Strategic Management Report: Analyzing Atlassian's Business Strategies

This report presents a comprehensive strategic management analysis of Atlassian, a prominent Australian software company. It begins with an executive summary and introduction, outlining the report's purpose and scope. The analysis employs various strategic tools, including PESTEL analysis for macro-environmental factors, Porter's Five Forces for industry analysis, and the VRIO framework to assess Atlassian's core competencies and competitive advantages. The report delves into detailed discussions of the macro-environment, industry dynamics, company resources and capabilities, and competitor analysis. The report also examines Atlassian's strategic approach, distribution model, and unique culture. The conclusion summarizes the key findings and highlights the factors contributing to Atlassian's competitive advantage. The analysis considers the challenges and opportunities facing Atlassian in the rapidly evolving software market, offering insights into its strategic positioning and future prospects.

Running head: STRATEGIC MANAGEMENT
Strategic management- Atlassian case study
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Executive summary:
The report is prepared to evaluate the factors affecting the overall performance of the Australian
team collaboration software company that is Atlassian. Several strategic tools have been
implemented for conducting an in depth market analysis, competitors analysis and macro
environmental analysis. Strategic tool of PESTEL is employed for analysing the macro
environmental factors and the industry as a whole. Porters five force model is implemented for
analysing the life cycle stage of the industry and determining the attractiveness of the industry. In
addition to this, VRIO framework has been used to determine the most effective strategies in
terms of the capabilities and resource competencies.

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Table of Contents
Introduction:....................................................................................................................................2
Discussion:.......................................................................................................................................2
Macro environmental analysis:........................................................................................................2
Industry analysis of Atlassian..........................................................................................................2
Company analysis of Atlassian........................................................................................................2
Competitor analysis of Atlassian:....................................................................................................2
Strategy analysis of Atlassian:.........................................................................................................2
Conclusion:......................................................................................................................................2

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Introduction:
The paper elucidates the overall analysis of Atlassian, which is a software company
operating in Australia. Such overall analysis incorporates depiction of the macro environmental
analysis, competitor analysis, situational analysis, industry analysis and company analysis.
Framework of VRIO has been used for analyzing the core competencies, resource and
capabilities of the company. The life cycle stage of the industry is evaluated using the Porters
five forces analysis and the macro environmental factors affecting the performance of the
company is evaluated using PESTEL. In addition to the competitor analysis, resource similarity
and market commonality analysis has been analyzed for evaluating the competitor’s position.
The business model of software and delivery services is being disrupted due to rapid change in
the demands of customers. In this regard, it becomes essential to conduct the environmental
analysis to determine the performance of the organization.
Discussion:
Macro environmental analysis:
In this section, all the factors creating influence the organization and industry as a whole
is illustrated with the help of PESTLE analysis. Any change in the macro environmental factors
would affect the companies operating in the information technology services.
Political factors- The performance of Atlassian has been affected by the political factors
such as Brexit and election of United States president. It is so because these political events have
weakened the foreign dollar and have strengthened the US dollar. Several payments are received

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by the organization in US dollar, costs are incurred in foreign currencies, and therefore, it is
regarded as optimistic for Atlassian (Meyer et al. 2017). Therefore, the organization is impacted
positively in light of political scenarios.
Environmental factors- The performance of the company is impacted by environmental
factors such as change in the climatic conditions and the environmental management is done by
the organization engaging in the corporate social responsibilities. As per rule, human and
electricity are the two inputs used by the software companies.
Social factors- Trend of inclusion and acceptance of all people are some of the social
events that is expected to affect the operations of the business. Atlassian are vocal about the
inclusion for all as they considered themselves its proponent. It would make them attractive to all
such customers supporting the values and hence are regarded as positive factor (Aguinis et al.
2017).
Technological factors- Business growth of Atlassian is impacted by the advancement in
technology such as cloud computing and segment in technology that is Xaas business models. In
order to stay relevant, it is essential by the company to develop digital product. Total number of
potential customers can be increased by the development of the product with the help of software
development teams (Knight and Liesch 2016).
Economic factors- Any change in the environmental factors of the country such as
inflation, GDP growth rate and spending of consumers influence of the growth trajectory of
Atlassian.
Legal factors- The laws of cyber security and the potential trend in legal segment might
influence the performance of Atlassian adversely. With maturity, the product development and

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delivery of Atlassian can be influenced by higher standards of security. Furthermore, an increase
in the import tariff by the government of US also attributes for increasing the expenses and
because such products are subjected to the regulations and laws.
Industry analysis of Atlassian
Porters five forces analysis helps in providing a description of the life stage of the
industry in which Atlassian operates.
Supplier’s power- For the software company like Atlassian, employees are the main
inputs and there is extreme competition for the skilled workers. Regarding this, there can be
negotiation by the employees who are the suppliers of the input in terms of benefit package,
price and salary. Therefore, the bargaining power of suppliers in the technological companies is
high.
Buyer’s power- Some of the factors influencing the bargaining power of buyers are vast
scope of software implementation, cost and schedule and the customers in this industry has
higher switching cost. These entire factors make the bargaining power of buyer is medium. The
deployment of new model of the cloud software monthly subscription has resulted in raising the
power of buyer inversely and caused the switching cost to fall (Knight and Liesch 2016).
New entrants’ threat- The threat of new entrants is medium because of disruption in the
business models and rapid change in the service and demand of customers. In addition to this,
creation of the software product-attracting customer is somewhat difficult which makes the
entrance into the industry problematic along with the high cost of initial investment.
Furthermore, survival of the entrants is also difficult as in high evolving growth areas, it is

