Analyzing the Impact of Macro Environment on British Telecommunications

Business strategy
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
P1 With the help of appropriate framework analyse the impact and influence of macro
environment on British Telecommunications........................................................................3
M1 Critical examination of external environment to build and inform strategic decisions...6
TASK 2............................................................................................................................................6
P2 Internal environment and capabilities analysis of British Telecommunications...............6
M2 Assessment of strengths and weaknesses of British Telecommunications......................8
TASK 3............................................................................................................................................9
P3 Applications of Porter’s five forces model in context of British Telecommunications....9
M3 Suitable strategies to enhance competitive edge of British Telecommunications.........11
TASK 4..........................................................................................................................................12
P5 Application of theories, concepts and models to develop strategic planning of a business
firm.......................................................................................................................................12
M4 Strategic management plan for British Telecommunications which has tactical and
tangible strategic objectives and prioritise...........................................................................14
D1 Critique and interpretation of information and data.......................................................14
CONCLUSION..............................................................................................................................15
REFRENCES.................................................................................................................................16
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INTRODUCTION
Corporates create business strategy in order to develop future directions of the firm which
leads to profitability growth and increases market longevity of the company. The business firms
selected for the present report is UK based organisation British communication. The company
was founded in the year 1846 as electric telegraph company and became a private company in
1984. British telecommunications is currently headquartered in London, United Kingdom with
international presence spanning to 180 countries. The impact of exterior environmental factors
on British telecommunications is covered in this report with the usage of suitable frameworks.
Critical analysis of exterior environment of British communication is conducted to informs
strategic management decisions. Internal capabilities of British Telecommunications are also
provided in this report with the help of suitable frameworks. Strengths and weaknesses of the
firm are identified by critical evaluation of internal environment. The competitive forces present
in the industry of British telecommunication are identified in this report with the help of Porter’s
five forces framework. Suitable strategies to enhance competitive edge of British
Communications are provided in this report. Strategic planning for British telecommunications is
advised in this report with the usage of suitable frameworks along with production of strategic
management plan.
MAIN BODY
TASK 1
P1 With the help of appropriate framework analyse the impact and influence of macro
environment on British Telecommunications
Frequent and rapid changes that take place in the external environment have a significant impact
over the performance level of British telecommunication. PESTLE is an acronym for political,
economical, social, technological environmental and legal, which a strategic tool essential in
analysing the market environment and determine the potential threats and challenges that
business may encounter in future and to mitigate the risk associated with each factors by making
strategic decisions (Chen, Eshleman and Soileau, 2017). Below mentioned is the detailed
PESTLE analysis for British telecommunications:
 Political factors: British telecommunications operates in dozens of countries and expose
itself to the different political conditions and risk of each nation which affects its
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profitability and performance level in long run. There is variation in the idea of how
internet and telecom services should be operated in a nation. Internet, mobile and wifi
have become part of daily lives of people across globe and customer’s wants the
government to acknowledge the internet as a basic human right which can increase the
customer segment and profitability of British telecommunication. But on the other hand,
there is another war raging between customer, services providers and government with
regards to net neutrality, which prevents service providers from blocking internet and
data speeds which can be a challenge for them
 Economical factors: There are several factors such as interest rates, inflation rates and
taxes which affects the profitability of a business firm (Evans and et. al., 2017). Building
towers and extending services to rural areas leads to the high cost which in turn makes
the services expensive and customers in these areas bears the burden of pricing. On the
other hand, when area is more developed and there are residents than automatically there
is a rise in the demand of telecommunication services which in turn increases the revenue
of BT and makes the telecommunications resources easily available. Social factors: Telecommunication has become the core part of our daily lives which has
increased the demand of telecom services provides and therefore increase in their sales
revenue and profitability (Al-Weshah, Al-Manasrah and Al-Qatawneh, 2019). But their
horizontal growth is limited as it’s difficult for them to expand into rural areas and
customers are left with few options when they prefer to buy internet, mobile and
television services. Evidently, lower price and attractive packages from the numerous
competitors have influenced the buying patter of customers and thus affect the overall
profitability of BT.
 Technological factors: Rise in the technological advancement have gained the
competitive edge for the telecom companies as phones are becoming compact, copper
wire in place of copper wire and moving the business into wireless telecom business
(Soliman, 2020). BT is proactive in its approach and has made the right use of technology
and is prominent in providing high quality services at low prices. Legal factors: British telecommunication is more likely to influenced by the several
legislations imposed by government with regards to conducting business activities in a
more legal and ethical ways. There are several laws related with customer safety,
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