Strategic Management: Analyzing Telstra Corporation's Business Units

This report provides a comprehensive strategic analysis of Telstra Corporation, a leading telecommunications and information services organization in Australia. It identifies Telstra's various strategic business units and analyzes their relationships within the corporation. The report delves into the sources of Telstra's sustainable competitive advantage, highlighting factors such as brand recognition, service range, infrastructure control, and geographic coverage. It further identifies the corporation's revenue centers and assesses the extent of its diversification, distinguishing between related, related-constrained, and unrelated business units. An external environment analysis is conducted using the PESTEL framework, followed by a SWOT analysis for each business unit. Finally, the report offers recommendations for future strategic mergers, acquisitions, or downsizing initiatives for Telstra, with a conclusion summarizing the key findings and strategic implications. Desklib provides this and many other solved assignments for students.

Strategic Management: Telstra, Australia
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Table of Contents
Introduction.........................................................................................................................................3
1. Corporation Identification..............................................................................................................4
Identify a corporation with product or service portfolios that span multiple business units..........4
Strategic Business Units...................................................................................................................6
Diagram representing the relationships of the business units with Telstra.....................................7
2. Source of Sustainable Competitive Advantage:............................................................................7
Sustainable competitive advantage for Telstra across the Strategic Business Units.......................7
Four factors of sustainable competitive advantage for Telstra........................................................8
3. Corporation Revenue Centres:.....................................................................................................11
Identification of Revenue Centres..................................................................................................11
Product and service lines creating greatest revenues for Telstra..................................................12
Table of revenue for business unit within Telstra..........................................................................13
4. Identify the extent of the corporation’s diversification:.............................................................13
Identify which of the business units are related, which are related-constrained and which are
unrelated.........................................................................................................................................13
5. External Environment Analysis:..................................................................................................15
Operating Environment..................................................................................................................15
PESTEL Analysis...........................................................................................................................15
6. SWOT analysis for business units................................................................................................19
7. Merger, Acquisition and Downsize:.............................................................................................24
Recommendation for future strategic merger, acquisition or downsize of Telstra........................25
Conclusion..........................................................................................................................................27
References..........................................................................................................................................28
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Table of Figures
Figure 1………………………………………………………………………………………..8
Figure 2………………………………………………………………………………………13
Figure 3………………………………………………………………………………………14
Figure 4………………………………………………………………………………………19
Figure 5………………………………………………………………………………………20
Figure 6………………………………………………………………………………………28
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Introduction
Telstra is one of the largest and leading telecommunication and information service
organization, and it’s also one of the largest internet service provider and mobile operators.
The company offers its services mostly at home and at a business with core access, local,
mobile and internet services, as well as long-distance telephone call services around Australia
(Philip, 2000).
Telstra Corporation Limited is the Australian company, which mainly works for the
information and communication. It includes both international and local customers, and it had
even made its strong position in the Australian telecom market. The headquarters of the
company is located in Melbourne, and mostly all its operations go in Australia. In the year
2013, the organization workforce was around 37721 people (Telstra Annual Report, 2004).
Telstra commands to approximately 45.2% of the total market share within the mobile sector
in comparison to the competitors like Optus as well as Vodafone that includes the market
share of around 28.8%. It depicts the products of Telstra, which have a better appeal and
make it as the leading player in the market (Walker, Boyd, Mullins and Larrece, 2003). The
brand of the company is even strong, and that’s the reason it can profoundly penetrate in the
new niche market efficiently.
The position of the company has also enhanced by the bundling strategy, which places
focus towards good quality services like Pay TV, mobile voice, fixed-line voice services, as
well as fixed-line broadband. For Telstra to attain its position, it had taken various steps for
enhancing their product quality (Telstra Corporation, 2017). This report will also depict how
the company made strides in improving its competitive position in the market. This report
will also include an introduction to the operations and business units of Telstar. Along with
that, it will also include environmental analysis, SWOT analysis of the business units, which
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supports in analysing the strategies of the company; corporation identification, factors that
result into the sustainable competitive benefits for the company. It will also discuss corporate
revenue centres of the company. Through environmental analysis, this report will be able to
analyse the current and future progress of the company. Finally, a conclusion will be included
that highlights the critical points of the report and draw a concluding statement.
1. Corporation Identification
Identify a corporation with product or service portfolios that span multiple business units.
