4Com Telecommunications: Business Analysis and Strategic Planning

This report provides a comprehensive analysis of 4Com, a UK-based telecommunications provider, focusing on its strengths, weaknesses, and potential strategies for growth and improvement. The introduction provides a general overview of small business enterprises and the difference between entrepreneurship and small-scale businesses. Task 1 identifies 4Com's strengths, such as excellent customer service and a strong sales team, as well as its weaknesses, including unstable finances and limited market coverage. The report then analyzes the business using comparative measures like balance sheets and ratio analysis, comparing 4Com's performance with that of Vodafone Plc. Task 2 explores ways to overcome the identified weaknesses, including market expansion through intensification, product development, and diversification strategies. The report also discusses methods to enhance existing performance, such as strategic alliances and leveraging government funding. Task 3 focuses on assessing business objectives and plans, revising them to incorporate proposed changes, and developing an action plan. Finally, Task 4 assesses the impact of proposed changes, discusses managing the changes, and outlines how to monitor improvements in performance. The conclusion summarizes the key findings and recommendations, providing a strategic roadmap for 4Com's future development.

Small Business Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Profile of 4Com with identification of its strengths and weaknesses ..............................1
1.2 Analysis of business using comparative measures...........................................................2
TASK 2............................................................................................................................................5
2.1 Overcoming the identified weaknesses of business.........................................................5
2.2 Ways to enhance existing performance............................................................................6
2.2 Ways to enhance existing performance............................................................................7
2.3 Areas of expansion ..........................................................................................................8
TASK 3............................................................................................................................................9
3.1 Assessment of objectives and Plans.................................................................................9
3.2 Revise in Business Plans to incorporate changes...........................................................10
3.3 Action Plan.....................................................................................................................11
TASK 4..........................................................................................................................................12
4.1 Impact of Changes proposed..........................................................................................12
4.2 Managing the changes....................................................................................................13
4.3 Monitoring improvements in the performance...............................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................14

INTRODUCTION
Small business enterprise is a privately owned business which has relatively small
number of people employed and has a smaller sales volume. Small enterprise is the one in which
number of employees are not more than 50 and turnover should be under 10 million euros.
Various examples of such are retail stores, bakeries, small scale manufacturing, internet related
business and restaurants. There lies a difference between entrepreneurship and small scale
business. It is because; these businesses may or may not offer an innovative product to the
market (Abebe, 2014)The strengths and weaknesses of the company will be analysed. The
various ways in which the weakness can be converted into the strength will be studied as well.
Revision of the business objectives and plans will be done Changes will be incorporated on to
the organisation and impact will be monitored effectively.
TASK 1
1.1 Profile of 4Com with identification of its strengths and weaknesses
The 4Com is one of the emerging telecommunication provider in UK. Established in
1999, today business employs around 250 people (Acs and et al., 2013). The company caters the
carrier and broadband needs of the people. The company excels in providing cost effective
carrier and data services across UK. Identification of strengths and weaknesses is crucial for
every firm. It helps in identifying the areas that are performing well for the firm as well those
which are to be improved to enhance the productivity of organisation. The analysis has been
conducted to identify the strong features and non performing areas for 4Com.
Strengths
 Best company to work for
 Stable environment
 Excellent customer service
 Strong sales team
 Sales promotion activities/ pricing
 Better cable equipment
Weaknesses
 Unstable finances
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 Less market coverage
 Heavy competition
 Lack of rural network access
 Poor marketing
Assessment of strengths and weaknesses bring out the areas which have a scope of
improvement such as the area coverage of 4com is very less (Barber, J., Metcalfe, S. and
Porteous, 2016). So, enterprise should focus on these grounds and make plans according to it.
The pricing is the strong suit of the company and can get maximum benefits out of it. Working
on these grounds will help an enterprise to perform better in the market and sustain for long
period of time. The competitor of 4Com are performing at international levels and carry
abundant resources with them.
1.2 Analysis of business using comparative measures
Analysis of the business is a way to find out the performance of the business. This is
conducted on regularly basis to assess how good a business is performing. This analysis can be
carried out by using various tools such as Budgeting, KPIs and comparative ratios (Blenker and
et. al., 2012).
Balance sheet
It is a document which lists down the assets and liabilities of the company. This
statement is used to assess the performance of the company in monetary terms . It illustrates the
net worth of the company. The balance sheet is the most crucial component in the finance
department used to illustrate the financial standing of the business (Carraher and Paridon 2015).
Ratio Analysis
It is an analysis of the information stored in the books of accounting. It takes into
account the various items such as balance sheet, income statement and cash flows. It is a major
tool of analysis used to evaluate the company's financial operations. The ratio are used as a tool
for comparison. The ratio of a company compared with the ratio of other company which later is
used to measure the variances between the two. The ratio commonly preferred are current ratio,
debt equity ratio, dividend payout ratio etc.
The ratio analysis of Vodafone Plc
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It can be analysed from the balance sheet of Vodafone Plc is that they are facing a decline
in the revenue of the company (Di Domenico and Miller, 2012). The company have lost its
market share to its leading rivals Giffgaff and O2. The gross margin and operating income of the
company are same as the last year.
The balance sheet of 4Com Plc
2015 2016
Fixed assets 15,000 12,000
Current assets
Stock 7,000 18,000
Debtors 12,000 36,000
Bank 1,000 0
20,000 54,000
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Balance Sheet 1: Vodafone Plc

