Business Strategy: A Comprehensive Analysis of EE's Strategic Position in the UK Telecommunications Sector

This assignment delves into the strategic landscape of the UK telecommunications sector, focusing on EE, a leading mobile network provider. It analyzes the impact of the macro environment on EE's business strategies using PESTLE analysis and Ansoff's Growth Vector Matrix. The internal environment and capabilities of EE are assessed through VRIO analysis and SWOT analysis, highlighting its strengths, weaknesses, opportunities, and threats. Porter's Five Forces model is applied to evaluate the competitiveness of the UK telecommunications sector, identifying key industry players and their competitive dynamics. Bowman's Strategy Clock model is used to analyze EE's strategic direction and options, considering its pricing strategies and value propositions. Finally, a strategic management plan is developed for EE, outlining tangible and tactical priorities and objectives to enhance its market position, customer satisfaction, and overall competitiveness.

BUSINESS STRATEGY

TABLE OF CONTENTS
BUSINESS STRATEGY.................................................................................................................1
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................2
P1 Analyze the impact and influence the macro environment has on your chosen organization
and its business strategies............................................................................................................2
M1 critically analysis the macro environment and how it determines your chosen
organization’s strategic management decisions...........................................................................6
LO2..................................................................................................................................................7
P2 Conduct an assessment of the organization’s internal environment and its capabilities........7
M2 critical evaluation of the strengths and weaknesses of an organization’s internal
capabilities, structure and skill set.............................................................................................10
LO3................................................................................................................................................11
P3 Evaluate the competitiveness of UK’s telecommunications sector using Porter’s five forces
model.........................................................................................................................................11
M3 devising appropriate strategies............................................................................................13
LO4................................................................................................................................................14
P4 Using Bowman’s strategy clock model, analyze the strategic direction and options
available for chosen organization..............................................................................................14
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

LIST OF FIGURE
Figure 1: PESTLE Analysis.............................................................................................................2
Figure 2: Vector Matrix Analysis....................................................................................................4
Figure 3: Strength and weakness.....................................................................................................8
Figure 4: Industry rivalry...............................................................................................................11
Figure 5: Product position.............................................................................................................14

INTRODUCTION
As globalisation is the first thing which comes in the mind while any one is talking about the
business, it shows that there is huge and intense competition in every sector of business in terms
of growth. Telecommunication sector is also a growing sector because it directly relates with the
technology and technology is advancing every day so this industry has to be careful and more
focused in terms of sustaining and developing its business. Business strategy plays key role for
sustaining and developing the business because strategy is not made with just single factor but it
includes a deep study and analysis of every single aspect of business with the help of various
analysing tools such as PESTLE, SWOT, Ansoff matrix and other analysis tools. This
assignment gives the detail analysis of telecommunication industry in terms of devise a strategy
for chosen organisation and EE has been selected to study.
1

LO1
P1 Analyze the impact and influence the macro environment has on your chosen organization
and its business strategies.
Organizational overview: EE is very well known British mobile network provider which was
established in 2010 as an outcome of joint venture between T-Mobile and Orange. This
organization is very first in providing 4G services in UK and also it is the first organization to
offer contactless mobile payments (Wheelen et.al 2017.). EE operates with more than 700 retail
outlets across the UK. It is providing its access to its network to over 29 mobile operators which
services total of 5.7 million customers.
PESTLE analysis for EE
Figure 1: PESTLE Analysis
2

Elements of PESTLE collectively represent the macro environment that is very important for any
organisation and analysis of macro environment is known as PESTLE analysis (Grant, 2016.).
Table 1: PESTLE Analysis
PESTLE
Political The government of UK has noticed the coverage problems in rural area and
that is why it has invested almost 150 million pounds into this area (Rural)
as collaboration with O fcom. Before that EE was facing an issue of
customer dissatisfaction because of the coverage problem.
Economical Although UK economy is recovering from 2013 but in 2014 as EU union
demanded for 1.7 billion pounds payment, UK has faced considerable
problems but in 2013 there is also growth in GDP of 1.9% it is good sign as
if income is increased mobile services are also increased.
Social Every customer segment shows different buying power and behaviour,
various studies show that the mobile and telecommunication has grown very
much as youth use phones as part of their life. Chatting, sharing messages,
study purpose and there are so many reasons.
Technological This industry is very much influenced by the technology as every
telecommunication service provider has goal to network coverage
enhancement and technology plays vital role in that as it brings new
capabilities for the customer and industry both (patente et.al 2018)
Legal The regulations focus on consumers as the ability of customers in terms of
terminating their contracts without any penalties, because of specific
situations of price increase without giving notifications within the period of
month.
Environmental Telecom industry has to consider the environmental factors as production of
handset and use of handset and development of infrastructure.
3

