Today's business managers face numerous hurdles when attempting to enhance their operations, particularly in light of the present technology environment. Managers who are attempting to grow a new business have the biggest difficulties. Telstra, an electrical appliances and accessories firm, has not been left out of this competition. The company's management is confronted with five key business issues (Cooper, 2000)
In descending order of importance, the company's five primary business challenges are as follows: Demand is increasing, but prices are falling, wiping away favorable growth. Due to this growing demand, the company has created a range of products e.g. internet access, landlines, foxtel, etc (Grant, 2002). The company hence has to converge its prices for every product if it is to make reasonable profit and this has become hard to explain and undesirable to the customers.
The original Telstra fixed line network has been replaced by the national broadband network which is less attractive in terms of pricing and it also reduces profit margins and competitive advantages (Grant, 2008).
Mobile phones are not a wise business venture for the company since this industry is quite competitive
Telstra does not design or manufacture its own products hence little brand value.
Top business priorities
Delivering top-notch customer experience
Drive business growth.
Create new and better networks for future generation
Completely adopt digitization to improve customer experience
Achieve cultural shifts by focusing on key capabilities and core values.
Porter's five forces
The effects of IT in the company can be analyzed using Porter’s five forces. Looking at rivalry among firms, Telstra major include Optus, AATP Vodafone and Primus. Telstra has however managed to be dominant in the Australian Telecommunication market over the years. Telstra is also the largest services supplier and hence its position remains stable despite high bargain power of suppliers. Bargain power of buyer does not affect the company negatively since of its unique mobile services ad popularity. The stability has been created by the company whereby it uses the power of suppliers and the power of buyers to create a balance of power.
IT can be used by the company to solve the problem increased power of buyers or suppliers over each other. Telstra may do this by keeping both the customer and the supplier at close range through monitoring ad evaluation measures (Mitchell, Ferabee & Wright, 2005).
The company has taken some of the best strategic steps over the last three years. Last year, the company invested 270 million dollars in Ooyala which is a USA based video platform and increased its stake I the company from 23% to 98%. The company has also expanded its services to the healthcare sector through providence of e-health technology.
One of the company’s gravest mistake over the last three years is changing its network cable to NBN. Additionally, the introduction of the 1000GB data bundle has also been a major mistake since not many people are willing to purchase it.
A major missed out opportunity by the company is lack of partnering with VMware which would have helped make the company more competitive with Amazon. To fix this solution, Telstra will have to give VMware early access to its Iaas market. This will help the two company establish their dominance over the virtualization market together.
Losing of the NBN and ADSL is a major problem being faced by Telstra today. The company’s solution to this problem is fixing its severely damaged connection. It has also resulted to giving its customers two free data days.
A major reason why Telstra remains a red ocean is because it focuses on both competitor and customers instead of just the customers. To create a blue ocean strategy, Telstra must be willing to solve problems across the entire supply chain, own fluid assests and focus on customers and not competitors (Grant, 2016).
Bibliography
Barr, T., 2002. Telecommunications and the new economy (pp. 117-32). Sydney: Allen & Unwin.
Barr, T., 2008. Broadband bottleneck: History revisited. Media International Australia, 129(1), pp.129-139.
Cooper, S., 2000. Making it easier for… Telstra.
Grant, R. (2016). Contemporary strategy analysis. Chichester: Wiley.
Mitchell, J., Ferrabee, D. and Wright, M., 2005. How is your company or client using social media for employee communication?.
