Planning Process of Telstra Corporation - Case Study Example

Manoo Case Study Student Name: Student Number: Course Code: Instructor: 31st March, 2012. Table of Contents 1.0 Executive Summary………………………………………………….. 3 2.0 Introduction………………………..…………………………………. 4 3.0…………………………………………………………………………..4 3.1 Environmental Factors to be considered in Planning………4 3.2 Plans to Curb Environmental Factors………….……………5 3.3 Planning Process………………………………………………6 3.4 Value of Participatory Planning…………………….……….7 4.0 References……………………………………………………………..8 1.0 Executive Summary Telstra is an Australian telecommunication company service provider that offers fixed-line and mobile internet services to its customers. Due to the influence it got as a government-run corporation, it built a wide network of infrastructure that saw it expand to other sectors like the media, and to be specific, pay television. In this respect, it managed to gain a staggering 9.2 million fixed-lines and 5.2 million mobile internet customers. All this led to the government feeling the need to privatise a section of it so as to allow for the private sector to benefit from the company in line with government policy. Effectively, it was floated and an amount of $14 billion rose from the exercise. The privatization of the organization proved to be a challenge as it mostly led to the company operating as a monopoly. This, probably due to the vast and majorly copper wire-based telephone system that customers had grown accustomed to, did not take into consideration the dynamic nature of the current telecommunication sector. Consequently, the company did not practise standard industrial procedures and failed to change accordingly and in consistence with the dynamics involved. Furthermore, the failure by its management to appreciate product differentiation served to make matters even more complicated as the departments of production and marketing suffered general neglect. As a company operating in line with practises that easily identify with monopolies, its competitors faced difficulties in assessing basic services that it initially offered as a government organization. However, policies stipulated by the Australian government did not allow such practises to go unpunished. 2.0 Introduction First off, Telstra Corporation seemed to have it all nice and planned initially when copper wire-based technology was the main telephone system employed by telecommunication companies. Secondly, the floating of its stake to the public was made in such a way as to allow it to operate as a monopoly. The governments in most countries are wont to protect other companies from the ones that adopt monopoly-like modus operandi. This did not auger well with Telstra. The involvement of stakeholders in decision-making may also not have been exploited to the maximum as a way of finding ways of running the organization. Finally, an internal audit of the external environment might not have been done to assess what the company may have been missing in its operations. 3.0 Analysis 3.1 Environmental Factors to be considered in Planning Any market segment in the telecommunication sector is as important as the next. In addition, all the products offered by a company need to be in line with the demands of the market. A company can never model its product without due consideration of the market demands. In line with this thought, we find that Telstra failed to adapt to the market demands by sticking to its copper-wire based telephone system instead of acquiring fibre optic cables like the other competitors. Any telecommunication company that seeks to establish its presence as a new entrant needs to understand customer needs. In addition to this, it needs to design its products or services in such a manner as to enable it to stay abreast with information on the evolving markets. As a dynamic industry, a new telecommunication company also needs to embrace the standard accounting practises that are being adopted in the industry. This would be important in defining and shaping strategies to beat the old competitors. The best way to do this would be through a monitoring and evaluation strategy that would lead to the development of goals and objectives to beat the market leaders. In this respect, Telstra is considered to have failed to look at its competitors’ strategies and instead employed tactics to deter them from becoming a menace. As a company operating with monopoly-like behaviours, it chose to block them from accessing the network it was supposed to run as a public concern available to all operators. The political environment in Australia is actually conducive for any company that would like to set up shop as a new entity. The policies that are enacted to protect smaller companies from those that have the capacity to run monopolies are a testament to this. Effectively, the goals in a company’s objectives need to take this into consideration and leave out plans to employ unfair competition in dealing with its competitors. 3.2 Plans to Curb Environmental Factors “Customer is king” is amongst the many phrases employed in trying to put the importance of a customer in perspective. We cannot understate the fact that any company that goes into operation does so with the main goal of satisfying the needs of a specified market segment. With each market segment, the needs to be addressed vary. All these are points which should be considered as a new entity. The current market segmentation is driven by customer opinion on their specific needs. In this respect, it would be prudent to carry out surveys on specific needs so that products may be developed with focus on customer opinion. This helps to tailor products according to specifications, and as a result, it becomes easier to develop brands. One way through which customer opinion can be elicited is through use of web 2.0. This is an effective means as most customers have access to the internet. Secondly, customer opinion may be elicited through use of surveys. This may be conducted with a consistent frequency to help establish developing trends in the market. Dynamicity in the market and product development may be dealt with through consistent training of the available human resources. Standard accounting practises now employed in the industry serve to define how companies use their resources, and in particular, assets. An engineer is mostly allowed to manage projects in a telecommunication company. It is therefore important for engineers to adapt the standardised practises in managing projects within an organization. In this regard, they are required to have the basic knowledge on how to control finances allocated for the running of these projects. In the case of Telstra, the allocation of $300 million in improving coaxial cables without having a ready market was a bad decision. Such a project is doomed to fail as it is critical to develop, or expand production, only if there is a requirement to. All the engineers needed to do was to maintain the coaxial cable that was already in place so as to strengthen the product value. Value addition would have sufficed in a bid to increase demand that would eventually lead to a genuine need for expansion. 3.3 Planning Process The planning process needed in the case of Telstra Corporation LTD would need a two-pronged approach. Effectively, both the scenario analysis and the contingency planning would go hand-in-hand in finding a better solution to the problems the organization found itself in. The position Telstra finds itself in may be mitigated through use of studying likely trends using scenario analysis. This is due to the fact that the ever dynamic telecommunication industry needs a keen eye on unfolding scenarios. As an example, insufficient infrastructure used to offer services to the markets in the fixed line and mobile internet segments puts Telstra in a precarious situation because on the other hand, it hadn’t implemented the fibre optic installation for its use, but had chosen to strengthen its presence in the cable television segment. Contingency planning will then prepare the company for any eventuality seeing as the route it has chosen to take as concerns product development may not favour it given that most of the other companies have a backing from the government. Fibre optic cables currently provide for more coverage for consumers with huge consumption needs as opposed to broad band network solutions provided by Telstra. The responsible project engineers should carry out a feasibility study in line with contingency planning to establish the likely outcomes of relying on broad band to provide internet and voice needs for its customers. 3.4 Value of Participatory Planning Participatory planning is pivotal in developing a consistent product. It is highly recommended for underdeveloped regions in a country when offering communication solutions. Engineers tasked with managerial duties are supposed to work in synergy with the various stakeholders in the industry to ensure that factors such as value addition are attained with little struggle. Therefore, the situation at Telstra needs participatory planning. The shareholders are part and parcel of the organization and need to be consulted during decision-making processes. They form a huge segment of participants in product development. In essence, frequent communication between the management of Telstra need to have been the norm to ensure that major decisions have the approval of all the concerned parties. Reactionary approaches like allocation of $300 million to broaden the reach of cable television wouldn’t have been necessary if at all the stakeholders had been briefed on every development. It is equally prudent to use participatory planning to ensure that the need to employ monopoly-like behaviour, which may elicit harsh reactions from the government, is not put to practise. Participatory approach is therefore important in developing safe practises that may be within the stipulated rules that govern fair competition (Richardson, 1999). 4.0 References Richardson, D. 1999. Rural Telecommunication Services. SDdimensions. Retrieved at http://www.fao.org/sd/CDdirect/CDan0025.htm Read More