Telstar is the popular as well as leading telecommunication organization that provides
complete communication range services and also try to compete in the market of
telecommunication. The company offers 17.6 million mobile services in Australia, and along
with that, it provides 5.1 million services of fixed retail voice and 3.5 million services related
to retail fixed broadband (About Telstra, 2017). The company philosophy believe that it
should connect with the people, and there are considerable opportunities in the market, and
that’s the reason, they support in creating the right attached future for each person. That’s the
reason, the company try to build the content solutions and technology, which is quite simple
and comfortable, and include fastest and most extensive national mobile network in Australia
(Westaway, 2015).
The company also strive towards serving and understanding its customers in a better
way, and also provides the selection of its digital connection, along with digital content.
That’s the reason, Telstra has global presence spanning in around 20 countries of the world. It
is noted that in the 21st century, opportunity relates to the governments, connected business,
individuals, and communities (Yu, 2015). As Telstra is the leading information service and
telecommunication firm, it feels proud in supporting its customers in enhancing the ways
through which they work and live by the connection.
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Telstra is the accessible and largest mobile telecommunication offered in Australia,
including digital GSM network, which includes 94% of the total population as well as the
facility of international roaming in around 65 countries (Telstra: the company, 2015). The
company has also launched their second digital mobile network, which relies on CDMA
technology. The company expects to have the digital CDMA mobile network for offering the
vast range of high quality and coverage services for their customers.
Identifying the significance of internet and data services for the future and potential to
transform the telecommunication industry nature, the company tries to review the operations,
business, and network for assessing the changes needed to compete in the fast-growing
market of information effectively. The company has also set up individual strategic business
units, which is highly responsible trades expanding the wide data products range and towards
developing the business, which is content-based like e-commerce, internet, directories and
pay television services (Top 10 risks in telecommunications 2014, 2014). The company has
also set up the strengths in its products like electronic directories and internet access. For
instance, Telstar provides the highest internet service provider within Australia, which has
included around 400000 internet subscribers by the year 1999, along with that, they also
launched the website of Australian Yellow pages, which is one of the most popular and
frequently visited the site within Australia (Pearce, 2017).
Telstra has seriously devoted their resources in the current years to upgrade as well as
modernizing the system and network. This program has supported the company in enhancing
the expansion and flexibility of its wide range of both products and services, through which
the company can provide customers in the traditional telephone markets, internet markets,
emerging data, as well as mobile telecommunication market. This enables the company in
maintaining their revenue through telephony market as well as services to grow and generate
revenue in the market (Janda, 2013). From the last many years, the company is emphasizing
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the operating efficiency and is also trying to change the corporate culture to become highly
commercial and customer oriented.
Strategic Business Units
Commercial and Consumer- it offers the services to around small business customers a well
as seven million residents. The core activities of this business unit are the installation of
customer service, sales, repairs, management and billing information, payphones and
connection services (Telstra Corporation Ltd (TLSYY.F), 2017). Consumer and commercial
are also responsible towards maintaining and building the network for customer access in
case of the Network and technology group.
Telstra business solutions- it offers and sells out the customer service is the highly
comprehensive manner of services, products, and customer-driven solutions for the
sophisticated voice of core telephony and data networks (Telstra reaches into China with
Pacnet Business Solutions integration, 2015). The business units serve both the medium and
considerable businesses in Australia and New Zealand.
Telstra OnAir- it is highly responsible towards the customer service, sales, pricing,
development of product and investment in the wireless and mobile communication and
managing the new CDMA digital service launch.
Telstra Wholesale and international- it offers the wholesale services and product to various
other carriers, critical domestic internet service providers, carriage service providers, pricing
strategies, and wholesale products (Barker, 2005). It is also responsible towards the
international wholesale as well as international retail business, include overseas investments.
Telstra Convergent business- it offers the considerable range of activities, which includes
development and data management, e-commerce, internet, multimedia business, and
directories. It also tries to manage the investment in IBM Global services Australia,
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FOXTEL, as well as Advantra, and current 5% of Computershare Limited equity investment
(Media, 2018).
Network and Technology Group- it is highly responsible towards designing, planning,
construction, operations of local, global, fixed as well as mobile telecommunication and other
related systems for delivering services, products and customer help (Is Telstra Air A lot of
Hype or Hot Air and what are some of the facts, 2015). Network and technology group is also
responsible towards Telstra Research laboratories and technology strategy.