Ansoff Growth Vector Matrix for analysing strategic position of EE;
Figure 2: Vector Matrix Analysis
 Market penetration- it shows the present product with present market as EE is currently
having the largest amount of retail stores as 570 and more than 100 franchise stores on
the high streets and shopping malls. It has the largest 4G network coverage and it is
leading brand no doubt.( Loeser, et.al 2017) Not only Urban network but it also
considering the rural area with more focus and that is why it is big competition for
Vodafone.
 Market development –it is the situation where organisation goes for new market with
present product. It can be very good strategy for EE as its competitors are focusing only
in urban area and if EE focuses more towards the rural area with the government policies
it can be very good strategy for EE(Porter et.al 2016.).
 Product development – the strategy where organisation introduces new products in the
same market as EE has issues of customer dissatisfaction it needs to introduce services
that make feel its customer comfortable and provide tremendous customer service
experience.
4

 Diversification – it is the strategy where an organisation goes for new market with new
products. This strategy also would be suitable for the EE as it has various products and
services in its operating area but it can go for other countries for new market (Dijkman,
et.al 2016.).
5

M1 critically analysis the macro environment and how it determines your chosen organization’s
strategic management decisions.
The macro environment factors as PESTLE has great influence on the strategy formulation and
business decision for every organisation because political issues such as government regulations
on the usage of phones, the network coverage area and the other various things are only
controlled by the government. If government regulates these issues EE has to work under the
government pressure and decisions are taken accordingly. Its investment decisions, 4G network
decisions strongly depend on the political element. Economical stability and factors such as
income and age of using the smart phones influence the decisions of providing the data services
by the EE. VAT and other taxes make big effect on the buying of consumers and hence it affects
the EE’s decisions. In terms of social factors it is seen that youth is addicted for using the smart
phones this scenario good indication for EE but the lots of applications are there which creates
competition and EE needs to come up with more attractive service plans which are able to satisfy
social needs of customer (Ginter, 2018. ).
Technological factors keep the strongest influence on business decisions this factor allows EE to
innovate and create new products with technological advancements but this factor works as
threat and provides huge competition. Legal factors such as contracts rules, usage regulations,
and licensing regulations are the elements which needs to be complied and services are only be
introduced according to these regulations. Environmental issues as the harmful rays of smart
phones and the infrastructure setup can harm the environment it bounds EE to operate with eco
friendly technology and also encourages towards the CSR activities.
6

LO2
P2 Conduct an assessment of the organization’s internal environment and its capabilities
Strategic capabilities means
Strategic capabilities are the various abilities of any business or organization that allows it to
execute competitive strategies which are very important for survival of that organization.
Components of strategic capabilities (Egberongbe, et.al, 2017)
 Financial and Human resources – the available financial resources and Human
resources are very important and strategic thing for EE. The Human resource of the
company is responsible to formulate any strategy and then for its execution. The efficient
and effective HR plays the vital role for successful running of the EE. Financial resources
are the resources which gives budget and finance for availing the activities in effective
manner.
 Culture – the organizational culture is the another important strategic capability element
as the positive culture of EE allows its employees to work with boosted morale and that is
why it is vital for good strategic position.
 Assets – all the available assets in EE works as the important element of strategic
capabilities because assets can work in the negative situation
(Amuie, et.al 2017).
Apply the ‘VRIO/VRIN’ model to determine the strategic capabilities possessed by EE
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Table 2: VRIO Analysis
VRIO analysis
V – valuable R – rare I - imperfectly
imitable
O /N – non
substitutable
EE has valuable
resources such as its
Management and
Human Resources
which frames strategy
and executes them
which helps it to
develop and grow.
The innovative
efforts and quick
actions of executing
the creative strategy is
really rare thing
which makes EE
leader in 4G network
provider in UK.
The Management is
not imitable exactly
because in EE it has
something unique
with its management
as it is leading in
industry (Huq et.al
2016).
There is no any kind
of resources which
cannot be substituted
because of
technological
advancements.
Identify the organization’s strengths and weaknesses
Figure 3: Strength and weakness
8

