Strategic Development Tools and Telstra Case Study Analysis

This essay provides a comprehensive overview of strategic development tools, including PESTEL analysis, SWOT analysis, Porter's Five Forces model, and Porter's generic strategies. The essay uses Telstra Corporation Limited as a practical case study to illustrate how these tools are applied to analyze both the internal and external environments of a business. The PESTEL analysis examines political, economic, social, technological, environmental, and legal factors influencing Telstra. The SWOT analysis evaluates the company's strengths, weaknesses, opportunities, and threats. The Porter's Five Forces model assesses competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entry within the telecommunications market. Finally, Porter's generic strategies, including cost leadership, differentiation, and focus strategies, are discussed in the context of Telstra's strategic planning and development. The essay concludes by emphasizing the vital role of these strategic development tools in effective decision-making and strategic planning for businesses like Telstra.

ESSAY

Table of Contents
INTRODUCTION...........................................................................................................................1
PESTEL Analysis........................................................................................................................1
SWOT Analysis..........................................................................................................................2
Porter's Five Forces model..........................................................................................................3
Porter's generic strategies............................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Strategic development tools are considered as assisting techniques which are used in
making strategies and plans for development and growth (Kunc and Bhandari, 2011). The
strategies and the development in general business context are elaborated with a business case
scenario. Different type of strategic development tools is used as PESTLE, SWOT analysis,
Porter's Five Forces model and Porter's generic model is defined in this essay. In order to better
understand the concept of strategic development, a practical example of Telstra is selected in
order to analyse its internal and external environment.
PESTEL Analysis
This strategic marketing/development tool is a technique used by marketers to do proper
inspection and monitor the external marketing environment or macro factor that would have
impact on an organisation. There are many macro environment factor that could affect the
planning, production and profit of an organisation for example – introduction of new laws,
change in the tax rate, demand of customers, alteration in trade policy and may be demographic
change of an area etc. Organisation can maximize their opportunities and minimize threats, if
there is a proper examination and analysis of these macro environmental factors at regular stages
(6 months minimum).
The word PESTEL indicates “political, economic, social, technological, environmental
and legal aspects” which plays an important role in business and strategy planning, business and
product development and examine reports.
Political Factor contains government policy and may have a major impact on Telstra
Corporation Limited. It refers to the pressure and opportunities brought by political parties. like-
election and political trends, corruption, wars, terrorism and conflicts etc. due to which business
operations of Telstra can get influenced.
Economic factors affect the economy of the country and performance of business
enterprise like Telstra, which would directly impact on the operational functions of an
organisation and its profitability. Like-tax rate, interest rate, national/international exchange rate.
Social factors focus on collective environment and recognise new trends. It helps
marketer of Telstra to further understand the customer's need and wants (McGrath, 2012). Like-
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lifestyle trends, consumer buying new pattern. Telstra Limited is influenced by the current trends
in telecommunication market.
Technological factors keep on changing because of rapid changes in technology. It relates
to the innovation and development in technology that could affect a market or industry. Telstra is
a telecommunication company due to which this factor plays a major role in the operations like
research and innovation, maturity of technology.
Environmental factor relates to the biological effect that will affect demand for company
product and business functions will be operated. Like- impact of weather, reduction of carbon
affects various operations of Telstra such as supply chain management and warehousing.
Legal factor- business may be affected if there is not a proper understanding of lawful factor, so
they must be aware of any changes in legislation. Like-consumer protection, international
legislation.
SWOT Analysis
A full study of internal and external environment is an important part of a good strategic
planning process (Bratt and et. al., 2011). An inside analysis of Telstra means study about
strengths and weakness of this organisation. An external study means opportunities and threats
for Telstra Limited. Such an analysis of the strategic environment is referred to as a SWOT
analysis.
SWOT stands for “strength, weakness, opportunities and threats” which is an assessment
model that measures what an organisation can and cannot do, and its potential opportunities and
threats. This analysis focus on providing helpful information about Telstra in order to match their
resources and capabilities to the competitive environment in which they work. The primary
objective of SWOT analysis is to help organisation to develop an awareness system of all the
factors involved in a decision making.
Strengths refers to the capabilities and resources of a business which separates it from the
competition and gives advantage over the other. Like Telstra is efficiently established in
community links, has customer base, strong brand name, unique technology etc.
Weaknesses in a business defines lack of some strength that may be viewed as a
weakness which may stop Telstra to perform at its highest level, so these area needs to improve.
