STRATEGIC MANAGEMENT OF TELSTRA
Executive summary
This particular report will emphasize the understanding of Telstra Company and its various strategic issues that has become a constraint to maintaining its competitive advantages in the market. Telstra is a leading telecommunication company in Australia that offers a full range of communication-related services while competing with other telecommunication companies.
The overall analysis also focuses on the vision and mission of Telstra and reveals further support from the same towards managing strategic directions. Moreover, those values, mission and vision are examined and it has been seen that Telstra’s mission and vision statement is aligned properly to channel supportive future directions. Nevertheless, the company promises to provide the customers with a better future by keeping the community closer and for this bringing strong direction for managing employee engagement and extending networking needs to be followed.
This report also put importance on three major frameworks and those help in examining Telstra’s competitive strategies. Porter’s Five Forces analysis helps to analyze current work pressure and related profitability from the telecommunication industry. The SWOT analysis will identify Telstra’s different internal strengths, weaknesses and external opportunities and threats to evaluate how this impacts the business. The VRIN analysis will help to find out sustainable competitive advantages compared to the other competitors present in the market. The key competitive advantage for Telstra is battery supply but this is average because the resources and capabilities can be imitated.
This report also presents a summary related to some significant strategic issues which should be corrected by Telstra to achieve success. Telstra needs to strike a balance in the short-term results against its growth, long-term capabilities and opportunities. As the company promises to maintain strong customer engagement by providing them best values so proposing standard technological solutions which can effectively attain better research and development needs to be supported through this.
Table of Contents
2. Organization and industry context 3
3. Implications and improvement 4
4. Porter’s five forces framework 6
4.1 Competitive seller rivalry 7
5.1 Research and development 9
1. Introduction
This report will discover Telstra’s values, mission and vision which align with the different strategic objectives to provide standard services to the customers. The purpose of this assignment is to present strong strategic directions like engaging proper research and development in the technological areas to lead an increment in the range of products offered for the customers and make it diverse.
The report thus uncovers the frameworks that assist in investigating Telstra’s competitive position in the market. Here, we can state that by following the strategic management concept, the company can follow efficient directions which possibly match the business requirements like various resource planning and finding out the best opportunities. Furthermore, the SWOT analysis will help to provide a deep understanding of the current internal strengths of Telstra along with some market threats and opportunities. Porter’s Five Forces analysis will help to identify current competitive pressures in the telecommunication industry by stating the current condition of Telstra. The VRIN test will represent the competitive advantages of Telstra by continuing strong networking positions.
The concluding segment of the report presents some of the critical strategic challenges discovered by Telstra that the company requires to change to become competitive in the market and finally improve its strategic directions.
2. Organization and industry context
Telstra is famous for being Australia’s leading telecommunication company that offers a full range of communication services. The company provides 18.8 million retail services and more than 3.8 million fixed retail standalone data services and fixed bundles along with 960,000 fixed retail standalone voice services (Telstra 2022a). The company focuses on connecting the future through effective technology solutions that can be used and simply. In the 21st century, telecommunication opportunities can be maintained by connecting with governments, businesses, individuals and communities. Telstra is focusing on the customers to improve how they can live by building connections. Furthermore, to shape the work experience Telstra has focused on managing a dedicated workforce so that more customers can engage with the company and great values can be incorporated.
As the market size is measured from revenue, it can be stated that the telecommunication industry accounted for $33.7bn in the year 2023 (Dawson et al. 2020). The ACCC is responsible for managing the economic regulations in the telecommunication sector and this incorporates National Broadband Network (NBN) to promote strong networking and manage competition along with the infrastructure of the market. Needless to say, Australian telecom organizations are potentially maximizing different advantages of a cloud transformation with different cloud services like artificial intelligence, machine learning and analytics. According to market research, more than 38% of companies are now investing in cloud transformations to effectively support digital business.
3. Implications and improvement
Telstra’s mission, vision and strategic objectives follow the effective pathway towards managing better customer service and increasing engagement.
