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Essay: Telstra – SWOT analysis

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  • Subject area(s): Business essays
  • Reading time: 4 minutes
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  • Published: 24 January 2022*
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  • Words: 1,198 (approx)
  • Number of pages: 5 (approx)
  • Tags: SWOT analysis examples

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Executive summary:
This strategic report is investigating Australia’s dominant telecommunications company, Telstra, which offers an extensive range of services including communications and technology. The critical analysis of Telstra’s internal and external environments as well as management theories, the Bureaucratic and Human Relations theory can be valuable to the company as it determines which is best suited for the company. This analysis will consist of SWOT to further support and create recommendations to improve the organisation’s future strategic directions.
Telstra is Australia’s largest leading technology company, specialising in providing mobile services, fixed voice services and fixed broadband services (Telstra, accessed 30th March 2019). This report will contain a SWOT analysis, management theories and recommendations.
A SWOT analysis is crucial tool that can be used to assist Telstra to create a situational analysis of their organisation. It helps identify internal factors such as strengths and weaknesses and external factors such as opportunities and threats.
Telstra has beneficial strengths that seen through the organisation having a leading market position as it is Australia’s top telecommunications and information services company (Brand Finance, 2019). It is continuously expanding its infrastructure and operating limit. Another strength is that it has a strong and reliable distribution channel that can deliver to most of its potential market. This is shown though Telstra’s:

  • Improved control of fuel costs
  • Improved networking and communication
  • Newly developed business models that allows Telstra to stay ahead of trends
  • Faster job allocation and response times

Telstra will leverage its strengths to grab hold of their opportunities (Saurabh Pandya, 2017)
Telstra has weaknesses that could be improved. Telstra is currently known for their high prices as their products and services are currently priced higher than their competitors such as Vodafone and Optus. Telstra also had to refund $9.3 million to 72,000 customers (ACCC, 2018) as a result of overcharging customers for services they weren’t using such as digital content, ringtones and games. Telstra weaknesses can be used to improve their threats as it reduces vulnerability (Saurabh Pandya, 2017)
Telstra has been presented with multiple opportunities that could enable potential growth and expansion worldwide. This is evident as Telstra begins to expand and develop within Asia (Telstra, 2013), which currently holds 40% of the world’s economic movement. Furthermore, new technologies arising, and a government free trade agreement has also provided Telstra with the ability to globalise and become a new emerging market within the modern world.
Telstra has threats that could potentially be harmful to the company. This can be seen through the company suffering from the impact of increased competition (Financial Review, 2018) as this has led to lower net profit margins which has also impacted Telstra’s stock market. Telstra’s stock market has fallen within the past three years as it decreased from $6.62 in 2015 to $3.32 in 2019 (Sebastian Bowen, 2018).
Management theories:
Management theories are a collection of ideas that explore the ever-changing nature of modern organisational environments. It addresses the general guidelines on how businesses and organisations manage.
Bureaucratic Management:
Max Weber’s bureaucratic management theory involves structuring an organisation into a hierarchy. This theory was anticipated as a way for reaching goals in the most productive way as possible by purely focusing on the employee’s skills. Weber understood that an organisation’s best approach in being efficient was to stay organised in a united working environment even though he knew it would prevent individual freedom. Weber followed this idea by including regulations that were made to control an organisation and enable its employees to feel safe. This theory is logical as it enables employees to work more efficiently however it does not allow employees to have freedom and opportunities to move up the hierarchy, it only enables them to stick to their current role, possibly placing stress on employees.
Human Relations theory:
This theory was explored by Elton Mayo (Yasin Olum 2004, p.16). Elton Mayo conducted experiments that proved that an individual’s productivity would increase if the individual worked in an encouraging work environment with good working conditions and attitudes (Yasin Olum 2004, p.16). This further proved that encouraging and treating employees with significance will motivate them to work more efficiently in the workplace, hence improving productivity throughout the organisation. This theory positively impacts an organisation as it takes into consideration the feelings and values of the employees and allows them to have continuous support in a positive working environment.
Telstra Environmental Analysis:
This environmental analysis is an essential strategic tool that can assist Telstra in identifying the changing internal and external factors that may positively or negatively impact the company.
Telstra’s management practices are an internal factor that could positively impact the company socially. Telstra has implemented the Bureaucratic theory as the company organisational structure is similar to a hierarchy with one leading Chief Executive Officer who is currently Andrew Penn, followed by a Technology Group Executive, Consumer and Small Business Group Executive, Business Services Group Executive, Networks and IT Group Executive, Chief Financial Officer and Head of Strategy, Transformation and People Group Executive, Legal and Corporate Affairs Group Executive and General Counsel and, Telstra InfraCo Chief Executive Officer (Telstra, 2018) that are all on the same level. The Human Relations theory is also implemented as all these workers are working in a positive working environment that has fantastic working conditions.
Recommendation 1:
Telstra should continue to work on developing faster network speeds for customers in all different regions in order to retain its position as Australia’s leading telecommunication’s company. This is due to certain areas not having the updated technologies that provide fast network speeds as others. Telstra should aim to solve this issue by replacing older technologies with new and improved ones. This would also assist the company in dealing with increased competition.
Recommendation 2:
Telstra should also to aim to better its services in order to compete with its competitors. This can be done by ensuring that all their customers are always easily receiving the best of service including good customer service. To do this, Telstra should ensure that their information is easy to access online or through the phone and if there is an issue it would be resolved immediately as Telstra had to previously refund a large amount due to a mistake they made.
Recommendation 3:
Telstra should also aim to offer services that cater to different customer needs. The corporation should do this by creating cheaper plans and/ or deals that less financially stable people can afford as Telstra is known for being pricey. This will also help the company deal with its competitors as it will attract more customers. Telstra could even offer special deals for families or students
Recommendation 4:
In order to compete with competitors, Telstra should create more advertisements that will reach all potential customers. These advertisements should include their wide range of products and a description of the services that they offer. Telstra could also begin a customer loyalty program that could attract more customers and aid in increasing Telstra’s customer base.
In conclusion, through the use of the SWOT analysis and analysing Telstra’s management theories, four recommendations have been made in order to assist Telstra’s future strategic directions.

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