Strategic Planning and Analysis of Telstra Corporation

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MANAGEMENT & ORGANISATIONS IN A GLOBAL
ENVIRONMENT
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Table of Contents
Introduction......................................................................................................................................3
Discuss Strategic Planning distinguishing it and contrasting it with other planning functions and
techniques........................................................................................................................................4
1. The use of BCG Analysis in formulating the strategies for the management of a portfolio of
products or services offered to the market.......................................................................................7
2. Product life cycle as a guide to the management of a portfolio of products or services offered
to the market (Take two examples: CISCO’s FLIP camera and the typical electric jug)...............8
3. SWOT analysis and concepts of ‘fit’ and ‘stretch’....................................................................10
4. Porters Competitive Strategies (Illustrate with examples)........................................................13
Conclusion.....................................................................................................................................15
References:....................................................................................................................................16
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Introduction
Strategic Planning is considered as one of the effective initiatives for attaining the organizational
objectives. Telstra Corporation Limited is the largest Australian company operated in the
telecommunication industry. The company offers a wide variety of communication services such
as mobile services, fixed broadband services and fixed voice services and others. In Telstra,
strategic management focuses on to improve customer experience, how they simplifying their
products and services, the company shows how they simplify their operations, how they reduce
their cost system. So they plan to add in their strategy to: exit the customer pain points, solve the
problems that customers suffer. Develop the infrastructure business unit to improve their
performance. Simply a way of working is to empower their people and then serve their
customers. Reduction program in the cost built investment program. The report shows the
utilization of BCG analysis, product life-cycle, and SWOT Analysis and Porters Competitive
strategies.
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Discuss Strategic Planning distinguishing it and contrasting it with other planning
functions and techniques.
As per Telstra, Strategic Planning refers to the methodology used by the organizational leaders
for the purpose of determining future vision along with the identification of organizational goals
and objectives. The key aim of strategic planning is ensuring that the efforts of employees and
other associated stakeholders direct towards the attainment of common goals and objectives. It
also involves the alignment of the efforts, resources, and focus of all the employees and the
company. Strategic planning of Telstra sets the vision for the future of an organization that
means this process is forward-looking instead of using historical facts. There are different types
of strategic planning that are utilized on the basis of culture, leadership, and size of the
organization (Sosiawani, et. al., 2015). Strategic planning helps in making organizations aware
of future trends, challenges, and opportunities as well. Strategic planning not only helps in the
development of future plans but also ensures the success of those plans.
The key output of the strategic planning of Telstra is the strategic plan that refers to the
document used for the purpose of communicating the organizational objectives and goals, the
actions for their attainment and other vital information being determined in the planning to the
employees and other organizational personnel. The strategic planning process follows a
systematic approach involving crucial stages. The process initiates with the collection of inputs
or information about the company's position in the market, environment, competitors and other
key elements of the market environment. The inputs are basically gathered by using the past
strategic plans; and internal as well as external business environment scanning using PESTLE
and SWOT analysis (Gomera, et. al., 2018).
The next step is the determination of vision; mission and values as well that will further help
Telstra in the attainment of the organizational goals and objectives. Moreover, the company
undertakes an analysis of the existing and potential competitors along with the risks assessment
and challenges that can hamper the success of the strategic plan. The next step is the
development of a communication plan that involves the strategic plan along with the strategic
priorities using audio, meetings, videos or any other communication channel. The
implementation of the strategic plan is the most significant part of the planning process. For this
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purpose, an action plan is needed to be developing so that the strategic plan can be implemented
successfully.
There are other planning techniques that are different from strategic planning. These planning
techniques are comprised of strategic planning, operational planning and contingency planning,
and other planning techniques.
Meaning
 Strategic planning is conducted by top-level management for the purpose of determining
the vision, mission, and objectives of the company for the future along with the actions in
order to pursue these objectives.
 Operational planning is undertaken by the middle-level management in order to ascertain
the day-to-to activities of a company.
 Contingency planning is different from the other planning techniques as it is done in
order to prepare for the worst scenarios when the strategies are failed (Babafemi, 2015).
Time Duration
 The strategic planning is done for long-term planning.
 On the other hand, operational planning is done for a short period of time.
 Contingency plans are made for a short time as operational plans.
Scope
 Strategic planning has the wider scope as it takes organization as a whole
 Operational planning is done for supporting the strategic planning that shows the narrow
scope of the operational planning. The organization is categorized into departments,
centers, units and divisions under operational planning.
 Contingency planning has a narrow scope as it covers the contingencies or the emergency
times.
Emphasis on
 Strategic planning mainly emphasizes on the vision and mission of the company
 Operational planning focuses on daily routine activities
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 Contingency planning largely emphasizes the risk management during contingency times.
