MGT302A/BIZ303: Strategic Management - Telstra Case Study Report

This report provides a strategic analysis of Telstra, a major telecommunications company in Australia. It begins with an executive summary outlining the report's objectives, which include assessing Telstra's strategic framework, decision-making processes, and the impact of internal and external factors. The report then delves into an evaluation of Telstra's organizational environment, utilizing Porter's Five Forces, PESTLE analysis, and value chain analysis to understand the competitive landscape and internal capabilities. It analyzes Telstra's competitive advantages, focusing on its technology and network capabilities. Furthermore, the report examines Telstra's strategy formulation, including its vision, corporate strategies, and initiatives in cost leadership and differentiation. The report concludes with recommendations for improvement and a summary of findings, supported by secondary sources such as company websites and academic articles. The analysis aims to provide insights into Telstra's strategic decisions and its position in the market.

Telstra Strategic management

STRATEGIC MANAGEMENT-TELSTRA 1
Executive summary
The aim of this report is to assess the strategic framework of Telstra. Strategic
management is the process of continuous planning and monitoring to analyses the external and
internal environment of the company, so that the organization can meet their objectives after
assessing the market and business requirement, with serving the better business strategy.
Innovation and emerging technologies and other market trends are forcing organizations to make
decision strategically and reach to the success.
Telstra is one of the largest telecommunication industries based in Australia, delivering a
wide range of telecommunication products and services. The report will assess how the company
will make decisions in the context of their business strategy. In addition, it will also evaluate that
how external and internal factors including risk, are impacting company’s overall strategy and
decision-making process. All the statement will be supported by secondary sources that include
the websites of the company, books and journal articles.
Contents

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Introduction......................................................................................................................................3
1. Evaluation of organizational environment...............................................................................4
1.1.1 Porters model...................................................................................................................4
1.1.2 Pestle analysis..................................................................................................................5
1.2.1 Value chain analysis........................................................................................................5
2. Analysis of Competitive advantage.........................................................................................7
3. Strategy formulation and choices.............................................................................................7
3.1 Vision.................................................................................................................................7
3.2 Corporate strategy and goals..............................................................................................8
3.3 Initiatives cost leadership and differentiation....................................................................8
4. Recommendations and conclusion.........................................................................................10
Bibliography..................................................................................................................................12

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Introduction
Telstra Corporation Ltd is the top telecommunication service provider located in
Australia. The organization operates and builds the telecommunications network, mobile,
internet and various other services and products. The company has a long history in Australia
originated with the Australia post as the “Postmaster general department” (Telstra, 2019).
The report will analyze the company’s organizational environment. It will also assess its
internal and external factors with the use of porter, pestle, and value chain analysis and also
assess the company’s vision goals and initiatives. The report will also provide a recommendation
to improve organizational productivity.

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1. Evaluation of organizational environment
1.1.1 Porters model
Threat of new entrance
Major rivals of the company are Optus, Primus, AAPT, and Vodafone. Telstra, Optus and
Vodafone operates GSM mobile webs and taking the market portion of approximately 57
percent, 31 percent, and 11 percent severally as of 2018 (university, 2018). Telstra is still leading
the haul (Daly, 2018).
Bargain power of provider
Telstra has largest suppliers network. They have irresistible dominance into the
telecommunication market and also in all segment of the market. The wholesale share of the
company is 94.1 percent, which contains the basic access lines resold by its rivals (Telstra,
2018).
Bargain power of consumers
The shift costs crosswise diverse service suppliers are moderately lesser than before the
liberalizing in 1997. The strength per unit area has been additional to the industry on the
stipulation the quality and coverage of the products and service web which customers is most
worry about (university, 2018).
Potential of New Entrants
The threat of a substitute to service or products is high if it deals a value proposition
which is uniquely diverse from the current offering (Kranzbühler, 2018). Telstra can tackle the
situation and can lead the role by being service-concerned with than just product oriented also by
the switching cost for the customers (university, 2018).

