Overview
Telstra Corporation Limited is an Australian telecommunication company that builds and operates telecommunication network, it was established in 1901. It operates in the market of mobile, pay television, internet access and other products. The company grew with the high rate of profit. In 2011, Telstra announced the formation of Telstra Digital, the purpose of the company was to improve the digital channel for the customer services. As the years passed, the company launched the smartphone and Facebook application for the customer’s entertainment and for managing the Telstra account. In 2017, the company earned $26billion with the help of 32000 employees. With the help of its human resources, the company serves the 17.6 million mobile services, 5.1 million retail fixed voice services and 2.5 million retail fixed broadband services. It helps the customer to improve their living standard through connection (Telstra, 2018).
Industry
Telstra operates in Australia under the Telecommunication industry. Telephony and broadband networks have always been important in Australia. All the Australian network services were the government asset of the Australian government before Telstra entered into the industry (Budde, 2018).
In this paper, the internal and external analysis of the company is undertaken to identify the strength and weakness of the company. In the starting of the report, internal analysis of the company is discussed. After that, the tangible and intangible resources are discussed with the core competency of the company. At the end of the report, the suitable information system is selected and evaluated to meet the need of the company.
General environment Analysis
Political factor- It has been analysed that the Telstra is getting affected from the government of Australia interventions. The government of Australia put a restriction on the phones and the tariffs which can be easily produced by the company to earn the revenue. It is necessary for the company to produce those goods and services which are passed by the privacy and safety government regulations (Brink, 2017).
Economic factors- Inflation, interest rate and economic growth have a great impact on the Telstra Company. Australia has a large number of areas which offer the great investment opportunity. GDP of Australia is declined due to falling prices of the product and services. It is observed that the Telstra suffered loss due to falling prices (Singla, Ahuja, and Sethi, 2017).
Social factor- It has been seen that Telstra aims to enhance the living standard. It is all about the career, attitude, and safety of the company. It is observed that the social factor has a positive impact on the company just because many companies rely on the Telstra to carry out the conferences calls, instant messaging, daily phone calls and other activities.
Technological factor- It has been evaluated that the new phones models and communication are being produced on daily bases in Australia. It is observed that all the companies are focused on the new technologies in the market which makes the life easier. The company has the benefit that the consumers are getting attracted towards the technologies or smartphones (Hakansson, 2015).
Demographic and physical factor- It has been analysed that the population of Australia is continuously rising and expected to increase in the near future. Due to increasing population in Australia, the demand for the smartphones and internet is increasing; that has the positive impact on the company. In order to save and protect the environment, Australian government promotes the wireless network that is also a beneficial move for the Telstra Company (Hasanati, 2018).
Industry Environment
(Source: Jurevicius, 2018)
The threat of new entrants
It has been analysed that the Telstra has a low threat of new entrants just because of high-cost requirement. Telstra earned good name in the market; it is difficult for the new companies to compete with Telstra. New entrants bring innovation to do the things in a new way; it brings the high pressure on Telstra Corporation. Through the lower pricing strategy, and reducing costs, the company manages all challenges and builds effective barriers to save itself from the new entrants (Dobbs, 2014).
Bargaining powers of buyers
It has been evaluated that the bargaining power of Telstra buyers is high. The buyer wants to buy the product at the lowest price with the best quality. It is observed that the bargaining power of buyers put pressure on the Telstra Corporation. Telstra offers cheaper prices as compare to the other companies. However, despite offering lower prices consumers switch to other companies (Najib et al., 2017).
Bargaining power of suppliers
As per the research, it has been seen that all the companies in the telecommunication industry buy their raw material from the numerous suppliers. The suppliers of Telstra are in the dominant position which decreases the margins of Telstra Corporation Limited. It is observed that the powerful suppliers of Telstra use their negotiating power to maximise their raw material prices. The overall impact of higher bargaining power of supplier is that it lowers the overall profitability of the company.
Threat of Substitute
It can be said that the new products and services satisfy the customer needs in different ways and hence the company has the high risk of threat of substitutes. Dropbox and Google Drive are the substitutes of the company to storage hardware drives. New companies offer the unique products as compared to Telstra. Telstra has the high risk of threat of substitute just because the new entrants enter the market with the unique quality of products and services.
Threat of competitors
As per the research, it is observed that the Telstra has low threat of competitors. Telstra is the leading company of Australia, it has good image in the market. It is very difficult for the other companies to compete with Telstra in the Telecommunication industry. Telstra has a low risk of new entrants which comes with new unique products and services in the market.
Competitive Environment
There are many competitors of Telstra. StarHub, SingTel, and M1 are the top competitors of the company. The company faced many challenges just because of the competitors like the bargaining power of buyers. M1 is the number one competitors of Telstra; M1 is the telecommunication equipment company. M1 generates 2.82 % of Telstra revenue. StarHub is second competitor of Telstra. StarHub is the competitor of Telstra in fixed-line telecommunication services industry (Grant, 2016). StarHub earned $23.7B less than the Telstra (Telstra, 2018). SingTel is also one of the top competitors of the company. It is also competing Telstra in Fixed-line telecommunication services industry. As compared to Telstra, SingTel earned $9B revenue that is less than the company’s revenue. There are many other competitors of the company like Vodafone. Vodafone made the pricing strategy to attract the customer towards the prices and products. Vodafone offers 50% discount on the services which increased the pressure on Telstra. Telstra and Vodafone are now offering the low prices to the customer. It is observed that the Vodafone will put the direct competition on Telstra by setting its prices carefully (Telstra, 2018).
