P1 Impact and influence the macro environment has on BT organisation

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence the macro environment has on BT organisation.............................1
TASK 2............................................................................................................................................4
P2 Internal environment and organisation capabilities..........................................................4
TASK 3............................................................................................................................................6
P3 Evaluate the competitiveness of UK’s telecommunications sector using Porter’s five forces
model......................................................................................................................................6
TASK 4............................................................................................................................................7
P4 Understanding and interpreting strategic direction...........................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In current scenario, every business wants to attain long term benefits. For this, it is
necessary for firm to prepare and make an impressive business which contribute in rising
performance level of the organization. In this business strategy refer to process and policies
which may provide better guidance to various department with the purpose of attaining desirable
results in effective manner. Basically, business strategy is related with long term planning
process in which firm perform their entire task by reducing the risk factors in most effective
manner (Ackermann and Audretsch, 2013). Along with this, manager also play vital role in
evaluating internal and external factors. This will aid in developing as well as implementing
appropriate policies at workplace. With the help of this company easily attain competitive
advantage by providing better services to its customers. Present report is based on BT, is
telecommunication company which provide global services to large number of people. They
perform their business in various countries with the aim of attaining better results. This report
also discussed about PESTLE analysis which may assist in rising performance level of the firm
at market place.
TASK 1
P1 Impact and influence the macro environment has on BT organisation
It is important for business organization to evaluate all the environmental factors because
it directly affect the business activities in positive and negative manner which may leads in
achieving competitive advantage. As BT is biggest telecommunication organization in which
they operate their business activities in over the world. Basically, it provide mobile and
broadband and IT service in UK. In addition of this, company have number of staff members in
which they effectively serve prime services to its users according to their taste. In assistance of
BT, various subsidiaries are work for this organization for delivering better telecom service in
over the world. For attaining better success, manager have to evaluate the macro environment
and its elements which may aid in determining the actual performance of the organization at
market place. For attaining the same, company use PESTLE model to effectively understand the
entire elements.
PESTLE Analysis of BT organisation
In today's business environment, number of factors are exist outsider of the business
which directly affect on company and its activities as well (Alsoboa and Aldehayyat, 2013).
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Basically, this is more important tool which used by the business organization to reduce the
negative impact of all the environment factors in most effective manner (Bentley, Omer and
Sharp, 2013). For this company formulate future business strategies in order to enhance the
performance level in most effectual way. In this PESTLE analysis of BT company are as
follows:
Political factors: It is consider as an crucial factors because it related with political
condition of the nation. For improve their performance level, it is important for BT company to
implement all the government rules and regulations within their activities which may helps in
enhancing the productivity level at market place. As a famous telecommunication company, BT
operate their activities in various countries so that they have to consider all the political factors
within their business to execute their activities in appropriate way.
Economic factors: It is relate with inflation rates, economic cycle, interest rate, foreign
exchange rates and many more. All these are directly affect the organizational activities. Thus, it
is crucial for BT company to efficaciously assess as well as evaluate all the factors to manager
their entire activities in suitable way which helps in improving overall performance of the
company. In this, it is more complex for BT telecommunication to effectively develop all the
resources in appropriate way which may leads in reducing the chances of any kind of risk
factors.
Social factors: Basically the growth level of telecommunication is very high in which
number of company run their services with the purpose of achieving desirable success. In this
customers belief, attitude, taste and preferences play vital role in market place because in this
company easily enhance their profitability level by understanding all these social factors. In
context of BT organisation, they serve prime services to its customers according to needs and
wants in order to attain their satisfaction level.
Technological factors: Changes are rapidly take place in technologies so that it is
important for BT organisation to adopt as well as use advanced technologies within their
business activities in which they easily provide high speed network to its customers in order to
attain their higher satisfaction level. If firm does not focus on high speed technologies as well as
network then they reduce their performance level at market place and also reduce their
profitability as well (Cadle, Paul and Turner, 2010).