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Rivalry barriers
The company has increased a strong status in the telecommunication market for its new
engineering and R&A D undertakings. Hence to vie with the Telstra new organizations will hold
to tolerate big set up price. On the other side, Telstra contains of many extremely focused assets.
It might be difficult to sell when challenging congestion.
1.1.2 Pestle analysis
Technological factor
The company providing the HD voice calling that enable the make calls over 4G and
4GX services also company provides rich communication services. The forthcoming changes are
that the company Accelerating 5G for Australia and the international market (Pugh, 2019).
Political factors
Political factors include laws such as employment laws, consumer laws, and other
environmental laws. Also regulatory changes by ACCC impact the company business
performance. Complex telecom compliance laws also impact the company’s potential in the
domestic and international market (Gregory, 2018).
1.2.1 Value chain analysis
Core competencies and support activities comprise the firm infrastructure, HRM,
technology development and procurement. With the HR department of the company have a total
of 165 employees (Telstra, 2018). The technology department is the major department of the
company as it captures the new emerging opportunities in like software, digital media, and e-
health. The procurement department obtains IT and network tools from its suppliers and vendors.
The company also procures spectrum for better bandwidth (Telstra , 2018).
Inbound logistics

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With the inbound logistics, the company uses network and electronic components for
instance gold and tin tungsten are extracted from the earth (Telstra, 2019).
Operations
With the communications operations, the company develops the new areas for
connectivity and also maintains the network facilities. Apart from that the company also
maintains a constant innovation process (Telstra , 2018).
Inbound logistics
Manufacturing, transport, and logistics operations of the company are undergoing digital
disruption driven by customer demand for personalization and the requirement of differentiating
with services (Telstra , 2018).
Sales and marketing
Installation is done effectively and also products are sold in the retail stores (Telstra ,
2018).
Support and services
The company serves greater services and influence extends beyond operation and results.
Also, the company customer-centered approach of the company enhances the customer
experience. The SDG goals of the company comprise 17 goals and 169 targets which reflected
the sustainability strategy (Cross, 2018).
2. Analysis of Competitive advantage
2.1 Competitive rivalry
The company has technology and network capabilities which can keep millions of
customers and business connected every day and this is the largest source of competitive
advantage (Telstra, 2019). As many key trends and opportunities coming from increasing

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demand for data, hence the company has set up the network for the coming years and digitization
strategic programs that provide its customers best experience with the more data, devices and
better connectivity. This strategy of Telstra is killing the Optus, TPG, and Vodafone and make
them victim for the next 3 to 4 years. However, Optus giving equal competition to Telstra.
(Financial review, 2018).
Apart from that, the company is giving various offers to its customers with the limitless
all data plans at the very low cost for the three years also they reduced the number of plans from
1800 to 20 and also accepting the 5G program for the world. This move to providing unlimited
data plan in Australia is important as Optus debacle over 2018 FIFA world cup reviews that
Consumers are continuously dependent on the network for content consumption. It also states
that the not only mobile network for connectivity (Collins, 2019).
3. Strategy formulation and choices
3.1 Vision
The vision of the company is to make Telstra a globe’s number one technology
organization that empowers worlds to connect. Also, the aim is to build a connected future by
committing to stay close to the customer and provide the best experience. Also delivering the
better technology with the wide network (Telstra, 2018).
3.2 Corporate strategy and goals
The purpose of the company is to establish a connected future between its customers so
that everyone can thrive. They also appreciate their stakeholders and shareholders and also
provide up to date information about all the information about the company. Telstra created the
innovative objectives that help to maximize the value of its stakeholders. For instance, as the

