Analysis of Business Strategies and Performance Metrics

This assignment is focused on analyzing business strategies and performance metrics in the context of the telecommunication industry. It involves a detailed examination of PESTEL analysis, Porter's Five-Forces Model, SWOT analysis, and strategic capabilities. The assignment also includes references to relevant articles and online resources for further reading.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1 ...........................................................................................................................................4
a) PESTLE Model for environment analysis..........................................................................4
b) Ansoff's growth vector matrix to analyse organisation's strategic positioning..................6
TASK 2............................................................................................................................................7
a) Applying VRIO model to analyse strategic capabilities possessed by organisation..........7
b) Strengths and weaknesses of organisation.........................................................................9
TASK 3..........................................................................................................................................10
a) Strategies to improve organisation's competitive edge....................................................10
TASK 4..........................................................................................................................................12
a) Strategic Management Plan for organisation...................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Executive summary
This report is based on EE which has formulated business strategy for running their
business. It is high level plan made by organisation to gain competitive advantage. There are
various analysis done by EE for sustainability and profit earning in market. PESTLE and Ansoff
are used to know about external environment and different strategies which can be adopted by
firm. It has adopted diversification marketing strategy for increasing market share and profit in
new market with new product. The resources and capabilities can help business to earn profit. It
is very important to make strategic management plan for running business successfully.

INTRODUCTION
Business Strategy is collection of competitive actions and moves which business uses for
attracting consumers, strengthening performance, compete success and achievement of goals and
objectives. This strategy outlines how business carry out work for achievement of desired
outcomes. It is also known as set of decisions or course of action that help entrepreneur for
achieving particular objectives of organisation (Amran and et. al., 2016). It is master plan that is
used by management for securing competitive position in market, carrying operations, pleasing
consumers and achieving desired results. The given assignment is based on EE (Everything
Everywhere) which was founded in 2010 at England, United Kingdom. It is British mobile
network operator, division of BT group and internet service provider. It is considered as largest
operator in UK. It covers both internal,external environment and organisation capabilities which
are explained with help of models and theory. There is analysis of telecommunication sector and
interpreting strategic direction.
TASK 1
a) PESTLE Model for environment analysis
PESTLE analysis is defined as tool of macro environmental factors that is used in
environmental scanning component of strategic management (Barberá and et. al., 2012). This is
used for monitoring and analysing factors which can impact performance of organisation. It is
used by manager of EE when new business has started or entering into foreign market. It is
explained below:
Political Factors- It is related with opportunities and pressure brought by political factors
and impact of policies of government on business and its activities. It can be trading policies,
government policies, corruption, internal political issues and others. Political factors can impact
EE organisation need to follow government laws which has put restrictions on tariffs and phones
for better outcome. The new and upcoming technology adhere to governmental rules and
regulations. The products and services made by EE need to be fit safety and privacy of
government regulations.
Economic Factors- It is related with economic structures, policies and impact on
business. This can be taxation, interest, inflation, international trade and so on. The economic
growth, inflation and interest rates greatly impact telecommunication industry. During recession,

