Telecom Corporation of New Zealand Limited - Strategic Profile

Strategic Profile

•Brief description of the organisation

Telecom Corporation of New Zealand Limited, the largest telecommunications company in New Zealand, was established in 1987. Telecom provides information technology and telecommunications products and services in New Zealand and Australia. The products and services of Telecom Corporation of New Zealand Limited include fixed line phone services, wireless services and data network services. Telecom mobile accounts for about 49% market share just behind Vodafone which is the largest mobile telecommunications network company in the world (Telecom New Zealand, 2007).

Telecom has been developing environmental protection measures for many years .Telecom was the first company to introduce mobile phone recycling and power savings along with products in New Zealand. Telecom aims to provide value to its customers and stakeholders through its environmental friendly ethic (Telecom and the Environment,2007).

• Corporate mission and vision

The mission of a company represents the fundamental purpose that sets a company apart from other companies of its type and identifies the scope of its operations in product and market terms, which means why the organisation exists and what it should be doing(Hill, 2007). The mission of Telecom Corporation of New Zealand Limited is to provide high quality products and superior service for personal and business customers.

The vision of a company is what the company is trying to achieve over the medium to long term time period(Hill, 2007). In the future, Telecom Corporation of New Zealand Limited will run a number of separate entities for the supply of wholesale, retail and network services so that the customers will get more and more choice and value from Telecom(Strategy Overview, 2007).

• Stakeholders and their influence

The stakeholders are separated into internal stakeholders and external stakeholders. (Hill, 2007) As for Telecom Corporation of New Zealand Limited, the internal stakeholders are employees and shareholders who are composed of executive officers and board members. Shareholders provide Telecom with capital in exchange for appropriate reward on their investment. Employees offer skills and labour in exchange for income and job satisfaction (Hill, 2007).

The external stakeholders include customers, government, suppliers and general public. Customers provide Telecom with its revenue in exchange for high quality products and high level service (Hill, 2007). The relationship between Telecom Corporation of New Zealand Limited and its consumers is based on trust and transparency. As a company value generation and growth are to a great extent with consumers satisfaction. Therefore, Telecom needs to know customers’ real expectations, such as regulating the safety of personal data.

Telecom must pay more attention to customers when it represents its strategies. As some situations might occur, such as shareholders may sell shares of Telecom, employees may quit job, customers may buy lower price product from other companies and suppliers may look for other buyers. These situations can have a serious impact on Telecom (Hill, 2007). Thereby, it is crucial for Telecom to determine a strategic direction which may account for sudden changes in the market.

• Strategies adopted and the overall strategic approach

Over the last 5 years, the telecommunications environment has been changing significantly in New Zealand. There are three major changes including intense retail competition, market consolidation and major technological change that have significant influence on Telecom. For instance, the world’s biggest mobile network company Vodafone access to the fixed-line business of New Zealand market. Vodafone and Kordia have acquired two of largest internet service providers in New Zealand. The market share of Telecom has declined every year since Vodafone took over BellSouth. Therefore, Telecom launched the first 3G network into the 3G market along with text message package at $10 in a month in 2005. At the end of 2005, Telecom clawed back 72,000 new mobile customers compared to 27,000 for Vodafone (Telecom New Zealand, 2008).

However, Telecom was beaten by a series of decisions in 2006. Firstly, the New Zealand government allow Telecom’s competitors, TelstraClear and Ihug, to offer broadband and communications services in New Zealand. Secondly, the Commerce Commission allowed Vodafone to set up a mobile product which provides free local calling. Lastly, the Commerce Commission allows Telecom’s competitors, CallPlus and Ihug, to provide competitive broadband services. Telecom faces intense competition in all areas now (Telecom New Zealand, 2008). Under the circumstances, Telecom needs to reshape the way in the market to achieve superior performance. A strategy is an action that an organisation takes to attain one or more of its goals (Hill, 2007). Accordingly, a strategy adopted by Telecom is operational separation which is the biggest change in New Zealand telecommunications industry. It means retail and wholesale customers get the same product at the same price at the same time through the same processes (Strategy overview, 2007). The appearance of internet protocol(IP) allow separation of service and

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