Strategic Information System into Telstra: Business and IT Analysis

This report provides a comprehensive strategic analysis of Telstra, a leading telecommunications and technology company in Australia. It begins with an overview of Telstra's operations and then delves into its business challenges, including falling prices and revenue in mobile businesses, security threats, and the absence of in-house product design. The report employs Porter's five forces model to assess the impact of IT on Telstra's business, evaluating factors such as rivalry, supplier power, threat of substitutes, customer bargaining power, and the threat of new competitors. It explores how IT supports Telstra's business, examining IT strategic steps taken and mistakes made by the CIO, along with overlooked opportunities. Furthermore, the report identifies strategic IT risks and challenges, such as rapid technological changes and increasing competition, and analyzes factors contributing to both Red Ocean and Blue Ocean strategies for IT within Telstra, offering insights into how the company can maintain its competitive edge in the telecommunications market. The conclusion summarizes the key findings, emphasizing the importance of IT strategies for Telstra's profitability and customer satisfaction.

Running head: STRATEGIC INFORMATION SYSTEM INTO TELSTRA
Strategic information system into Telstra
Name of the Student:
Name of the University:

1STRATEGIC INFORMATION SYSTEM INTO TELSTRA
ABSTRACT
Telstra is largest telecommunication as well as information service provider into Australia.
The organization offers mobile and also internet services. The report summarizes a short
introduction of main operations of Telstra and the entire body of the report discusses about
the strategic analysis of the organization into Australia. Present as well as future directions
of the organization are also discussed. Concept of Red Ocean and Blue Ocean strategies
are also analyzed in this report.

2STRATEGIC INFORMATION SYSTEM INTO TELSTRA
Table of Contents
INTRODUCTION..................................................................................................................... 3
1.0 STRATEGIC ANALYSIS.................................................................................................... 3
1.1 Business challenges of Telstra......................................................................................3
1.2 Top five business priorities of Telstra...........................................................................3
1.3 Porter’s five force model to review impact of IT into Telstra........................................3
2.0 STRATEGIZING................................................................................................................ 5
2.1 Use of IT to support business of Telstra........................................................................5
2.2 IT strategic steps taken by CIO during three years.......................................................5
2.3 IT strategic mistakes of CIO during past three years....................................................5
2.4 Significant IT opportunities overlooked out by CIO throughout past three years.........5
2.5 Top strategic IT risks and challenges faced by Telstra.................................................5
2.6 Identification of factors contribute to Red Ocean and Blue Ocean for IT into Telstra. .6
2.6.1 Factors to contribute of Red Ocean for IT into Telstra...........................................6
2.6.2 Factors to create blue ocean strategy in Telstra.....................................................6
CONCLUSION........................................................................................................................ 6
REFERENCES........................................................................................................................ 7

3STRATEGIC INFORMATION SYSTEM INTO TELSTRA
INTRODUCTION
Telstra is a leading telecommunication and technology company within Australia.
The organization provides full range of communications and competing into
telecommunications markets. The organization offers services and competes into the
Australian telecommunication market. It provides services of mobile telecommunication
content (Telstra.com.au 2017).
The report discussed on strategic analysis of Telstra with its business challenges
and priorities consisting of Porter’s five force model to review impact of the IT into
business operation of Telstra Corporation Limited.
1.0 STRATEGIC ANALYSIS
1.1 Business challenges of Telstra
Following are business challenges of the Telstra:
a) There is raise of demand but the prices are falling.
b) Telstra responds to the growing demand but there is an increase of range of
services. Each of the services are operated with discrete niche, therefore none of
the devices are interacting.
c) Telstra is falling of revenue into its mobile businesses. The revenue of mobile is
decreased by 8.7 percent in last six months (Telstra.com.au 2017).
d) There are security threats and challenges that the information is being hacked
by the hackers.
e) Telstra is not designing and manufacturing of its own products. It has purchased
its mobile network from elsewhere.
1.2 Top five business priorities of Telstra
Following are business priorities of Telstra:
a) Telstra targets everyone towards their mobile network based on age, location
and income to enjoy the benefit of telecommunication technologies.
b) They work into strategic approaches to identify and minimize the
environmental impact of their products and operations (ABC News 2016).
c) The organization strives to deliver of customers and growth into revenue.
d) Continue into invest into long term growth
e) Acceleration of productivity programs (Computerworld 2013).
1.3 Porter’s five force model to review impact of IT into Telstra
Intensity of existing rivalry: Telstra has few competitors, which is positive for the
organization. The governmental policies as well as regulations are limiting the competition.
Telstra has large industry size to gain a large market share. Due to fast growth of industry,
it increases revenue that makes a positive affect into Telstra (Wheelen and Hunger 2017).

