Business Strategy on BT Assignment

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............................................................................................................................................7
P3 Competitiveness of UK’s telecommunications sector using Porter’s five forces model. .7
TASK 4............................................................................................................................................9
P4 Bowman’s strategy clock model.......................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is a process of measuring performance of an organisation at
marketplace. It reveals actual position of a company as well as potential of competitors used to
grab a marketplace. In addition to this, it helps a firm in developing effective strategies and
policies through which it can obtain better outcomes in business (Williams and Figueiredo, 2011)
. This term aids employers in building long term action plan which is helpful in reducing risks of
business and gain higher advantages. In context with understanding the procedure of business
strategy, a report has been prepared on BT telecommunication. This firm is largest service
provider of UK which provides various products like broadband, TV channels, IT solutions and
more. In order to operate its business in many countries successfully, this assignment discuss
about macro factors by using PESTLE analysis, Porter’s five force model along with SWOT
technique.
TASK 1
P1 Impact and influence the macro environment has on BT organisation
Business environment of a company constitutes various factors which affect operational
functions either internally or externally. Factors like political, economical, changes in
technologies, business ethics and more are come in macro environment. Therefore, to run
operations and functions of enterprises in a proper manner, managers are needed to evaluate
impact of these (Klettner, Clarke and Boersma, 2014). As per present scenario, BT Plc. is a
British multinational company of UK which deals in telecommunication sector. Currently, this
firm is operating its business in 180 countries with 106,400 number of employees. It provides
fixed-line, mobile and broadband services in UK. Along with this, it also provide IT services and
television subscription. Due to distribution of wide range of products, this association has
become the largest service provider in telecom industry. Since, this enterprise is running business
at international therefore, it creates a large impact on operational activities. So, to understand
these affects of macro-environmental factors, its managers has used following techniques:-
1) PESTLE Analysis of BT organisation:
Political factors- This kind of factor entails with political rules and regulations of a
country which create a huge impact on operational activities of a company. In addition to this,
such type of factors also help managers in exploring itself in terms of political issues. In context
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with BT Plc., this firm is currently running its business operations in various countries. So, its
managers are required to follow all laws and legislation established by government of territorial
regions in order to run business successfully (Li, Zhou and Si, 2010). Due to higher rate of
interest of Brexit, help BT in reducing its pension liabilities. Along with this, managers of this
company are needed to analyse some more concept which includes stability of industries in
telecom sector, security in terms of intellectual property, taxation rates, trading laws and more
before expanding business in other countries.
Economic factors- Economical condition of a country impacts a lot on financial growth
of organisations which operated their businesses in its territorial regions. This factor includes
interest or taxation rate, inflation, deflation, foreign exchange rate and more. All these attributes
affect purchasing power of people which indirectly impact on sales performance of firms also.
Therefore, high inflation rate creates benefits to BT and other companies in developing
businesses as well. In telecom sector, it becomes more complex for earning high return on
investment if they operate business in rural areas. Other factors on which such enterprises are
needed to concern more on are employment rate, quality of products or services, level of
education, economic growth and more. By focusing more on these elements, an association can
earn profitability in a better manner.
Social factors- Behaviour of customers reflects taste and preference of them which are
needed to be understand by companies for producing services accordingly. In context with
telecommunication sector, growth of business is generally limited due to common products. In
addition to this, conducting business in rural areas is not an easy task as it confines company to
work properly because of the limited resources (Johnson, 2016). In context with BT Plc., this
firm needs to be consider more on culture, leisure interests, product differentiation and more in
order to get large number of customers. Along with this, it should conduct business with ethical
laws in which employees are treated equally. So, it creates good image at marketplace.
Technological factor- Rapid change in technology impact business of a firm in both
positive and negative manner. In telecom industries, high technologies help in providing good
broadband services and provide information to various customers in a unique way which
strengthen their business (Tavitiyaman, Qu and Zhang, 2011). So, BT Plc. needs to make
investment in technologies which helps in providing high speed of network. But due to such
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development, price of services also raised which creates negative affect on sales performance as
customers are started to move on substitutes which have less price.
Legal factors- This factor includes various laws such as intellectual property law, anti-
discrimination act, e-commerce and customer protection rights, data security etc. So, all these
laws help in getting high security of business as well (Kernbach, Eppler and Bresciani, 2015).
