Global Strategy

Only available on StudyMode
  • Download(s) : 106
  • Published : April 18, 2013
Open Document
Text Preview
Telstra Case Scenario 2 (12 Marks, 4 marks and 8 marks each) PORTER 8 FORCE, PAGE 38 Case study 1
Monopoly until 1997, wholesale and retail Telecommunications Company Fixed line copper wire network fast become obsolete
Strategy:
Former CEO say adding value for our customer base is our driving force and idea of service and the drive for improvement must be at the core of the culture of the organsiation
CEO David Thodey said the company need to transform from an engineering and technology led company to a truly sales and marketing led company, and he the first one have really did sth
13 years later, still try to make customer service part of its corporate structure Need to implement strategy for increasingly competitive and technologically evolving environment and marketplace
Continue to redefine itself as distributor and retailer offer competitive products and pricing
Government:
either adopt super fast fibre to every home and structurally separated Telstra (sh will not buy its shares until govt bb policy is finalized) or pull it back to market driven environment with tougher competition rules but No structural change Misalignment of CEO and senior executives:

Telstra senior executives seems not align with the CEO by admit the company is not managing customer service and announce a 1 billion transform project to fight for customers in mobile, fixed bb and wireless bb markets

1
Telstra case Page 2 of 21
___________________________________________________________________________________ New measures:
Educate customer importance in employee training
Removing and simplifying bundle and package product and services to make customer less confusing
Fewer customer complaint reduce number of staff in complaint dept and fee imposed by telecommunications industry ombudsman
From CEO Thodey (the first CEO to):
 first to open customer services lines 24 hours a day
 cut mobile and broadband price to competitive levels
 send technicians out on weekend
 other initiatives: new IT troubleshooting service, higher subsidies for mobile handset and possibility of “welcome” credit for new customers Financial performance:
Last yr, net revenue fell 2.3%
Expect to fell up to 9 % due to transformation cost
(400 mil go to improve customer service and upgrade system)
(600 mil go towards subsidizing mobile phones, t-boxes and t-hubs to attract new customers)
steady decline in market shares and traditional sources of revenue 1.5 fewer residential home phones (fixed line) today than 97, number of calls made from home phone drop my half – as no need to have a second line used for dialed up now

CEO and CFO met investor to explain how a yr of pain will lead to better returns over the long run
CFO gone to US to meet foreign investor
Bottom line is must invest to grow, win customers and lower cost base to make room for a lower-margin product mix world to grow gross earnings
2
Telstra case Page 3 of 21
___________________________________________________________________________________ Share price not bounce back from 9.5 % drop on the poor annual result day sh will not buy its shares until govt bb policy is finalized or sh unconvinced they can get the customer service right

Former CEO: expand Telstra overseas and build a new 3G national network, but cannot stop the steady decline in market share and traditional sources of revenue Labor government policy is to build a fibre network to 93 % of houses, with the rest serviced by wireless and satellite (this will structurally separate Telstra) Or pull back in market driven environment with tougher competition rules with no structural change

This will see Telstra transfer copper network customer to govt-owned national broadband network company’s wholesale fibre network and receive 9 billion in cash as compensation and for leasing pipe network

Statistical figures:
1.5 mil fewer residential home phones (fixed line) then 1997, home phone calls drop by half
decline as previous need a...
tracking img