been found that the NEXTDC has delivered the best quality
products and services and thus the SWOT analysis, PESTEL analysis and Porter’s five forces
analysis have been done to assess the external environment and to check whether the business
functions properly or not. This has helped in managing flexible solutions along with operations
within the multi cloud environment to deliver fast and secure cloud based services along with
allowing the clients and partners to gain access to the cloud based providers to facilitate
communication and connectivity networks with ease and effectiveness (Nextdc.com 2018).
Conclusion
From the topic, it was understood that NEXTDC had managed to implement the most
effective strategies with the management of SWOT analysis, PESTEL analysis and Porter’s five
forces analysis to ensure that the forces affecting business were understood along with
management of data security and distribution of IT system and networks to digitally align the
networks and ensure specialization of partnership working for ensuring smooth business
functioning and gaining competitive advantage in business as well.

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References
Alias, Z., Zawawi, E.M.A., Yusof, K. and Aris, N.M., 2014. Determining critical success factors
of project management practice: A conceptual framework. Procedia-Social and Behavioral
Sciences, 153, pp.61-69.
Cserháti, G. and Szabó, L., 2014. The relationship between success criteria and success factors in
organisational event projects. International Journal of Project Management, 32(4), pp.613-624.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Gomes, E., Angwin, D.N., Weber, Y. and Yedidia Tarba, S., 2013. Critical success factors
through the mergers and acquisitions process: revealing pre‐and post‐M&A connections for
improved performance. Thunderbird international business review, 55(1), pp.13-35.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Nextdc.com. (2018). Data centres, colocation, hybrid cloud solutions. NEXTDC offers secure,
flexible, neutral solutions for ICT needs | NEXTDC. [online] Available at:
https://www.nextdc.com/ [Accessed 28 Oct. 2018].

11MANAGING, DEVELOPING AND IMPLEMENTING STRATEGIES
Parmenter, D., 2015. Key performance indicators: developing, implementing, and using winning
KPIs. John Wiley & Sons.
Sigalas, C., Pekka Economou, V. and B. Georgopoulos, N., 2013. Developing a measure of
competitive advantage. Journal of Strategy and Management, 6(4), pp.320-342.
Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for
enterprise resource planning implementation from stakeholders’ perspective: A systematic
review. International Business Research, 8(4), p.25.