Management Analysis Report: CSG Limited, Business Strategy

This report offers a comprehensive analysis of CSG Limited, an Australian IT solutions company, addressing its current challenges in market capitalization and internal communication. It employs various analytical tools, including SWOT, VRIO, PESTEL, and Porter's Five Forces, to evaluate the external, internal, and industrial environments. The external analysis highlights the impact of government policies and economic conditions, while the industrial analysis focuses on market competitiveness. Internal analysis, using frameworks like McKinsey's 7S and Three Horizons, identifies issues such as limited product diversification and innovation. The report aims to provide strategic insights for CSG Limited to improve its market position and address internal management challenges. The analysis covers political, economic, social, technological, legal, and environmental factors, alongside industry-specific threats and opportunities.

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Executive summary
CSG limited is one of the renowned IT solution companies in Australia. Currently, the company
is facing severe problems regarding not only its market capitalisation but also communication
gap between the new CEO and the existing management. In this regard, this report tries to
implement different analytical tools in order to understand the external, internal and the
industrial environment of the organisation. The external environmental analysis states that the
pressure of the government and liberal economic approach makes it difficult for the organisation
to refurbish its business strongly. The industrial approach argues that high competitiveness in the
market ushers new organisational goals and objectives for the organisation to penetrate into the
market with new approaches. On the other hand, the internal analysis highlights the lack of
innovative ideas and product diversification obscure the path of further development for CSG
Limited.

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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Background................................................................................................................................4
3.0 Define the problem(s)................................................................................................................5
3.1 SWOT Analysis.....................................................................................................................5
3.2 VRIO Model..........................................................................................................................6
4.0 External Analysis.......................................................................................................................7
4.1 PESTEL Analysis..................................................................................................................7
4.1.1 Political...........................................................................................................................7
4.1.2 Economic........................................................................................................................8
4.1.3 Social..............................................................................................................................8
4.1.4 Technological.................................................................................................................9
4.1.5 Legal...............................................................................................................................9
4.1.6 Environmental...............................................................................................................10
5.0 Industry Analysis.....................................................................................................................10
5.1 Porter’s 5 Forces..................................................................................................................10
5.1.1 Threat of entry..............................................................................................................10
5.1.2 Threat of substitutes......................................................................................................11
5.1.3 Bargaining power of customers....................................................................................11

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5.1.4 Bargaining power of suppliers......................................................................................11
5.1.5 Industry rivalry.............................................................................................................12
6.0 Internal Analysis......................................................................................................................12
6.1 Blue Ocean...........................................................................................................................12
6.2 McKinsey's 7s Framework..................................................................................................13
6.3 McKinsey's Three Horizons................................................................................................13
7.0 Conclusion...............................................................................................................................14
8.0 Reference.................................................................................................................................15
9.0 Appendices..............................................................................................................................18
Appendix 1.................................................................................................................................18
Appendix 2.................................................................................................................................19
Appendix 3.................................................................................................................................20
Appendix 4.................................................................................................................................21
Appendix 5.................................................................................................................................22
Appendix 6.................................................................................................................................23
Appendix 7.................................................................................................................................23
Appendix 8.................................................................................................................................24
Appendix 9.................................................................................................................................25

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1.0 Introduction
High competitive market in the Information and communication sector of Australia is
considered to be one of the major challenge for a number of companies. The digital industry of
Australia generates more than AU$23 billion approximately per year. It is associated with a
number of activities in the Information and communication technology industry with product
development facilities (R&D), technical assistance sectors and the global sourcing. From the
research of Anton (2018) it can be stated that the growing use of technology by the not only the
personal use but also for business development and professional activities it becomes an
important factor to put great impetus on the IT industry in Australia. The lucrativeness and the
great opportunity to build up an effective measure in course of delivering profitable measures
create a gateway for different IT companies to develop their business effectively.
In this regard, the purpose of this research is to deliver an understanding related to the
understanding that CSG Limited is facing in Australia. Therefore, putting emphasis on different
external and internal analysis tools like the PESTLE, SWOT, VRIO and Porter’s Five Forces
help to project the organisational issues from different point of views. Moreover, tools like
McKinsey's 7s Framework and McKinsey's Three Horizons is also going to be discussed in order
to formulate a deep insight into the challenges that CSG Limited is facing in Australian market.
2.0 Background
CSG Limited is a public listed company in renowned for providing business technology
to different business organisations. Build in 1988, the company has a number of technology
products and services in terms of the One Partner, One Money bill and One Cloud (csg.com.au
2019). Primarily focusing on the managed print business and print solutions that organisation

