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STRATEGIC MANAGEMENT
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Table of content

Introduction................................................................................................................................3
TPG Telecom company overview..............................................................................................4
Telecommunication (telecom) Industry overview......................................................................4
Analysis of external environment..............................................................................................5
Analysis of internal environment...............................................................................................7
Recommendations of porter’s generic strategies.......................................................................9
Analysis of organizational structure and culture to examine the appropriateness of
differentiation strategy.............................................................................................................10
Conclusion................................................................................................................................12
References................................................................................................................................13
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Introduction

This report will analyze the strategic management process in the company TPG Telecom in
Australia. The report will provide a brief on TPG telecom and the industry in which the
company is operating its business. This report will also discuss the internal and external
environment of the company with the help of PESTLE and SWOT analysis. Porter's generic
strategy will be analyzed to identify a suitable strategy for TPG telecom to gain competitive
advantages. Lastly, the study will highlight the culture and organizational structure of TPG to
state the appropriateness of differentiation strategy.
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TPG Telecom company overview

TPG Telecom Limited is a locally-owned publicly traded corporation that receives its income
from the delivery of wholesale, business and residential telecommunications services in
Australia. The business hires 5,366 staff in its activities and is managed from its head office
in Macquarie Park, New South Wales. The firm works in Australia, New Zealand, the
Philippines, Bermuda, and the UK. The corporation works across three operating segments:
TPG Business, TPG Corporate, and iiNet (Nicholls, 2016).

The company offers both personal and consumer items. Purposes, email, web, and cell phone
are the personal properties of TPG. The company provides Media programming for isolated
ADSL 2 +, handheld cable TV and Internet protocols (IPTV) and wireless off-net, bare
ADSL2 +. The T3 G and 3 G Plus services became part of their telephone contracts. TPG
makes home calling services with ADSL2 +. The business also sells a cable system and
telephone card with fiber for the building kit NBN (National Broadband Network). Bundles,
the website, images, telephone phones, and other resources are part of our market items.
Audio control and VoIP Company (voice over Internet protocol) are provided with TPG’s
package offerings. It offers internet infrastructure such as fibro-optical fiber, Ethernet high-
speed wireless subscriber line (SHDSL) and cable, stand-alone ADSL2 +, naked ADSL2, and
fiber. TPG's other corporate facilities provide managing domain names, web pages, POP3
(Post Office Protocol 3) and IMAP (Internet message control protocol) email accounts, IP
addresses, and mailing list servers. The affiliate firms of TPG include Chariot Pty Ltd, PIPE
Networks Pty Ltd, and TP GmbH (NZ), Orchid Cyber tech Services Incorporated, Kooee
Communications Pty Ltd, Soul Pattinson Telecommunications Pty Ltd, and Trusted Web Pty,
Trusted Web Pty Ltd.

Madsen (2020), states that the TPG Market division of TPG offers domestic and small
business clients with telephone services. In FY2016, AUD674.3 M, or 28.2% of overall
business sales, was registered in the customer division of TPG. The business division TPG
offers private, government, and large-scale telecommunications services. The Corporate
Segment of TPG posted earnings of AUD654.6 million in fiscal 2016, comprising 27.4% of
the overall revenue of the company. The iiNet division of TPG serves residential and
enterprise consumer’s telecommunications and infrastructure services. In FY2016, the
AUD1.058, 9 million sales for the industry, comprising 44.3 percent of the overall business
revenues, were announced by iiNet.

Telecommunication (telecom) Industry overview

In the area of IT, the telecommunications industry includes both telecom/telephone firms and
internet service providers and plays a significant part in mobile network growth and the
digital society.
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Abdilahi (2020), noted that continuing, however, with the progress of network technologies,
telecommunications are nowadays less associated with speech and more and more with text
(messaging, email) and photos (e.g. video streaming). High-quality internet connectivity is
widespread with computer-based network services, including cable and digital entertainment.
The primary high-speed communications infrastructure is the Electronic subscriber service
(DSL). The most rapid development emerges from (value-added) cell network providers.