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market leader of Australia, it would benefit all the stakeholders as customers would also get a
high quality of services. The organization is performing well and competing in the international
market (Telstra, 2019). The corporate governance also supports its business strategy.
Corporate strategy of the company is to allow them to lead the market of Australia by
abridging the services and products to enhance customer satisfaction. Also, simplify all the
operations that help to decrease the cost base. The strategy of the company built on four pillars:
 Radically simplify the service and products offering, reduce the consumer’s pain points
and develop all-digital experience.
 Establishing a standalone substructure business unit to run the performance
 Greatly simplify the structure of the company and the ways of working to empower the
people to serve the consumers.
 Leading cost drop platform and project portfolio (Telstra, 2018)
3.3 Initiatives cost leadership and differentiation
According to the July 2018 report of the company, it can be analyzed that the leadership
team of the company utilized both kinds of leadership cost leadership and differentiation. The
strategy of the leadership of the company is to ensure the rapid and effective delivery. Under the
leadership of Mr. Penn the company, the company’s strategy is to offer unlimited data service for
the next three years at the cost to Telstra of around 500 million dollars. This strategy proves that
the company running with the cost leadership and earning the profit by providing its products
and service at the lower cost than its competitors. This strategy helped the company to increase
the customers and current organization is earning 4 billion per year with the revenue of 10$.
With the differentiation leadership, Mr. Penn also provides the strategy as he states that by mid
next year they will fully change the market and service and product strategy in. And in order to

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deliver these changes they are publicizing the new E2E products service and technology division.
It assessed that the company is significantly growing the technical capabilities with the products
developments. Mr. Penn also announced the company will deliver the leading innovation in
networks with and providing the 5G services to the world. The leader states that Australian
household with no fixed broadband service is around 15 percent and is expected to rise to 30
percent. This strategy of providing a different and unique service to its customers will lead to a
competitive advantage for the company and increase the customer base in return.
Ultimately the basic and efficient structure will reduce the duplication within the company and it
will help the company to improve the service that the company provides its customers. Hence the
leadership team of Telstra uses both of the leadership and sustains the competitive advantage for
the long term (Telstra, 2018).
4. Recommendations and conclusion
It is concluded by me from the above discussion that the Telstra is the international
telecommunication industry based in Australia. With the Porters and pestle model’s I understood
that the company is facing the decrease rate due to the increasingly competitive environment.
Optus and Vodafone are giving tough competition to the Telstra. The supplier network of the
company is wide and the organization has various competitors such as Optus and Vodafone. But
I still consider Telstra is leading the haul with the highest number of users, as there is a large
difference between the users of Telstra as it has 16 million users and Optus has 9.5 million users
Company has the vision to make Telstra number one technology and to achieve the vision, the
company is using both cost and differentiation leadership. Differentiation strategy helps
company to fulfil the need of the customers and also solve their problems. IT also helps in the

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put focus on the marketing trends so, hence this lead to gain market knowledge which can be
very useful in increasing the sale of the services and products.
Yet after assessing the differentiation strategy, I have analyzed that there are various cons of
differentiation of this leadership such as a negative feature of this strategy happens when
organization leaders take it too far, that means company is creating which is off the wall, also
customer sometimes believes that is it true or not and they don’t consider the benefits of the new
products (Zollo, 2018). Hence the company has to focus on the need of the customer. As the
customers’ needs are to get unlimited data at the lower cost. Hence Telstra has to adopt cost
leadership as a core strategy and then it has to align with the differentiation strategy and it can
help also as company’s dominant market positions is stable as most of the businesses dependent
upon lasting network capability of Telstra.
Also when the company gets too specific how it could be different they might exclude the
large demographic (Li, 2019). Hence according to me, the company has to target the entire
segment and analyze the need for all segments of customers. Also if the niche market is strong,
the large is enough to support this level of niche differentiation. Apart from that, there are some
tools and techniques that I want to suggest to Telstra. They have to apply cloud-based solutions
that can integrate on top of OSS/BSS infrastructure. Telstra also has to start tacking emerging
customer-related metrics such as KPI, QOE, and QOS (Daly, 2018).

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