Diagram representing the relationships of the business units with Telstra
Figure 1
2. Source of Sustainable Competitive Advantage:
Sustainable competitive advantage for Telstra across the Strategic Business Units
Currently, Telstra provides various advantages to consumers along with competitive
benefits and different other telecommunication carriers, which operate within the market of
Australia, which includes, large identified brand, massive range of services that are offered to
consumers (Anderson and Rungtusanatham, 1994). It also controls the mobile infrastructure
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as well as fixed line infrastructure; geographically coverage of network all around Australia.
It also includes distribution channels, which make sure about ease of access through
consumers to the representative of Telstra and customer service through Telstra Shops
owned/operated through retail outlets, On-Line retail outlets along with other retail outlets by
the support of Telstra Licensed Dealers. Bing a setup company, Telstra ensure the operating
and corporate stability of consumers (Barrile, 2009). It also includes the financial stability
that moves over the ability for funding the projects of research and development like 3G.
Dominance over most of the telecommunication and infrastructure of Australia
permits Telstra to provide coverage of consumers and network access around Australia, while
simultaneously, it dictates to a specific extent, and emphasize over competing carriers by
wholesale division of Telstra (Bayo-Moriones, Bello-Pintado and Merino-Diaz-de-Cerio,
2011). Along with this, new technology arrival, such as 3G offers Telstra with the
opportunity to provide different products and services like i-mode.
Four factors of sustainable competitive advantage for Telstra
In present competitive business environment, organizations are rapidly emphasizing
over the attention to offer quality products and services. Enhancing and maintaining the right
quality is the competitive benefits, which business companies can easily capitalize to keep it
and to expand the share of the market (Beckford, 2002). Improvement in quality at Telstra is
highly driven by the desire towards maintaining the control of dominant market within
telecom industry in Australia. Four factors lead towards sustainable competitive benefit for
the company, these are economic, social, environment as well as strategies, and the same are
discussed below:
Economic Imperative- the economic imperative is the critical driving force that brings quality
enhancement at Telstra. The quest of the company towards attaining quality is resulted
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through the requirement to provide better services and that too at competitive prices for
earning good profits. In this context, efforts were taken by an organization to improve the
efficiency of both the operational procedures and processes (Bendall-Harris, 1994). In result
of this, economic preferences of the company are enhancing importantly with time. In the
2011 financial year, for instance, the revenue of the company amounted to around $25304
million, and the profit was $3231 million. Due to the enhancement of quality, the revenue and
profits of the company are enhancing steadily. By the 2013 financial year, the revenue
increased by $25678 million, and the profits shot up to $3813 million (Telstra, 2013).
Social imperative- As per Brown and Wiele (1996), the social imperative is referred as the
driving quality enhancement at Telstra, which moves around creating value for the various
stakeholders like employees, community, suppliers, government, and customers. This was
attained through the corporate social responsibility of the company in areas like consistent
payment of government tax, creating a job, preferred dividends, and right remuneration
packages it also emphasizes over providing better quality services, not only for the customer
base but even for the community (‘Telstra Corporation Limited SWOT Analysis,’ 2014).
Along with this, the quality enhancement efforts of the company have included the resource
use and its products for the advantage of the community, in which they are working.
Environmental Imperative- According to the economic imperative, Telstra achieve the
sustainable competitive benefits through its quality improvements in case of caring out the
resources and safeguarding the environment (Barney, 1991). Mainly, the organization has
taken efforts to make sure, that it attains enough consumption of energy with the minimized
greenhouse gas emission. The organization is also attentive towards the radio frequency
radiations, which are applied in the sector of telecommunication (Daft, 2006). Along with
this, the company has also created its policies that intend towards minimizing the resources
consumption like paper and water.
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Strategic targets- Business organization quality improvement is related to strategic
significance. Once the organization can rapidly provide quality items, then it can achieve the
competitive befits over its competitors in the market (De Wit and Meyer, 2004). The strategic
targets of Telstra in context of quality improvement includes the operational touch, strategy,
administration, and long-term objectives and normative decisions. In the context of
operations, Telstra intends towards constructing the new strategy for the business, which pegs
towards the network services. It also emphasizes over the expansion in the Asian market and
even interested in venturing into eHealth and various options for attaining long-term benefits
in areas like global application and digital media (Kotaku, 2015).