4STRATEGIC INFORMATION SYSTEM INTO TELSTRA
Bargaining power of suppliers: There is lower cost of switching suppliers due to
less bargaining power. Low concentration of the suppliers means that the suppliers have
low bargaining power. The critical creation inputs are comparable, and then it is easier to
equal the efforts (Hill, Jones and Schilling 2014).
Threat of substitutes: There is low performance product means that the
customers are fewer switches to other products. The products are low quality. When the
products as well as services are varied, then the customers are less to find similar products
services to meet their requirements (Peppard and Ward 2016).
Bargaining power of customers: The customers are paying further for single
product which definitely affects the organization. There are huge numbers of consumers,
and then no consumers are tending to negotiating leverage (Hill and Jones 2013). As the
customers have limited choices, then it ends up paying more for available product.
Threat of new competitors: Telstra should improve their brand value to compete
into the market. Higher sunk cost makes it critical for the competitors to enter into new
market.
Figure 1: Porter’s five forces model
IntensityofexistingrilvalryRelativelyfewercompetitorsGovernmentlimitsthecompetitionLargersizeofindustryFastergrowthrateofindustryThreatofsubstitutesLowercostforswitchingsuppliersLowerconcentrationofthesuppliersCriticalinoutofproductionaresimilarBargainingpowerofsuppliersLowerperformanceLowerqualityProductdifferentiatonBargaingpowerofcustomersProductisimportantforthecustomersLargernumberofcustomersLimitedbuyerThreatofnewcompetitorsStrongchannelofdistributionnetworkStrongbrandnameHigherrequiremnetofcapital

5STRATEGIC INFORMATION SYSTEM INTO TELSTRA
(Source: Ethiraj, Gambardella and Helfat 2017, pp-3)

6STRATEGIC INFORMATION SYSTEM INTO TELSTRA
2.0 STRATEGIZING
2.1 Use of IT to support business of Telstra
Telstra uses of information and communication technology (ICT) solutions to deliver
of positive telecommunication services to the customers. ICT solutions also help the
organization to achieve sustainability into the business (ABC News 2016). With support
from IT, the organization developed innovative products which help into global technology
to connect with other people. It will help to gain profitability as well as market share.
2.2 IT strategic steps taken by CIO during three years
a) The cloud division of Telstra joined with Cisco to launch of own cloud services to
become first global partner into the business process (Wheelen and Hunger
2017).
b) The organization invests into technology for improving cost efficiency as well as
driving of growth.
c) Design and implementation of innovation process of telecommunication network
as well as products
2.3 IT strategic mistakes of CIO during past three years
a) In the year 2016, due to sudden system shutdown, the customers of Australia are
not able to make and receive calls for two hours after two many nodes are fault.
b) Telstra failed to market as well as communicate the IT values to the customers
and their telecommunication network users (Slack 2015).
c) The technology project are time consuming and expensive. Therefore, Telstra
has made larger investment into IT infrastructure and deployed into complex
application.
2.4 Significant IT opportunities overlooked out by CIO throughout
past three years
During the past three years, CIO had missed out the opportunities of digital
transformation which will test leaderships across Telstra. Driving of new digital workplaces
is harnessing the power of cloud as well as mobile. The new technology is available for both
customers and employees. Use of advanced IT technology should empower Telstra to drive
innovation as well as growth in their market share. It also helps to raise the profitability
(Rothaermel 2015). The market segments of Telstra are mobile telecommunication
services, broadband access, internet services and IT management into telecommunication
network. The opportunities are strategic IT growth plan. There is an increasing demand of
telecommunication services and growth of IT market. The organization also missed out the
opportunities to launch of 4G mobile broadband network.
2.5 Top strategic IT risks and challenges faced by Telstra
The risks and challenges faced by Telstra are rapid change in technology and
increasing of competition of other IT organizations. Technology is changing and this

