Strategic Management Report: Telstra's Analysis & Recommendations

This report provides a comprehensive strategic analysis of Telstra, an Australian telecommunications company, using strategic management theories and tools. It begins by outlining key strategic concepts and then applies PESTLE and SWOT analyses to evaluate Telstra's external and internal environments. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors affecting Telstra, while the SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The report highlights Telstra's brand value and expansion opportunities, but also notes weaknesses such as latency issues and high prices. The competitive landscape, including threats from Singtel and Starhub, is also discussed. The report concludes with recommendations for Telstra, including adopting a cost leadership strategy and pursuing market expansion through mergers, to enhance its competitive advantage and market share. Desklib offers a range of similar solved assignments for students.

Strategic Management

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Executive Summary
The main aim of this report is to understand the theories and concept of strategic
management. There are many strategic tools which are used by the company to analyse the
internal and external factors such as SWOT and PESTLE Analysis. The company faces the
political and legal issues but the technological factor is beneficial for it. The company also
faces the threat from the competitors such as Singtel, Starhub and many others. It is
recommended that Telstra has to adopt the strategies and techniques in order to improve its
performance and gain the competitive advantage such as cost leadership strategy and
expansion strategy. It has been concluded that the company will gain the competitive
advantage and success in the near future.

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Contents
Introduction...........................................................................................................................................4
Strategic theories...................................................................................................................................4
External and Internal environment analysis...........................................................................................5
PESTLE Analysis..............................................................................................................................5
SWOT Analysis.................................................................................................................................7
Recommendations.................................................................................................................................9
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10

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Introduction
The main aim of this report is to understand the theories and concept of0020strategic
management. In this report, Telstra has been taken into consideration in order to identify the
internal and external factors. Telstra is an Australia’s largest telecommunication company
that deliver the services of telecommunication networks and markets voice, mobile internet
access, pay television and the other services.
At the beginning of the report, the strategic theories and concepts will be discussed. After
that, the tools and techniques have been implemented in the organisation. The
recommendation will be mentioned in the end of the report in order to overcome the issues
and challenged which is face by the company.
Strategic theories
Strategic Management is the process of planning, monitoring, and evaluating the environment
of an organisation. An organisation analyse the environment in order to adopt the strategies.
Fast paced innovation, developing technologies and customer expectations forces
organisation to think strategically in order to achieve the success in the business. The
strategic process helps the company to access the current situation of the market by analysing
the effectiveness of the implemented strategies (Ansoff, et.al, 2019). It is essential for the
company to evaluate the position to adopt the effective strategies. The process involves the
analysing concepts such as:
 Analysing internal and external strength and weaknesses
 Strategic Forecasting demand
 Formulating actions plans
 Executing actions plans

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 Evaluation of plan
There are many strategic tools are used by the company in order to identify the external and
internal factors that affects the growth of organisation such as PESTLE Analysis, SWOT
Analysis and many other tools (Wheelen, Hunger, Hoffman, and Bamford, 2017).
SWOT Analysis is a strategic tool which is used to determine the strength, weaknesses, threat
and opportunity for the organisation. It identifies the factors that impact the business and
helps in future to achieve the success (Pandya, 2018).
PESTLE Analysis is a framework which is used to analyse and monitor the macro-
environmental factors that may have a profound impact on an organisation. It helps to analyse
the external factors and gives an overview of the different macro-environmental factors. It
defines the political, economic, social, technological, legal and environmental factor.
External and Internal environment analysis
PESTLE Analysis
Political
It has been seen that Telstra Corporation operates in many location due to which it has to
follow the rules and regulation of different locations. Government of different countries
develop the rules and regulation as per the market condition of the country. It is difficult for
Telstra in order to adopt the policies of different countries. The company have high risk of
changing the government in the next elections. The decision taken by the government in the
favour of the company is affected by the changing government. The Australia government
develops the network with the 108 offices across the United States and this is a beneficial
factor for Telstra Corporation.