As per Kotler and Keller (2006), it also aims towards attaining the quality
enhancement by administrative actions, which emphasize over aligning the organization with
the operational strategy. In the context of administration, the organization often look towards
the changes in the portfolio, which aims towards enhancing quality. All these changes include
business unit creation that is known as Global Enterprise and Services, that core
responsibility consists of the global network application, platforms, Telstra ventures as well
as international applications services (Mintzberg, Ahlstrand and Lampel, 1998). Telstra retail
also tries to create with the aim of integrating with the retail segment of the company. This
division also emphasizes overdriving the different eHealth departments and the same will be
administrated according to the enormous administrative practices of customer service,
innovation, marketing, and sales service (Phahalad and Hamel, 1990).
Telstra conduct review for its long-term strategies by aiming for correct attention in
the right way for attaining the long-term value. For instance, the organization has changed
their customer orientation. For example, the organization has shifted its focus to the
satisfaction of customers, to initiate the value of shareholder (Porter, 1980).
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The organization also undertake normative decisions relying on the decisive
influence. It is noted that head of the department often tries to facilitate the subordinates in
making a decision and in some instances head of the department take a decision, they try to
consult the teams. In cases related with the scientific or technical decision is undertaken, the
leaders of the company usually try to delegate the work, such as decision making is given to
the appropriate experts working in the specific field (Porter, 1985). These decisions, for
instance, includes the environmental effect assessment related to the possible effects that can
come on operational environment of Telstra (Porter, 1991). This approach makes sure that
decisions taken should be right and achieve the required help from critical stakeholders.
3. Corporation Revenue Centres:
Identification of Revenue Centres.
Telstar retail income includes the Telstar consumer and business, which was hugely
flat, excluding the effect of mobile terminating access service (MTAS), as well as regulatory
decisions of 0.2%. As per the report, the impact of MTAS income reduced by 2.1%, which
comes to around $16489 million (Telstra Analyst Briefing- half year results presentation
pack, 2015).
International Enterprise and services (GES) positively respond towards the increased
sale and meet the product portfolio of Telstra, because the GES income has risen by around
1.6% that comes to $6343 million. The domestic income of GES has been increased by
approximately 2.5%, because of the double NAG growth (Telstra Annual Report, 2015).
Telstar Wholesale income has increased by around 7.2%, which is approximately
$2830 million, and it’s mainly due to rise in nbn™ ISA ownership, that has raised with the
rollout of NBN. Excluding the MTAS effects as well as fixed line service as well as Final
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Access Determination (FAD) income has increased by around 9.7% (Telstra Investor Reports
and Presentations, 2015).
Figure 2
Product and service lines creating greatest revenues for Telstra
The telecommunication giant mentions that net profits of the first half after deduction
of tax has increased by 8.8% to around $1.6 billion, relying on the 1.7% rise in the $12.7
billion total income (Telstra Annual Report 2017, 2017). As per the expectations of the
analyst, according to Bloomberg basically, expect to have net profit results of $1.6 billion.
Telstra had mentioned that they have to earn 607000 new services of local mobile in the last
six months, and the same has brought various mobile services to offer 14.4 million. This had
also resulted in the rise of 4.6% in the $4.56 billion mobile revenue (Telstra Half Year Report
2005, 2005). Nevertheless, it is mentioned by Telstra that it had even spent enough money in
both maintaining as well as enhancing the mobile technology to around $1.9 billion,
contribute on capital that works around the business units (Telstra Corporation Limited, Third
Quarter Market 2004-05 Update, 2005).
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Table of revenue for business unit within Telstra
Figure 3
4. Identify the extent of the corporation’s diversification:
Identify which of the business units are related, which are related-constrained and which
are unrelated.
The proverb of “die” is not referred as the concept lost in the telecom industry.
Diversification has become the central concept for the mobile and fixed operators that are
deployed at different strategies at a particular time, and cover up acquisition, partnerships,
along with in-house development (Komatsu puts IT into Telstra’s cloud, 2010). It is analysed
that operators are often anxious to ignore the commoditized channels, on which both nimbler
tech companies can provide their services, and move towards the area, which hold core
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competencies (Nair and Prajogo, 2009). It also includes the payment through mobiles, with
the help of mobile network operators, content services as well as cloud-based services. In the
world, where both the mobile and fixed convergence exist, consumers act in different ways
towards the delivery content methods, if it’s available every time. Where the diversified
revenue stream quest is aimed towards the margins of bolstering dwindling at the level of the
carriage, the actual variation for the consumer's generation seems to look available for taking
content. In traditional ways, the approved purpose of this model is that content tries to move
the traffic towards the distributors (Singh, Chua-Ming and Sum, 2013).