EE need to stay a float for business competing. With recession, prices of tariff, plans rise which
is not afforded by all individuals. EE should move with market and make investments and efforts
for better work performance.
Social Factors- It relates with attitudes, beliefs, culture and other aspects that can affect
demand of products of company. It is related with lifestyle, demographics, work ethic, consumer
attitude (Bharadwaj and et. al., 2013). With rise in mobile telecommunication, need and demand
of consumers also rise. Many users use mobile network for conference calls, emailing, instant
messaging and daily phone calls. Here, EE has opportunity to provide best plan as per need and
demand of consumers. Telecommunication industry is largest growing sector because of more
use of networks by user which is available in market.
Technological Factors- This factors are related with barriers, innovations, incentives and
impact of activities and operations of business. It includes emerging technologies, information
and communications, technology legislations, research and development. There is advancement
in technological sector because of more research and development in market. As young
generation prefer new smartphone and communication due to which there is growth in
telecommunication sector. In order to fulfil their need and demand of EE, there is more focused
on new technologies in market. Consumers want internet access everywhere so data plan is built
in mobile and Wi-Fi in cars and buses too (PESTEL Analysis of Telecommunication Industry,
2018).
Legal Factors- The laws, legislation and regulations which can affect ways of doing
business is called legal factors. It can be consumer protection, health and safety, money
laundering, tax regulations and others. Due to legislation there is impact on EE where market has
opened doors for exports and imports that increase number of new technological devices in
market. Telecommunication has impact employment laws that has increased productivity. EE has
opportunity to provide all facilities to users by following all legal laws.
Environmental Factors- These are the environmental and ecological aspects of
organisation which can affect demand of products. This factors includes environmental
regulations, sustainability, impact of adverse weather, ecological situations (Blackburn, Hart and
Wainwright, 2013). For expanding business in market, EE need to take opinion from public.
They need to consider climate change and global warming for running business in
telecommunication sector. As EE operates under rapidly change and competitive environment

for fulfilling consumer need and demand. EE facilitate users with high quality materials at lower
prices than competitors (PESTLE Analysis of the Telecommunication Industry, 2019).
b) Ansoff's growth vector matrix to analyse organisation's strategic positioning
Ansoff Model is strategic planning tool which provide framework for helping senior
managers, executives and marketers for growth of future (Drnevich and Croson, 2013). This
concept was created by Russian researcher Igor Ansoff for organisation. There are four types of
strategic positioning which are described below:
Market Penetration- It is the strategy where EE can achieve growth in existing market
through existing products for increasing market share. This is less risky as firm's existing
capabilities and resources can be leveraged. As this strategy does not requires more cost because
products is already known in existing market. EE does not have to do any promotion regarding
their goods and services.
Market Development- This is strategy in which firm can seek growth in new market with
their existing products (Ghezzi, 2013). This strategy can be suitable for EE if core competence of
firm are related with particular products than to experience with specific segment. It carry more
risk than market penetration because firm is expanding into new market with their same
products.
Product Development- In this type of strategy, EE can develop new products in existing
market for their consumers. It is suitable to those organisation whose strengths are related to
particular user than specified products. It can leverage strength through development of new
products targeted to existing consumers. This carry more risk for EE as products might like or
dislike by consumers and helps in increasing market share for organisation.
Diversification- This is the most risk strategy for organisation. In this type of strategy,
firm can grow by diversifying into new market through help of new products for consumers. This
is more risky than all other types of growth strategy which is outside core competence. As it
carry high return with high risk. This strategy requires more research and development in market
to know about taste, preference of consumers. As EE is mobile telecommunication industry, it
need to evaluate every factors for effective outcomes.
After analysing all above growth strategy, it can be said that EE should adopt
diversification strategy for their business. In this type of positioning, new product is developed
into new market. EE deals in various products such as fixed line, mobile, digital television,

broadband internet. With helps of market analysis, it can do proper research to know about need
and demand of consumers to fulfils their requirements. As it is renowned brand in UK market so
it can produce products such as washing machine, refrigerators for their users in new market. It is
largest in mobile network operators in UK so it can easily come into market with electronic
products. This firm does not have to do more promotion as already known in market. This can
help EE to increase market share, profits, sales and revenue. While coming up with new product,
price, place, promotion, segmentation, targeting and positioning should be considered by firm for
better outcome. The important factor is to maintain quality of goods and service. Here, new
product is washing machine and refrigerators so timely servicing facilities should be made
available for all consumers who have purchased products.
TASK 2
a) Applying VRIO model to analyse strategic capabilities possessed by organisation
Strategic Capabilities
It is defined as business ability to harness capabilities, resources and skills for gaining
competitive advantage, survival and increasing value. This is also known as capabilities of
members of enterprises which enable deployment and formation of strategy in pursuit of
sustainable advantages. There are different tiers of capabilities that can be from basic to
advanced such as leadership & management, business architecture and innovation. This includes
concern, creativity, analytical thinking, learning, development, strategic focus, capability
creation, modularity in design, adaptability and so on (STRATEGIC CAPABILITIES, 2019).
VRIO Model
VRIO model is business analysis tool which is larger part of strategic scheme. The
process which firm goes through is vision statement, objectives, internal & external analysis,
choices of strategic and strategic implementation. It is used for internal analysis of firm which
evaluate capabilities and resource (Grover and Kohli, 2013). This model can be used by EE for
knowing their resources and capabilities. The capabilities and resources of EE are accessibility,
network system, spectrum and telephone. There are four elements through which evaluation can
be done by EE which are given below:
Resources Valuable Rare Inimitable Organised
Telephone Telephone - - -