According to Sharabati (2016), the telecommunications industry rises rapidly, as fixed-line

telephony traffic and sales decline. The NBN's multi-technology design, and its reliance upon
VDSL and Fiber-to-the node, often decreases as the fiber- and fixed-wireless internet
networks on the copper network become more readily available. Most voice traffic would be
rendered the data packets in due course, utilizing technologies like Voice over Long-term
Evolution (Volte). Over the last five years, competition in the Australian fixed line industry
has declined dramatically and improved. The domination of the telephone market and the rise
of the internet broadband sector are significant factors for this. In the next five years, the
demand is projected to decline further until 2024 as the prevalence of cable and internet
broadband continues to grow.

In the coming year (2021), the telecommunications industry would potentially see a decline
in cell device demand, while retaining and updating current networks would still be
challenging for network operators to handle workflows. For certain nations, the cumulative
transition to 5 G may be postponed or reduced.

Analysis of the external environment

PESTEL analysis

The study of the PESTEL provides great clarity on TPG Telecom operating problems in the
prevalent macroclimate. E.g., an industry may be highly competitive with a clear outlook for
development, but if placed in an uncertain political climate, it will not be good for TPG
Telecom Restricted. This PESTEL review provides a quick description of how different
strengths will impact TPG telecommunications in the global environment in these years.

Political factors: Han (2016), states that there are also threats to the TPG in the international
climate. Telecoms' conventional political challenges involve economic, network licenses,
regional radio assets, and trade barriers in certain countries. In general, these problems
impacted network operators and hardware and service providers worried less about their
consequences. Privatization and modernization were nonetheless a catalyst that operated for
the group. Due to its role in the cycle of globalization, the TPG had a time of relative
independence. Nonetheless, in recent years, there have been a variety of challenges that may
contribute to rising international risks.
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Economic factors: In the sense of TPG telecom, the position of economic factors is equally
significant. This field was badly affected by the crisis. Throughout the crash, citizens raising
their telecoms income. During the crisis, landline reductions increased as wireless
communications expansion declined. Now that the global crisis has ended, market telecom
spending has increased. In 2009 citizens have avoided reducing telephone prices. 2016 was
successful and trends are improving all over the world with global growth. Anything
nowadays rests on the consumer's wallet. The healthier the population, the higher the
spending on some good or service. The technical developments often drive these economic
patterns. Wider growth levels for US-based network vendors may contribute to fewer trade
barriers (Lamb, 2017).

Social factors: Social considerations do have a profound effect on the competitiveness of the
sector. In several areas like work and culture, communication is important. The use of internet
access has increased worldwide. Many will use social media to make fun and to conduct
company. Internet sharing providers will require really strong connections from YouTube
videos to Netflix. That explains why the adoption of 4G has expanded worldwide. In
addition, growing numbers of people want to remain linked. Their appearance is part of it. It's
that certain individuals are overworked and can't get out of contact with family and partners
in the case of some. In fact, as reported in a survey, Australian people use their smartphones
and handheld apps at least 9 billion times. Mobile computing has become extremely popular,
and without a really strong link, too many apps on these phones and tablets will not be
utilized.

Technological factors: As opined by Çitilci (2017), the whole TPG is technically oriented
and is thus heavily affected by technical developments. There is a growing usage of mobile
computing. Events are never before shifted all over the world. In different respects, it is
essential to industry and profitability. The center of innovation has been computers and cloud
storage. The worst of these technical developments in the telecommunications market.
Smartphones and laptops have continued to grow and nothing without a fast connection can
be used in full. 5 G is soon to launch, so a lot of hype has already taken place. IoT is an
environment where telecommunications companies have tremendous resources. Therefore,
one of the most powerful technical powers impacting TPG telecommunications.

Environmental factors: This year, devices are a major part of e-waste. Due to the amount of
e-waste generated by both service providers and hardware manufacturers, the industry
focuses on waste reduction and minimizes the environmental effects. There are growing
investments by companies in raising their carbon intensity. Based on its 24 MW Green power
by 2025, Verizon is in the process. Providers such as Verizon are now dedicated to recycling
products as they contribute directly to the development of e-waste. This honors users who
recycle their gadgets instead of dumping them into the garbage with its system (Gevorgyan,
2016).