Modifications
 Once developed, strategic plans are not changed periodically.
 Operational planning is done every year that shows the flexibility of operational plans.
 Contingency planning provides an adequate degree of flexibility that can be modified as
per the risks identified (Sosiawani, et. al., 2015).
Process
 The strategic planning follows a long process involving the analysis of internal and
external environment; developing vision, mission and objectives; competitor analysis,
risk assessment, the establishment of a communication plan and at last the action plan.
 The operational planning process involves the assessment of the strategic plan,
emphasizing on the most significant goals, establishing key performance indicators,
assessing the operational risks and developing a plan.
 On the other hand, contingency planning initiates with the analysis of risks and hazards
and the recognition and prioritization of contingencies. Further, it involves establishing
scenarios regarding the planning process and a contingency plan for every scenario. The
contingency planning is completed by the maintenance of the contingency plan.
Dependency
 Strategic planning helps in the development of operational plans.
 Operational plans are formulated on the basis of strategic planning and supporting the
tactical plans.
 Contingency plans are formulated using the strategic planning and the operational plans.
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1. The use of BCG Analysis in formulating the strategies for the management of a portfolio
of products or services offered to the market.
The BCG analysis is the technique that is used by companies to make the strategies for the
company products and services. The BCG analysis of the Telstra company includes the decisions
that are concerned with the products that are profitable for the company or not. The BCG matrix
has four quadrants that show dogs, question marks, stars, and cash cows. These four quadrants
show different situations of the business in relation to the market share and growth rate. It is a
method that is used to diversify the business products and services to improve the corporate
performance of the company. The Telstra uses the BCG matrix to decide the performance of the
products or service that is profitable for the company. The dog quadrant shows that the product is
in the low market growth rate and the market share is also low. Every company tries to avoid the
dog situation in the business (Morsillo, 2013).
This situation shows that the company might have losses or partial profits with little cost. The
products and services of Telstra should be managed to give the required rate of return to be
profitable for the shareholders and have enough cash reserves for the uncertain future. This will
also ensure that the business invest in the right things for the innovation and improvement of the
business. The next quadrant is question marks which indicate that the market share is relatively
low and the market growth rate is high. This situation has an unpredictable future which means
that the products of Telstra may be profit-bearing. In this quadrant, it is advisable to invest
wisely in it to maintain the market share and ensure profits for the future. The other quadrant
implies stars which show that the market share is high and the growth rate is also high in the
products of Telstra.
They are mostly the market leaders in the industry and have high profits during the product life
cycle. The next quadrant is the cash cows which are considered to the time of high market share
but relatively slow growth rate. They are considered to produce more profits that are utilized for
the improvement of the business. This situation is considered to be of less competition because
of the low market growth rate. The main usage of the BCG matrix is that is should help the
business decision to invest in which products at right time to give the highest possible return to
the shareholders. The matrix is based on the theory of economies of scale which considers that
the increase in the market share will increase the revenue (Rahman and Areni, 2014).
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2. Product life cycle as a guide to the management of a portfolio of products or services
offered to the market (Take two examples: CISCO’s FLIP camera and the typical electric
jug)
A product life cycle refers to the marketing concept that involves the stages through which a
product passes initiating from the product idea to the stage of removing the product from the
market. The product life cycle mainly constitutes the stages of research & development,
introduction, growth, maturity, and decline. It is true that not every product reaches the final
stage of declining as some products grow continuous in the market while others failed to grow
effectively. Product life cycle plays a significant role by providing guidance for the management
of the portfolio of products and services being offered to the market. The product life cycle
signifies the stages involved from the initial stage of a product idea to the final stage of product
withdrawal from the market. Having an understanding of the product life cycle is vital for the
companies as it helps in managing the product portfolio.
This concept indicates that every product when launched in the market also dies and replacement
of such product is necessary if the company wishes to sustain the revenue level. The predictable
life cycle of the product helps in determining the cautious actions at the advanced level so that
strategies can be used before the declining stage for sustaining the product in the market. These
strategies may involve modifications in quality, product as well as style; and pricing strategies.
Using the approach of product life-cycle, an organization can develop a product plan in an
effective and efficient manner. This concept helps in making aware of the latest technological
changes emerged in the business environment. These technological changes further assist the
organization in the enhancement of the product quality, design and features as well. Moreover,
the organization gets assistance in the decision-making regarding product development and other
aspects as it provides sales data along with the performance data of real time. It helps the
management in diminishing the product from the market due to which the sales have been
reduced for the company.
