Overview of the company and current operations

Dicuss about the Understand The Business Expansion Of Telstra.

International business is the conduct of business across borders (Cavusgi & Kight, 2015). International business allows firms to grow in terms of customer base. It also helps to find new markets (De Pablo, 2013). Through international business a firm can gain substantial growth in revenue (Dlabay, 2010). Therefore, international business is an important function of management in the present world. Many firms aim to become global through international expansion

International business brings in much larger market share for a company (Maude, 2014). It also has its opportunities and challenges (Salacuse, 2010). Legal, ethical and cultural framework across borders varies, leading to differences in business practices. Therefore, international business strategies have to be assessed deeply.

Telstra is the largest telecommunication company of Australia (ACCC, 2017). Its main products include telecommunication services like voice, data and pay television (Telstra, 2017). Telstra has a considerable presence in Australia which it has generated through the use of acquisitions and quality service delivery (Telstra, 2017). The firm has more than 50% market share in Australia (ACCC, 2017). The firm has also expensed oversees (Telstra, 2017). It has been present in the European markets since 1992 and has been providing voice and data services to customers.

There is a huge and growing market for mobile phones (GSMassociation, 2012). Due to this the market for telecommunication services is also growing. This opens a huge opportunity for Telstra to sell its services across borders. (Telstra, 2017). The firm has partnered with various companies and has expanded to US, India, Hong Kong, China and Singapore (Telstra, 2017). The firm mostly uses partnering, joint venture and acquisition as a global entry strategy.

Competitive strategy is the long term strategy undertaken by business organisation to enhance its competitive advantage (Brady, 2014). Telstra has a huge market base in Australia and is trying to expand its operations worldwide. For this purpose the firm has undertaken expansion based on infrastructural development and partnership with major companies across the globe (Telstra, 2017). The firm has partnered with many Government agencies to develop telecommunication infrastructure in developing and emerging countries (Telstra, 2017). This infrastructure includes sub-sea cable network in Asia pacific region (Telstra, 2017). Such infrastructural development gives the company a ready market as it can negotiate with Governments for market share based on the infrastructure facility it has provided (Telstra, 2017).

The firm has also tied up with private companies in Asia pacific region to provide high value communication network (Telstra, 2017). The firm has also heavily invested in telecommunication to provide better and high speed connectivity in Europe and USA (Pearce, 2017). Therefore, through value service and infrastructure development the company has created competitive advantage for itself (Czinkota, 2012). Another competitive strategy of the firm is to invest in innovative technology development in the field of telecommunication (Telstra, 2017). Its research and development drive gives it a massive competitive advantage (Telstra, 2017). Therefore, focus of Telstra on quality and technology makes it better equipped to handle global competition.

Company’s International competition strategy

Organisational structure identifies the process flow of communication and work direction with in an organisation (Craig & Campbell, 2012). Most commonly used structures are functional and divisional organisational structure (DuBrin, 2011). In a functional organisational structure there are divisions based on departments and all the department heads report to a single authority (Craig & Campbell, 2012). Such a structure is suitable in a medium sized company or a company operating in only one country. In a divisional structure the firm divides the work roles based on products, projects or subsidiaries (Craig & Campbell, 2012). This structure is suitable to multinational companies. Telstra also follows divisional structure. This is shown in the following diagram

Therefore, Telstra has divisions based on different countries it operates in and then it has departments within these countries. All the Division heads report to the chief executive officer (Telstra, 2017). This structure helps the firm in maintaining control over various divisions.

Divisional structure works well for Telstra because it allows divisions to work in teams to concentrate on single region. Further departmental subdivision helps in concentrating on singular functions (Telstra, 2017). The major control issue which may arise for Telstra is competition between divines (Craig & Campbell, 2012). These divisions may start acting independently and start competing with each other for company resources. Divisional structure may also lead to compartmentalisation which may lead to incompatibility (Craig & Campbell, 2012). Therefore, it is important for the CEO to create a team to keep him aware about function of all divisions so that he can control all the divisions well.

Firms use various entry strategies to enter into global marks (Paliwoda, 2011). The most common among them are direct investment where the firms creates direct infrastructure in the host country (Cavusgi & Kight, 2015). Another common method is franchising where the firm gives its licence to operate to a local firm based on certain specifications (De Pablo, 2013). Another common way is joint venture or acquisitions where a firm partners or acquires a local company to make a foot-hold in the host country.

