Cutthroat Competition
In all across the globe competition has raised to the highest of levels irrespective of the industry in which they are working in. Such competitive environment also exists in Australia. This leads to huge challenges for the companies in the country. Telstra is one of the biggest Telecommunication companies in World and the largest in Australia (Peng, 2016). This company provides its services in the fields like providing telecommunication network. In this they gives services like voice calls, internet access, mobile, pay television as well as other products and services. There is a change in the nature and the demand of the market which company will have to respond to so as to gain competitive advantage. In this type of competitive environment it is essential that company focuses on increasing their business reach as well as improve the core competencies. It depends on the strategies made by the company that how they are able to cope up with these challenges related to international competition.
The first and the most basic challenge that Telstra is facing is the cut throat competition. With so many companies emerging in the market offering services at lowest of costs, retaining market share has become difficult (Wettenhall, 2011). Management of Telstra needs to ensure that they understand the nature of competition as well as the strategies made by the competitors so as to make the strategies accordingly. This will help the firm in placing themselves at better positions in the market. Another important and very crucial factor that is changing the global telecom market is the technology. In this industry technology has expanded in multi folds and the global players have huge amount of technological resources to expand their business. Since the research is going on in various parts of the world hence Telstra will have to be ready with their plans to face this business challenge. This can be done by bringing some kind of disruptive technology (McFarlin & Sweeney, 2014).
A report by company suggests that there will be fixed cost decline by around 7% in the financial year 2018. This might show a decline in the overall revenue of the company. The major reason for it is the emergence of new competitors in the market. In order to overcome this company has led many strategies which also includes new kinds of investments especially in the emerging technologies. Switching to IoT is one of the major challenges for the company (Binder, 2016). This also includes transport links, autonomous mine sites and port logistics. The number of devices on the network is increasing especially in terms of the sensors, trackers and monitors. With the increasing demand for the data rates, it is a challenge for the company to provide them to all the consumers. The recent price competition between Vodafone and Telstra has been very intense which has benefited their customers. Along with this there is an immense increase in the quantity of data that is generated in the business operations. All these data are crucial and needs to be managed in a proper manner so as to gain appropriate information from it (Deresky, 2017). Global environment challenge is becoming very big and companies like Telstra needs to work on managing the use of the technology that is emitting less radiation or in other words creating less health issues. Installation and use of technology in the residential area needs to be rechecked.
Technological Advancements
When it comes to upgrading technology, training becomes a very tedious process. It is to be noted that providing training to the people that are from different cultural backgrounds can be a difficult process. Training is important for the employees at every level of the organisation. Training must also be provided in terms of ethical concerns linked with the improper use of technology so that such issues do not arise in the business process (Verbeke, 2013).
Trade deficits among countries have increased with the powerful nations becoming more powerful while the poor countries still seeks external help. Along with this there are new centres of economies getting generated in the world. This has challenged the preposition of the world’s economy and the affect can be clearly seen with the examples like downfall of European economy and the slowdown in the American economic growth. This has also affected the Australian economy and hence Telstra’s expansion plan has also been affected. Managers of the company have to be ready with a plan that has pre-calculation regarding Return on Investment. The most exact calculation that company needs to do is regarding the use of resources as well as mode of entry that they select for their expansion into a nation (Sinha, 2012). In the amount political risk that exist in the global business it is a bigger challenge for the company. The decisions like Brexit change the global business environment for which Telstra needs to be ready with.
Global Human resource management is another greater challenge for the International managers. This is due to the fact that the demands of the employees are increasing. Meeting these demands could involve an extra cost from the company pocket and not meeting these demands could lead to situations like strikeouts or lockouts. Cost saving has become one of the major goals of the companies all around the world. In the large companies like Telstra there are many employees working from different cultural backgrounds and hence it becomes important for Telstra to have an efficient diversity management policy (Schuler, Jackson & Tarique, 2011). This might be strengthened from the fact that Australia has a huge number of students studying from different countries giving them equal chance into their company has to be ensured by Telstra. Apart from this it is essential for Telstra at the time of expansion that they understand the culture of the nation and provide services accordingly as customers also prefer it.
Customer Retention and Demographic Changes
Internet marketing has taken a lead role in the business but the competition in this field has increased intensely. In such an environment company has to have a powerful internet marketing plan so as to remain ahead of their competitors (Guo, Zhang, Wang, Yu & Zhou, 2013). This is also important in the modern day business as customers are highly active on these mediums. These platforms are an excellent source for promoting their services but at the same time they are also highly dangerous as negative news also spreads through the masses at a very fast speed. This is extremely dangerous in the modern day business where lots of things are at stake. There must be a dedicated technical team that manages the online business of the company.
In the telecomm industry another bigger challenge that is faced by the company is about customer retention (Vaiman, Scullion & Collings, 2012). This is due to the fact that numbers of service providers are increasing at very fast speed. People want fast services and laggings in fulfilling their demands might lead to customers switching to other networks. With the facilities like number portability, this has become a bigger challenge for company. Customer retention is highly dependent on the Customer relationship management and compliance handling. In the telecomm industry many technical issues arise at the side of clients. Providing them with quick customer is very essential.