Constrained and diversification
Diversification is referred as the strategy, which is adopted through the companies to
minimize the risk related factors by moving towards the new extended market or either
through launching the new items and finally by way of investing in capital, which can reduce
the threats of losing assets towards specific concern (Berry, 2015). Companies mainly spend
in the capital in the form of various assets, so that they can avoid the market volatility. At the
particular instance, they try to come up with new products, as well as existing products, to
grab the market attention (Bhpbilliton.com, 2016). This strategy work to possess the threat,
because when the organization is moving towards expansion through its products and
services, or either through investing money in various areas, they are entirely new to the
organization (Buckley, 2014).
There are two kinds of diversification, such as concentric diversification, which
includes the distribution channels integrity or either through adding the items with the
previous one; as the details are divided same, and needs to have changed in their marketing
efforts (Carroll, 2015). In case of horizontal diversification, it supports the organization to
move towards new product line, which is different from the previous one; this kind of
strategy come, when the organization understand that the customers are loyal towards their
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brand and will gain equal trust towards products which are launched under the same brand
name, just because of the promotional, product quality as well as pricing strategy
(Rothaermel, 2015).
Telstra has successfully implemented the diversification strategy through capturing
the international market other than the exchange of Australia. The company has expanded
into the Asian market. Telstra has emphasized over its expansion in overseas market through
adopting the solid strategies of diversification (Servaes and Tamayo, 2013). It is revealed that
70% of the company’s revenue is collected through Australian market, and Asian market also
offers reasonable share to the company. The primary objective of Telstra is to provide the
investors with the opportunities for collecting profits and provide diversified products to their
customers.
5. External Environment Analysis:
Operating Environment
The operational environment implies political, social, economic, legislative, natural
and cultural environmental factors, which importantly impact the company’s implementation.
All these factors are expected to be considered at the time of planning, to ensure, that
company fit with the operational environment or not, and whether it’s based on the present
local conditions. Companies are successful when the operational environment is considered
(Tate and Yang, 2015).
PESTEL Analysis
Political and Legal factors
Telstra operates their services in the strict legal as well as political framework. The
Australian telecommunication industry is highly governed by the 1997 telecommunication
Act as per the directions were given by Communication Minister as well as the Department
of Communications, Arts and Information Technology. All the regulators, which are working
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within the telecommunication industry cover-up, Australian Competition and Consumer
Commission (ACCC) as well as Australian Communication Authority (ACA) (Australian
Communications Authority (ACA), Telecommunications Performance Report (2003-04),
Chapter 6: Mobile Telecommunications Services, 2004). It is noted that ACCC tries to
oversee the Trade Practices Act application for making sure that consumer interest and true
competition should be initiated, while ACA should try to maintain the technical regulations
as well as various other non-competitive areas within the telecommunication industry. It is
analysed that, Telstra is 51.8% owned by the Government of the commonwealth and that
controls the telecommunication providers (Porter, 1996). If it’s required, then communication
Minister can offer directions to Telstra to make sure about the Australian public interest.
Economic
The factors of macro environment like the rate of interest, rate of inflation, rate of
foreign exchange, saving rate, as well as economic cycle keenly determine the aggregate
investment and demands within the economy. While the microenvironment factors like norms
of competition affect the company’s competitive benefits (Telstra.com, 2016). Telstra
Corporation is making use of economic factors of the country such as industry economic
indicators, the rate of growth and inflation like telecommunication service industry rate of
growth, as well as consumer spending to forecast the growth trajectory not only for the sector
but also for the company (Gutierrez and Rodriguez, 2013).
Social
Society culture and manner in which things are done effects the organization culture
in the environment. Shared attitude and beliefs of the population also play an essential role in
understanding how the marketers working at Telstra will analyse the customers of specific
markets and how they will going to design the marketing messages required by
telecommunication service industry consumers (Smad, 2017). Other social factors that needs
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to be analysed by the Telstar corporation leadership through social analysis is, skill and
demographic population level; hierarchy, structure of class and society power structure;
culture; level of education, along with Telstar corporation industry education level; leisure
interests; attitudes, including environmental consciousness and health, and entrepreneurial
spirit and broad society nature, as there are few societies which motivate the entrepreneurship
(Ahdar, 1995).