Therefore, it is necessary for BT Plc. to examine importance of these laws and legislations made
by government to operate business in a perfect way.
Environment factor- Climatic condition affect business of telecommunication sector. As
due to bad weather, speed of network gets disrupt in a large manner. Along with this, usage of
carbon in wires and cables emit poisonous gas in renewable process. Therefore, BT Plc. and this
type of industries are required to switch 100% renewable energy. In addition to this, they should
use proper techniques for reducing wastage of products as well as recycle them in appropriate
manner.
2) Ansoff matrix:
This matrix is used as a strategic planning tool which gives a framework for managers to
formulate strategies for future development. It includes a 2x2 market/product grid in which four
different options are available for developing marketing strategies of a company. This method
considers various factors which are match up with business strategies in order to improve brand
image of a company. Using this model, a firm can determine in which it is going best. Along
with this, it also reveals position of an association at marketplace and gives techniques to
improve marketing image (Grover and Kohli, 2013). This would help in gaining competition
advantage from rivals as well as gain high attention of customers. So, all these things impact
positively on performance of an organisation.
Ansoff matrix of BT organisation :
Market penetration- Under this factor, a company can identify various ways through
which it can enhance brand image and gain loyal customers in an effective manner. It focuses
more on existing marketplace where an industry already operates its business and wants to
increase sales performance in same area. Therefore, it evaluates the way through which people
can be attracted and become a part of regular customers. So, by using this strategy BT Plc.
encourage its customers to do more phone calls on low cost.
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Market development- This matrix helps a firm in finding new marketplace where it can
sold existing products easily. It helps in identifying areas of different places where demand of
similar products are arising. In addition to this, it also evaluates those people who never use
such type of products and want to use. So, through both ways, a company like BT can sale its
commodities in a better way. But this firm focuses more on grabbing more attention of new
customers rather than opening business at new marketplace.
Product development- This option is useful to develop products of a company in order to
sell in same marketplace (Firnkorn and Müller, 2012). Therefore, its is necessary for
organisations to create modifications in techniques and adopt new technologies so that new
products can be manufactured as per customers demand. In context with BT, it needs to access
5G technology in broadband services which provide high speed of networking.
Diversification- This is the final option for a firm to produce innovative products for new
market. It is useful for new ventures who have sufficient amount of money for investment as
well as seek to get opportunity (Porter, 2011). Although making diversities includes greater risk
but it generates higher profitability also. Thus, BT Plc. needs to expand its business in new
market area and creates modifications in existing products by adding more valuable features in
them. It will help in earning more and more profitability in business.
TASK 2
P2 Internal environment and organisation capabilities
1) Strategic capabilities
This factor reveals the capabilities and abilities of employers which they used in
formulating strategies. Along with this, how they implement the same into organisation system
through which better outcomes can be occurred. Therefore, BT Plc. builds strong strategies in
order to grab a largest market share (Sumer and Bayraktar, 2012). This form concerns more on
resources available at such marketplace where it can operate business in a more profitable way.
In order to evaluate effectiveness of strategies, this company needs to make proper analysis
which helps in evaluating strengths and weaknesses of business as well as opportunities and
threats present at marketplace.
2) Application of VRIO model on BT
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VRIO stands for Value, Rareness, Imitiability and Organisation. This model is used to
make a proper analysis about resources of an enterprise. As per current scenario, BT Plc. is one
of an establish organisation of UK which reveals good financial condition of this firm. In
addition to this, having a large number of employees in various branches of this company also
shows its major effectiveness (Scholes, 2015). Therefore, main resources of present enterprise
are its large working organisation and sufficient funds which is its main value. In terms of
rareness, workers of BT have gained high experienced and skills through which they are able to
provide good services to customers. Since, finance cannot become a valuable or rare resource
therefore, unique strategies of this firm shows that this firm has shown imitablity. In addition to
this, managing entire operations and resolve all problems in a quick time proves that BT Plc. is
good in all terms of manner.
3) Strengths and weaknesses of BT:
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STRENGTHS WEAKNESSES
 Being the largest service provider in
telecom sector, reveals major strength
of BT Plc. in context with rivalries
present at same marketplace of UK.
