Business Strategy of 3 Mobile UK: A Comprehensive Analysis

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Business Strategy

Table of Contents
Introduction....................................................................................................................................................3
LO 1...............................................................................................................................................................5
Analyse the impact and influence which the macro environment has on an organisation (P1, M1, D1)..5
LO 2...............................................................................................................................................................8
Assess an organisation’s internal environment and capabilities (P2, M2)................................................8
LO 3.............................................................................................................................................................13
Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given market
sector (P3, M3).........................................................................................................................................13
LO 4.............................................................................................................................................................16
Apply models, theories and concepts to assist with the understanding and interpretation of strategic
directions available to the chosen organisation (P4, M4)........................................................................16
Conclusion...................................................................................................................................................19
References....................................................................................................................................................20
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Introduction
The Business strategy of an organisation as a process where the management of an organisation
creates the future plan to make the efficient use of the organisational resources according to the
business environment so that the company could achieve its mission and vision
The current report would analyse the telecom sector of UK as this is one of the fastest growing
sector in the country. Some of the major telecom organisations in UK are Vodafone, Virgin, EE
Limited, BT, O2 and 3 Mobile. These organisations have very tough competition in the telecom
sector to grab the larger share of the market which has resulted in the overall growth of the
industry and better services to the customers.
The business strategy of an organisation does not only depend upon the resources of the
organisation it has but also on the competition in the market and changing market trends
(Shapiro, 2017). The first part of this report would analyse the impact of the macro environment
on the business strategy using PESTEL analysis.
The internal environment of the organisation is another critical element of the business strategy
development. The capabilities of the organisation depend upon the financial resources
organisation has and also on the human resources of the organisation. The product or the service
an organisation providing and its expertise in that particular domain is equally important. The
second part of the report would analyse these internal capabilities of the organisation.
The competition in the market also plays an important role in the business strategy development
of an organisation. The third part of the report would analyse the competitive environment in the
telecom sector in UK.
The last part of the report would focus on various strategic models that an organisation could use
for developing a good business strategy. A strategic management plan for the chosen
organisation (3 Mobile) would also be provided in this section.
3 Mobile is a major telecom service provider in UK and currently the company has 12% market
share in the UK Telecom Sector. 3 Mobile was established in 2003. Maidenhead, United
Kingdom is Headquarter of the company from where the company operations are handled by the
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top management. The company also has 19 different regional offices across the country with
more than 1300 stores. Hutchison 3G UK Limited is the owning organisation that operates 3
Mobile subsidiaries in UK.
According to the annual reports published by 3 Mobile, UK, the total customer base of the
company in UK is 11.2 million and the company recorded £1.19 billion revenue in 2018 which is
2.3% more than the revenue of the company in 2017. The company has shown a growth of 6% in
the active 4G internet connections in 2018 as compared to 2017. 3 Mobile UK has also become
the first UK telecom operator that has covered 98% population in the country through its wide
range of services.
The business strategy of an organisation is a mean to achieve its mission. According to the
website of 3 Mobile, the mission of the company is – ““Our mission is to help our customers
use their phones to live their best lives””
3 Mobile has also presented its vision to “Provide quality internet and voice services to its
customers on reasonable pricing and bring a revolution in the telecom sector”
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LO 1
Analyse the impact and influence which the macro environment has on an organisation
(P1, M1, D1)
Strategy could be defined as a “Plan or Action which is developed to achieve a long term goal”.
Another definition of strategy is – “A general direction set for the company and its various
components to achieve a desired state in the future”
While the first definition of the strategy is completely aimed at achieving the long term goal, the
second definition of the strategy provided above mentions a state in future. Since the state in
future could either be short term of long term, the second definition provides a broader definition
of the strategy (Ansoff et al, 2019).
The PESTLE analysis of 3 Mobile is provided here to assess the macro environment of the
company
PESTLE Analysis
Political
Telecom sector in UK is governed by the regulatory framework developed by the
government of the country. The government of the country is responsible for the
awarding of the telecom spectrum to the telecom organisation which is a crucial
technology for providing the internet services by these organisations. Telecom
organisations need to access the networks of each other to provide seamless services to
the customer which was allowed by the government when it provided the BT Network
access to 3 Mobile. This was a major boost for the expansion plans of the company.
