Telstra's IT Strategy: Business Challenges and Priorities Report

This report provides a comprehensive analysis of Telstra's IT strategy and management. It begins by identifying the business challenges faced by Telstra, such as increased competition, price reductions, and the impact of the National Broadband Network. The report then outlines Telstra's top-five b...Read More

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Information Technology Strategy and Management
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Table of Contents
Q1. Business challenges of Telstra.........................................................................................................3
Q2. Top-Five Business Priorities of Telstra..........................................................................................3
Q3. Impact of IT in Telstra......................................................................................................................3
Q4. IT support the business of Telstra to overcome the problems......................................................4
Q5. Best IT strategic steps taken by Telstra..........................................................................................4
Q6. Worst IT strategic steps taken by Telstra........................................................................................4
Q7. Missed IT strategic steps in Telstra.................................................................................................4
Q8. IT risks faced by Telstra...................................................................................................................5
Q9. Factors which contribute to “Red Ocean” for IT in Telstra..........................................................5
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Q1. Business challenges of Telstra
The growing demand of mobile devices, internet services and other telecommunication services
led to decrease in their prices. Currently in Australia, one out of two people have an internet
enable phone and one of five have an iPad. This has led to increase in demand for Internet
services and because new companies have come up and have lower prices, Telstra was forced to
reduce the prices of its services so as to keep their customers and attract new members.
Convergence rules for years, due to increasing demand of range of services by customers, Telstra
reacted by expanding their services and ventured in to new dimensions. Customers now want to
access everything on one device for example watch download TV on a laptop or watch it online,
access internet using TVs and Telstra have been having a challenge to meet these new
technological advancement and the changing consumer needs. (Morgan, 2012).
When the national broadband network (NBN) replaced Telstra’s network with the 8-times faster
network owned by the government affected its attractive businesses because it will lose that
market force of controlling communication prices.
Telstra may be owning technically sophisticated network but still mobile business poses great
competition. Indulging in mobile business won’t save Telstra’s problems because there is a lot of
competition in this sector. For example, Vodafone recently cut their prices in order to win back
the market share.
Telstra has made itself a brand and this forms the basis of last line defense. Telstra brand may
offer it some protection if there was sudden deflation in mobile network prices until affordability
is made irrelevant. The problem, however, is that designing of products is not done by Telstra
itself, that is, it buys these products like T-boxes, mobile network to ADSL from somewhere
else. Therefore, it is a bit difficult to determine where the value of brand lies.
Q2. Top-Five Business Priorities of Telstra
According to Blenko, Mankins & Rogers (2010) some of the business priorities include:
Enhancement of productivity program.
Continuation of network leadership consolidation
Investment in long-term development.
Winning the national broadband network and reducing purchase cost.
Continue with innovations and inventions to become world class telecommunication company.
Q3. Impact of IT in Telstra
Porter’s five forces model
The following are the Porter’s five forces as suggested by Michaux, Cadiat, & Probert, (2015).
Supplier power- supplier will always raise the prices of their product if they know that they are
the only ones supplying it or rather, they supply quality and unique products. Technology has
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helped Telstra in many ways including giving it the ability to identify new suppliers and weigh
their prices and quality.
Buyer power- technology has made it possible for customers to search and identify services and
product over the internet and compare them based on price and quality. If a customer knows that
he/she have options of the same commodity, then the next selection criteria will be price and
quality. Currently there are several companies offering services which are the same as that of
Telstra. If the competitors are offering the services and selling the products at lower prices then,
this fact will force Telstra to also cut its prices because the customer has an option.
Currently in the telecommunication industry, many companies hare offering services and
products which are undifferentiated thus creating some business rivalry among them. This fact
has been brought about by the enhancement of technology and the reduced cost of it. thus this
has led to Telstra having stiff competition from its rivals.
Threat of substitution- technology has led to customers having an option on a service or a
product. The mentality of a customer currently would be “if Telstra’s services are expensive,
then why not try company XYZ”. This reduces Telstra’s power and market attractiveness.
Threat of new entry- telecommunication is a very attractive and profitable industry thus
attracting development of new companies. This leads to reduction in Telstra’s market share.
Q4. IT support the business of Telstra to overcome the problems
According to Sauter (2014. information technology has enabled Telstra to overcome the
problems it is facing by: enhancing efficiency, increasing collaboration, improving customer
relationships and reducing the time needed to search for information.
Q5. Best IT strategic steps taken by Telstra
Beginning with a clearly outlined objective for example one of the purpose was to make sure
very person identify them as they are innovative and their services are crucial to them.
Concentration on internal issues like coming up with flexible working conditions for employees.
Taking time to gather customer feedback and improving their service experiences.
Q6. Worst IT strategic steps taken by Telstra
Selling its copper networks to federal government.
Investing in new companies rather than enhancing its technology.
Trying to identify new ways of utilizing the old infrastructure.
Eyeing and focusing on startups.
Q7. Missed IT strategic steps in Telstra
Telstra fail to focus on improving their own technology rather it focused on outdoing its
competitors and pressing startup companies that posed some competition to it. if Telstra had
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invested in enhancing it technology, services and products it would need to worry about
competitors because it would still dominate a large percentage of market share.
Q8. IT risks faced by Telstra
The growth of telecommunication competitors and decision on prices is the greatest risk facing
Telstra. Also the concern by customers that signals transmitted by mobile devices could affect
their health is another big risk because customers may shy away from using its products. This
risks can be avoided by Telstra investing to advance it technology to outdo new companies and
conducting mass education and informing the public that the signals will not affect them.
Q9. Factors which contribute to “Red Ocean” for IT in Telstra
A suggested by Kim & Mauborgne, (2015) the following factors may have contributed to the red
and blue ocean for IT in Telstra:
Using existing customers’ insights to create new products, services and demands.
Taking market strategies as niche approaches.
Confusing market strategies with technology innovation.
Creating “Blue Ocean” Strategy for Telstra IT
Innovating and developing new products and services.
Increases the rate of contact with customers.
redesigning service delivery model
Lowering cost of services and products.
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Reference List
MORGAN, J. (2012). The collaborative organization: a strategic guide to solving your internal
business challenges using emerging social and collaborative tools. New York, McGraw-Hill.
http://www.myilibrary.com?id=367654.
BLENKO, M. W., MANKINS, M. C., & ROGERS, P. (2010). Decide & deliver: 5 steps to
breakthrough performance in your organization. http://www.books24x7.com/marc.asp?
bookid=40527.
GIARRATANA, N. (2012). Survive at the top, Jaico Publishing House.
MICHAUX, S., CADIAT, A.-C., & PROBERT, C. (2015). Porter's five forces: Stay ahead of
the competition. [Place of publication not identified], 50Minutes.
http://public.eblib.com/choice/publicfullrecord.aspx?p=4005662.
SAUTER, V. L. (2014). Decision Support Systems for Business Intelligence. New York, NY,
John Wiley & Sons. http://nbn-resolving.de/urn:nbn:de:101:1-2015021910785.
KIM, W. C., & MAUBORGNE, R. (2015). Blue ocean strategy: how to create uncontested
market space and make the competition irrelevant.
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