Table 3: SWOT
SWOT
Strengths Weakness
 It is enjoying market leader position in
industry (Goldman et.al 2017)
 It has largest 4G customer base in UK
 First operator to pre install the Lookout
Mobile Security App
 It has wide coverage
 It has shown highest performance in
speed
 Brand recognition is low as 77% of its
customer connected with other network
 It is brand but low value for money
position
 Low rated customer service
 4G roaming is not available
Opportunities Threats
 It has many chances for product &
service advancement
 It has scope for strengthening post paid
customer base.
 It has launched its own branded smart
phones and tablets (D tone et.al 2016)
 The expansion of Wi-Fi services and
free application expansion
 Strong competition from Vodafone,
O2 in 4G coverage
9

M2 critical evaluation of the strengths and weaknesses of an organization’s internal capabilities,
structure and skill set.
EE is a market leader in UK within its industry of telecommunication. Leading a market is not
easy definitely behind this there is a huge effort and investment in various related area. In terms
of its strengths it is seen that its management has great skills to take quick decisions regarding
the development for any area such as speed, 4G network coverage and others. Its highest
performance in terms of speed shows that its management and skills of its workforce in order to
execute those strategies (Gattorna, 2017.). The security app which is very firstly introduced by
the EE has shown the innovative steps towards the service for its customer. The skills, human
resources are actually responsible for this apart from that its structure allows EE to take quick
decisions.
Although EE is enjoying leading market position but it needs huge amount of focus and efforts to
maintain and sustain in the strong competition. On the other hand it can be seen that EE has lots
of issues of customer dissatisfaction as there is low brand recognition rate for EE it is because
the strategies of customer satisfaction are not that much effective as compared to other. Its
management needs to work more towards the customer satisfaction and brand recognition
strategy because it has potential to convert these weaknesses into strengths
(Grant, 2016)
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LO3
P3 Evaluate the competitiveness of UK’s telecommunications sector using Porter’s five forces
model.
The mobile telecommunication industry is generating revenue almost 3.8 billion pounds every
year with good growth rate (Adi, 2015). With intense competition in UK it has various key
players such as EE, Vodafone, BT, O2 and others. Different studies for this industry show that
different age group use smart phones with different frequency (Badii, et. al 2018)
Figure 4: Industry rivalry
(
 Competition – HIGH – the market of telecommunication sector is saturated and all the
players in the market are very strong competitors. EE ranked first for its network quality
criteria, speed and in network coverage but in area customer satisfaction it rates low it is
risky position and other can take advantage (Owusu and Duah 2018.).
 Threat of new entrants – LOW – it is very profitable industry but at the initial phase it
needs huge capital investment for example in order to acquire 4G spectrums Vodafone,
EE and BT has invested 2.3 billion pounds. So it becomes difficult to enter in this
industry (Kharub and Sharma, 2017.)
 Bargaining power of buyers – MEDIUM - in this industry organisations have to work for
new & innovative products & services for customer loyalty but number portability is a
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difficult task because customer needs to inform this on prior basis this gives medium risk
to bargaining power of buyers.
 Bargaining power of suppliers – HIGH – EE has to maintain its performance and for that
it needs to comply with technological advanced suppliers with healthy relationships then
only it can stand with its competitive advantage (Cho and Park, 2015).
 Threat of substitute – MEDIUM - development of various applications such as Viber,
Skype and others because of this telecom industry is losing almost 59 million of pounds
because of Skype alone. So it is producing significant risk for telecom operator.
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M3 devising appropriate strategies
In terms of business strategy the two areas needs to be concerned in EE as its sustainable growth
and the other growth or new market with new products.
 Sustainable development – it is very important as leading market position needs to
sustain with new and unique product ideas. The EE organisation can go for the market
expansion it can be done through same product or different products and services. The
Asian market is very much open for EE as so many global brands are operating
successfully in Asian market so in that scenario EE can merge with any Asian big player
and can create new customer base with market expansion (Jordehi, and Jasni, 2015).
 Merger with suppliers – in UK EE has many suppliers who work for different
telecommunication operators and that is why there bargaining power is also at very high
so this situation clearly gives indication that EE can do strategic alliance with any of the
suppliers as it will give profitable situation to both EE and that supplier organisation as
well. These alliances can be outside the UK as EE can go for focus diversification like its
major competitors Vodafone.
 Improvised customer service – EE has so many opportunities but the biggest thing is its
low customer satisfaction rate so it needs to work on the customer satisfaction. EE must
introduce new services as the various discounts offers for new customers and the very old
customer apart from that it can introduce some free offers for those families who are only
using EE’s network connections. EE can collaborate with some handset manufacturer
companies and offer handsets to its loyal and potential customers (Singh, et.al 2015).
13