Network System Network System Network System - -
Spectrum Spectrum Spectrum Spectrum -
Accessibility Accessibility Accessibility Accessibility Accessibility
Valuable- The foremost and first resources should be valuable. It can be valuable if firm
can implement strategies which can improve efficiency and effectiveness of firm by finding
opportunities or mitigating threats (Hoejmose, Brammer and Millington, 2013). There are four
resources which are valuable for EE such as accessibility, network system, spectrum and
telephone. While providing connection there should be accessibility which should be available
for all with help of spectrum. Similarly, telephone is most required in business for connecting
people with each other. The network system provided by EE should be very strong for
connection.
Rare- The second capabilities and resources can be rare. When resources can be acquired
by few or one companies are called rare in nature. There are many capabilities which are
possessed by EE which are rare in nature (Köseoglu and et. al., 2013). EE has network system as
rare resources for other companies as it cannot be easily copied by others. The rare resource of
EE are accessibility, network system, spectrum. As other company cannot copy such resources
easily. Here, spectrum, accessibility and network system used by EE is very strong as it has
invested lots of money for such resources. Telephone is not rare as it is required by each
organisation for connecting people with each others.
Inimitable- When competitors copy other resources then it is called inimitable situation.
As it is very hardly and costly to copy other capabilities for organisation. The resources of EE
cannot be copied by others easily because of high cost incurred. The inimitable resources of EE
are spectrum, accessibility. Spectrum is used for connecting two network in single line and
accessibility which is easily available for all. These resources can be copied by other competitors
of EE in market as cost incurred is high but can be copied easily.
Organisation-Wide Supported- The resources of organisation does not create any value
itself unless managed by firm in effective and efficient manner. It is very important for EE to
assemble capabilities and coordinate resources effectively. The components of organisation
requires proper formal reporting structure, budgeting system, strategic planning, compensation

policies, management control systems. Without proper organised resources and capability, EE
cannot achieve sustainable competitive advantage. When all resources of firm are organised in
proper manner then it can lead to gain competitive edge (Li and Tan, 2013). The organised
resources of EE is accessibility as it is not easily available every where. It is necessary to
organise such capabilities for business to get success.
(Source: VRIO Model, 2019 )
b) Strengths and weaknesses of organisation
The internal analysis of organisation can be explained with help of strengths and
weaknesses which are described below:
Strengths- It is the power of firm which can help in achievement of goals and objectives.
This is found inside enterprise which can be evaluated through performance achievement. There
are many strengths which are carried by EE that are given here. It has more than 27 million
customers who uses their services and has covered largest areas including 3G and 4G network
across UK. EE operates large number of retail store that is 570+ and including 100 franchise
store located on shopping malls and high streets. It has done sponsorship of events and big
footballs that increase brand visibility. It has strong brand portfolio that is useful for expansion of
new product categories. On regular basis, it is doing product innovation for their consumers. It
maintain customer relationship with consumer to provide satisfaction for creating good brand
Illustration 1: VRIO Model, 2019

