PESTLE Analysis of EE Limited: Doc

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Apply frameworks for analysing influence of macro environment on EE Limited..........1
I PESTLE Analysis.................................................................................................................1
II Ansoff's growth vector matrix............................................................................................3
TASK 2............................................................................................................................................4
3. VRIO model.......................................................................................................................4
4. Strengths and weakness of organisation.............................................................................5
TASK 3............................................................................................................................................6
5. Porters five forces model....................................................................................................6
TASK 4............................................................................................................................................7
6. Strategic management plan with Bowman's strategy clock model....................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to course of action and set of decisions which will aid
entrepreneurs in achievement of business objectives. It acts as a master plan which is used by
management for remaining competitive within market. In this report, Everything Everywhere
(EE) is taken into account. It is a British internet service provider, mobile network operator and it
is a division of BT Group. EE is a telecommunication industry which is headquartered in
Hatfield, Hertfordshire, England. It is one of the largest mobile network operator of United
Kingdom with customer base of around 29.6 million and largest 4G operator in Europe. This
report contains framework for analysis of impact of macro and internal environment.
Competitive forces are evaluated by making use of Porter's five forces. Apart from this, models
and concepts are applied for strategic planning.
Task 1
P1 Apply frameworks for analysing influence of macro environment on EE Limited.
It is necessary for each organisation to examine their environment in which they carry out
their operations and make changes in strategies accordingly. There are two types of environment
they are internal and external. Internal environment can be controlled and modified by
organisation. Whereas external environment refers to uncontrollable aspect of organisation, it
completely depends on supply and demand of industry. PESTLE analysis has been used to
analyse EE Limited’s external factors so that probable threats and opportunities within market
can be found. PESTLE analysis is shown below:
I PESTLE Analysis
Political environment: This factor is associated with environment which prevails within
country due to certain factors like policies made by government like tax rates, political stability,
dumping duties and many others. Decisions made in EU act related with roaming charges have
eradicated chances of business to grow and generate high revenue (European telecoms brace for
losses as roaming charges end, 2019). As per Euro telecommunication (ETNO) group will lose
around 7 billion by 2020. EE Limited has maintained healthy relationship with government
which has been favourable when organisation was started within market of UK. The aim behind
this is to generate high quantity of corporate taxes. From this it can be said that the present
situations of United Kingdom was not good for telecommunication industry due to enhancement
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in laws as well as conditions prevailing due to BREXIT. This factor creates a strong impact on
working and rendering services to their customers. EE Limited has been affected pessimistically
due to decisions made by government.
Economic environment: It comprises of factors which are associated with economy of
UK such as fluctuation in currency, unemployment, inflation rate etc. According to recent
inflation rate which is 2.1% of UK, is the lowest from till now and has created affirmative
influence on telecommunication as disposable income thereby generating high revenue (Inflation
falls to lowest level in nearly two years, 2019). With enhanced demand of 5G spectrum within
UK has created pessimistic impact on revenue of EE Limited as government has increased cost
of spectrum due which telecom industry have to buy frequency and have to pay more amount for
its usage (Strong demand in UK spectrum, 2019). This has negative impact on overall working of
EE Limited as fluctuations in inflation rates and tariff rates can lead to decline in rate of their
potential customers.
Social environment: It comprises of elements which are associated with society in which
organisation is rendering their services. In this environment EE Limited need to consider beliefs,
norms, attitude of people, knowledge, their preferences and many other factors. Number of users
have been continuously increasing within telecommunication sector of UK and as per survey
which was conducted in 2017 around 82 SMS were transmitted which show high usage of
mobile phone (Mobile Phone Usage Statistics in the UK, 2019). Enhanced demand within
telecommunication sector yields affirmative results in terms of growth for EE Limited. By
considering the needs and demands of customer they can attract more number as the people are
more cost sensitive, this means that they must have those points in consideration.
Technology environment: In the telecommunication sector, it is essential to have
advanced technology as it assists company to provide higher quality of product which leads to
high customer experience engagement experience. To improve their technology so that high
speed internet would be used by customer, EE Limited has invested millions of money to acquire
5G spectrum. By making use of technological advancement this can lead to significant increase
in their working structure as well as the way in which services are rendered.
