Strategic Information System Analysis: Telstra Business Overview

This report provides a strategic analysis of Telstra, a major telecommunications company in Australia. It begins with an introduction outlining the scope of the analysis, including business challenges, priorities, and competitive forces. The report then delves into the company's challenges, such as declining mobile revenue and struggles with resource alignment, and its key priorities, including customer satisfaction and growth. Porter's Five Forces model is applied to analyze Telstra's competitive landscape, considering its main competitors and market dynamics. The report further examines Telstra's IT strategies, including best and worst practices over the last three years, and missed opportunities. It identifies the top IT risks faced by Telstra and factors contributing to a red ocean strategy, while also suggesting a blue ocean strategy for future development. The report concludes with a summary of the key findings and recommendations for Telstra's strategic direction.

Strategic Information System M

Contents
Introduction..........................................................................................................................................4
1.2.1.1 Top Business Challenges of Telstra..........................................................................................4
1.2.1.2 Top Business Priorities of Telstra.........................................................................................4
1.2.1.3 Porter's Five Force Model....................................................................................................5
1.2.2 Strategizing..................................................................................................................................6
1.2.2.1 Information Technology's help to the Telstra...........................................................................6
1.2.2.2 Best IT Strategic Steps over last 3 years..............................................................................6
1.2.2.3 Worst IT Strategic Mistakes over last 3 years......................................................................6
1.2.2.4 Missed Deal of the Telstra....................................................................................................6
1.2.2.5 Top IT Risks of Telstra.........................................................................................................7
1.2.2.6 Factors that contribute to Red Ocean for IT in Telstra.........................................................7
Conclusion............................................................................................................................................7
References........................................................................................................................................7

Introduction
The telstra is the telecommunication company in Australia. It is taken for analysis. The business
challenges and priorities of the company is to be discussed. The competitors, customers of the
company is to be determined. The biggest IT risks that Telstra faces today is going to be
determined. The red ocean traps of the company and blue ocean strategy to develop the company
will be discussed.
Part 1 – Understanding and Strategy Analysis
1.2.1.1 Top Business Challenges of Telstra
Mobile Revenue

The business of Telstra that is related to mobile phones has been fallen. So the revenue
earned through mobile sales is decreased by 8.7% in 6 months of time.
Decrease in Sales
The main products that are under sale in Telstra is in the decreasing stage. Investors are in
worry that whether the business will get pick up or not.
Revenue of the Retail
Retail of the Telstra which offers the products and services based on telecommunication,
solutions to the customers who are individuals and medium sized sales saw a decrease by 5.6%.
Struggle to align resources
The Telstra is struggling to overcome the challenges which the company faces with the
alignment of the resources.
Software Sale
Due to the fast updates in other software based vendors, Telstra has more competitions in the
software sales (Henderson, 2002).
1.2.1.2 Top Business Priorities of Telstra
 The Telstra had planned to improve their environmental practices in a sustainable way with
lowest priority of about 39%.
 The Company decides to launch new products and services to their customers. This has the
priority with 48%.
 The Company is planning to make reductions in the cost of the products in which they
perform sales. This has 78% priority.
 The company has taken decision to concentrate more on the satisfaction of their customers.
This has high priority of about 82%.
 The company's main mission that has the highest priority of 87% is the achievement in their
growth (Xin, 2015).

1.2.1.3 Porter's Five Force Model
The above
diagram is the Porter's Five Force Model (Asad, 2012). Now this model is analysed for the Impact
of IT in the Telstra Company in Australia. The competitors of the Telstra are Optus and Vodafone in
Australia. These three are the main Telcos in Australia. As these three are in competition. They fight
to provide 4G network to all who lives in the country, even to the regional and rural areas of the
country.All over the Australia, at present Telstra provides 17.4 billion mobile services, 6.8 million
voice services and 3.5 million of retail fixed broadband services (Telstra.com.au, 2017). Telstra has
declared that it will cover 99% of the population in this year whereas Optus and Vodafone told that
they can cover 98.5% and 95% respectively. Telstra had put its effort by saying to piggyback some
small concerns with them and they are ready to offer the service to even other service providers of
the country. Thus in this way the Telstra balances its power over other telcos.