Technological
In the last few years, it is a witness that rapid advancement in technology, as well as
internet convergence and technologies of mobile communication, has come up with the new
delivering content method as well as mobile service quality. Besides that, the mobile
telecommunication emergence associated innovations in technology will change the
capabilities, speed, information availability and functionalities for end users as well as mobile
industry market players (Atkinson, 1987). These type of continued telecommunication
technology advancement, especially in the mobile segment will offer space for the growth for
both the providers and carriers, even though it is a witness that market looks to moving
towards saturation with only 17.2 million subscribers at the end of 2004, which is equal to the
77% penetration (Band and Tustin, 1995).
Presently, most of the products and services of Telstra were assisted with 2G as well
as 2.5 CDMA mobile technologies. It is noted that this type of technology permit to move
with the digital voice call, messaging through SMS as well as other core ancillary
information like date and time (Beer, 1997). With the coming of new 3G mobile technology,
it is expected that Telstra should make sure about the marketing and product mix, that can be
managed carefully so that revenue coming through the retail customers is assisted through the
previous and emerging technologies can be reduced. Supported products of 3G will offer
consumers with the transferability by both the voice data (like a telephone call) as well as
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non-voice data (like games, instant messaging, and information of downloading, exchanging
emails, and ringtones) (Bolton, 1993). Therefore, offering the services of value like content
and mobile data will get fast growth through the mobile area of Telstra.
Environmental
Mobile telecommunication is considered as high yield, as well as fiercely and high-
cost competitive industry. It is analysed that since 1997, the investment made within the
industry are mainly to support the new networks for increasing $8 billion. Therefore, the
barrier to entry in the industry is highly substantial and create a threat to the existing key
players and new entrants, such as Telstra, due to the operating cost and high investment
needs. In the last five years, the mobile industry has raised by around 48% in comparison to
the 30% rise in the telecommunication industry in complete (Burack, Burack, Miller and
Morgan, 1994). The mobile industry revenue is calculated at approximately $8.8 billion by
the year 2004 that depicts the 28% of the total revenue of telecommunication industry.
Besides that, it was forecasted by the subscribers in 2005, that revenue will increase by 17.2
million that reach the market penetration by 87% (Lopez, 2012).
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Figure 4
Competitive environment- there are around five competitors such as Telstar Mobile,
Vodafone Australia, Optus mobile, Orange, as well as Hutchison 3G. It is noted that Telstar
mobile is the market leader, and is viewed as the driving force for attaining growth with 5.5%
rise in the year 2004 (Loyola, 2011). The main competitor is Optus mobile, which is facing a
healthy increase in the last year. Both the companies, Vodafone and Optus, have set up the
3G network as well as radio infrastructure that is built for attaining competitive benefits
against the Telstra Corporation. It is noted that Hutchison 3G starting entry in the expanding
market of the 3G network has to lead the company to dominate in the new market easily
(Lubatkin and O’Neill, 1987). Nevertheless, Optus, Vodafone as well as Telstra are coming
in the market, and the dominance of the market for Hutchison within 3G services might go
low.
Figure 5
Growth is driven by the Telstar, which is a market leader by 5.4%, while the main
competitor Optus has faced strong rise, and Hutchison 3G service is starting to create an
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effect on the market. It was noted that market share was low to around 1.5% (Lucas, 2012).
Nevertheless, it was expected that high level of growth could be seen in coming years.
6. SWOT analysis for business units
Telstra Business Solutions
Strength
Telstar announced that their international customers could easily gain benefit through
the direct as well as low latency connectivity of the network in China, and this all has
happened due to the integration of a network of Telstra as well as Pacnet Business Solutions
(PBS), which is an overseas invested joint venture organization. It is analysed that PBS was
the very first overseas country that gains licensed for offering IPVPN services as well as
network services in China. They also expanded their business in around 23 provinces around
the mainland, which also includes Shanghai, Tianjin, Beijing, Chongqing, as well as
Shenzhen (Markides, 1995).
Weakness
Telstra B2B solution for the telecommunication services emphasizes over the critical
issues associated with relationships of B2B. It examines these issues as offering different
selling strategies for organizations of different sizes such as medium-sized, small and
international organizations, delivering as well as assisting massive quantity of customized
goods and services, managing agreement at the service level, as well as handling of a
challenging process for telecommunication management of customers (Markides, 1997). This
solution also assists various scenario of billing on behalf and split billing.