BREXIT is a political decision taken by the UK government which is going to have a
great impact on the UK Telecom sector. According to the market experts, the telecom
sector might be negatively affected by BREXIT as it would bring many challenges in
technology transfer from EU countries.
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Economic
Economic condition of the country plays an important role in the expansion of the
telecom services in the country. A weak economy could create a cash crunch for the
government that affects the infrastructure development in the country. It also reduces the
consumption of the services that affects the sales and net revenue of the telecom
organisations (Figge et al, 2015). Recession in 2008 was a major factor behind the slow
growth of the telecom sector in UK. However, conditions since 2010 have been excellent
and 3 Mobile has been growing at a good rate since then. Now BREXIT is creating
another threat for the organisation because of the losing value of Pound Sterling against
Euro. The government needs to make a clear policy and address the negative economic
concerns of BREXIT. Similarly, the fiscal and monetary policies have their impacts on
the industry.
Social
Social structure of the country is an important factor in the telecom sector. The use of
internet services varies with different social conditions. In the rural areas of the country,
the use of 4G services have been limited and 3 Mobile used its 3G network to connect the
people in these areas where some other major organisations focused only on the growth
of 4G segment in their services. Because of this, 3Mobile has become the only telecom
company in the country that covers 98% population. Because of its low cost and
unlimited data 3G services, 3 Mobile UK has been able to add maximum number of
people from low income group with its network that has helped in the growth of the
company.
Technological
Telecom sector is a technology dominated sector where only the organisations that focus
on the latest technology and inventions have been able to grow. 3 Mobile developed a
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new Ultrafast technology that has increased the speed on the internet services in its
VOLTE and DC-HSDPA services. Since 3 Mobile introduced Ultrafast, streaming on
company’s network has increased by 19% which is a great achievement for the company.
3 Mobile is now also working on increasing the range of Wi-Fi modems for better
coverage and speed on its network.
Environmental
3 Mobile is an organisation that havs been working for a better environment in the
country. 3 Mobile is associated with many non-profit organisations that work for saving
the environment and company provides financial support to these organisations. E-waste
is a big problem in the telecom sector and 3 Mobile is spending lots of resources of the
company to develop an efficient technology that could produce renewable energy from E-
waste.
Legal
The government of the country has put in place a legal regulatory framework to govern
the telecom sector in the country. Inter-network access among the telecom service
providers has always been an issue between 3 Mobile and BT and company had to fight
many legal battles with BT. But finally, the company has got network access rights to
other networks as per the regulations. However, the inter-network access charge is still a
legal issue that company is facing. There are also other laws such as competition policy
and Employment Act that 3 mobile have to follow.
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LO 2
Assess an organisation’s internal environment and capabilities (P2, M2)
This section of the report would analyse the internal environment and the availability of the
resources to 3 Mobile UK to assess its capabilities. There are different types of resources such as
financial resources, technical resources, strategic resources that define the capabilities of an
organisation. For example, 3 Mobile has excellent network across UK which is a resource of an
organisation and enhances the capability of the organisation to provide its services to 98%
population in the country.
In order to analyse the internal environment of the company 3 mobile, the different techniques
could be used that could provide the exact information about the internal capabilities and
resources of the company. Here, two techniques Porter’s value chain analysis and McKinsey’s
7S model would be explained:
Porter’s value chain analysis
Value chain analysis of the company 3 Mobile gives an idea of how the input of the company
could be converted in the output so that the effective and the good services could be provided to
the customers of the company (Welford and Gouldson, 2017). Here, the activities and processes
of the company3 Mobile could be divided in two parts:
1. Primary activities: These activities are related to the production process of the products
and services that 3 Mobile is offering to the customers. Providing strength to these
activities become very important for the company as with the help of this, the company
could gain the competitive advantage into the leading market. Here, the primary activities
of 3 Mobile are explained:
Inbound logistic: Includes the processes and the activities which are related to the
storing and distributing the input of the company. In the case of 3 Mobile, this may
include network equipment and spectrum. This could be put in the strength of the
company as approx. 98% population of UK is covered through the network equipment of
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the company and spectrum is approx. 1,800 MHz which very high to provide the
effective and good telecom services to the customers.