Society needs are changing and so is the demographic constituent of the world. This has resulted in the demand shift especially in terms of quality of services and its prices. Company will have to be ready for the changing demand so that they can gain larger market share in the future. Segmentation has become a very essential part of the modern day business as companies these days need to provide customised services to the customers (Steiner, Mason & Hayes, 2013). Customer loyalty is very poor in the international competition that is going on in the whole world.
With the nature of business changing in various parts of the world, the number of ethical issues has also grown. In the increasing competitive rivalry every company wants to stay ahead of the others and hence they sometimes take decisions that may have ethical consequences (McDougal, 2017). For example in the case of data management there are many ethical concerns associated with it. Security and privacy has been their major concern. In the field of technology managing security and privacy has become very necessary. With the enlarging networks of the telecomm infrastructure and the emergence of the technologies like IoT has increased the privacy and security threats. Ethical laws have strengthened both in Australia and other parts of the world and hence Telstra needs to have an effective policy for managing ethics inside the firm. Apart from this there is an extensive increase in the number of cyber-attacks going on in the whole world. This has increased the number of ethical issues for the company.
Opportunities in Emerging Markets
Employees are demanding of more freedom and measures that could motivate them. High bonus and incentive demands have become a challenge for the global managers of the firm. In the present competition when the Telstra is planning to have cost cuts, this can be a burden on the company. Managers need to ensure that they use other methods to have higher employee’s motivational levels as it is essential for achieving higher performance from them. This becomes extremely important in the case of change management (Telstra International, 2018). Since company needs to change from time to time as per the requirement of the environment hence role of managers as a motivator increases.
Telstra is having huge amount of opportunities in the external market. The markets like Asia where the number of mobile subscribers is increasing; it can be an excellent place for the company’s expansion plans. For ensuring profits in the market company needs to follow lower pricing strategy. It can be possible if the company enters into the nation in some kind collaboration with other firm. Joint ventures can be profitable as it helps Telstra in understanding the local market. Both the companies could use the technology of Telstra and the local market knowledge of the other firm. This collaborative approach will increase each other competencies which they could also use in their other business ventures. This company also has opportunities in the internet security market (Ramli, 2016). This is because the number of cyber-attacks is increasing day by day and hence there are various firms that are demanding of quality security infrastructure. This is an opportunity which Telstra can grab both in Australia and other parts of the world.
There are many challenges which Telstra will have to face in the process of grabbing this opportunity. The first and the most basic challenge that Telstra need to face is regarding this are to manage the Human resource as most of them will be from different cultural backgrounds (Telstra, 2017). Other is regarding the approach of decision making. This is because every issue that arise in the business requires a different kind of decision making process to be followed. All these issues needs to be solved with the help of different kind of problem solving tool and the selection of the tool must be based on the nature of the problems. Apart from this company will also face the challenge from local players as the local players work at the lowest of costs competing which could be a challenge for Telstra. It might also face challenges in the construction of organisational culture at it must address and respect the culture of the host nation and the nation in which company is expanding. In this process of designing of culture, understanding of organisational behaviour would be a challenge for the managers of Telstra.
Apart from this it is crucial that Telstra uses its resources in a sustainable manner so as to gain maximum profits from it. This is necessary for the long term growth of the company. It is also a challenge for the managers to ensure that the quality of the inventory and the resources is maintained. In order to avoid these issues before making any kind of expansion, it would be beneficial that company does a heavy market research about the local market. This also involves gaining knowledge about the customer’s choice and purchasing power as well as the trends that is prevalent in both local and global market.
References
Binder, J. (2016). Global project management: communication, collaboration and management across borders. Routledge.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson Education India.
Guo, B., Zhang, D., Wang, Z., Yu, Z., & Zhou, X. (2013). Opportunistic IoT: Exploring the harmonious interaction between human and the internet of things. Journal of Network and Computer Applications, 36(6), 1531-1539.
McDougal, M. (2017). Insights from the company monitor: Telstra. Equity, 31(11), 15.
McFarlin, D., & Sweeney, P. D. (2014). International management: strategic opportunities & cultural challenges. Routledge.
Peng, M. W. (2016). Global business. Cengage Learning.
Ramli, D. (2016). Telstra CEO Andy Penn’s plans for innovation and Asian expansion. Retrieved from: https://www.afr.com/brand/boss/telstra-ceo-andy-penns-plans-for-innovation-and-asian-expansion-20160110-gm3289
Schuler, R. S., Jackson, S. E., & Tarique, I. (2011). Global talent management and global talent challenges: Strategic opportunities for IHRM. Journal of World Business, 46(4), 506-516.
Sinha, V. (2012). Managers challenges to widen global excellence and talent management in post-recession world of business and information technology. International Journal of Electronic Customer Relationship Management, 6(1), 74-86.
Steiner, N., Mason, R., & Hayes, A. (Eds.). (2013). Migration and insecurity: citizenship and social inclusion in a transnational era (Vol. 3). Routledge.
Telstra International, (2018) About Us. Retrieved from: https://www.telstra.com.au/aboutus/telstra-international
Telstra, (2017). Telstra Annual Report. Retrieved from: https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf-e/Annual-Report-2017-singlepages.PDF
Vaiman, V., Scullion, H., & Collings, D. (2012). Talent management decision making. Management Decision, 50(5), 925-941.
Verbeke, A. (2013). International business strategy. Cambridge University Press.
Wettenhall, R. (2011). Global financial crisis: the Australian experience in international perspective. Public Organization Review, 11(1), 77-91.
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