Opportunities
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PBS, as well as Telstra, are highly committed to offer customers with the robust
services of connectivity, for the enormous provincial centres and also for the challenging
locations, in which international enterprises are located. The company is also working to
deliver the services, and drive the customers towards the success of business around the
mainland (Markides and Williamson, 1996).
Threats
Threat includes compliance threats, which is faced by Telstra business solutions.
These threats occur through politics, regulation, and law and corporate governance. It also
includes operational threat created through systems, processes, business value chain and
people; a strategic threat that relates with competitors, customers, and investors, and finally
its financial threat, which mainly stems through volatility in the market and actual economy
(Markides and Williamson, 1994).
Telstra OnAir
Strength
Telstar OnAir is highly responsible towards the development of the product, customer
service, investment in the wireless as well as mobile communications, pricing and managing
the launch of CDMA digital service.
Telstra OnAir also assists small businesses in fulfilling the expectations of customers
and offer them with new directions to attract the customers, analyse the preferences and
engage the customers in a personalized manner.
It’s quite a valuable service for any business, in which customers visit the premise,
mainly the services such as cafes, restaurants, dentist, doctors, and hairdresser
(Martin and Sayrak, 2003).
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Telstra OnAir also permits the small size businesses to collect the insights through gathering
the customers, either by conducting a customized survey or either through social media. As
the online panel permits in creating the customized offices as well as support in personalizing
the connection experience through Wi-Fi.
Weakness
Telstra has not precisely informed about the hotspot range.
They have even not placed the guarantee of internet speed; therefore, if the caravan parks
speed of previous internet year was profoundly slow, then it might be slow this year too.
Opportunities
Telstra OnAir will support the small business to provide the facility with a Wi-Fi
connection to the fixed as well as mobile customers of Telstra. Through this facility member
of Telstar OnAir will be able to log through the help of Telstar OnAir app automatically.
Owners of small businesses make use of OnAir of Telstra, and they will be easily able to take
benefit from one million hotspots offered by Telstra when they are out somewhere and either
they are at 20 million Fon-Spots in foreign countries (Locsin, 2011).
Threats
Telstar OnAir requires to have hold of people to gain more success, and this can only
be done through signing for Telstar OnAir, else the entire system will get fail. It is quite
surprising to know that Telstra has not employed the people to organize the Max prevailing
parties of Telstar, in which people are usually invited through the modem, and along with that
person who is present there are always invited to hold their modem parties at Telstra.
Network & Technology Group
Strengths
23

Telstar Corporation is presently trying to build the secure infrastructure network,
which will assist in conducting operational work. This move will help in making sure that
Telstra can also compete in the industry of telecommunication, but simultaneously, they will
also try to enhance the performance through improving the service quality provided to the
customers. Along with this, the present industry position of the market leader will make sure
that continuous organization leads to the market space (Chalmers, 1989). The organization
includes the vast pool of skilled employees, which support the company in understanding the
fast rate of growth in the telecommunication sector of Australia. Telstar even has the big
monetary help, which offers the continuous assistance in monetary terms.
Weaknesses
With the expansion of the company regarding its geographical coverage, there exist
various inefficiencies in operational terms and the same as a witness through the different
cases of unsatisfied services offered to customers. In comparison with the other organization's
operations going in a similar market, Telstar has to face the problems of latency. Moreover,
they even charge the high cost in comparison to the competitors (Cascio, Young and Morris,
1997).
Opportunities
Opportunities for business within the global market such as China and Asia can prove
as an excellent opportunity for the company. There are many huge businesses as well as
projects existing for the organization, in which they can venture. Moreover, the organization
renews their emphasis over the services of customers for minimizing the unsatisfied customer
percentage.
Threats
24

Australian telecommunication industry mobile market is getting saturated, which has
resulted into increase in competition. The regulation passed by the government related to the
industry is getting more complex. Along with that, the variation in the regulations of
government as per country might create limit over the entry of Telstra in the global markets.
The rapid technological change, as well as its applications within the industry of
telecommunication, often place limit over the Telstra corporation operations (SWOT, 2012).