Table 1: Telstra’s strategic vision, mission, values and objectives
Vision |
Telstra innovate to provide help to the customers |
Mision |
Committed to staying close to the consumers and providing them with the best experience |
Company values |
Change-markers: Setting ambitious goals and proposing stakeholder direction becomes highly supportive Better together: As a team, Telstra focuses on team value management and embraces diversity Simplistic approach: The easy process to associate with the customers and provide them with 24/7 support Care and assistance: Towards managing the planet effective and right decision-making has been followed. |
Objectives |
To move the communities forward To concentrate on innovative action plans and standard work directions To build a better future with the customers |
Source: Developed by the student (Telstra 2023a)
3.1 Vision
The strategic vision of the company is to enhance its position as a leading telecommunication service provider and information services company in Australia along with managing its presence globally. This vision has generated an understanding of where building a better future in the telecommunication market and effectively moving forward to manage the community is highly prioritized.
3.2 Mission
The company through its mission statement is trying to stay close to the customers by providing a better experience so they need to enhance its research and development team by managing the best coordination. This can be directed further by following the market preferences of the customers and keeping a close observation of the competitors’ auctions as well.
3.3 Values
The company values concentrating on standard service guidance to the customers and enhancing core work approaches which are appropriate for the market. To support the values it is highly applicable to channel curiosity and propose innovation along with the stakeholders.
Table 2 – Examples of Telstra fulfilling its values
Values |
Company fulfilling values |
Caring |
Setting ambitious goals to chase success Care about planet |
Trust |
Team development is done by practising communication Workplace diversification |
Collaboration |
The team management plan focuses on collaborative directions Embrace values while working |
Simplicity |
Easy approach management for the customers |
Source: Developed by the student (Telstra 2023b)
Table 3 – Telstra’s objectives against its vision mission and values
Objectives |
Vision, mission and values |
Help customers |
Manage automatic reminders to solve customer queries 24/7 customer assistance Manage customer preferences in networking and equipment processing |
Build better future |
Enhancing student technology projects focusing on 5G Joint pipeline creation for R&D projects in future Expanding network and technology capabilities |
Move with community |
Recognize and acknowledge original, existing and ancient community connections Integrated solution management through enhancing digital channels Effective loyalty program management and creation of standard distribution systems |
Source: Developed by the student (Telstra 2023a)
Source: Developed by the student
3.4 Strategic objectives
Telstra’s vision, mission and values align with its different strategic objectives. The objective is to lead the telecommunication market in Australia with simplified products and services by improving customer services. Furthermore, the strategic directions also have been channelized through managing better customer experience by strategizing operational plans while reducing the cost base.
4. Porter’s five forces framework
Porter’s Five Forces Framework helps to convey an industry-specific competitive environment (Haeruddin et al. 2020). The nature of the competitive forces and the various strengths will be stated through this framework.
Table 4: Porter’s five forces analysis
Porter’s Five forces |
Telstra Company |
Verdict |
Rivalry among the competitors |
Generate standard product and service scaling to maintain competition Collaboration with competitors to increase the market size and market value |
High |
The threat of new entrants |
By innovating new services and products effective customer engagement can be maintained |
Moderate |
The threat of competition towards substitute products |
By strong being service oriented in the telecommunication market rather than just being product oriented By increasing the switching cost for the customers |
High |
Supplier bargaining power |
Effectively building efficient supply chain planning Experimenting with the product design by managing materials |
Low |
Customer bargaining power |
Manage to provide appropriate services to the customers which are innovative and appropriate |
High |
Source: Windholz, 2021
4.1 Competitive seller rivalry
The different market competitors of Telstra Company are Vodafone, Singtel, TPG Telecom etc. In this context, Vodafone and Telstra have a point of parity as both of them are focusing majorly on the 5G mobile speed with the 5G mobile networks (Telstra 2023b). The major point of difference between Telstra to Singtel comes from the context of handling stakeholders within Singtel as the company believes in handling large-scale digitization prospects by accelerating macro trends. In these criteria Singtel and TPG Telecom are maintaining a strong stakeholder value with the internal and external stakeholders is noteworthy.
Reasons for competitive rivalry
The telecommunication industry in Australia strives to stay resilient as challenging times have come. Companies are working hard to maintain a workforce culture. The necessary sustainability agenda has been followed to accelerate digitization approaches. From different reports, it has been observed that 2.8 billion unique customers want innovative services from telecommunication companies (Windholz, 2021). Different competitors are encountering barriers because of the infrastructural monopolies and efficiency generated from the digitization approaches.
The market size of the telecommunication industry
Australia’s telecommunication market is valued at $34.2 billion in 2022 and this is expected to grow more than 1.5% in the year 2023. The gross revenue of the telecommunication industry becomes US$ 8.74 billion and further, the organizations are growing to generate strong market directions which can be beneficial in this prospect (Madsen & De Percy, 2020).