Legal factors: Çitilci (2016), argues that compliance with international legislation raises
significant threats for telecommunications companies. In addition to the standard labor and
labor laws, many other laws and licenses are necessary for enforcement. The FCC, which was
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created by Congress in 1934, supervises media laws in Australia. The networks have to
comply with different regulations, including telemarketing and privacy rules. Following the
9/11 attacks, numerous developments took place that generated more competition on TPG
telecommunications companies.

Analysis of the internal environment

SWOT analysis

Strength

Better returns on capital spending – TPG Telecom Limited has fairly effectively executed
new ventures and generated strong returns on investment through the production of different
revenue streams.

Large distribution network – TPG Telecom Limited has built over the years a trustworthy
delivery network that covers much of the potential sector.

Powerful supplier group – Cotton (2017), highlighted that distributors & dealers have
developed a culture in which suppliers not only advertise the goods of the business but also
participate in the creation of the distribution team to demonstrate how they will allow full use
of the items to their clients.

Superb results in emerging markets – TPG Telecom Limited has gained experience in the
introduction and growth of international markets. The move helped the company generate a
different source of sales to diversify the impact of the business cycle of its global markets.

Weaknesses

There was much to consider for the promotion of the goods. While this company is a success
in terms of revenue, it does not explicitly identify its role and its exclusive market proposition
that can contribute to competitors' attacks in this sector.

Putra (2017), states that there is not sufficient and effective financial preparation. The
existing mix of investments to available investments indicates that the company will manage
the funds more efficiently than it actually does.

Research and technology spending is smaller than the industry's fastest rising teams.
Although TPG Telecom invests above the research and development sector average, it has
been unable to compete in terms of innovation with the industry's leading players. It turned
out to be a seasoned business looking forward to selling goods focused on proven
functionality.
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Little progress in the corporate sector – While TPG Telecom Little is one of the leading firms
in its field, its existing community confronts itself with the difficulty of expanding into
certain product segments.

Opportunities

The new tax policies will affect the industry and provide existing companies like TPG
Telecom Limited with a new opportunity to increase their productivity.

In the words of Zafar (2020), stable free cash flow provides acquisition incentives in
complementary commodity markets. The business is willing to grow in emerging
developments and different manufacturing areas with more cash in the accounts. It will open
a gap in other commodity segments for TPG Telecom Limited.

New business developments will open up the TPG Telecom Limited market. This gives the
company the chance to create additional revenue sources and even to diversify into other
product categories.

The business spent a large sum of capital in the internet network in the past three years. The
expenditure for Tpg Telecom Limited has created a new source of sales. Over the next two
years, the organization will be able to leverage Big Data Analytics to maximize this ability to
truly identify its clients and satisfy their needs.

Threats

The business may be threatened with a significant medium to a long-term challenge from
emerging technology created by the rival or market disruptor.

Rising weaknesses of local distributors are also challenged by competition for local
distributors in certain markets (Tian, 2018).

Liability law in various countries is specific and, when regulation shifts in certain
jurisdictions, TPG Telecom Limited can be subject to multiple liability claims.

The market for highly competitive goods is volatile and any unlikely occurrence in the peak
season will have a short- to medium-term impact on the company’s profitability.

Recommendations of porter’s generic strategies

Porter’s generic strategy

Porter's Generic strategies are a category of strategies consisting of three general strategies
that mainly serve to achieve and maintain a competitive advantage by companies. Similar
approaches from Porter provide three forms of techniques, namely cost leadership,
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differentiation, and focus strategy.

Cost leadership: In the words of Islami (2020), cost leadership is a strategy that in the target
market segment carries the lowest operating costs and prices. The low-cost leader in each
market is able to produce many at the lowest cost, which gives it a competitive advantage.
When a corporation follows this approach, the business may benefit and gain a larger income
than other firms. Price-sensitive customers benefit from this.

Differentiation: A strategy of differentiation is one that separates the company from other
companies within the same industry. It is designed to develop a unique and custom-worthy
product or service. When there are unique consumer criteria, the distinction is important. The
market price will rise if goods or services are special. There are also incentives for innovation
to be replicated from others and strengthened in business.