Wholesale and International business
Strengths
Telstra holds the secure infrastructure of networks that also assist in operations. The
robust infrastructure of the network usually back by the operations of the business and even
offer Telstra with the competition with other organizations. In the context of retail business,
Telstra has created a record for its strong growth. The operations of the company are going
better, after the strong retail performance of broadband launched by Telstra. In the Australian
telecommunication industry, Telstra is considered as the most performed organization. They
have even started off with their new wholesale services and has also improved their
competition that has happened due to their strong position in the market.
Weaknesses
The faith of stockholders, as well as its brand, has gone damaged by the weak
relationship existing between the regulatory bodies and Telstra.
Opportunities
In the china telecommunication market, the business operations are expanding by
Telstra. Along with this, the opportunity for penetration in China has increased by 298
million, which is more than 42%. In the china penetration to around 22.6%, is low and has
25

even left the room for growth. Internet market of China can quickly try to stimulate the
growth of the company by viewing it from the perspective of present expectations (Cascio,
1993).
Threats
The mobile market of Australia is shared. Telstar has got its revenue shared through
the mobile market of Australia. Simultaneously, the Telstar operating performance can be
profoundly influenced by the near terms. Nevertheless, in the coming time, the environment
of regulations might affect the operational performance of Telstra wholesale.
7. Merger, Acquisition and Downsize:
Merger- A merger is considered as the corporate strategy, including the combination of
various individual companies, to improve the operational and financial strength of both the
companies.
Acquisition- An acquisition is referred as the purchase of every, either particular portion of
the corporate asset or either target organization. The acquisition is primarily created through
cash or either debt for buying the outstanding stock, but organizations can also make use of
its assets through exchanging the firm commodities that are targeted. Acquisition can be
either friendly, or it can be hostile (Cascio, 1993).
Downsize- in the enterprises, downsizing is referred as minimizing the employee’s number
over the operating payroll. Specific uses differentiate the downsizing from the one mentioned
as layoff with intended downsizing to be permanent downscaling, because in case of layoff it
mainly intend to be temporary downscaling, and in this workers can be rehired later on.
Businesses also make use of different techniques in case of downsizing, which also includes
offering the incentives for taking early retirement as well as transfer to the subsidiary
organization, but the most usual procedure is to terminate the staff (Cascio, 1993).
26

Recommendation for future strategic merger, acquisition or downsize of Telstra
Acquisition
It is recommended that Telstra should acquire MTData, which is an Australian
company, and it would fast-track the company, that is connected with the vehicle services
under the portfolio of the Internet of Things. In the year 2003, MTData was founded, and
currently, their operations are going in UK, New Zealand, Middle East, United States, along
with Australia. The organization also offers the fleet management services along with GPS
telematics. The acquisition of MTData will provide Telstra with the deep domain expertise,
along with advanced technology for linking the vehicle solutions.
It is suggested that exist a line with the growth strategy of the Internet of Things and
the same is leverage through the Lot footprint investment in the mobile network, which is
considered as the highest in Australia and most significant all over the world. It is mentioned
that strategic acquisition will permit the Telstar for business capitalization, that is ready to
hold the loT capability over the network; delivers the solutions of loT to the customers’
existing within the heavy vehicle industry and assist to have a natural transition towards the
technologies of an autonomous vehicle in the coming time. It is recommended to go for
acquisition, as Telstra has also previously staged towards the demonstration of the
infrastructure vehicle that communicates with the 4G network (Cascio, 1993).
Downsizing
The main downsize operations connect with enhancing competition that is away from
the fixed and mobile share of the market for Telsta (Cascio, 1993). With the rise in
competition, it has captured the considerable attention of media, and Telstra national
broadband and mobile network share of the market have track currently in better ways as
expected. There is a risk related to the EBITDA because Telstra had tried to enter the market
27

in the coming five years. In the year 2017, it was decided by ACCC not to mention about the
mobile network of Australia by Telstra. In the next month, Vodafone has given the threat
through creating the Federal Court of Australia applications, which try to review the decision
of ACCC. It looks like different that judgments of ACCC might get reversed, but this thing
creates a possibility to bring profound change and downsizing of network business.
Figure 6
28

Conclusion
Being one of the famous telecommunication companies of Australia, Telstra provides
the complete range of mobile and telecom services around Australia. This report was helpful
in understanding the main business areas of Telstra. This report has also introduced with
various environmental factors that impact the company, along with sustainable competitive
befits gain by Telstra. SWOT analysis is also done for analysing the strategies of the
company.
29

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