Telstra has used joint ventures and acquisitions extensively to increase its market presence in the global sphere (Telstra, 2017) Joint venture is a partnership between two firms preferably a local firm so that the international firm can get ready customer base and the local firm gets a better technology and expertise (Czinkota, 2012). On the other hand, in acquisition strategy, the international firm completely acquires a local firm to get a ready customer base and infrastructure (Czinkota, 2012). Telstra has entered into horizontal joint ventures such as the one with Tata telecommunication in India (Telstra, 2017). Similarly, the firm tie up with SouFun to get an entry point into Chiba (Telstra, 2017). It has also made vertical joint ventures in the area of supply chain and back-end infrastructures (Telstra, 2017). Examples of such ventures are partnership with Pacific century cybarways in Hong Kong to set up an undersea communication cable.

Organisational Design Structure and Existing Issue

In addition to joint ventures the company has also used direct investment as a strategy to enter Europe and US markets (Telstra, 2017). In US the firm has also invested in communication infrastructure and has laid down a communication cable linking Sydney and Hawaii (Telstra, 2017). The firm has also used direct investment in Japan and Singapore (Telstra, 2017). Therefore, Telstra has mostly used Joint Ventures, partnering and Direct investment to enter the global stage.

Telstra is into service delivery. It delivers communication service. Telstra has directly invested into communication infrastructure or partnered with companies like Tata Communication to create production and distribution facilities (Telstra, 2017). The firm has communication cables, communication towers and other infrastructure which it has developed by various methods like joint effort or direct investment (Telstra, 2017). Through this communication infrastructure the service is created and distributed. Operational control is managed through control towers where the continuous supply of voice and data services is managed (Telstra, 2017).

The firm has contract with various suppliers who help in maintaining the infrastructure (Telstra, 2017). Therefore, maintenance through suppliers is done on a continuous basis so that uninterrupted supply of service can be maintained (Telstra, 2017). These suppliers include supplier of hardware as well as software (Telstra, 2017). The firm uses both traditional and online method for distribution. The customers can purchase data from authorised retailers and through online medium as well (Telstra, 2017). Therefore, the firm generates quality flow of service with help of adequate supply chain and distribution network.

Telstra operates on a global scale. However, the firm has not yet reached the mega international size that some of its competitors like Vodafone have (Czinkota, 2012). Like any other service organisation the firm is heavily depends on human resources for delivery of services (Lovelock, 2012). The firm employs local people in various roles like administration, support, procurement and finance (Telstra, 2017). However, the top leadership is mostly from Australia (Telstra, 2017). The regional offices reports to the head office in Australia. Additionally, the firm has customer support staff to handle customer quarries and issues (Telstra, 2017) .The firm employs local workforce at most medium and lower level positions. Therefore, the firm has a diverse workforce.

To manage the diverse workforce the firm has incorporated a culture of non-discrimination and respect for all races and cultures with in its workforce (Telstra, 2017). There is a uniform work code and people are promoted, transferred and given increment based on set policies without any discrimination (Telstra, 2017). Additionally, a culture of mutual trust and performance linked appraisal is incorporated so that the workforce remains motivated.

Entry Strategies used to enter other regions

As a service organisation is highly people driven, staff training is given importance in the company (Kandampully, 2011). Communication sector goes through fast paced innovations and changes. Therefore, the company keeps its employees up to date with the changes happening in the sector (Telstra, 2017). Knowledge management is important in Telstra and employees are encouraged to improve their skills and abilities (Telstra, 2017). Therefore, Telstra is a people driven organisation with skilled staff and knowledge management.

Management function in an international firm is complicated (De Pablo, 2013). The management has to manage and maintain all functions in various countries. These regions may have varied cultural dynamics (Czinkota, 2012). This gives rise to management issues.

Telstra is a huge company in its home ground but it is still small if we consider the international arena (Telstra, 2017). Therefore, the management may face various issues in establishing management roles and teams in different countries. The firm needs teams which understand the basic vision of the company and also understands the cultural fibre of the host country (Czinkota, 2012). Understanding culture and creating communication techniques as per the culture is a major issue (Paliwoda, 2011). This can be resolved by undertaking market research and hiring skilled people to manage the teams in various countries.