 Along with operating business in more
than 180 countries shows its diverse
customers portfolio. It also helps in
earning more profitability.
 Through O2 brand it has good market
reputation in domestic areas by offering
various services like Fixed-line
telephony, broadband internet, IT
telecommunication and more.
 Limited liquidity of this company
shows its major weakness. Along with
lack of product differentiation impact
on business in a large manner (Dobbs,
2014).
 Usage of old techniques and lack of
underdeveloped business operations in
mobile technologies also shows its
weaknesses.
 Lack of proper communication with
customers and delay in providing them
IT solution affects image of this
company in a negative way.
OPPORTUNITIES THREATS
 Rapid change of technologies help
telecom sectors to provide good
services to customers like television
facilities, high speed of networking, It
solution and more in effective way
(D'Aveni, Dagnino and Smith, 2010).
 Emergence with other companies of
same sector working in different
locations, help BT Plc. to provide high
quality of services. It helps in
accomplishing mission and vision of
business in a short period of interval.
 By offering more internet services on
broadband aid in attracting more
 Economical crises of country affects
much on financial performance of this
company.
 Increasing rate of labour's cost and high
bargaining power of suppliers also
impact on business of BT Plc.
 Increasing rate of taxation and trading
policies also becomes a threat for
expanding business in other locations.
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customers through which high return on
investment can be gained.
TASK 3
P3 Competitiveness of UK’s telecommunications sector using Porter’s five forces model
The ever changing nature of technology is a well observed trait of telecommunication
market (Pagani, 2013). It supports the development of customer desires and the products offered
by communicators service providers and is accordingly the establishment of rivalry that conveys
advancement, decision and effectiveness in these business sectors. In this respect, Porter's five
forces model is acquired by firms in order to analyse the competitiveness of this sector.
Although, British Telecommunication is a leading networking service provider company of UK
by having wide of range of competitors which might be affected businesses in direct and indirect
manner. Along with this, porters' five forces model is assistive in improving decision making
capabilities of the firm and supports to implement effective marketing strategies which are able
to deliver potential market growth to the firm (Porter’s Five Forces of Competitive Position
Analysis, 2018). British Telecommunication has several rivals over the world, such as -
Vodafone, EE Ltd., Virgin and O2 etc. Below is defined porters' five forces model of the
company:
Bargaining power of customers – In present scenario, buyers are regularly demanding a
lot. It puts a burden on profitability and sales revenues of British telecommunication in an
adverse manner because due to rapidly changing market trends it is quite difficult for business
associations to meet needs and wants of all customers in the best possible manner. In context of
BT, the firm has large and more powerful customer base thus it has high bargaining power of
customers which forces management to provide effective discounts and offers for attaining and
retaining more buyers from target market (Curwen, 2011). In this relation, it is essential for
management to provide effective and innovative products to customers which meets their needs
and wants in the best possible manner.
Bargaining power of suppliers - Firms which deals in telecommunication sector buy
their raw materials from diverse suppliers. In UK, this service providers have a dominant
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position which can reduces profit margins of company. In British telecommunication, effective
suppliers are being used negotiating power which extract higher prices; it put a vast impact on
profitability and operating income of the firm. In this relations, it is essential for management to
create an efficient supply chain network with multiple suppliers. In addition, it can also make
experiments in product designs by using attractive materials so that if the prices go up of one raw
material then company can shift to another. Furthermore, having wide range of suppliers can also
gives an opportunity to company in respect of make a comparison between quality and chose the
best one supplier.
Threats of new entrants – New entrants in telecommunication Services brings
advancement, better approaches for getting things done and put weight on BT Group plc through
lower pricing strategy, decreasing expenses, and giving new offers to the clients (Cadle, Paul
and Turner, 2010). In addition, the firm can manage such challenges through using safeguarding
policies and obtain high competitive edge. Due to globalisation, there is increasing high market
competition which changes mind of new entrants, i.e. not to enter in such market. Thus, threat of
new entrants I low in UK. BT group can handle this threat by building economies of scale so
that it can lower the fixed cost per unit. Along with this, the firm is also required to generate new
and innovative products which will gives a reason to customers to buy products and services of
the company.
