Contemporary management and value chain analysis at China Telecom Essay

Contemporary management and value chain analysis at China Telecom - Essay Example This is a significant accomplish for an organisation that must operate in a dynamic, competitive, and price sensitive environment whilst also managing multiple international cultures in its many divisions that operate globally in Asia, North America, and Australia. China Telecom is able to maintain a cost leadership position among competition by maximizing its supply chain and replenishment planning software, thus providing not only efficiency in service delivery but total price value in a region of the world that is willing to defect to other brands based on price sensitivity (Boone and Kurtz 2007). China is a collectivist culture, meaning that individuals in society value group membership and the establishment of group-minded goals with little emphasis on individuality common to Western consumers (Hofstede 2012). Because of this, word of mouth advertising and appealing to group-minded consciousness in the target market requires the organisation to be aware of pricing models compare d to competitors as well as pricing that will ensure long-term brand loyalty. Even though China Telecom is a fixed line service provider as the primary service and product, the business recognises trends in social culture and therefore has adopted a model of innovation and modernisation. Growth in Internet usage in the country of China exceeds the growth rates of the rest of the world and China Telecom continues to evolve its wireless Internet options therefore diversifying business practices and divisional competencies. Table 1 illustrates the growth in Chinese consumer Internet usage over a 10 year period. However, in order to effectively manage these innovations, the business must focus on cross-cultural management, engage in transformational management, continue to decentralise business divisions and leadership, as well as conduct routine quality assurance/auditing practices as part of strategic management and risk management models. Table 1 Source: www internetworldstats.com (2 010). China Telecom continues to be a leader in supply chain management allowing the firm to maximize its total brand value and price value components in its business and profitability models. The organization utilises manufacturing and distribution from ZTE, Comba Telecom, SimTech, UT Starcom, and Grentech (Meng 2009). China currently maintains an unfavourable exchange rate with the rest of the Westernised world, therefore it procures its products domestically to ensure yuan exchange and thus maximizing profit. This also avoids tariff costs for importing mobile devices and service provision information technology equipment. In order to maximize efficiencies in supply, China Telecom must be strategic-focused and work with collaborative supply chain systems to ensure partnerships and efficient distribution networks for purchasing needs. Outside of the financial and managerial aspects of total value chain considerations, China Telecom maintains many strengths in relation to corporate social responsibility and understanding how to develop cultural awareness to create a unified and loyal corporate culture. In May of 2012, China Telecom was awarded the Best Managed Company in Asia by FinanceAsia, a respected financial and management consulting company (China Telecom 2012). China Telecom received this award for its