Legal environment: After BREXIT, rules and regulations formulated by EE Limited may
have to face complexities due to alteration in immigrants workers act. They need to make
alterations in their existent policies (Brexit Impact The Telecoms Industry, 2016). The UK TV
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and Telecom regulator act 2003 will be executed after exit of UK. This will lead to loss of
millions of customers due to privacy control as well as data exchange. Apart from this,
customers will also face problems as they have to pay extra for roaming charges. EE Limited
needs to formulate strategies as per rules and regulations so that they do not lie into any kind of
legal issue. By making use of legal factors they can stay away from legal troubles.
Environmental environment: It comprises of all elements which are interrelated with
environment factor, they have to pay some portion of profit for the welfare of society. EE
Limited has actively participated within CSR activities by which they can connect with around
50 million women by 2025 as it is necessary for growth of country. Furthermore, they have opted
for reduction in GHG emission thereby strongly contributing to sustainability of environment
(Global transformation areas, 2018). EE Limited needs to acknowledge CSR activities by this
more number of people will come to know about this organisation and will also lead to
significant impact on customer base.
II Ansoff's growth vector matrix
It is imperative for organisations to have pre planned business strategies related with
future by which they would be able to perform in effective way within the market. This will
enable them to tackle the uncertainties associated with external market. For attaining position
within market, ansoff matrix can be used which will assist EE Limited to make effectual
strategies as per market. It has been explained below with its example:
Market penetration: It is defined as a way to attract customers by which existing
services and products are used by customers in such a way that it lead to enhanced results. To
achieve this, it is significant for organisation to make their strategies as per needs and
preferences of customers thereby attaining high success. For example, to attract more number of
customers EE limited can provide the extra benefits such as reduce the tariff cost. As customers
are more sensitive to prices, by this it will create relevant impact on mindset of individuals.
Market development: It is referred to a way of creation of new market for the existent
services and products by which they can enhance revenue and profitability which will be
generated by organisation. By opting for this strategy they can increase their market share by
which institutional risks can be minimised to certain extent. For example EE Limited can render
services at areas where there is no connectivity by this they will be able to fascinate more
number of customers (Akter and et. al., 2016).
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Product development: According to this customers will be attracted towards
organisation if they produce new and innovative product or service for thereby accomplishing
needs and demands of customers. For example EE Limited can launch their services in which
they can provide free calling for around 150 pounds. By launching it, organisation can handle
their existing customers as well as they will be able to attract new customers by which they can
enhance their profitability.
Diversification: It is one of the most risky strategy in which organisation can plump for
producing a new product by development of market for the same. This needs large amount of
funds as they are about to bring a new service or product within market for the first time (Chang,
2016). For example EE Limited can minimise the tariff rates to gain attraction of customers. This
will also lead them to generate high profit and acquire competitive edge with respect to other
organisations.
EE Limited has opted for diversification strategy; by this they are able to increase their
customer base as well as market shares. By this they are able to attain competitive edge within
the market. Furthermore, it also eliminates institutional risks which eliminate their financial
burden. Thereby it can be said that, by Ansoff matrix their position id diversification.
TASK 2
3. VRIO model
It is essential for an organisation to weigh up their internal capabilities and strengths as their
strategies by which they can acquire competitive edge from other organisations present within
the market. Therefore, it is liability of management to constantly consider their internal
environment by which they can identify their weakness and take necessary steps to remove them.
There are different resources which must be used to analyse the internal capabilities. To measure
capabilities of EE Limited, VRIO model can be taken into consideration, it is mentioned below:
Value: Human resources are identified as number of employees who are working within
organisation to carry out functionalities of business. This will enable them to attain
organisational goals and objectives within stipulated time duration. EE Limited has more than
30,000 employees in places where they are furnishing their services by this they provide value to
the customers. For example, queries or enquiries of customers are managed by human resources
only. From this it can be stated that HR is responsible for creating value for EE Limited. Apart
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from this, financial resources are also considered for creating value for their customer. Stronger
financial conditions will aid them to spend more in marketing and R&D which will create value
for EE Limited customers. They have around 29.6 million customers which show their position
within the market. Resources like brand name are considered valuable for both customers and
organisation. This is the reason they charge high for their premium customers as they have high
brand image in minds of people as well as in market. Next resource which can be taken into
consideration is global footprint. They are conducting their services in many countries by this
they have market share and number of customer (Eaton and Kilby, 2015). All these factors help
EE Limited to provide value for their customers by which their demands and needs can be
fulfilled. BY this EE Limited can attain competitive edge within market. In this the resources
includes employees and the skills which are being possessed by them.