1.2.2 Strategizing
1.2.2.1 Information Technology's help to the Telstra
The 4th Generation network known as 4G is the major challenge among the telcos in Australia.
Telstra is working hard to achieve its aim to provide 4G to the 99% of the population in the country.
Now the company has appended 1.56 million 4G mobile subscribers to its different networks in one
year. The broadband connections has been in increasing state. So the Telstra covers 2.6 million
customers in Broadband connection.
1.2.2.2 Best IT Strategic Steps over last 3 years
 During the december month of 2016, Telstra signed an agreement worth $11 billion with the
federal government to make a sales on its coaxial cables made up of copper and hybrid fibre
to NBN Co. This agreement had pumped billions of dollars to the company.
 In the month of August, the company has chipped in an US based company on video
platform known as Ooyala. Telstra has invested $US270 million in this deal.
 In september, Telstra made a deal with Silicon Valley e-signature.
 The biggest investment of the Telstra is the deal in which they are going to invest $100
million for the establishment of a big Wi-Fi network across the country (Butler and Weill,
2007).
1.2.2.3 Worst IT Strategic Mistakes over last 3 years
 The telstra provides bad services for the telephone landline services.
 The revenues that is earned through the mobile phones is fallen upto $5 billion.
 Voice service revenue had fallen down nearly 5% in the last year of about $3.3 billion
(Rushdi, 2000).
1.2.2.4 Missed Deal of the Telstra
Telstra declared that it would not have a joint venture with the Phillipines for a mobile
telephony. As the company only offers 2G network, it cancelled the deal.
The CIO of the company would have taken steps to improve the generation of the network to 3G or
4G by supporting them (Bartholomeusz, 2017).

1.2.2.5 Top IT Risks of Telstra
Telstra says that the price decisions taken by the Australian Competition and Consumer
Commission is the biggest risk among all the IT risks.
To mitigate this risk the company can concentrate in increasing the production and using little less
resources to manufacture the prodcuts (Henderson, 2002).
1.2.2.6 Factors that contribute to Red Ocean for IT in Telstra
 The company directly competites with the big companies.
 It provides costlier charges for the landline connections.
 The company targets less on the upcoming technologies.
Blue Ocean Strategy
Telstra should concentrate more on their customers rather than competitors.
The company should make aggregation in their customers.
They should work more on their supply chain (Chang, 2010).
Conclusion
The telecommunication company called Telstra is taken in this paper for research. The
challenges, priorities of the company is discussed in the descending order. The competitors and the
balance of the power of Telstra is explained. The best and worst IT strategies taken by the company
is discussed. The red ocean traps and the blue ocean strategy of the Telstra is explained.
References
Asad, M. (2012). Porter Five Forces vs Resource Based View - A Comparison. SSRN Electronic
Journal.
Bartholomeusz, S. (2017). The implications of Telstra’s non-deal. [online] Theaustralian.com.au.
Available at: http://www.theaustralian.com.au/business/business-spectator/the-implications-of-
telstras-nondeal/news-story/0a9e726414ac4f2fc75df6805b06e033 [Accessed 8 Sep. 2017].
Butler, C. and Weill, P. (2007). Standardising the Information Technology Environment at Telstra
Corporation: a case study. Australasian Journal of Information Systems, 4(2).
Chang, S. (2010). Bandit cellphones: A blue ocean strategy. Technology in Society, 32(3), pp.219-
223.
Henderson, I. (2002). Telstra Troubles. AQ: Australian Quarterly, 74(4), p.5.

NewsComAu. (2017). Telstra profit surges to $5.78 billion. [online] Available at:
http://www.news.com.au/finance/business/technology/telstra-profit-surges-to-578-billion/news-
story/0fc849c5de62bc87405e807a47b72e18 [Accessed 8 Sep. 2017].
Rushdi, A. (2000). Total factor productivity measures for Telstra. Telecommunications Policy,
24(2), pp.143-154.
Telstra.com.au. (2017). Telstra - Our company. [online] Available at:
https://www.telstra.com.au/aboutus/our-company [Accessed 8 Sep. 2017].
Xin, W. (2015). Telstra Financial Analysis Report Fy2009 – Fy2013. Journal of Finance and
Accounting, 3(5), p.150.