Overview of Telstra
Rapid development of globalisation is creating urgency among the companies to expand their business overseas and thereby increasing the rate of profitability. Running business serves the companies with the ability to accelerate their market share which is the key of acquiring a strong position in the intense competitive market. At the same time, the rate of global customers is also rapidly increasing. Therefore, business must be expanded by breaking the potential regional barriers and thereby reach towards a strong base of customers (Shenkar et al. 2014). The aim of present report is to analyse the market entry strategy. UK and UAE have been chosen as the country and Telstra has been chosen as a company. UK is one of the major business destination, where every company aspires to run business.
Manageable taxation policy and strong infrastructure are the major factors, leading the companies to overseas their business in UK. On the other hands, UAE is also a leading and famous company among the marketers to expand their business. Present paper intends to discuss about the important factors of both the chosen countries. The risk and opportunities of the countries will also be discussed and recommendations will be presented based on the challenges.
Telstra Corporation Limited is the largest telecommunication organisation in Australia which operates a strong network of telecommunication across the nation. The company also produces mobile, internet access, markets voice, pay television and several other products. This is the largest telecommunication company, providing excellent network of communication in the entire world. They provide almost 17 million retail million services along with 36 million broadband services. The company believes that more connected people can avail more opportunity (Telstra – Our company. 2018). The fundamental aim of the company is to create excellent connected future for all of their customers.
The company builds the technology and content solution in simple way, which helps the customers to use the largest and fastest network of Australia in an effective manner. They strive to serve a strong base of customer by providing them with a multiple variety of digital connection. Being the largest telecommunication company in Australia, Telstra is highly committed towards helping the customers to live in a connected world by using fastest communication. With the assistance of strong and dedicated workforce, Telstra is becoming able to serve millions of customers and thus keeping them loyal and satisfied. The underlying purpose of the company is to create a strongly connected future by working in a collaborative manner (Telstra.com.au, 2018). Rapid development of globalisation is leading the company to implement their international business strategy. Long term innovative business strategy is being executed by them in order to operate business overseas. UK and United Arab Emirates (UAE) are two of the crucial countries which Telstra can target in terms of operating their business.
There are certain factors, which must be kept in mind while planning to expand business in UK and United Arab Emirates (UAE).Subsequent discussion will help to explore the geo-political as well as the macro-environmental factors of both the countries.
Macro-environmental and geo-political forces influencing UK and United Arab Emirates (UAE)
PEST analysis is needed to be carried out to explore the macro-environmental factors, affecting the countries. The factors are as follows:
UK is a politically stable country and is one of the popular destinations for initiating foreign direct investment. A minimum standard of wage is being followed in the country. National Minimum Wage Act 1998, has been introduced with the intention of supporting the companies to provide equal wage to all the labours without making any discrimination ((Legislation.gov.uk, 2018), 2018). However, BREXIT issue can create difficulty for the companies like Telstra to run their business properly.
Before expanding business to a country, it is important to understand its economic landscape. UK is considered as the 5th largest economy throughout the world with a very nominal GDP. However, during 2008 the issue of recession has affected the economy which is being retrieved by the government by implementing several policies and procedures. During 2017, the rate of inflation has been increased by 3.1%, which has resulted in increased rate of interest (BBC News, 2018).
UK holds the biggest consumer market throughout the world with a multicultural population. The major social factor of UK is high standard of living which is make it easy for the companies like Telstra to set the price of their products. However, the ongoing social unrest in terms of migration is creating some uncertainty for the companies to operate their business properly.
Technology is one of the major technologically advanced nation across the globe. As Telstra is a technology company, it will be easy for them to be the leader in UK market. London is being considered as the greatest technological hub. This progressing technological infrastructure will create greater opportunity for Telstra to market their business properly.
BREXIT is one of the major geo-political issue, influencing entire UK. This BREXIT has created a significant gap in the supply and demand of high skilled labours. At the same time, BREXIT has also restricted the ability of UK to recruit skilful and efficient staffs. Evidences are showing that in UK, the rate of FDI inflow has been decreased by 22% which might make it difficult for Telstra to operate their business in a cost effective manner (Forsgren and Johanson, 2014). BREXIT has created an uncertain situation in the process of trade negotiation.
In order to assess the external condition of UAE, it is imperative to conduct PEST analysis of the country is very much needed. Following discussion will help to evaluate the macro-environmental factors, impacting the country.
There are certain political factors must be assessed by the companies before planning to expand business in the country. The political environment of UAE is quite stable and the governmental structure is dynastic in nature. One of the most important aspect of the country is its flexible management which can help the companies like Telstra to run business smoothly. However, there are certain political conflict in terms of ownership (Gutierrez et al. 2015). Still, the noteworthy political aspect is that UAE maintains a strong trade relationship across the globe which can help Telstra to outsource their business.