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Legal factors: This is one of the major element which consider legal structure which is
essential for business organization to follow all the laws and standard in order to protect their
rights of property. Thus, it is necessary for company before implementing all the activities which
may leads in rising their performance level at market place (Curwen, 2011). Basically, it includes
various factors like discrimination law, data protection act and many more. All these help in
maintaining ethical performance of the company.
Environmental factors: This type of factor which is important for business organization to
reduce the negative impact on environment. In this context, the main focus of BT organisation is
to reduce the carbon emissions which helps in protecting the environment. In this recycling,
endangered species, waste management and many more which is important for considering for
business organisation to improve their productivity level at market place.
Ansoff matrix
It is one of the important matrix which is known by market/ product grid. By using this
company easily evaluate their actual performance at market place. Basically, it includes four
options which may leads in attaining better success. One of the main advantage of using this
matrix is to determine the risk factors in order to attain desirable results. Along with this, the
positioning strategy define strength and weakness of the firm in which company easily
determining their customers needs and wants towards the products. In addition of this the main
aim of this strategy is to accomplish strong image in market as compare to its rivals. With the
help of this company attain competitive advantages. In this Ansoff matrix is consider by the firm
to develop appropriate strategies in appropriate way.
Market penetration: It is one of the important strategy in which company produce new
products in new market which the aim of attaining better success. Along with this company also
use various ways to increase customers base within the company which may leads in achieving
profitability level.
Market development: Under this, business organization provide their existing products in
new market with the purpose of attaining better results. Along with this, the main focus of
company is to invite new customers towards the products which may leads in accomplishing
positive brand image in new market (D'Aveni, Dagnino and Smith, 2010).
Product development: It include new products which may use by the company to provide
better satisfaction to its customers in existing market. In this, company use new and innovative
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technologies to manufacture quality product in order to invite as well as attract customers. It
directly help of this company increase their gainfulness level.
Diversification: Under this, business expand their business in new market with new
products which may help in improving the performance level. In context of BT company, they
produce their new and innovative products in new market in order to increase market share from
its rivals (Dobbs, 2014). Basically this type of strategy includes high risk factors so that company
have to evaluate all the factors before expanding their business in most effective manner.
TASK 2
P2 Internal environment and organisation capabilities
Strategic capabilities
It is one of the crucial strategy which is used by the business organization to reach better
success at market place. This will contribute in increasing the overall performance level of the
company by implementing the abilities in most effectual manner. Basically, it is more effective
model in which company define their financial condition by which firm easily attain set goals
and objectives. On the other side, some companies make an effective research and development
process in order to increase their performance level at market place in order to attain better
success at market place. For attaining desirable position, every business organisation tries to
determine the strength and weakness in order to evaluate their actual performance at market
place. With the help of this company easily develop appropriate strategies which may leads in
attaining better position at market place.
Application of VRIO model on BT
VRIO is an effective framework which used by the company to analyse the available
resources within their organization. In context of BT group is biggest company and also strong
financially. Along with this they also having skilled and capable workforce within their business
organization. In this fund and skilled employees both are important resources which contribute in
achieving overall success of the company in most effective manner. In this context, VRIO
analysis of BT group is understand by following points:
Value: In today's time money and human capital is one of the valuable resources for
every business organization to enhance their performance level. In this context, BT company is
financially strong as they able to invest their money for using new and advances technologies
like they introduce 5G network for customers in over the world. Along with this, company also
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have more than 95000 workers who work for business organization to attain better success at
market place (Firnkorn and Müller, 2012). In this context, experience as well as experts to
operate their business activities with the aim of attaining better success at market place. In
context of BT, skilled workers are consider as an important asset for company to enhance
profitability level.
Rareness: This term is also an important term which define the resources which is related
with financial term (Grover and Kohli, 2013). In this context, company have various financial
resources in which BT company easily improve their performance level. In addition of this,
company also provide better services to its customers as per their needs and wants in most
effective manner. With the helps of this, workers are also contribute in providing better image in-
front of customers which may leads in attaining customers base.
Imitability: Finance is one of the important resources which may help in executing
business activities in appropriate manner. Along with this, strategies are also more effective
which may helps in attaining strong position of the company at market place. Along with this
training programs also conduct by HR department in order to increase the productivity by
delivering better services to its customers.