equity among them. EE has strong free cash flow of money to expand into new projects. This
organisation invest money for training and development of their employees for increasing their
skills and efficiency. As skilled staff are motivated and courage to give their best performance in
organisation. It has reliable suppliers who has strong base of retailer supplier for raw materials
which overcome any supply chain bottlenecks (EE SWOT Analysis, Competitors & USP, 2019).
Weaknesses- It is considered as negative aspect of organisation which can impact for
achievement of goals and objectives. This is internal analysis which can be easily improved by
them for better outcome. There are some weaknesses carried by EE which are discussed here. As
EE is targeting business segment and losing all individual consumers. Brand recall is weak
because of recently launched brands in market. The financial planning is not done in effective
and efficient manner. As liquid and current asset ratios suggest firm to use cash more effectively
and efficiently. The product demand forecasting is not good due to which many opportunities are
missed out. EE is successful in integrating small companies as it fail to merge with high and
different work culture. The research and development is very low as compared to competitors
due to which it is unable to compete with others. There is high employee turnover in EE as
compared to others because other competitors provide high level of training and development to
improve their employees for better outcomes (EE SWOT Analysis / Matrix, 2019).
TASK 3
a) Strategies to improve organisation's competitive edge
Competitive Edge
It is the attributes which allows organisation to outperform its competitors. This can
includes natural resources such as highly skilled labour, high entry barriers, geographic locations
and access to new technology (Maté, Trujillo and Mylopoulos, 2012). In order to improve
organisation competitive edge in market different tools and techniques can be used by EE for
effective outcomes. Here, it is explained with help of Porter's Five force model that is used for
market analysis which is discussed below:
Porter's five force model
This model is use by an organization in order to analysis as well as evaluating
competition level of its business operations and functions. That will help a company in
developing strategies and plans in effective and appropriate manner thorough which they able to

gain competitive advancement in proper way. Along with this by respective methods, company
able to identify factors which are affecting their business operation. Everything Everywhere also
conduct analysis through respective method, whose explanation is given below:-
Bargaining power of suppliers: It refers to situation which is related to bargaining power
of suppliers, in this case suppliers can demand for more amount of money by offering low
quality of products (Murthy, 2012). In situation of EE company bargaining power of suppliers is
high because they have to supply products from different different suppliers. For this manager of
respective company maintain good and effective relations to their suppliers so that they provide
than products and services in effective price.
Bargaining power of buyers: It refers to factor which is related to power of buyer,
according to which buyer can demand for quality products and services at low price. Due to
which company business operation get influenced because if they offer products at low price
they have to do comparison with quality of the product which may reduce their customers base.
In respect of EE company power of buyers is low because other competitive company offer
products at high price. Whereas respective company is offering products as well as services of
good quality in affordable price.
Threats of entry: It refers to those situation which is related to barriers which is incurred
at the time of entry (Oestreicher-Singer and Zalmanson, 2013). In other word it is related to how
Illustration 2: Porter’s Five-Forces Model
(Source: Porter’s Five-Forces Model, 2013)

easy a new company can enter into marketplace and survive for a long run. In respect of EE
company, threat of new entry is low because it is not easy for new company to enter into
telecommunication market and operate their business function their. This is so because it
required large amount of money to conduct business in respective market which is not possible
for everyone who wants to operate in respective sector.
Threats of substitutes: This factor of respective model describe about alternative
products which is available at a market. These products are generally same or consider as an
alternative of any particular company (Reich and Benbasat, 2013). In respect of EE company
there are other various company which provide same range of products and services which are
provided by respective company. But EE is providing there services in affordable price to their
customers. This will attract more customers and retain them for a long run. Due to this it can be
evaluate that respective company has medium risk of substitutes products.
Competitive rivalry: This is a factor by which a company able to identify strength of its
competitors then accordingly they will develop plans and strategies in effective manner. That
will help them in gaining competitive advancement at a marketplace in proper manner. In this
competition will conducted on various basis such as rivalry company is of same size, both have
effective strategies, existing barriers is high and many more. In respect of EE company there are
other various company who are operating business in same telecommunication company such as
Vodafone, Three, O2 and many more. Along with this, these companies have different different
market shares according to their customers base like EE is accounted for 31 %, Vodafone is for
16 %, Three have 9 % and so on (EE marketing report, 2019). Which show EE is operating its
business as a market leader but there are other companies who can be their big competitor in
future. Due to which it can be consider that competitive rivalry is high for respective company.
TASK 4
a) Strategic Management Plan for organisation
Strategic Management Plan (SMP) is considered as document that is used for
communicating within organisation the set priorities, goals, configure resources, focus energy,
strengthen operations and ensuring employees and staff are working towards common goals,
establishment of agreement and intended outcomes (Scholes, 2015). There are different tools