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strictly followed a great deal of other services in the field of fully managed IT services, cloud
communications, contact centred solutions and other professional services. According to Jackson
(2014) CSG Limited is known for largest dealer of Canon devices in Australia. As a matter of
fact, the company intends to deal with a large number of partner companies Melbourne Football
Club and Sydney Swans. As per the annual report of the company, the total sales revenue in
2017 was amounted $210,428. Moreover, the profit amount in the year 2017 was $43,715 (Alam
and Imran 2015). It proves the steady growth of the organisation and its role to cope with the
high competitive market in Australia extensively. Currently, the company operates in both
Australia and New Zealand with its headquarters located in Brisbane, Australia. Furthermore,
there are 600 employees presently working in this organisation and performing high quality of
working and skilled practices.
3.0 Define the problem(s)
Despite of the fact that CSG Limited is creating effective entry into the Australian
market, there are some challenges that the organisation is facing in order to consolidate its
foothold more effectively. It was further intensified with the change in the CEO as Julie-Ann
Kerin became the CEO and Managing Director of the organisation in 2012. A different
managerial approach and type of leadership quality posed some communication issues between
the top management and the CEO. In this context, this report is going to take the SWOT analysis
and the VRIO model in order to identify the challenges that the organisation will face in an
overall spectrum.
3.1 SWOT Analysis
Strength Opportunity

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 A reputed IT solution company in the
Australian public domain.
 Loyal customers who are identified as a
driving factor for the profitability of the
organisation.
 Expanding business effectively in Australia
and New Zealand.
 Prolonged experience of 30 years in the
particular field.
 Great workplace environment to enrich the
creativity of the employees.
The IT industry in Australia is booming
rapidly.
Demand in the market creates more
opportunity for CSG Limited.
Government endorsement for expanding the IT
market can also leave a significant impact
on the business orientation of CSG Limited.
Weakness Threats
 Limited products to offer.
 Absence of new products in the market.
 Lack of intention expand the market
internationally.
 The profit percentage is negative so that it
brings further introspection into the
organisational activities (annualreports.com
2017).
 New change in the management posed some
challenges regarding the aims and objectives
of the company.
Huge competitiveness in the market is
considered to be a major threat for CSG
Limited in the IT sector of Australia.
Lack of unique products is also posed a
challenge for the organisation.
Lack of adaptability for the employees can
create sever problem for the management.
International pressure and possible entry of the
global IT giants will render more challenge
for CSG Limited.

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3.2 VRIO Model
Elements Valuable Rare Imitable Organised
Financial resources √ x √ √
Human resources √ x √ √
Intellectual resources √ √ x √
Physical resources √ x x √
From this point of view, it can be stated that the financial resources of CSG Limited is
highly valuable and organised that can generate a strategic advantage in the highly competitive
market. Moreover, the human resource of the organisation is very much imitable which means
the CSG Limited has a strong base of recruiting power to appoint skilled people. Nonetheless,
due to the huge market of the IT industry, a large number of human resource is available into the
market that other companies can recruit. Despite of that the intellectual resources of the company
is highly unique and rare enough to deal with the process effectively. One of the major reason
behind this was the unique training process of the organisation that helps to build up a strong
intellectual property. The physical resources are also common so that there is opportunity for the
other companies to imbibe the resources as well.