LO4
P4 Using Bowman’s strategy clock model, analyze the strategic direction and options available
for chosen organization.
The different positions which are given by this model are very important as it shows the
competitiveness and the worst position for the organizations. In business an organization takes so
many decisions and according to those decisions and pricing, products its position is determined.
Here the brief discussion is made regarding those positions (Bayani, and Dakila, 2017).
Figure 5: Product position
(Source: Positioning in the business, 2018)
 Low price & low value added (position 1) - it is not a competitive position as product is
not differentiated, customer perceived low value despite a low price. The 3G network
services are currently in this position.
 Low price (position 2) – it is the cost minimization strategy is used to be successful. Here
profit margins on every product are low but high volume of output can still generate high
overall profits. Some of the service providers for network or small players work on this.
For some offers EE can opt for this (Sagah, et.al 2017).
14

 Hybrid (position 3) – it is a hybrid position because it includes bit element of low price
and some product differentiation. EE has this position as it is giving new offers with
affordable range.
 Differentiation (position 4) – it is the position where customer are offered highest
perceived added value and according to that its prices are charged because here branding
plays vital role.
 Focused differentiation (position 5) – it is the strategy which is used to achieve prime
premium prices by specially segmented and targeted customer. Luxuries brands usually
adopt this strategy. In telecommunication this strategy does not work well as EE must not
go for this.
 Risky high margins (position 6) – it is the position where organisations usually charge
much without offering high perceived value. Here customer easily fined the same offered
perceived added value in lower price.
 Monopoly pricing (position 7) – there is only one business who just sets its prices, they
are not concerned about the value which customer perceived, they have only one choice
purchase or not purchase (Fotea, et.al 2017).
 Loss of market share (position 8) – it is the worst position for a company where setting a
middle range price for a product with low perceived value is unlikely to win the
customers. EE needs to focus on the other position so this scenario would not come.
15

M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.
After going through the discussed position of EE with the help of various tools it is seen that it
has objectives for providing the better services with the help of implementing new advanced
technologies, to enhance the customer satisfaction by every possible way and be the top most
brand in UK. EE can have the SMART objectives so further planning would be easy and will put
positive impact (Cassidy, 2016).
 In terms of producing strategic management plan EE must go for some tactics and actions
as it has to offer more flexible plans to its customer as it can opt for improvised way for
video calling and other options. It encourages long term relations with the customer base.
 In terms of pricing it needs to go with penetration strategy as this strategy will allow EE
to set lowest price for penetrating the market of products and it would be impactful for
buyer’s behaviour and demand.
 EE has to give quick and direct access via internet which increases comfort and
convenience of its customer apart from that it can develop more retail stores so it would
be more approachable.
 In terms of customer satisfaction it has to make awareness as promotional activities and
for this new offers have to be introduced such as discount coupons, social media
interactions, and direct emails and direct sales can be done to draw attention of more
customers.
 All the workforce at every level must be offered a training and development programme
so if any lacking skill is there, training and development will improve that and
management will work in more strategic way apart from that every possible effort must
be made to motivate its employees (McDonald and Wilson 2016. ).
 More advanced technology uses would be adapted by EE so it can reach to every
customer and every potential customer.
16

CONCLUSION
It is very successful assignment in order to make understanding regarding the business and
business strategy. It is clearly showing all the important factors of business as macro and micro
environment of EE and analysis of these through PESTLE and SWOT. All the important things
such as Ansoff matrix, Bowman’s model, VRIO analysis are discussed in this assignment with
the help of EE as an organization and it is concluded that Telecommunication industry is
growing and technology based industry so it needs to prepare its strategy after considering each
and every element then only it would be able to sustain and develop.
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