h2>Executive Summary Telstra is Australias largest and most efficient telecommunications company, which provides one of the best-known brands in the country. They offer a full range of services and compete in all areas of telecommunications both domestically and internationally. Telstra, originally Telecom Australia was established in 1901 by the Postmaster Generals Department to manage all domestic phone services. Telecom Australia continued to be operated by the Postmaster Generals Department until 1975 when it was created as a separate entity. In 1982 Telecom Australia became the official Telecommunications Corporation for all domestic and international telephone services. On the 1st of July 1995 Telecom Australia changed their name to Telstra for the purpose of differentiation from other global telecommunications companies.
The company has been trading international since 1993. Currently Telstra operates in over 19 countries worldwide (Appendix One).
Telstras vision is to enhance its position as the leading full service telecommunications and information Service Company in Australia as well as to expand its presence internationally. Telstra recognises that Data and Internet services are the way of the future. Telstra is redefining the telecommunications industry and therefore are redefining their markets to offer a more extensive array of products to compete effectively in these markets. Telstra has made many international investments in the Asia-Pacific region. As well as this, Telstra continues to review all investment opportunities, which will provide substantial strategic and financial placement in overseas markets. 1.0 Reasons for international expansion 1.1 Increases Sales By entering countries with already large uses of broadband Internet access, Telstra acquires knowledge to be able to provide local consumers with better products both home and abroad. These better services therefore will entice a larger market share worldwide.
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1.2 Acquire Resources By forming an alliance with one of Asias larges wholesale telecommunications providers Reach Ltd (Refer to section 4.1) Telstra has acquired access to their worldwide network of submarine cables, I.P Systems as well as satellite systems. 1.3Diversification Currently there is a major loss occurring in the telecommunications sector across Australia (Appendix Two), however good times are predicted ahead. (Appendix Three) Telstra has recorded a record low of revenue as well as share price in the 3rd quarter of this financial year. By broadening their focus into different global markets, Telstra has been able to pick up the lost revenue in the domestic market in the global market. 1.4 Minimise Competitive Risks Currently domestic markets are going through a period of rapid decline where as the global markets are going through a period of immense growth. Global consumers needs are becoming very similar on a domestic level, and therefore marketing strategies can be thought on a more global level.
1.5 Cushioning the economic Cycle As mentioned in section 1.3 there is a large drop in the telecommunications sector currently occurring across Australia. Since Telstra operates in over 19 countries worldwide (Appendix Four), the drop in the domestic market is having a smaller effect on the overall market. 2.0 Describe Market Research undertaken before International Expansion Before Telstra expanded into the Asia-Pacific Region, it was extremely important to undertake a specific amount of market research to prove wether the investments were both viable to the financial aspects of the business and the business operations. The Asia-Pacific market had to be analysed both for opportunities and consumer needs. Methods of expansion needed to be assessed to work out which would be more financially viable, a joint venture, a strategic alliance or the creation of a new business all-together. The following factors were taken into consideration: The structure of the telecommunications market in the Asia-Pacific Region.
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Consumer needs in regard to telecommunications in the Asia-Pacific. Possible competitors in the region if expansion was undertook. Success or otherwise of past expansion in the Asia-Pacific region as well as in other regions. Economic and business trends in the Asia-Pacific Region. Research was undertaken by Telstra to show the potential of expansion in to the Asia Pacific region. The target market was assessed in accordance to their array of products and links were found in both the Australian and Asia-Pacific markets. Looking at consumer trends in the region, who uses the products, how much they pay and what they expect from their telecommunications providers.
The current telecommunications providers were assessed and analysed in accordance to what the consumer needs were in the current environment. 3.0 Identify Global Targets 3.1 Global Business Strategy Through a combination of strategic alliances and joint ventures Telstra offers voice, data and wireless services globally. 3.1.1 Objectives Telstras global objectives are mentioned in section 6.1 and 6.2. 3.1.2 Resources Telstra has recently acquired many resources globally. Resources acquired in the Asia-Pacific region are discussed in section 4.1. Other resources acquired include access to Xantics global satellite network . (Appendix Five) 3.1.3 Competitive Advantage By providing global sales and technical professionals globally, Telstra has managed to sustain a competitive advantage in the majority of countries of operation by properly servicing multinational customers.
Telstra is also consistently redefining all markets of operation separately. This helps to keep new ranges of products as well as broaden the range and reduces costs of their products. 4.0 Method of international Expansion Telstra however Foreign Direct investment is the one most used as well as the most successful have used many methods of financial expansion. 4.1 Foreign Direct Investment On the 9th of February in 2001, Telstra International completed a set of strategic alliances in the Asia-Pacific region. The Strategic Alliance was with a Hong Kong Based company called Pacific Century CyberWorks Ltd (PCCW) (Appendix Six).
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This alliance comprises of: A 50:50 joint venture with Reach Ltd (REACH), which is one of the leading providers in Voice data and Internet connectivity in the Asia Pacific Region.
(Appendix Seven) A 60% controlling interest in Regional Wireless Company Ltd (RWC), which operates of Hong Kongs leading telecommunications businesses CSL Ltd (CSL).
The strategic alliances were focused primarily in the Asia-Pacific region because at this current time, there is a large growth in this telecommunications in this regional area and there for provides the largest source of profit for the company. Telstra also obtained a 35% equity interest in Xantic, a satellite company located in the Netherlands. Xantics company information is discussed in section 3.1.2 as well as in appendix five. Telstra also have a 50% share in Telstra Saturn Ltd located in New Zealand which is discussed in Appendix four. 5.0 Influences on the business set by the Global Market There are many influences set on Telstra in the global market. These are broken down in to 4 key areas Financial, Political, Legal and Social/Cultural influences.
5.1 Financial Influences 5.1.1 Currency Fluctuations Telstra has substantially expanded its business outside Australia and ….