Rare: It is defined as way in which services or products are rare within the market. For
example, if EE Limited is launching their 4G services in some part of UK then it will not give
them any value as competitors are about to launch 5G services within market. As per above
discussions, financial resources is rare for EE Limited as they are not able to manage it properly
which leads to decline in their revenue as well as profitability within a single financial year.
Another is human resource; it is not rare in nature as competitors also possess large number of
human resources to carry out similar work (Evans and et. al., 2017). From this it can be
interpreted that human resources are not rare in nature. In this case the resources will be the skills
which are possessed by employees as without this would not be able to work with 5G. The
employees have relevant knowledge which assists them to carry out their operations and further
do research related with services they are providing.
Imitability: It signifies that it is easy for other company to duplicate or make copy of
product or services provided by the company. For example, brand name of EE Limited within
UK is unimitable and unmatchable as no other company has as high brand name. Financial
resources are imitable as this the only way through which organisation can attract high amount of
the funds. Like taking loans or selling of equity for money. Global footprint is also not imitable
as it is very difficult for any company to carry on their operations in different countries within
same time by upholding quality of services by which high profitability can be attained. The
reputation of EE Limited is imitable as they were the one who first started working on 5G
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technology. The reputation which they earned and the work which they are doing cannot be
imitated.
Organisation: It signifies ways in which resources is exploited by organisation to carry out
their operations within the market. For example, premium customers of EE Limited pay extra
amount for services and this is due to high brand image of organisation within market. By this it
can be stated that brand image aids organisation to attain long term competitive edge over their
competitors. In these resources of EE Limited is their brand image within the market. This can
be attained by other resources and factors like employees, information possessed by them and
their skills.
4. Strengths and weakness of organisation
By usage of frameworks PESTLE analysis, ansoff growth matrix and VRIO, certain
strengths and weakness of EE Limited are acknowledged they are shown below:
Strengths
They have more than 27 million customers and they have largest coverage of 4G network across
UK. They have large number of retail stores more than 570 and around 100 franchise store which
are present within malls and high streets (Moseley III, 2017).
 They cover around 70 % population of UK and they are also sponsor of movie events as
well as football events which provide them high brand visibility.
 They are able to attain high level of customer’s satisfaction as they have dedicated
department for customer relationship management. By this they have high brand equity
among their existing and potential customers.
 They have high track record of integration of complimentary firms by acquisitions and
mergers by this they created a reliable supply chain.
Weakness
 Their brand recall is week due to the new launched organisations which have gained
established brand name. Their main focus is on business segments due to which they are
not able to maintain their individual customers (Razak and et. al., 2016).
 There organisation structure is limited to only present strategies and business model; they
cannot expand in other product segments. Apart from this, financial planning is
conducted effectively.
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TASK 3
5. Porters five forces model
It is essential for an organisation to identify industry in which they are working as it will
assist them carry out their operations effectively. To assess the external environment or industry,
Porters five forces model is used to analyse external environment, it is mentioned below:
Bargaining power of supplier: Role of suppliers within the industry is to furnish raw
materials to manufacturer so that they can provide services to customers. There are many
suppliers in the market but EE Limited has few suppliers with whom they deal as they provide
high quality raw materials like Siae Microelettronica etc. bargaining power of supplier is
moderate in nature.
Bargaining power of buyer: Telecommunication sector has large number of buyer as cell
phones have become indispensable and enduring part of human life. Due to this reason, buyers
have high power as compared to organisation (Scholes, 2015).
Competitive rivalry: Competitors are those who provide same services to customer with
whom organisation is dealing with. There are wide number of competitors of EE Limited like
Vodafone, BT, giff-gaff, Virgin etc. Competition is driven by cost of services provided to
customer as they are sensitive in nature. Competitive rivalry is high in nature.
Threat of substitute: It is defined as way of using different services provided by
competitors. There is no direct substitute of the services as communication cannot occur with
people living in different parts of country. But still options such as mail or call via online
medium acts as substitute of EE Limited. Threat of substitute is low in nature.
Threat of new entrants: It refers to entrance of start up into telecommunication industry.
