The approach used in the process of strategic planning to review the external environment affecting a business now and in the future is PEST analysis (Southside Marketing Solution, 2009.)Telstra Corporation limited as a large and a complex business need to focus on the external environments which can be done through PEST analysis.
Political factors include changes in the government policies which can affect the industry. Political factors also includes changes of government locally or at federal or national level, changing government policies in taxation schemes, privatization of certain bodies or changes in nationalized industry structure.
Generally competition makes things cheaper. Telstra as a Privatized company has lots of opportunities than the Government owned company. Telstra, formerly telecom was only the choice of the consumers for telephone service. After deregulation many competitors entered into the market and more choices were available for the customers to use the telephone service. Privatization of Telstra and deregulation of the market allowed it to enter into the competitive market (Act now 2006).
The new idea of National Broadband System is a threat to Telstra. The government announced that 90 percent of the household will be serviced by the fibre whereas 10 percent via satellite. This policy of government is justified by blaming Telstra as the most vertically integrated carrier in the world. (Kenneth Davidson 2010). But it has no evidence to prove this fact. The policy if implemented will materially affect Telstra’s profitability and its share price. The legislation if passed will destroy Telstra and also the government. On the other hand, the federal government decision to push for the structural separation of Telstra has been generally welcomed by those who feel it will enhance the competition but the investors fear that this will harm the value of their assets. (Bartlett 2009). The...