7STRATEGIC INFORMATION SYSTEM INTO TELSTRA
changes lead to render of equipments, services as well as technical obsolete (Peteraf,
Gamble and Thompson 2014). It will affect the competitiveness and needs the organization
to raise capital expenditures to maintain of competitive positions (Slack 2015). In order to
mitigate the risks and challenges related to technology, Telstra are required to analyze the
changes previously before it affects the products as well as services leveraging of new
technology.
2.6 Identification of factors contribute to Red Ocean and Blue Ocean
for IT into Telstra
2.6.1 Factors to contribute of Red Ocean for IT into Telstra
a) Telstra should develop trusted relationships with the customers so that they
become more loyal as the organization provides high quality services.
b) Create of revenue beyond advertising and marketing services with new
offerings for customers (Telstra.com.au 2017).
c) Implement of content delivery model by lowering cost and emphasizing
innovative value by creation of value curve
d) Innovation of new products and pricing models to quicken the digital world
e) Development of new applications in order to exploit of online content
2.6.2 Factors to create blue ocean strategy in Telstra
a) Use of leadership skills to improve the entire organizational performance of
Telstra, it boosts the team engagement and motivation of the workers in their
job
b) Decreasing of employee turnover, raising of customer loyalty and
absenteeism leads to improve the profitability of the organization
(Computerworld 2013).
c) Implementation of new innovative strategies for driving of profitability and
market growth (Slack 2015).
d) Delivering of products and network services at lower cost
e) Executing of higher level leadership activities at lower cost
CONCLUSION
It is concluded that Telstra is a telecommunication company that is offering of
telecom services to the customers. This particular report analyzes the main area of
operations of Telstra. Strategic analysis of the organization is discussed to find out the IT
strategies used into the organization to increase their profitability as well as customer
satisfaction.

8STRATEGIC INFORMATION SYSTEM INTO TELSTRA

9STRATEGIC INFORMATION SYSTEM INTO TELSTRA
REFERENCES
ABC News 2016. Telstra faces a $3b black hole in lost earnings once NBN rollout is
finished. [online] ABC News. Available at:
http://www.abc.net.au/news/2016-05-20/telstra27s-243-billion-nbn-blackhole-puts-
dividends-under-pre/7432910 [Accessed 2 Sep. 2017].
Computerworld 2013. Telstra to face challenges in broadening its business: analyst.
[online] Computerworld. Available at:
https://www.computerworld.com.au/article/523301/telstra_face_challenges_broadening_its_
business_analyst/ [Accessed 2 Sep. 2017].
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2017. Reviews of strategic management
research. Strategic Management Journal, 38(1), pp.3-3.
Hill, C.W. and Jones, G.R., 2013. Strategic management theory. South-Western/Cengage
Learning.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building
a digital strategy. John Wiley & Sons.
Peteraf, M., Gamble, J. and Thompson Jr, A., 2014. Essentials of strategic management: The
quest for competitive advantage. McGraw-Hill Education.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.

10STRATEGIC INFORMATION SYSTEM INTO TELSTRA
Telstra.com.au 2017. Telstra - Our company. [online] Telstra.com.au. Available at:
https://www.telstra.com.au/aboutus/our-company [Accessed 2 Sep. 2017].
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.