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4.0 External Analysis
4.1 PESTEL Analysis
4.1.1 Political
As far as the political stability in Australia is concerned, the World Bank data calculated
the average value with 1.01. It means the country witnesses a strong political stability that is
effective for business in Australia. As a matter of fact, the Australian government also fixes a
stern focus on privatisation with the trade freedom percentage of 86.2 in 2018 (). As per the
report, it can be stated that in the financial year of 2019 it will rise up to 87.2 and leads to more
privatisation for the country (theglobaleconomy.com 2019). The imprisonment rate is also
increasing in a rapid pace that connotes a clear identification of the government effectiveness to
retain effective business environment. In this regard, the foreign trade regulations and controlling
the immigration are notably pointed out the efficacy of the government to create better situation
within the country.
4.1.2 Economic
In terms of the economic advantages for business in Australia, it can be stated that the
corporate tax rate within the country is same since 2010. The average corporate tax percentage is
30 and it is still prevalent within the country. Moreover, the unemployment rate is also low in the
country so that it will boost the aspirants to get desired jobs easily. The average unemployment
in Australia is 6.84% which is very low in case of a developed country (Lopes 2016). As a matter
of fact, the GDP of the country is growing steadily with the value of Australian dollar in the
second quarter of 2018 was 499.35. Besides this, the consumer power index has been seen with

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an average of 51.49 points which connotes a better market opportunity for the business
organisations to get potential customers.
4.1.3 Social
As per the research of Shahiduzzaman and Alam (2014) the demography of Australia is
changing its course with the advent of globalisation. Besides the, white Christian settlers there
are also Chinese, African and Indian people who are effectively contribute to the development of
the society (Lopes et al. 2016). Moreover, the indigenous culture puts more vibrancy into the
demographic changes. As far as the wellbeing of the Australian people is concerned, the birth
rate shows a systematic progress in the population with an average rate of 15.9. In fact, the
government and NGOs take necessary steps for combating with chronic diseases like obesity.
4.1.4 Technological
Innovativeness and unique performances of the population are also considered to be an
important facet for Australian business organisations. The innovative index proves that there is a
strong prevalence of innovation inside the country with an average value of 52.75. The
innovation capability index of the World Economic Forum also contributes through the patent
application with a value of 57.06 (Schwab 2019). Moreover, the use of advanced technology in
the business practice is becoming a trend in Australia with the implementation of artificial
intelligence, augmented reality and block chain technology. It creates a strategic competitive
nature of the Australian business companies to get more advantage through using advanced
technologies.

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4.1.5 Legal
Australia follows a strong business environment through putting great emphasis on the
workers. In this regard, there are several government regulatory and legal framework that are
entitled to safeguard the interests of the employees (fairwork.gov.au/ 2019). The Fair Work
Ombudsmen is there to create an equal opportunity for the employees to ventilate their problems.
Moreover, there is also the Fair Work Commission that deals with the unfair dismissal,
protection of employee rights and effective measures to deal with the wages, leave and other
cognate topics (fwc.gov.au/ 2019). Besides this, a healthy competition in the market is also
create better environment for the organisations to do business.
4.1.6 Environmental
For protecting the environment from further degradation and adverse impact of business
practice, the Australian government sets some rules and regulations in the name of Environment
Protection and Biodiversity Conservation Act 1999 (environment.gov.au 2019). Based on this act
the corporate organisations are entitled to follow matured step towards safeguarding the
environment. In response to this, concepts like eco-tourism green tourism with great emphasis on
the practice of corporate governance became a pertinent aspect for the business organisations to
do business in Australia.

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5.0 Industry Analysis
5.1 Porter’s 5 Forces
5.1.1 Threat of entry
The threat of new entry into the IT and Communication of Australia is relatively low in
compare to the global market. There are certain factors that are responsible for such conditions.
According to Shahiduzzaman and Alam (2014) the decreasing trend in profitability in Australian
market is one of the most important factors to restrict the new entrants to invest in the Australian
market. Moreover, the draconian government regulations pave the way for new companies to
enter into the Australian market. However, there are some threats that the existing organisations
in Australian IT market can get such as the patent rights, branding, customer loyalty and
accessibility of distribution.
5.1.2 Threat of substitutes
In the Australian market of IT industries, the threat of substitute product is limited and
moderate. As the business organisations controls the innovation and introduce new technologies
therefor the entire market is relied on their activities. The existing products in the market try to
maximise its customers and intend to create a loyal customer base (Guo and Liang 2016).
However, the government endorsement encourages the IT companies to take more responsibility
in incorporating extra effort for advanced technologies. Nevertheless, the willingness of the
buyers and price are also contributing equally to force for substituting a product effectively.
5.1.3 Bargaining power of customers
The power of the buyers in Australian IT market is very high because the IT companies
are not only manufacturing products but also offering services to the customers. Therefore, the