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Business strategy Assignment : BT

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Added on  2020-10-22

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A study about the business strategy of BT (British Telecom) which belongs to the telecommunication sector of the UK. The study will analyze the external as well as the internal environment and the capabilities possessed by the organization. Porter’s five forces model will also be applied which will then be followed by suggesting proper strategies by which the overall competitive position of the company can be improved. Using Bowman’s strategy clock model, analyses the strategic direction and options available for BT. Apply the ‘VRIO/VRIN’ model to determine the strategic capabilities possessed by BT. The internal environment and organization capabilities.

Business strategy Assignment : BT

   Added on 2020-10-22

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Business strategy of BT1
Business strategy Assignment : BT_1
Table of ContentsTask 1 the external environment.................................................................................................................31.1PESTLE model for environmental analysis.......................................................................................31.2 Ansoff’s growth vector matrix to analyze the organization’s strategic positioning...............................5Task 2 The internal environment and organization capabilities..................................................................62.1 Explain what strategic capability means............................................................................................62.2 Apply the ‘VRIO/VRIN’ model to determine the strategic capabilities possessed by BT....................62.3 Identify the organization’s strengths and weaknesses......................................................................8Task 3 competitiveness of UK’s telecommunications sector using Porter’s five forces model....................8Task 4 Using Bowman’s strategy clock model, analyses the strategic direction and options available for BT..............................................................................................................................................................10Conclusion.................................................................................................................................................11References.................................................................................................................................................132
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Introduction Business strategy is the technique to assess how any firm will attain the goals and objective andalso meet the overall expectation of consumers so as to gain competitive advantage in the longrun. It is very important for firms to be clear about their business strategies so as to attainincreased growth and long term sustainability for the future (Arora and et.al., 2017). The presentstudy has thus focused on making a study about the business strategy of BT (British Telecom)which belongs to telecommunication sector of UK. The study will analyze the external as well asinternal environment and the capabilities possessed by the organization. Porter’s five forcesmodel will also be applied which will then be followed by suggesting proper strategies by whichthe overall competitive position of the company can be improved. Task 1 the external environment1.1PESTLE model for environmental analysisIn order to assess the overall nature of external environment that is being faced by BritishTelecom the need is to focus on Pestle analysis which is as follows; Political factors – British Telecom group operates in a diverse political environment. InUK, the European Union has set the framework for fiber access, spectrum and netneutrality and thus widening the scope of operations of BT. The policy of Digital Agendain UK helps the BT group to promote high speed networks. It is considered that latestpolitical factor, Brexit, in UK would be beneficial for British Telecom to some extent. Itis so as higher interest rates due to brexit will reduce its pension liability. However, arecent policy reform introduced by UK telecoms Ofcom announced a three times increasein license fees to be paid by companies in telecom industry in UK (Akio, 2005). This mayhave a negative impact on overall costing of BT. British Telecom has to work under strictpolicies introduced by the UK government with respect to network access facilities. Economic factors – Economically, globalization is on a rise and with this, more and morebusinesses are likely to enter the telecom industry. This demands to introduce moreeffective communication and services from British Telecom. A change in investmentclimate facilitated by growing demand will lead to emergence of new businesses in theUK telecom industry. In addition, there will be further opportunities for Mergers &Acquisitions, with increasing scope of services in the UK telecom industry. In 2015, BT3
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had acquired EE from Deutsche Telecom and Orange. This synergy as helped BritishTelecom in improving cost efficiencies through economies of scale (Cardeal andAntonio, 2012). However, economic factors such as tax and interest rates and recession inUK will also have an affect on business of British Telecom. With this, BT can use factorslike inflation and growth rates as well as industry indicators such as consumer spendingand growth rate to track its growth in future. Social factors- Socially, there are a number of positive changes that have an influence ontelecom industry of UK and British Telecom as well. Earning capabilities have increasedleading to increase in investment rates. The ratio of younger to older generation is higherwhich results in increased use of internet and various communication technologies.Growth in use of smart phones and smart devices as well as faster network in future willlead to an increase in British Telecom operations (Gassmann, 2006). Technological factors – In lieu of the current technological advancements BritishTelecom is required to keep in pace with technology by working on issues like fasternetworks, poor signal and coverage. Investments in high speed network and alliances for5G network will be the latest technological developments in the telecom industry. BThas announced to invest £6bn on supe fast broadband and extend high speed servicecoverage all across UK by 2020. Capitalizing on ‘Cloud of clouds’ services by GlobalServices division of British Telecom will help in achieving high economies of scale.‘Cloud of clouds’ strategy helps the companies in bringing all independent and distinctcloud services under one umbrella (Grant, 2010). Though BT has always catered to thelatest technology but still the company will have to keep track of recent technologicaldevelopments by its competitors. Investment in and latest technology would also have animpact on cost structure and value chain of BT. Legal factors – British Telecom has been often affected by various legal aspects. One ofsuch aspect is ruling by Ofcom, wherein the UK telecom regulator makes way forseparation of open reach from BT. Another regulation is prohibiting use of mobile phoneswhile driving which has an impact on usage of network thus affecting the overall serviceand revenue of British Telecom (Kraaijenbrink, Spender and Groen, 2009). In addition,scope of services of BT also gets affected by laws related to consumer data protection4
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