Like-limited production resources and manpower affects functional operations of Telstra.
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Opportunities is an analysing factor that may affect growth and profit development for an
organisation as it generates new opportunities like- by considering trend of buying local
products, Telstra can capture even greater market.
Threats- those factor which may harm organisation because of changes in external
environment. Like- Telstra is operating in a monopolistic environment where there is huge
number of competitors.
Porter's Five Forces model
This is one of the strategic tools introduced by the Michael Porter who was professor of
Harvard Business School. This model mainly concerned with managing business structure. It
became more approachable and highly respected business strategic tool. This model mainly
focuses around five major elements which are defined as follows;
Competitive rivalry, which defines the strength of competitors found in organisational
context. This helps to identify the numbers of rivals working in market and where the products
and services stands in competitive market (França and et. al., 2017). Aggressive pricing
strategies, heavy discount rates are some factors considered in this force. In case of Telstra,
competitive rivalry is moderate as countries like Japan has a significant scope of competition.
Supplier power is another force of this strategic tool which defines the nature, scope and
strength of suppliers. It helps to determine the potential supplier’s organisation have and the
power of fluctuating the price of supplies. It depends upon the services and the products provided
by suppliers at low cost. This force has a high influence on Telstra has raw material like cables
has high scope of bargaining.
Buyer's power is one of the important and affecting force which mainly defines the
strength of buyers. Potential buyers subject to products and services are analysed in this
particular force. It helps to analyse the flexibility of Telstra in terms of fluctuating the price of
products and services subject to potential buyers. This factor also highly influences Telstra.
Threat of substitution analysis assists Telstra to identify the position, sales or market
group and customer unit subject to alternate market in organisational context. There is
comparison made between the substitute products that automates an important process, people
may substitute the products. This force has low affect on Telstra as there is less number of
companies who has acquired satellite rights.
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Threat of new entry helps to determine the position of business like Telstra in existing
market and entry of new organisation. There is an analysis regarding the ability of people to
enter in market. It provides a feasibility to enter in industry and in market.
Porter's generic strategies
This model development tool is considered essential in terms of operating the functions
and operations of Telstra for better growth and development. This strategy was given by Michael
Porter in 1985 in this book, “competitive advantage: Creating and sustaining superior
performance. Porter gives the name of Generic strategies to this model. This is focused around
two main fields which are cost and differentiation. Telstra is using this model in order to identify
various strategies which can be beneficial for them. It is elaborated as follows;
Cost leadership strategies, which are considered as ways to attain competitive advantages
and the edge to gets the sale and takes away from customers. There are three main ways within a
cost leadership which as increasing profits by reducing cost and charging industry average
prices, increasing market share through charging lower price, making reasonable profit on each
sale and by reducing cost.
The differentiation strategy mainly helps in making the products and services more
specific and attractive from competitors (Duggan, 2015). It mainly based upon the nature, scope
and the industry remains involve in features, durability support and functionality. The brand
image of Telstra is considered in mind while preparing the strategies and plans.
Focus strategy mainly helps to centralise the actions and the efforts at desired section and
the dynamic forces are used to elaborate the sections for the specific market in which Telstra is
operating. It helps to determine the market needs mainly associated with exploring the sales
functions of business, the plans and the strategies for the enterprise (Parekh and et. al., 2011). It
tries to develop products and services viable to customers at low cost with well specified
products which can be helpful to attain growth of Telstra.
CONCLUSION
As per above report, it is considered that strategic development tools play a vital role in
strategic planning and decision making of Telstra. There are four strategic development tools
which analyses the environment and strategies of Telstra and they are defined in the above essay
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as PESTEL, SWOT analysis, Porter's Five Forces and Porter's generic Strategies subject to
effective strategic planning and development.
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REFERENCES
Books and Journals:
Bratt, C. and et. al., 2011. Assessment of eco-labelling criteria development from a strategic
sustainability perspective. Journal of Cleaner Production. 19(14). pp.1631-1638.
Duggan, P. M., 2015. Strategic Development of Special Warfare in Cyberspace. Joint Force
Quarterly. 79(4).
França, C. L. and et. al., 2017. An approach to business model innovation and design for strategic
sustainable development. Journal of Cleaner Production. 140. pp.155-166.
Kunc, M. and Bhandari, R., 2011. Strategic development processes during economic and
financial crisis. Management Decision. 49(8). pp.1343-1353.
McGrath, M. E., 2012. Setting the PACE in product development. Routledge.
Parekh, A. K. and et. al., 2011. Managing multiple chronic conditions: a strategic framework for
improving health outcomes and quality of life. Public health reports. 126(4). pp.460-
471.
Online
Porter's Generic Strategies, 2015. [online] Available through:
<https://www.mindtools.com/pages/article/newSTR_82.htm>.
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