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Economic
It has been seen that the Australia have strong GDP rate with the amount of A $1.69 trillion
which indicates the high purchasing power of consumers. There are large numbers of
industries and every industry requires a telecommunication service that is why; the demand
of Telstra services is high (Tang, 2018).
Economic growth of Australia
(Source: By Author)
Social
It has been evaluated that the developing technology changes the lifestyle of consumers.
Australian adopts the western culture that is why; they walk with the trends and fashions. It is
observed that the ecommerce industry earned the US $21,224 m in the year 2019. It indicates
that the demand of consumers for telecommunication services increases and it is a favourable
factor for the organisation (Statista, 2019)
Leading
indicator Economic
growth

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Technological
Australia is a fast adopting country in the terms of advance technology. The technology
industries of Australia such as Media & Telecommunication are increased by the 5% of
average annual rate over the period. The company directly affect from the growth of
technology in order to achieve the success.
Legal
The Australian government introduced the different laws for the telecommunication and
national broadband companies such as non-discrimination obligations, authorised conduct
and special access undertaking. The company has to follow these laws to survive for long
time in the market.
Environmental
The environmental policy develops by the government is suitable for the company because it
protect the environment. The policy develops by the government such as energy use,
greenhouse gas emission, suppliers and office waste. Telecommunication industry operates in
networks and wiring projects that is why; the chances of arises the environmental issues are
less (Australian Government, 2019).
SWOT Analysis
SWOT analysis – Through the LISA framework
Strengths
Leverage
Opportunies
Seize
Weaknesses
Improve
Threats
Awareness
Create a “Fit”
Reduce vulnerability

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(Source: Pandya, 2018)
Strength
It has been evaluated that the organisation has high brand value in the telecommunication
industry and that is a main strength of the organisation. It also has high opportunity to expand
the business at the international level as per its high degree of demand in every country.
Weaknesses
It is observed that the organisation also suffers from latency issues when it is compared to
Vodafone. It offers the high prices to consumers as compare to its competitors due to lack of
cost management.
Opportunity
It has been seen that the organisation has the opportunity to analyse the market in order to
open the more stores and offices at the international level. As discussed above, the use of
ecommerce sites is increases that is why; it has the opportunity to adopt the new payment
system so that the consumers can easily adopt it services.
Threat
It has high threat of competitors which enter the market with the advance technology in order
to grab the market share. There are many competitors of the company such as Singtel,
Starhub and many others (Owler, 2019). It is difficult for Telstra to follow the complex
telecom regulatory of the different countries.

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Recommendations
Cost leadership strategy
As per the above discussion, it has been seen that the company offers the high prices to
consumer as compare to its competitors. It is recommended that it has to adopt the cost
leadership strategy in order to manage the cost of production (Block, Kohn, Miller, and
Ullrich, 2015).
Market expansion strategy
As per the above analysis, it is observed that the organisation has the high degree of
opportunity to expand the operation at the global level as per the high demand of consumers.
But it faces the difficulties to expand the business due to legal and political issues. The
company has to merge with the other company to enter the new market and grab the large
number of market share (Grant, 2016).
Conclusion
At the end, it has been concluded that Telstra will attain the success in the near future. It has
been seen that the political and legal factor affects the growth of the organisation. As per the
analysis, it is observed that the strength of the company has high brand image in the market
but it fails to maintain the cost of operation. The company has high threat of its competitors
such as star hub, Singtel and many others. It has been recommended that the company has to
adopt the different strategies and the expansion technique to attain the high market share such
as cost leadership and market expansion strategy in order to beat the competitors and for
expansion of the business.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R. (2019) Implanting
strategic management. Springer.
Australian Government. (2019) Environmental Sustainability Policy. [online] Available
From: https://www.humanservices.gov.au/organisations/about-us/publications-and-
resources/environmental-sustainability-policy [Accessed 29/3/12].
Block, J.H., Kohn, K., Miller, D. and Ullrich, K. (2015) Necessity entrepreneurship and
competitive strategy. Small Business Economics, 44(1), pp.37-54.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Owler. (2019) Telstra's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. https://www.owler.com/company/telstra
Pandya, S. (2018) Improving the learning and developmental potential of SWOT analysis:
introducing the LISA framework. Emerald insight. 33(3).
Statista. (2019) Ecommerce. [online] Available From:
https://www.statista.com/outlook/243/107/ecommerce/australia [Accessed 29/3/12].
Tang, E. (2018) 2017-18 GDP growth rate of 2.9% confirms the resilience of our economy.
[online] Available From: https://www.austrade.gov.au/news/economic-analysis/2017-18-gdp-
growth-rate-of-2-9-per-cent-confirms-the-resilience-of-our-economy [Accessed 29/3/12].
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E. (2017) Strategic
management and business policy (p. 55). Boston: pearson.