There are only few competitors within market but acquire large market share which indicates that
scope of new entrants is very less. Furthermore, there are certain rules and policies which they
must comply with so that they can enter telecommunication industry. Threat of new entrants is
low in nature as many strong competitors exist within the market (Thompson, Strickland and
Gamble, 2015).
From overall evaluation, it can be said that telecommunication industry is attractive as it
provides people with a medium through which they can communicate anywhere across the
world. This industry is one of the most growing sectors, as people are addicted to their smart
phones with respect to other things.
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TASK 4
6. Strategic management plan with Bowman's strategy clock model
Strategic management plan is a formative document that consist those essential elements
which helps in making communication within organisation. There are different type of factors
that includes in an organisation such as strength, goals, resources and focus . In addition with this
strategic management plan effectively insures that workers and related stakeholders of an
organisation effectively directing and contributing their effects towards common objective of
business. With the help of this plan present functions and activities of a company can be used in
order to respond towards the changing and dynamic environmental situations. This can be
effectively done by combining the situations in a systematic manner with the help of vision
strategy resources and action of an organisation. With the help of strategic management plan E &
E Limited can effectively conduct the business by aligning resources in a formative manner. E &
E Ltd. By taking advantage of Bowman strategy clock model can effectively able to evaluate
their strategic directions of their business in best effective way
Bowman's strategic model
This model helps business organisations to analyse their actual competitive position in a
market place as compared to the other Rival (Raza and Rehman, 2012). This strategic model was
coined by David Faulkner and Cliff Bowmen which is a further formatter elaboration of porter’s
three generic strategies. This model effectively showcases a possible strategy in which there are
eight possible strategies for four quadrants and are define by perceive added values. Along with
axis of price it basically showcases a manner in which an organisation can position their services
and goods in a market place in a two different dimensions. In this the first dimension is linked
with price and second one is formative linked with perceived value of different type of products
and offered services. By effectively evaluating both of these dimensions E & E limited can
efficiently adopt 8 strategies. Mentioned below there are strategy effectively elaborated:
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Figure 1 What is Bowman’s Strategy Clock
Position1: Low price and low added value
In this price business organisations not choose to compete as in this price they may face
severe losses which may affect their market value. As this is a position in which market placed
organisations are basically forced to complete which is mainly because of lack of product
differentiated value. Thus, if a company want to take effective advantages in this strategy they
are required to sell more and maintain effective balance in their cost input. Further they are
required to attract more and more numbers of new customers (Gupta and Sahu, 2015). It will not
only aid business organisations to gain more consumer loyalty but also benefits them to sustain
for long term and stay one step ahead from their competitors.
Position 2: Low price
Organisation those who compete with each other under low price strategy are known as
low cost leaders. As in this pricing strategy only motive is to maintain an effective low level
price margin in order to sell the products in high volume. This strategy will effectively help those
organisations who hold high volume and possess strong strategies. While on the other hand if a
business organisation is not that much able to sustain a powerful business position then they can
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trigger price which is only going to benefit consumers. This strategy is not affective for EE
Limited as it is not possible to lower down the prices as they are already furnishing their services
at affordable rate and it is justifiable for an organisation to have a loss to attract more customers.
Position 3: Hybrid moderate prices
In this strategy organisation offer there company products and services at a margin of
low rate along with perceived value in high level as compared with their Rivals who are also
engage in the process of selling services and products at low level of cost. Volume can acts as a
one the major obstacle, but this will help business organisations to establish a good image by
offering different type of products and services at reasonable price range. With the help of hybrid
moderate prices strategy E&E can effectively able to create an affordable prices range of the
services and products which will further help them to build a strong consumer loyalty. This will
automatically stimulate them towards high success and profitability.
Position 4: Differentiation
In this Bowman strategy clock, business organisations offer their product and services to
consumers at a high level of perceived value in order to maintain continuous success. Under
these strategy business organisations can rise up the price level of their products this will further
help them to sustain themselves for longer period of time (Shahin and Mohammadi Shahiverdi,
2015). In this strategy E&E Ltd. can increases the prices of the product and services as to gain
higher margin while on the other hand by lowering down the prices of their commodities
company can lead towards increased in market share of company. In addition to this, branding
act as an one of the strongest element with the help of organisations like for E&E Ltd Can
create positive image within consumers. That will simultaneously help company to gain more
market share. In this case the services which are provided by EE Limited assists them to attain a
high level of success, in this strategy by significantly raising the prices of their services their
sustainability can be ensured within the market for longer time frame.