Organisation: This is major for business to manage their available resources in
appropriate way which may leads in rising the performance level of the company ta market
place. In this context, the money on training events as company raise their performance level at
market place by delivering quality services to its customers.
Strength and weaknesses of BT
BT is biggest and popular telecommunication company in UK which provide best quality
of services to its customer. With the help of this firm attain competitive edge and at the same
time also increase customers base.
Strengths Weaknesses
 One of the best broadband company
which provide better internet services
in UK.
 Company also deliver international
telecommunication services in various
countries.
 One of the main weakness of BT
company is lack of mobile occurrence.
 Business strategy and policies are less
effective which may reduce the
performance level.
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 BT company is leading broadcasting
internet provider in UK.
TASK 3
P3 Evaluate the competitiveness of UK’s telecommunications sector using Porter’s five forces
model.
Porters-five-forces is a tool of strategic management that is used for analysing the
different factors through which they can get maximum benefits. In context with BT
telecommunications they are using Porters-five-forces model for operating their business in an
effective manner (Porter’s Five Forces of Competitive Position Analysis, 2018). Through this,
the company is gaining competitive advancement and giving tough fights to rival companies. As
organisation is providing a better services to diverse fields therefore, its power has been
increased and they are giving potential services and facilities. Henceforth, porters-five-forces is
helping them in making effective decision in terms of implementing new technologies in their
firm or for enhancing sales and profitability.
In this report, BT has incorporated this model in analysing the competitive advancement
that are available in the market areas. Other than this, it is enabling them in identifying the
negative factors that can hamper the performance of the business operations. This includes five
models of porters-five-forces is incorporated that company can utilised for operating their firm in
a better manner. With the change in course of time many rival companies have evolved some of
them are like Vodafone, Virgin, EE etc.,
Porters five forces model given below:
Competitive rivalry: This is a common factor so, to sustain in the market for a longer
period of time company must determine the strengths and weaknesses so that they can make
appropriate strategies. In context with BT there are many organisation who are giving them
tough fight for example: O2, Virgin and many more due to this the market shares of Talk
Talk/AOL and Virgin company is 23% and 22.5% respectively. For gaining maximum benefits it
is important that company works according to the current market situations. Like they can reduce
the cost price of their call rates as compared to others (Johnson, 2016).
Threats of new entries: BT communication has owned the market shares of around 27%
in United Kingdom as compared to other rival organisations. Whereas Virgin has captured a
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market share of Virgin is around 22.5% which is reasonable according to them. As a result
Virgin has sustain a better position in the market area.
Bargaining Power of Consumers- It has been analysed that power to purchasers may
put both positive and negative impact on quality of products and services that are being
manufactured by companies (Kernbach, Eppler and Bresciani, 2015). Away from this, it is being
located that customers likes to pay less and asks for more in every single country. Both BT and
Virgin are doing business at international level but BT has strong customers base on the other
hand Virgin does not. Along with this, users do not pay much and their perceptions also gets
changes on regular basis. Therefore, this can be stated as a challenge which British Telecom
faces and if they wants to sustain at international market they need to take proper care of all the
requirements of them
Bargaining power of supplier: In this, the power of suppliers are high because number of
suppliers provide raw materials in which company produce quality products and services to its
customers as per needs and wants in order to attain better success.
Threats of substitution: Under this, organization which define same products and
services which define same products in same line. In context of BT company, they provide better
services to its customers as per their needs and wants.
TASK 4
P4 Understanding and interpreting strategic direction
Bowman’s strategy clock model
Bowman's Strategic clock can be stated as one of the better and result
oriented model which is being utilised for availing ample of opportunities in
order to explore various kind of choices for the strategic positioning in
which they will be positioned for giving out the high level of competition
within the marketplace (Bowman Strategy Clock, 2017). Major motive of the
Bowman's strategic clock is business evaluation which can various kind of
options for product positioning which is highly based upon the two kind of
dimensions which are price and value. Below described is the strategy
clock:
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Illustration 1: Bowman's Strategy Clock
(Source: Bowman's Strategy Clock, 2018)
Low Price and Low Value Added (Position 1):
In this sort of rivalry, there isn't much rivalry inside nature for a business as the
administrations are not profoundly separated and clients which has basically sees some sort of
qualities and costs which are low (Klettner, Clarke and Boersma, 2014). There is the scratch and
dent section methodology which can be expressed as path by which remaining rivalry must be
shabby as could be expected under the circumstances and in this way they don't diminish the
cost.