UK
Economic factors play a very important role in running business in a cost effective manner. The rate of GDP per capita is really high. This is the second richest country to experience a positive growth in GDP. The inclusion of such stable economy can help Telstra to operate business in a stable condition. However, the trend of blue collar labour abuse is quite high in UAE which can create difficulty for the companies to recruit highly skilled and knowledgeable labours.
Rapid development of globalisation is resulting in mixed culture in the country. Therefore, expanding business in the country will help Telstra to maintain diversity in their organisation which is the key of satisfying the requirements of global customers. The trend of well-paying job is relatively high in UAE (Al-Ruzouq et al. 2018). This means that, it is important for Telstra to execute considerable salary structure in order to keep the staffs happy and satisfied and thereby amplify their productivity.
In the fast changing world, technology is one of the prominent factors in promoting growth in business. The government of UAE is showing intense commitment towards executing smart technology in order to monitor the infrastructure and thus taking effective action in terms of strengthening it. In addition, smart technology is also playing a significant role in the way of amplifying the entire country in terms of transport, health and social care along with education (Bu? and Divjak 2018). As Telstra is Technology Company, expanding business in the country will help UAE to accelerate their public image by providing fastest network throughout the country.
In order to expand business in a country, it is important to understand its trade policy, which is the key of running business in accordance with the rules and regulations. The trade regulations of both the countries are as follows:
As the trend of international business is roundly emerging, UK government is taking special care towards executing significant policies. Both overseas trade and the inward investment are the crucial factors towards the prosperity of UK. Free and fair trade strategy has been undertaken by UK government with the intention of executing considerable wage structure for all the labours without making any kind of discrimination (Sparrow 2018). In addition, Free and fair trade strategy also intends to ensure that people can access wide variety of products and services. A Trade Bill has been passed during November 2017 with the intention of preventing any kind of disruption in business by enabling the consumers to take part in decision making process (GOV.UK. 2018). This policy also helps to ensure the consistency of trade and investment arrangements across and thereby pave the way of international business.
In order to ensure a strong position in the international trade, UAE is highly keen towards executing a strong legal system. Leadership strategy is being followed in the country. Reformist economic agenda is being followed in the country in terms of modifying the economic structure of the country. Independent judicial system, single window system and e-government programme are some of the major initiatives, undertaken by UAE government to restrict the legal barriers of the nation. The custom duty on the imported products is 5% (Austrade.gov.au. 2018).
UAE
It is important to perceive both risks and opportunities of a country before planning to expand business. The risks and opportunities of doing business in both UK and UAE are as follows:
- Manageable taxation system which helps in executing the taxation agreement in an effective manner.
- A strong base of skilful and professional employees which can entities to improve their productivity (Hamilton and Webster 2015).
- Strong infrastructure of the country which is the key of promoting growth in business.
- BREXIT is a major issue in UK which is hampering the economy of the country and restricting the companies to operate business in a cost effective manner.
- Due to BREXIT, the issue of market reduction has taken place. Moreover, it has also restricted the abilities of companies to recruit high skilled labours (Wood et al. 2015).
- UAE is located at the heart of trade routes in both east, west, Europe and Asia. Such geographical location play a significant role for the companies to initiate international trade flow in a cost effective manner.
- Major changes in infrastructure has enabled UAE, the international centre of business (Botha et al. 2016).
- The inclusion of political risk might pose certain challenges for the companies like Telstra to expand their business in the country. The tension over the nuclear program of Iran is constantly threatening UAE in terms of oil flow.
- Domestic turmoil is also quite high in UAE, this can create some infrastructure related issues for business (Cavusgil and Knight 2015).
Conclusion and recommendation:
Based on the discussion, it can be concluded by saying that both UK and UAE are the leader in the global market. Being the famous technology across Australia, expanding business in those countries will help Telstra to accelerate their rate of profitability. However, certain challenges are there in both the countries which can create difficulty for Telstra to expand their business in an effective manner.
However, as UK and UAE are the centre of attraction in terms of international business, it is important for Telstra to implement strong and proactive strategies. As BREXIT is a major issue, resulting in economic turmoil throughout the country, it is recommended for Telstra to set relevant pricing strategy, which can be affordable to the customers. As UK is a diversified country, it is the prime responsibility of Telstra to maintain diversity in their organisation which can help them to satisfy millions of customers. As domestic unrest is the prevailing issue in UAE, it is recommended for Telstra to execute strong organisational structure which is the key of sustaining in the uncertainty of domestic market.
However, based on the ongoing economic and political unrest in UK, it is suggested for Telstra to expand their business in UAE. The inclusion of free trade zone in UAE can help them to attract multiple foreign inventors which is the key of amplifying the economic performance. Moreover, in UAE, there is no income taxation on the business owners. Being the hub of international business, Telstra can register their company, which can help them to get immovable ownership in the country. UAE is absolutely free from any kind of regulations on currency exchange which can serve Telstra with the ability to run their business in a cost effective manner.
References:
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Retrieved from https://www.legislation.gov.uk/ukpga/1998/39/contents
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