Position 5 Focus differentiation:
As per this strategy, business organisation offers their products and services those who
come under the section of designer products and holds a high perceive values and prices. This
perceived value will help them to offer their products in order to attract wide base of consumer
(Fernandes, 2018). This strategy can be used by E&E Ltd two charged high value of their
products and services in order to maintain high perception value. With the help of this strategy
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EE Ltd can effectively target high market which holds high margin value in order to effectively
survive in competitive market. By making use of this strategy EE Limited can serve the
organisation who basically designs their products. It will help them to stay stronger as these are
also the organisations and by having healthy relationship with them they can have long term
clients.
Position 6 Increase price:
In this strategy of Bowman strategy clock, business organisations effectively increases
price ranges of their products and services rather than to increase the values side in an equal
proportionate amount. Thus, as per this strategy if the high price range that has been set by
organisations gets accepted by customers then the company will effectively enjoy high
profitability level. While on the other hand, if the high price range does not get accepted by
consumers market share of company plumped. Therefore, in this situation business organisations
are required to take related necessary steps to maintain and adjust a balance in between factors
that includes price and value. EE Ltd Limited with the help of the strategy can aid their
organisation not only focus on short term profits but to focus on long run relevance (Raza and
Rehman, 2012).
Position 7 High price:
This strategy is mainly linked with monopoly pricing range that has been adopted
business organisations to gain more profitability as in this there are only soul business unit who
offers goods and services. Thus, in order to enjoy monopoly in a market place they are not
worried about adding more value and price to their price range as they know consumers got no
choices but to buy their products which are available at any cost by business organisation. In
order to get effective advantage of high price strategy E&E Limited is required to offer great
quality products and services are there initial stage as to create a strong brand image in the
Marketplace as to gain long term advantage in this playing field.
Position 8 Low value:
Business organisations who follow this strategy make can suffer from decrease in the level
of their company market share as in this strategy of an organisation is offering the services and
products at low value which can lead towards simultaneously losing their market share base.
Thus in order to sustain for a long period of time it is important for the organisation to sell their
products and services with great quality. In order to take effective advantages of this strategy it is
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important for E&E Ltd. to lower down few cents value of their product and services for a short
period of time in order to gain high profitability. As it is unnatural behaviour of customers to buy
products at low range (Fernandes, 2018).
Strategic plan for EE Limited: It is a key factor behind success and growth of
organisation. They can render networking, communication, high standard, secure, high available
and resilient infrastructure. The goals must be balanced, reliable, accessibility and policies which
are efficient and cost effective. EE Limited can make sure their overall interoperability of
communication and networking system can be ensured. Furthermore, they can integrate and
understand the needs of customer related with creation cohesiveness.
CONCLUSION
As per the above mentioned report it has been concluded that it is important for business
organisations to frame an effective and efficient business strategies by evaluating overall factors
that prevailed in external environment. This will help them to take advantage of success in
addition with this by developing a formative business strategic plan companies can easily able to
increase their market shares. In addition with this the report covers, various factors that suggest a
company to perform their day to day functions as per according to their actual strength and
capabilities. This will automatically let them towards high success in a marketplace as if an
organisations hold strong capability to perform a particular task then they may automatically put
more effort on their performance to become more efficient in that activity to gain high market
value and profitability.
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REFERENCES
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Eaton, D. and Kilby, G., 2015. Does Your Organizational Culture Support Your Business
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Evans and et. al., 2017. Business model innovation for sustainability: Towards a unified
perspective for creation of sustainable business models. Business Strategy and the
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Fernandes, A. A. R., 2018. The mediation effect of customer satisfaction in the relationship
between service quality, service orientation, and marketing mix strategy to customer
loyalty. Journal of Management Development. 37(1). pp.76-87.
Gupta, A. and Sahu, G. P., 2015. Exploring relationship marketing dimensions and their effect
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Moseley III, G.B., 2017. Managing health care business strategy. Jones & Bartlett Learning.
Raza, A. and Rehman, Z., 2012. Impact of relationship marketing tactics on relationship quality
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Razak and et. al., 2016. Theories of knowledge sharing behavior in business strategy. Procedia
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Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
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