Low Price (Position 2):
There are different business who are researching for many pioneers in
the centre. It is very important to follow the low price strategy so that it can
maintain a unique position and through this it can derive many benefits.
There is reduction in overall revenues in the business but business has
potential to derive different benefits. There is price war in the market from
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various competitors and thus there are conflicts that which company
charges very lowest price's among all firms.
Hybrid (Position 3):
Numerous kind of factors which are present in this kind of factor and
position as per the name for the low kind of price which is mainly related to
the competition and product differentiation as well (Li, Zhou and Si, 2010). Main
motive of this kind of factor is positioning and thus encouraging the for
purchasing the services along with some of the acceptable product
differentiation. Certain effectual strategies and plans are being made with
motive of positioning along with adding up of value which is highly involved
for the offered in effective manner.
Differentiation (Position 4):
Multiple kind of factors which are highly involved within
differentiation strategy which is highly offered by the customers and hence
there is much high perceiving for the brand value. Branding plays crucial
role within business process for maintaining the quality of product or the
services. There are certain relatively prices for the high quality products
along with having strong quality services and awareness which in turn can
keep up the loyalty. This kind of position is mainly know for adding up the
value which requires differentiated strategy needs.
Focused Differentiation (Position 5):
Company put emphasis on distribution, advancement and division of
products. Firm can sell good quality of differentiated products to many
users for many years so that it can earn more revenues and it can maintain
unique position in the market as well as in minds of all users. This also
helps firm to easily expand and diversify the business.
Risky High Margins (Position 6):
It is a risky position for the firm. Company charges high prices for all
products and do not give any additional or unique features in the product.
Through this they can easily take deal from clients as they can determine
the different thing which are not present in competitors. They also uses
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Unsafe high edges in which they use cost premium and this also gives them
many benefits.
Monopoly Pricing (Position 7):
Syndication is where there is simply single business who gives certain
sort of items. There is no post for the opposition inside the commercial
centre and in this manner chiefly client needs to principally sees inside item
(Porter, 2011). There is no substitute which is accessible, so in the greater part
of the nations, there are imposing business models which are exceedingly
controlled so as to have abnormal state of costs.
Loss of Market Share (Position 8):
This is one of the powerful system of calamity inside the commercial
centre. There are a large number of the clients which has prevail upon the
cost alongside setting up of standard alongside low apparent incentive
when contrasted with the other sort of items.
From the above statements, it is very clear that the company will have
mainly three kind of positions which are mainly 7,6 and 8 which can not be
stated as uncompetitive in nature. These are considered as one of the
effective price as compared to the perceived value. Company like BT which
is British Telecommunications and thus this kind of company can mainly
utilise the position of 2, 3, 4 which can take company into better place.
CONCLUSION
As per given report it can be summarized that, business strategy play vital process for
company because it helps in attaining long term goals and objectives. It is related with the long
term benefits in appropriate period of time. In addition of this, by preparing strategy company
easily enhance their profitability level. In addition of this, BT business organisation is also make
an appropriate strategy as well as procedures to execute all the business activities in systematic
manner. It also determine internal and external factors which directly affect the organisational
activities in both positive and negative manner. Furthermore, Porters-five-forces also used by the
company to measure the competitiveness at market place. By this firm easily capture larger
market share form its rivals.
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Bowman Strategy Clock. 2017. [Online]. Available
through:<https://www.toolshero.com/strategy/bowman-strategy-clock/>.
Porter’s Five Forces of Competitive Position Analysis, 2018. [Online]. Available through :
<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>./
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