Competition in the industry: The competition in the industry is quite high and it has been seen that Vodafone is the competitor of Telstra. Telstra operates in a quite competitive telecommunication service industry and to maintain the strong profitability of the organization it is highly appropriate to build sustainable differentiation in the segment of telecommunication (Madsen & De Percy, 2020).
The threat of new entrants: In telecommunication services, new entrants can bring several new and innovative services and the ways to process with the business also can be different. This situation can majorly impact Telstra Corporation as the company follows some lower pricing strategies by providing valuable solutions to the customers.
The bargaining power of suppliers: The suppliers can be demanding as they want to buy the best offerings available by paying a minimum amount. This situation can put pressure on Telstra as in the long run their profitability can decrease. The supplier’s entry into the market is not that tough and supplier entry has increased with time and the bargaining power has become low.
The bargaining power of customers: The bargaining power of the customers in this electric automobile industry can be counted as a moderate force and different factors are associated with this to influence the bargaining power of the customers. The low switching costs can be a strong force because of the increase in the buyers’ bargaining power as from Telstra the customers can move to any other brand that can provide some cheap services.
The threat of substitute products: The threat of substitute products in the company has a moderate force because Tesla has a limited or moderate number of substitute options such as in the networking and modem options available in the market. The most significant aspect is the low switching cost and the increase of competitors in the market and the moderate performance is also seen in this context.
From the overall five forces discussion it can be presented that Telstra needs to work more on managing innovative and diversified service plans which cater for the best direction towards managing the telecommunication industry and staying ahead of the competition.
5. VRIN framework
The VRIN assessment helps to find out company-related strategies to generate sustainable competitive approaches over other competitors. The below-mentioned table presents valuable, rare, inimitable, and non-substitutable for Telstra.
Table 5: VRIN framework
Resources and capabilities |
Valuable |
Rare |
Inimitable |
Non-substitutable |
Competitive significance |
Performance implications |
R&D |
Yes |
Yes |
No |
No |
Sustainable competitive advantage |
Average profitability |
Brand presence |
Yes |
Yes |
Yes |
No |
Competitive advantage |
Average profitability |
Equipment management |
Yes |
Yes |
No |
No/Yes |
Competitive parity |
Average profitability |
Network capacity |
Yes |
Yes |
Yes |
Yes/No |
Competitive parity |
Average profitability |
Source: Madsen & De Percy, 2020
5.1 Research and development
The strong research and development planning by Telstra is enabling a focused understanding of effective networking approaches and managing the power systems where it is necessary. The pipeline of this R&D process further re-joins the idea of strong project planning and checking both internal and external requirements.
5.2 Brand presence
Telstra Company is operating in over 20 countries outside Australia and the robust services along with the significant market association make the brand quite innovative in front of the customers. As a leading telecommunication service provider Telstra is associated with the government, businesses, different carriers and OTT customers which is growing with the passing years. The brand’s presence is quite expensive to further imitate although rivals are working hard on the digitization prospect Telstra is continuing to invest in innovative networking management to initiate unparalleled coverage (Madsen & De Percy, 2020).
5.3 Equipment management
Different hardware and software management plans by Telstra focus on single service desks where equipment parts replacement within an hour and arrangement of the same become highly appropriate. The equipment management and delivery site planning of the equipment also become quite specific by the company.
5.4 Network capacity
Retaining and managing network equipment by the company becomes efficient and Telstra’s Network Care Plan becomes highly cost-effective as well (Competition, A. & Consumer Commission, 2020). Therefore, managing strong reliability and convenience becomes highly appropriate which directs the better point of contact for any carriage fault or any kind of hardware replacement and makes the entire process quite easy for maintenance.
6. SWOT analysis
By following a SWOT analysis the proper identification of strengths and weaknesses for any firm can be maintained and opportunities to direct future actions by eliminating weaknesses also get followed.
