The Role of Marketing in Telstra International
...d 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. • 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 Telstra’s 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). 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. Xantic’s 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 therefore has a range of international investments. Movements in the Australian dollar against other countries could affect operating revenues dramatically. To counter strike this, Telstra swaps foreign currency borrowings into Australian dollar equivalents. Occasionally there are exceptions however this method has proven to remove the foreign exchange risk. 5.1.2 Economic Developments Telstra is dependant on the general economic conditions in Australia, including levels of Gross Domestic Product (GDP), Interest Rates and Inflation. A significant determination in these conditions could adversely affect the business activities and the results of operations. 5.2 Political Influences 5.2.1 Restrictions on Foreign ownership The Australian government has two specific Acts set in place to protect Telstra from international take over, they are the Telstra Act and the Foreign Acquisition and Takeover act 1975. 5.2.1.1Telstra Act The Telstra Act states that an unacceptable foreign Ownership situation will exist if all foreign persons and associates hold in total a particular stake of more than 35%. 5.2.1.2 Foreign Acquisition and Takeover Act 1975 This Act applies to any acquisition of an interest in the shares of an Australian company with total assets of A$50 Million, which would result in, and foreign person controlling 15% or more. 5.3 Legal Influences 5.3.1 Hong Kong Telecommunications Regulation Unlike many other countries, Hong Kong is void of a general competition law. The Telecommunications Authority regulates anti competitive behaviour by issuing competition provisions in licences which states: “…Shall not engage in any conduct which, in the opinion of the authorities has the purpose or effect of preventing or restricting competition in the operation of the service in any market…” 6.0 Establishing Marketing Objectives Internationally the marketing objectives are in 2 main areas, Applications and Content and in international expansion. 6.1 Applications and Content Focuses on enhancing their capabilities to provide services more efficiently by developing new innovative products and then to further expand into these markets. This involves constantly redefining the market strategies and product line to ensure the best quality products at the best possible price. 6.2 International Expansion Focuses on increasing revenues and earnings from outside Australia, especially throughout the Asia-Pacific region. This includes strategic alliances and joint ventures already in progress as well as reviewing opportunity for new investments on a global scale. 7.0 How have Marketing Strategies been adapted to the Global Market 7.1 Research of Market The confl...