Threats of substitutes: This type of threats is generated when a competitor used to
provide similar products on low cost and meet needs of customers in another ways. So, to cope
up with this service, BT company is required to concern more on service orientation rather than
just product differentiation. In addition to this, it should determine the need of customers more in
order to provide them services accordingly.
Competitors rivalry: This sector entails the potential of competitors who grabbed a lot
of space of marketplace already. Therefore, in context with BT Plc. it has various companies in
telecommunication sector like O2, Vodafone EE, Virgin and more (Bentley, Omer and Sharp,
2013). These companies occupied a large market share which impact on profitability of this firm
in a large manner. Thus, to tackle intense rivalries, BT organisation is required to build product
differentiation in sustainable manner. In addition to this, instead of being focused more on
competition, it needs to make a collaboration with them in order to increase market share.
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TASK 4
P4 Bowman’s strategy clock model
This kind of model is used by marketing managers of a company for measuring the
potential of competitors present at same marketplace. In addition to this, by using such model an
association can evaluate its brand image as well as its strategic position also (Bowman Strategy
Clock. 2017). This model includes the competitive advantage in context to the cost benefits as
well as differentiation. Under this strategy, there are eight different strategies are mention below
as above:
Position 1: Low price / Low value added: Under this segment, organisations make
common strategy without concerning on competition. Therefore, it is also known as bargain
basement strategy also which is used when a firm has failed to gain good position at marketplace
due to less differentiated value. In addition to this, selling commodities on low price also seems
to useless in gaining loyalty of customers. In case of BT Plc., as products of this company are
ordinary in nature, thus, it fails in gaining competition at marketplace.
Position 2: Low price: Generally people at marketplace seek to get products on
minimum price therefore, to complete their desires firms are used to offer goods on low cost. But
due to provide products on low price, it will generate less profit also (Alsoboa and Aldehayyat,
2013). So, this type of strategy is useful for new ventures whose main objective is to gain
attention of customers which helps in raising profitability in gradual manner.
Position 3: Hybrid: This term refers to combine two or more strategies in a single way.
In this process, associations used to offer its prices on minimum cost as well as with high
differentiation. So, it aids BT Plc. to gain loyalty of customers easily by giving them more
satisfaction.
Position 4: Differentiation: Under this kind of strategy, BT used to offer its product at
less price but of high quality. Through this differentiation, company gets success in gaining high
number of customers and their retention towards its services for longer period of time.
Position 5: Risky high margins: In this type of sector, a company used to offer its
products on high profit along with no extra benefits. So, it includes various type of risk as
customers will seek to another substitutes whose price is lower than such type of products.
Therefore, BT organisation need to evaluate impact of this kind of strategy before apply within
business.
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Position 6: Monopoly pricing: Under this kind of strategy, a company used to offer its
products or services on single price in such marketplace where no more competitors are exist. It
would help in earning more and more profitability.
Position 7: Focused differentiation: Under this kind of policy, companies are used to
make differentiation in products so that customers at marketplace can compare commodities of
various firms easily and choose as per want. But this type of strategy is useful as per value of
perception of people who seeks to get better quality of goods (Ackermann and Audretsch, 2013).
In addition to this, it is highly essential for this company to make its brand image good and
impressive which will be helpful in changing perception of people in a positive way and
convince them to buy the same.
Position 8: Loss of market share: When sales performance of a company goes down
then it will loss its profit share in marketplace in a vast manner. So, it assists management of
such organisations to create modifications in business structure. In case of BT enterprises, due to
loss of market share, it has to change existing strategies and policies in order to gain better
position. This firm has now sell its commodities or services on reasonable prices along with this,
its managers have adopted new marketing techniques to promote the same. As such tricks are
risky but it will also help in attracting more customers towards its services and aid this
organisation to regain previous position in a better manner.
CONCLUSION
From this report, it has concluded that through unique business strategy, a company can
achieve its goals and objectives in a short period of interval. In addition to this, concept of this
kind of strategy is helpful in determining the potential of internal and external factors have on
business environment. By using this analysis, managers can reduce negative impact of such
attributes on operational activities in a proper manner. This report also states that how internal
factors help organisations in running business smoothly. Along with this, business strategy also
useful in measuring position of a company at marketplace and presence of competitors present
there. So, using this such type of enterprises can make effective strategies in order to grab
opportunities and acquire largest market share.
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Online
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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