Operations: Includes the processes and the activities which are used to convert the input
into output of the company. In 3 Mobile, different in house network operations are used
by the company so that the input could be converted in output effectively and the better
services could be provided to the customers.
Figure 1: Porter’s Value Chain Analysis (Welford and Gouldson, 2017)
Outbound logistic: Includes the distribution of the telecom services of 3 Mobile. This
also could be put in strengths of the company as 3 Mobile has good distribution network
as this distribute the services to the customers of UK through more than 500 stores and
also through online stores.
Marketing and sales: As the name implies this includes marketing department and sales
department which formulates the strategies to enhance the services of 3 Mobile among
the customers and here it could be said that these two departments works really hard and
capable of formulate the competitive strategies for the company.
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Services: rather than telecom services, services through contact centres and online
supports are also given to the customers that enhance the image of the company into the
minds of the customers. So this also could be considered in the strength of company 3
Mobile.
2. Support activities: These are the activities that provide the support to the primary
activities of the company and this includes:
Procurement: This includes the acquisition of services through external vendors to
provide the telecom services to customers (Vickery, Droge and Markland, 2015). Here,
the negotiation and relationship strategies of 3 Mobile are very effective.
Human resource management: The processes like recruitment, selection, training and
development are included here.
Technological advancement: Latest technology is used by the company 3 Mobile to
provide services to the customers.
The main advantage of value chain analysis in 3 Mobile is that with the help of this, the company
is able gain the competitive advantage and also could enhance the overall profit through focusing
on specific activities like marketing, outbound activities etc. Along with this, the disadvantage of
value chain also could not be neglected by the company. For example, when the operations are
executed then they are divided into small segments. Here, the chances of losing the vision and
mission of the company is really high as the company has to focus on each and every small
segment (Vickery, Droge and Markland, 2015).
McKinsey’s 7S model
With the help of this model, the company 3 Mobile could find the link between the different
elements of the company through which the total efficiency could be enhanced. Here,
McKinsey’s 7S model for 3 mobile is explained.
Hard element:
 Strategy: Main strategy on which 3 Mobile is the service differentiation where the
company works for providing the effective services to the customers. In this way, it uses
the latest technology so that the needs and wants of the customers regarding the telecom
services could be fulfilled. This element act as strength of the company.
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 Structure: the organisation structure of 3 Mobile is tall that includes vice presidents,
managers, senior managers etc. basically functional organisational structure is followed
by the company where responsibilities are divided among the various departments. As 3
Mobile provides telecom services and target whole population of UK then this
organisational structure of company could be put under its strength.
 System: The different types of systems like business intelligent system, knowledge
management system, management information system etc are used by the company so
that effective services could be provided. But still, the absence of system like training and
development system, customers relationship system has create the weakness for the
company.
Figure 2: McKinsey’s 7S model (Vickery, Droge and Markland, 2015)
Soft element:
 Shared value: This includes the centre belief of 3 Mobile which are the core values of
the organisation. The values of 3 Mobile are strictly linked to the welfare of the
customers and these core values are communicated inside in the organisation to keep the
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employees aware of that. The shared value of 3 Mobile acts as its strength as it belongs to
customers only.
 Staff: The numbers and types of the employees working in 3 Mobile are skilled enough
to achieve the goal of the company. In 3 Mobile, some programs like financial incentives
etc have been introduced so that these could be kept motivated.
 Style: This includes the management and leadership styles of the senior employees of 3
Mobile. Normally, democratic leadership style is followed by the senior employees of 3
Mobile which could be considered as strength of the company.
 Skill: In 3 Mobile, the capabilities and knowledge of the employees of the company is
very high and these are the real assets of the company. So this also could be considered
the main strength of the company.
The main advantage of McKinsey’s 7S is that the managers of the company could use it as a tool
to survive in the competitive environment as it provides the information of various activities and
elements of organisation itself. And the main disadvantage of this model is that confusion could
be created among the processes and activities of the company.
Here, it could be concluded that examination of the internal environment through the processes
like value chain and McKinsey 7S is very important as these provide all the information about
the activities and processes of the company which are being executed in the organisation
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