Communication service is highly regulated in certain countries and laws and regulations very (Czinkota, 2012). While running a business in these countries the management needs to have thorough knowledge of these regulations (Maude, 2014). For example, in India communication services cannot be sold without taking identification proof of the customer (De Pablo, 2013). However, in UK and other European countries this is not mandatory (Paliwoda, 2011). Therefore, understanding of legal frame work is must for the management in order to manage business in different countries.

Global pricing strategies have to be managed based on the currency value, customer affordability and mind-set (Czinkota, 2012). Therefore, the firm has to conduct independent market research survey to determine pricing in each country. This puts a pressure on budget and hence is a major management issue. Similar issue arises with communication or promotion strategy (De Pablo, 2013). The firm needs to keep in mind the cultural framework of the country in order to create lasting impression on the customer.

If we consider management opportunities, communication sector is a highly growing sector all across the globe (ACCC, 2017). In addition emerging markets are opening up and getting de-regularised leading to great opportunism for communication firms to invest in these countries (Telstra, 2017). This gives opportunity to Telstra to invest in communication infrastructure. Therefore, Telstra has an opportunity to grow in new markets if it manages the various issues properly.

Telstra is a huge company in Australia and has a presence in the global arena. The firm is a well-managed firm (Telstra, 2017). However there is always scope for improvement. Following are some of the recommendations for Telstra to improve its international business.

1. Telstra should extend its product line and offer other communication services other than voice and date. Telstra has started offering fixed line network but it is not extensive(Telstra, 2017). Additionally, it should also offer direct to home television services in emerging markets. This will increase the customer base of the firm and enhance its revenue.
2. The firm has a presence in emerging markets but it should try to enhance this presence. Emerging markets offer a huge window for growth and Telstra must capture this opportunity. It should increase its visibility in emerging markets through advertising and should invest in servers and other communication infrastructure so that it can grow in these markets
3. Telstra’s focus should be on improvement of distribution network in the various regions where it is present. The firm can open point of sale display in supermarkets and sell its products through super market tie ups. This will improve the firm’s visibility in emerging markets
4. To popularise its voice and data services the firm should create awareness of its service quality. Additionally, it should use tactics like price bundling and offer discounts for customers who buy both voice and data services.
5. It is also recommended to the firm to enhance its research and development drive further. International competition is tough and communication sector is highly technology oriented which keeps changing at periodic intervals. The firm needs consolidated research efforts to stay abreast in tough competition. Therefore the firm must have research and innovation wing in each country of operation

These recommendations will help Telstra in creating better service quality and delivery across the globe. Through these recommendations the firm can make its service quality better and reach a larger customer base.

Conclusion

A global firm can run smoothly if it takes care of service delivery and quality in various regions. Additionally, proper maintenance of cultural dynamics, human resources and supply chain and distribution will help in better execution of the organisational functions.

References

ACCC, (2017) Telecommunications Report. [Online]  Available at: https://www.accc.gov.au/publications/accc-telecommunications-report [Accessed 26 September 2017].

Brady, D. L., (2014) Essentials of International Marketing. New York: Routledge.

Cavusgi, T. & Kight, G., (2015) The born global firm: An entrepreneurial and capabilities perspective on early and rapid internationalization. Journal of International Business Studies, 46(1), pp. 3-16.

Craig, T. & Campbell, D., (2012) Organisations and the Business Environment. New York: Routledge.

Czinkota, M., (2012) International Marketing. New York: Cengage Learning.

De Pablo, O., (2013) International Business Strategy and Entrepreneurship: An Information Technology Perspective: An Information Technology Perspective. Hershey: IGI Global.

Dlabay, L., (2010) International Business. london: Cengage Learning.

DuBrin, A. D., (2011) Essentials of Management. London: Cengage Learning.

GSMassociation, (2012) Impact of Mobile Technology on Economic Growth, s.l.: s.n.

Kandampully, J., (2011) Service Management: The New Paradigm in Retailing. NewYork: Springer Science & Business Media.

Lovelock, C., (2012) Services Marketing : People, Technology, Strategy. New Delhi: Pearson Education India.

Maude, B., (2014) International Business Negotiations Principles and Practice. Hampshire: Barry .

Paliwoda, S., (2011) Perspectives on International Marketing. New Jersey: Routledge.

Pearce, R., (2017) Telstra to guarantee connectivity over key subsea cable routes. Computer World, 16 Jan.

Salacuse, J., (2010) Teaching international business negotiation: Reflections on three decades of experience. International Negotiation, 15(2), pp. 187-228..