Considering the example of the flip camera by Cisco, it can be said product life cycle approach
had assisted the company in managing the product portfolio. In 2007, the company decided to
enter the consumer electronics market with the launching of flip camcorders. In the initial phase,
the product used to dominate the camcorder industry. However, just after 2 years of the
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launching, the company had to shut down the selling of flip cameras and decided to eliminate the
product from the market. It was due to the emergence of growth and developments of ownership
and capabilities at a rapid rate.
Considering the example of the electric jug is an electronic product which reduces the
consumption of fossil fuel. According to analysis and research the 88% environment impact
concerns by fossil fuel depletion. With the effect of climate change (6.5%) and inorganic
respiration (4.8%) caused by pollution which is concerned with energy used for the boiling of
water. The functional unit for this production is by reducing the use of resources and decrement
in the wastage like remaining ash by burning of wood. Electric jug effect on three groups: human
being, environment and the natural resources. In terms of human being, it reduces the effort of
collecting the equipment, resources etc. and in terms of the environment; it reduces the pollution
and the harmful gas which directly effect by the burning of fossil fuel. As in same for natural
resource, this is already limited stock in the environment. It needs to be preserved. The electric
jug is environment-friendly equipment still people need to be aware of this eco-friendly jug.
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3. SWOT analysis and concepts of ‘fit’ and ‘stretch’
A SWOT analysis is a framework which is used for identifying the strengths, weaknesses,
opportunities and threats of a company which helps in evaluating its position in the competitive
market. Basically, SWOT analysis helps in finding the opportunities and threats of the
organization and its strengths and weaknesses which helps in determining what the organization
can achieve and what it can’t (Kenton, 2019). A SWOT analysis is an organized and systematic
framework which helps in assessing what the business unit, i.e. Telstra is able to achieve and
what it can’t, for both internal and external factors. By the use of environmental data and
assessing the company’s position, SWOT analysis helps in finding out what helps the firm in for
the purpose of achieving the organizational objectives, and also determines the barriers coming
in the way of achieving the organizational objectives, that it has overcome.
A SWOT analysis of Telstra
A. Strengths, Weakness, Opportunities and Threats analysis of Telstra is as follows:
 Strengths: Strength means the strong point of the organization. It means that special
point of the organization which separates it from other organizations. (Kenton, 2019). Telstra’s
strengths are as follows:
1. Telstra is one of the Australia’s leading information services and Telecommunication
Company.
2. Telstra serves customers from 230 countries with its 35,000 employees.
3. Strong customer service base.
4. A wide range of service portfolio.
5. Active sponsorship in major sporting events.
 Weaknesses: Weaknesses are the negative spots of the organization. Weaknesses
prevents the organization to give its best, what it is actually capable of. (Mindtools.com, 2019).
Telstra’s weaknesses are as follows:
1. Tough and increasing marketing competition leading to limited share in the market.
2. Low level of liquidity.
 Opportunities: Opportunities are the various external factors that provides an
opportunity to grow and expand itself. Telstra’s opportunities are as follows:
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1. Opportunity to lauch4G mobile broadband.
2. Regular increase in the demand of Telecom service.
3. Strategic growth initiatives.
4. Growing IT services market.
 Threats: Threats refers to the various factors that hinders the successful operation and
growth of the organization. Telstra’s threats are as follows:
1. Increasing competition.
2. Stringent regulations.
3. Rapid technological change.
The above information shows the SWOT analysis of Telstra along with its marketing and brand
parameters (Mindtools.com, 2019).
Concepts of ‘stretch’ and ‘fit’.
Strategic fit or simply ‘fit' refers to the degree to which the resources of the organization are
matched along with the needs of the external environment. It is a process which helps in
identifying the various growth opportunities arising in the environment of the organization, and
then building the strategies of the organization which helps in capitalizing the opportunities
(BusinessDictionary.com, 2019). However, the organization must not set its vision only limited
to external environment and the available opportunities. Planning and implementing the strategy
are the two key factors that helps the organization in achievement of strategic fit. Strategic fit is
associated with the proper utilization of resources by the organization which concludes that
positioning and selecting right industry is not necessary for the purpose of achieving profitability
rather it can be achieved by focusing on the internal factors and properly using the organization's
resources and opportunities.
Strategic stretch or ‘stretch' means creating a competitive advantage and finding new
opportunities by the process of development and innovation using an organization’s resources.
Stretch or Strategic Stretch is the difference between strategic intent and the resources that are
available. The key to Stretch is leveraging resources (author STREAM, 2019). There are two
ways of leveraging resources which are financial and non-financial. Some of the ways of
leveraging resources are as follows:
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 Accumulating the resources efficiently.
 Conserving the resources.
 Concentrating them strategically.
 Recovering the resources form the market place in the shortest possible time.
 Complementing one resource with another.
Many organizations don’t have access to proper resources; this is where leverage complements
the strategic allocation of resources.
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