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required by the organizations to outpace their competitors in terms of cyber security, data
analytics and cloud computing techniques (Ansoff et al. 2018).
Competition within the industry- The long-term survival for the company entering into
the technological industry requires widening streams of revenue. In addition to this, intense
competition of the industry affects the long-term performance of the company and Atlassian
operating in the competitive technology services are impacted by such factors. Companies
having the potential of higher growth tend to be the leader in this sector and they compete on the
ground of platform, delivery, application and infrastructure (Usman et al. 2015). The saturated
market due to the maturity of the industry creates high degree of competition.
Threats of substitutes- For the availability of various enterprise software solutions and
any imaginable range of price and because the industry has reached the stage of maturity, threat
of medium level is faced by the software industry. The products offered by the medium and
small-scale enterprise also acts as substitutes as they are capable of creating homegrown
solutions such as word and Microsoft excel.
Company analysis of Atlassian:
Adoption of the VRIO framework would help in assessing the sustained competitive
advantage of Atlassian and such assessment is done by evaluating the capabilities and internal
resources and thereby competencies.
Valuable- The internal strength of the company lies in its unique culture along with the
management of knowledge. Higher percentage of revenue is deployed towards marketing and
building of greater products and the thoughts of promotion and distribution of the products is

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also getting changed. A substantial base of community users and customers is built by adopting
the strategy of word of mouth, which have been advocated for their solutions and brand. The
resources of Atlassian has low durability along with lower enduring value of resources and
capabilities. In addition to this, gaining and integration of new customers results in capturing of
the product value. Competitive superiority is one of the areas enduring value as the ranking of
resources and capabilities are higher (Jenkins and Williamson 2015). The core competency of
Atlassian lies in the manufacturing of software.
Rare- The factors that form the part of the success of organization is its distribution and
promotion strategies along with the adoption of the no force model. Promotion and distribution
are the two components of marketing mix that has been utilized extensively and effectively by
Atlassian. They have taken technological advantage in breaking down the staffs’ barriers and
scare capabilities lies in the connected model. In addition to this, the internal communication
channel and confluence are the platforms that helps in collaboration of employees. Atlassian also
employs quarterly innovation event such as ShipIt that helps in creating time so that employees
can step out of their everyday mindset and reinforcement of values of employees. It is also
implied by the customer style approach that product is available online and is free for trail.
Atlassian also well understand that the organization are driven by the experience and serving the
customers (Samson et al. 2017).
Inimitable- Sustainable competitive advantage can be experienced by the firm if it has
resources that are valuable and its imitation can be costly. The culture of Atlassian is unique and
is driven by the inspiring set of values and the interpersonal relationship along with the culture
forms the basis of capabilities of organization. Internal communication channel and confluence
helps in serving the collaboration of employees. Innovation at scale is the major challenge that

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Atlassian would face and sustaining in the competitive industry requires continuous innovation
(Michael et al. 2017).
Organized- Organization cannot confer any advantage when they cannot capture the
value from any strategic sources. Resources value changes continuously and it is essential to
constantly review such resources. The organized system of process, management, culture and
structure helps in realizing the potential of the valuable resources. Valuable resources of
Atlassian is captured by Atlassian are captured with the help of the financial resources so that
they are invested strategically and thereby helps in mitigating the threats and making the usage
of opportunities (Niazi et al. 2016). Therefore, the source of competitive advantage for Atlassian
is its resource. Products availability helps in ensured due to the distribution network of
organization.
Competitor analysis of Atlassian:
The software industry has some notable success factors, which incorporates product
capabilities, flexibilities, and total cost of ownership, scalability integration, global reach and
ease of use. There are three groups into which the competitors of Atlassian can be broken down
and this comprise of service and IT teams, software teams and business teams. Some major
competitors of Atlassian includes Symantec, Dendesk and Salesforce.com, IBM, Hewlett
Packard Enterprise and E bay. For becoming flexible to the changing needs of market and more
responsive to the demand of customers, these larger corporations are looking for the
implementation of new business models. All such companies are competing with the startups and
new players in the market by splitting into more nimble structures. The distinct business
strategies, innovation and targeted investment would help in providing better growth in revenue

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through separation. An inward look by the companies toward the improvement in the margin has
the tendency of losing shareholders and they are facing shrinking markets for some of their
legacy products (Breheny and McQuaid 2018). In order for the organization in the software
industry to sustained competitive advantage, widening the revenue streams is of utmost
importance.
Strategy analysis of Atlassian:
Atlassian is able to achieve competitive advantage based on their distribution model
concerning product strategy and their unique culture that helps in creating customer value.
Different elements incorporating the product strategy involves built for teams, easy adoption,
versatility, adaptable and the strategy that focuses on the customer satisfaction. Moreover, the
product strategy, distribution model and the culture of company helps in supporting the generic
strategy relating to distribution. It is required by Atlassian to adapt to the changing environment
by striking the balance between the strategy and suitability of the organization. The market
development of Atlassian should be expanded for gaining foothold in the industry and this
requires adoption of the business models as per the changing demands and requirement of
customers (Engert et al. 2017).

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Conclusion:
The report is prepared for addressing the different factors affecting the performance of
Atlassian. The differentiating factors of Atlassian is its unique culture, distribution and
promotion model and customer style approach that has helped it in gaining competitive
advantage. However, the challenging factor faced by Atlassian is innovation at scale and being
faced with the disruption by the more established and bigger technology companies. The
philosophy of no sales force in the current scenario is questionable and whether they would be
adjustable or compatible with the changing needs of the customer and market as a whole.
Therefore, the best way to support their sustained growth is to create expansion of workers
knowledge, achieving their mission, working out on their sales model and development of
market.

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