used for SMP which can be used by EE for results. It is explained with help of Bowman's
Strategic Clock that is discussed below:
Bowman's Strategic Clock
This model is used for strategic positioning that is how product can be positioned for
giving competitive position in market. There are two dimensions such as perceived value and
price (Verbeke, 2013). There are eight position of this model which are described below:
(Source: Bowman's Strategic Clock)
Low Price and Low Value Added- It is not competitive position for EE as product is not
differentiated and consumer perceive little value or low price. Here, price charge for product is
low with low value added.
Low Price- In order to be successful in market by EE, low price should be charged to
gain competitive advantage. There is low profit margin but volume of output is high which
generate overall high profits.
Hybrid- It is the combination of low price and product differentiation. This is the
effective positioning strategy which can be adopted by EE that can add value to firm.
Illustration 3: Bowman's Strategic Clock

Differentiation- It is considered as fourth position whose aim is to offer consumers with
high level of perceived added value. The product quality and branding helps plays effective role
in such strategy.
Focused Differentiation- This strategy can be aimed to position product at high price
levels where users can purchase goods due to high perceived value. EE can use this strategy for
increasing high profit margins.
Risky High Margins- This positioning strategy has high risk which can lead to failure.
Here, EE can set high prices for goods and service and known as uncompetitive strategy.
Monopoly Pricing- As EE can charge monopoly pricing for their goods and services.
This type of strategy can charge any price because there is monopoly in market regarding prices.
Loss of Market Share- This leads to disaster for competitive market. The high value for
same product is charged by competitors (Wang and Verma, 2012).
From the above it can be concluded that EE should adopt hybrid strategy for their
business plan. As it uses various kinds of product differentiation so such strategy can help them a
lot. When products are high valued then it focus on low price which add value and benefits to
them. Thus, many products are of high differentiation which create low price for goods and
services.
CONCLUSION
From above report it can be concluded that business strategy helps in achievement of
goals and objective of firm. It is very necessary to analyse internal and external environment for
running their activities in competitive market. PESTLE helps in knowing about marketing
environment and firm has adopted diversification strategy for increasing market share and
profits. Through VRIO model one can easily know about resources and capabilities of firm for
best utilisation. The Porter's five model has used for evaluating and identifying threats, suppliers,
buyers and other for survival and growth of market.

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Online
PESTEL Analysis of Telecommunication Industry. 2018. [Online]. Available through:
<https://www.bestessayservices.com/blog/pestel-analysis-of-telecommunication-
industry/>.
PESTLE Analysis of the Telecommunication Industry. 2019. [Online]. Available through:
<https://pestleanalysis.com/pestle-analysis-of-the-telecommunication-industry/>.
STRATEGIC CAPABILITIES. 2019. [Online]. Available through:
<https://managingresearchlibrary.org/glossary/strategic-capabilities>.
EE SWOT Analysis, Competitors & USP. 2019. [Online]. Available through:
<https://www.mbaskool.com/brandguide/telecom-service-providers/12954-ee.html>.
EE SWOT Analysis / Matrix. 2019. [Online]. Available through:
<http://fernfortuniversity.com/index.php>.
Porter’s Five-Forces Model. 2013. [Online]. Available
through:<http://www.businessbankingcoach.com/porters-five-forces-model-works-for-
lenders/>.
EE marketing report. 2019. [Online]. Available
through:<https://www.slideshare.net/VasilikiEvangelou/ee-marketing-report>.