External Analysis of Telecom Nz

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1. Table of contents

1.1. Table of contents2
2.Executive Summary3
3.Brief description of Telecom NZ4
4.Mission & Vision statements of Telecom NZ4
5.External Analysis4
6.The key strategic issues in industry & Telecom NZ7
7.Conclusions9
8.Reference list10
9.Appendix11

Executive Summary

Brief description of Telecom NZ

Telecom New Zealand is the biggest telecommunications service supplier in New Zealand. Telecom New Zealand employed over 7,000 employees in the end of 2011 (Telecom New Zealand, 2012). Today, Telecom plays a significant marketing leader role by owning more than one million fixed line customers and over two million mobile connections (consumer and business) in the New Zealand telecommunications market (Telecom New Zealand, 2012). Furthermore, Telecom has implemented a huge organizational change and structural separation by 30 November 2011, involving Telecom as a retail services provider and Chorus as a network services operator (Telecom New Zealand, 2012). However, the profit after tax has declined to $166 million in 2011 from $382 million in 2010 (The annual report of Telecom, 2011). The report will research and implement an external strategic analysis for Telecom (NZ) and identify the main strategic issues for Telecom (NZ) within the New Zealand telecommunications and IT industry.

Mission & Vision statements of Telecom NZ

Mission statement of Telecom New Zealand to become the top of telecommunication companies in broadband and mobile in New Zealand market. The Vision of Telecom New Zealand is to be the most preferred telecommunication company in New Zealand ( Telecom Corporate Review, 2010).

External Analysis

According to Hill, et al., (2007), business external analysis could effectively help the managers of business to identify the changing external business environment and found out possible opportunities and threats for designing and deciding the business strategy. Furthermore, PEST tool can be seen as one of the most popular model to help the business to scan the external business environment, involves four aspects, political factor, economic factor, social-culture factor and technology factor (Hill, et al., 2007). In the first place, political factor largely influenced New Zealand telecommunications and IT industry. According to The Commerce Commission New Zealand (2012), The Telecommunications Act 2001 regulates telecommunications services supply in New Zealand market. Furthermore, the Telecommunication Amendment Act in New Zealand will simplify telecommunications regulation and increase the marketing competition within the telecommunication service industry in New Zealand (Telecom New Zealand, 2012). As a consequence, Telecom has implemented structural separation by 30 November 2011 (Telecom New Zealand, 2012). In addition, Telecommunications Act 2001 has offered an easier entry level for the business who wants to provide telecommunications services in New Zealand. The New Zealand economy is suffering a quite slow recovery with the result of GDP by growing by 0.3 percent in the December 2011 quarter (New Zealand Statistics, 2012). The figure implied that New Zealand business lacked of confidence in the further business investment and hire more employees in the workplace. Indeed, the communication cost or phone cost for the business and even for the residential consumers. On the other hand, there is a potential marketing trend for both business consumers and residential consumers to purchase the products and services with the cheaper price within the current telecommunication service industry. For instance, as the cheaper mobile phone provider, 2-degree company has successfully entered into New Zealand telecommunication service industry by offering the similar mobile phone service with competitive and cheaper price to induce those potential customers. Importantly, the switching cost within the current...
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