Table 6: SWOT analysis
Strength Telstra has reliable suppliers to manage the strong action planning The work culture of dealers and distributors helps to promote company plans and investment for their training and also get managed |
Weakness Requirement of more investment for associating with new technologies Financial planning needs to be effective and efficient to maintain the current liquid ratio and asset rations Proper investment in research and development by considering the terms of innovation needs to be followed as this is lacking Limited success outside the core business has been seen and this challenge is moving to products segment to the present culture |
Opportunities
The lower shipping prices decrease the cost of transportation and this provides the opportunity to generate a strong market share New customers can be gained from the online channel and a new sales channel has been opened from current investments |
Threats Different shortages of the skilled workforce globally bring a threat to the steady growth Supply innovation practices are quite irregular Different lawsuits can be faced with continuous fluctuations in product standards can generate issues |
Source: Haeruddin et al. 2020
Strength: The strong expansion plan has created a better performance management process within the team for Telstra and this has helped in managing several benefits to generate connections with the customers for selling their products and services.
Weakness: Telstra has several weaknesses because of its low success at integrating different firms and handling proper innovation through the fastest-growing technological associations. Other than that marketing the products requires proper support from unique sales propositions and Telstra is still lacking in this segment.
Opportunities: To discuss the opportunities of Telstra it is highly significant to mention that the new taxation policy can generate strong indulgence power for the market and this creates standard investment approaches for the business (Haeruddin et al. 2020).
Threats: Telstra can face competition as the different rivals are generating new products and services and this can be a market disruptor. Along with that currency fluctuations can also be faced as Telstra operates in different countries.
7. Critical strategic issues need to address
Some of the critical challenges that Telstra is facing are due to its convergence rules and not being able to align the short and long-term goals as the focused understanding is not able to be structured in this prospect. Moreover, it has been seen that as the demand is growing so prices are falling and managing the entire action plan through the overall implementation can be a challenging process. Additionally, it can be also stated that managing the strong network strategy and understanding the technological plan through research and development also require supportive directions from the company so that inclusion of growth and development can happen. The company is also not able to create standard technological capabilities and here the proposition from stakeholders and third-party engagement is highly required to diminish this strategic issue. To mitigate the challenges, Telstra requires them to follow standard developmental directions where the stakeholders can join and share their valuable opinion towards creating better services (Competition & Consumer Commission, 2020). On the other hand, with a skilled employee management plan and focus on the research and development criteria the prospect of generating standard work directions can be maintained as well. New trends in consumer behaviour by opening up new markets have been channelized by generating an effective understanding of the customer requirements and managing the switching cost of the customers.
The company after opening up a new market by following technological adoption can be structured through possible agreement. Integration of complementary organizations through the process of mergers and acquisition streamlined effectively and the strong distribution network and successful track record of developing new services and products become effective.
8. Conclusion
From the overall discussion, it can be stated that Telstra requires to effectively create strategic implications which process with better research and development by understanding customer requirements. By focusing on the internal strength and weaknesses along with opportunities and threats the company needs to create a standard direction which will be supportive of the entire work system of the company. Therefore, Telstra requires creating and adopting proper technological directions to channel significant missions and values while associating with future growth.
References
Competition, A. & Consumer Commission, 2020. ACCC Communications Market Report 2018–19. https://policycommons.net/artifacts/1753925/accc-communications-market-report-2018-19/2485198/
Dawson, N., Rizoiu, M. A., Johnston, B., & Williams, M. A. (2020, December). Predicting skill shortages in labor markets: A machine learning approach. In 2020 IEEE International Conference on Big Data (Big Data) (pp. 3052-3061). IEEE. https://ieeexplore.ieee.org/abstract/document/9377773/
Haeruddin, M. I. M., Farhansyah, A., Haeruddin, M. I., & Mansur, M. A. R. (2020). We could be so good together. International Journal of Educational Administration, Management, and Leadership, 77-84. http://scholar.googleusercontent.com/scholar?q=cache:H_pWmTCN8lsJ:scholar.google.com/+TELSTRA+COMPANY+AND+ITS+MARKET+&hl=en&as_sdt=0,5&as_ylo=2019
Madsen, A. & De Percy, M., 2020. Telecommunications infrastructure in Australia. Australian Journal of Social Issues, 55(2) .218-238. https://onlinelibrary.wiley.com/doi/abs/10.1002/ajs4.121
Telstra – Our Company 2023a Telstra.com. Telstra. Available at: https://www.telstra.com.au/aboutus/our-company (Accessed: April 1, 2023).
Telstra – Our Company 2023b Telstra.com. Telstra. Available at: https://www.telstra.com.au/aboutus/our-company (Accessed: April 1, 2023).
Windholz, E. L. (2021). Fantasy sports in Australia: co-regulation and commercial accommodation. The International Sports Law Journal, 21(3), 154-165. https://link.springer.com/article/10.1007/s40318-021-00187-x