Focus strategy: The strategy focuses on a specific market and aims to gain a strategic edge
inside this market. The organization typically relies on specific key areas for the execution of
a marketing approach to please different audiences. Due to the company’s narrow segment
focus, the volume of products is low and thus suppliers and customers have less negotiating
power. A business that employs a concentrated approach is committed to its clients
(Abdolshah, 2018).

After analyzing the porter’s five generic strategies it is recommended TPG telecom use
Differentiation strategy which includes product differentiation. The differentiation of the
product involves customizing the goods or services. This enables companies to charge
premium prices for market share capture. Sometimes but not necessarily, a differential
approach is linked to higher costs as rates appear to be smaller. In applying this strategy, a
company focuses on delivering a unique product or service. Brand distinction fulfills a
consumer expectation as the good or service is specific. If a business defines its goods, a
higher price on its products or services is always paid in the sector. In contrast to current
consumers, certain common indicators of distinction include superior customer support,
increased quality efficiency, etc. Porter (1980) claimed that there should be an increased
expense to an organization that employs a differentiation strategy.

According to Kohzadi (2016), the importance of the differentiation approach is that it is the
consistency that insulates an organization from the challenges of one of the five powers that
decide profitability in a market. Once again, businesses using differentiation approaches have
certain internal resources such as the large potential for research and growth, good
distribution departments, and a reputation for efficiency and creativity. The integrity of the
brand defends an organization from risks from replacements. Differentiation is also the
essence of stretching and saving joining and continuing the market life cycle.
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For example, Vodafone established a strategy of differentiation as it introduced IT, as it paid

its consumers more than its rivals, it also had the edge on others with free Vodafone for
Vodafone calls to call for life and greater network capacity than other rivals. Similarly, TPG
telecom can also use this strategy in order to gain competitive advantages in the market
(Abdolshah, 2017).

The Coca-Cola Company would also be a good example of differentiation. In the 19th
century, the original and special recipe for Coca-Cola was created. For the previous century,
the original formula has not been replicated. Apple Inc. is also a corporation with a
distinction policy. In the computer sector, the Apple Company had produced a big
breakthrough. Innovating the electronics industry, iPhone, MacBook, iPad, and iPod had a
great impact. These exclusive Apple items meant that the business was the best-selling
computer firm.

Analysis of organizational structure and culture to examine the appropriateness of

differentiation strategy

In the words of Abdolshah (2018) Matrix structure is a sort of management scheme, where
workers refer to more than one entity with more than one supervisor concurrently. The matrix
form is implemented by TPG Telecom. This arrangement allows managers to rely on their
fields of specialization. And functional supervisors might concentrate on hiring, training, and
managing their field and project supervisors in order to achieve the objectives of particular
projects and products. It permits workers from different agencies to work immediately on a
specific project unit. This also provides versatility to easily satisfy the demands of clients by
developing a team of individuals who invest time on a job, return to their offices, or create a
different project team.

The task culture is focused around the company's organizational culture which functions to
select a squad to accomplish a particular mission. In today's contemporary business world,
this is one of the successful methods of finishing a job to date (Viltard, 2017).

The benefits are:

● In the team leaders, they can make choices

● They feel appreciated because of team selection.

● They are entirely accountable for the performance of the mission

● Team members are motivated by their capacity for decision-making.

In the case of TPG, a differentiation strategy is appropriate as the target consumer group does
not price responsive, the business is dynamic or crowded, consumers have very particular
demands that could be under-served, and the company requires unique ability and power to
address such requirements in ways that are impossible to imitate. A differentiation approach
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is necessary. Patents or other intellectual property, unique expertise (e.g. Apple’s design skills
or Pixar's animation expertise), talented staff, or innovative processes may be involved. This
strategy is effective and appropriate for TPG as the structure and culture of the company is
aligned with the strategy to gain competitive advantages (Karyani, 2018).
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Conclusion

The study included a detailed summary which would also provide a review of the external
climate of the organization, assessing possible opportunities and risks, its strategic capacity to
distinguish core strengths and weaknesses, and highlighting critical problems for investor
consideration and environmental and organizational audit. The above analysis suggested that
differentiation strategies are used to optimize an organization's business efficiency. The
standardized approach of Porter would encourage a company to achieve a significant market
edge. TPG Telecom should use differentiation strategies in order to gain competitive
advantages in the telecommunication industry in Australia.
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