Opportunities and Threats
With the rising population of Australia, the demand of the consumers towards the telecommunication is increasing day by day. Increasing demand of the consumers is the greatest opportunity for the company. Increasing demand helps the company to grow rapidly in the market by expanding the business in the new market. Nowadays, consumers are getting attracted toward the smartphone and digital market thus, the IT service market is growing at a higher rate. It is an opportunity for the Telstra to grow within the IT market. The company also launched its 4G mobile broadband network to target the new consumers and generating the sale (Brooks, Heffner, and Henderson, 2014).
It has been analysed that the new technology changes the lives of the people. The company has an opportunity to grow with the market. New companies come with the new technology which is a threat for the company. From the above research, it can be said that Telstra is a leading company of Australia. Thus, every telecommunication company aims to compete with Telstra. Telstra has a high threat of the competitors like StarHub, Vodafone, and M1.
Tangible and Intangible Resources
Tangible resources
Human resources- Human resources are the strength of Telstra. Telstra is one of the largest employers in Australia with total employees of 32000 and more in its workplace. Telstra paid four billion dollars in wages and salaries of employees. Telstra appointed the Women staff as well in large percentages. The company has 25.4% women in executive management. The company invests $1,116 in the learning and development of per employee (Telstra, 2018). Telstra has many opportunities to build their career across many areas. Telstra is one of the most famous companies for its facility. Telstra provides the good support to the families of the employees. 65% of Telstra employees believe that the company is providing them with sufficient training to develop their personality (Telstra, 2018). It offers many benefits to employees like maternity leaves, children education, health and safety and others. The company gives the maternity leaves to the parents. The company also provides the leases system for the personal vehicle of an employee to encourage the employee for his work (Saqib, et al., 2015).
Financial resources- It is found that the financial condition of Telstra is very strong due to which it enjoys the great success in the market. It builds the great reputation in the market. It contributed $ 129.8 billion in the economy (Saqib, et al., 2015).
Technology- It has been evaluated that Telstra has very new technology which is used by the company in its workplace. Telstra offers the new innovative products to the customers. It also starts the online delivery service to compete with the competitors. The company used the technologies to satisfy the consumer needs. The company used the cloud services and more powerful of regulation, cyber security and data sovereignty (Buckley, and Graves, 2016)
Intangible resources
Brand image- Telstra is the most valuable company in Australia. The Company comes under the 500 most valuable brands of telecommunication. The company’s brand value is counted in $14.3 billion (Buckley, and Graves, 2016).
Reputation and goodwill- Telstra has a strong base in the Australian market that is a strong intangible resource of the company. The company has a big name in the market which helps the company to grow fast in the market (Telstra, 2018).
Core competencies
There are four tests to recognize the core competencies of the company. As the year passed the competition in the telecommunication industry is increasing due to increasing demand of the consumers toward the telecommunication. The company has to offer the low prices to attract the customer towards their services. Nowadays, consumers demand the high quality of products at the low prices. Telstra clears the first test by providing the services in low prices. The first core competency test is providing significant value. By reducing the cost of business, the company attains the market share in the market.
The second test is also cleared by the company that is market share. The company has half of the market share in the telecommunication industry. Telstra has 40-50 precent market share (Rosemann, and Brocke, 2015). The company takes the competitive advantage by reducing the cost of the product or services. The company fulfils the third test by taking the competitive advantage of the company. To keep the limited product with the high quality, company state the cost leadership strategy. This strategy helps the company to compete with the competitors that are the fourth test fulfils which is fulfilled by the company.
Capabilities of Telstra
Telstra has the connecting capabilities. The company is well-known for its connection in 11 countries. The Company connecting capabilities has the digital transformation which helps the company to target the new customer (Porter, and Heppelmann, 2014). The company has the strong connection with humans and industries of 11 countries in Asia. The connection quality of the company is essential for the present and future. The company provides the digital facilities to the customer which is highly demanded. Almost 94% of countries believe that the digital transformation is essential for their economy. The company has the capabilities to connect the people and industry with the digital world (Tesltra, 2018)
Suitable Information System
An information system is essential for the Telstra. Telstra can use the system to collect the data, process, and store and modify the transaction. The company uses the system to store the information based data for the long term. The company can use the transaction as evidence for the legal work and for a claim. The company can use the system these are transaction system, enterprises system, and executive system (Neto, 2018).
Transaction system- The company can use this system to manage all transaction related to suppliers, employees, customers, and others.
Enterprises system- Telstra use this system to store the operating transaction like purchase sale and marketing. It helps the company to achieve the competitive ability.
Executive system- It helps to store the fact-based data in the market. It helps to support the senior executive system information and decision making needs (Rothaermel, 2015).
Evaluation & Recommendation
From the above analysis, it has been evaluated that the Telstra earned high revenue due to a large number of market share in the market. It has been evaluated that the company has to manage the data for the claims. Transaction and Enterprises help the company to store the data for a long time. In order to record the keep the inventor and manage the customer, the company can achieve the high growth in the market.
The company can easily use these systems but it requires the high cost which has the negative impact on the company sale. It is recommended that besides using this system, the company appoint the accountants expert or management expert to do the time to time research or to make the decision related to the inventory. The company also use the support system for analysing the data with the statics figure which helps the company to improve the productivity (Wheelen, 2017).
Conclusion
From the above analysis, it has been concluded that Telstra is the leading company in telecommunication. Due to its high-quality product at the lowest prices, the company takes a competitive advantage. By adopting the cost leadership strategy, the company has the high threat of competitors. To connect the industries and people with the digital world company grabbed the 50% of market share. To fulfil the consumer needs the company has enough tangible and intangible assets. Its cost structure strategies help the company to fulfil the core competencies test. Due to the increasing demand of the consumers, the company has to manage the data through the information system. The company can use various information systems in order to manage the data but it has to appoint the experts to analyse the data and maintain the statistical figure which helps the company in making a decision.
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