Less Current liabilities
Creditors 6,000 15,000
Bank overdraft 0 10,000
6,000 25,000
Working capital 14,000 29,000
Net Assets 29,000 41,000
Financed by capital
Opening capital 22,000 29,000
Add net profit 30,000 35,000
52,000 64,000
Less drawings 23,000 23,000
Closing capital 29,000 41,000
The ratio analysis for the 4Com Plc are:
a) Current ratio = current asset / current liability
2015 2016
CR = CA / CL = 20000/ 6000 = 54000/ 25000
= 3.33 times = 2.16 times
the current ratio of the company shows that they can pay off their debts with the help of the
current ratio. But there is decline in the position since last year (Ciampi and Gordini 2013).
 QUICK RATIO (ACID TEST) = CURRENT ASSET – inventory/current liabilities
2015 2016
Q r= CA– INVENTOR / CL
=20000– 7000/ 6000 =54000-18000/25000
= 2.17 = 1.44
this shows how good a company is doing its operations to meet its financial requirements in the
short run. This data proves that there is a decline in the quick ratio compared to the last year.
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TASK 2
2.1 Overcoming the identified weaknesses of business
When it comes to business, weaknesses can be defined as the disadvantage or a weak
point. It is the non performing part of business which hinders the operations of the business.
There are various tools which help in identifying the weaknesses in organisation and enterprise
must derive its resources to overcome hurdles in performance of business. The biggest weakness
of 4Com is lesser coverage area. This weakness does not let the business perform in a manner
they want to. Company should adopt various techniques to market expansion to overcome this
imperfection (Draycott and Rae, 2011).
Intensifying Strategy
This is one of the most preferred expansion strategy. This focuses on increasing the
existing market share of business through aggressive marketing of product. 4Com focuses on the
urban areas of UK and should try to gain customers in that particular market with adoption of
tempting marketing techniques such as sales promotion activities, advertising and price cuts.
Another two techniques are product and market development.
 Market development emphasizes on the product entering into new unexplored market
with the existing line of products. Example: expansion of rural areas. Product development means developing or innovating new products for the existing
markets or may go for a new market for increasing the customer base. Example:
Broadband services can be a new product for 4Com (Gorgievski, Ascalon, and Stephan,
2011).
Diversification Strategy
This strategy is focused on the internal environment of company. Diversification can be
entering into new markets with differentiated product concerning with varied skills and
technology. The diversification can be divided into mainly two segments: Horizontal Diversification: This focuses on the enterprise entering in new markets with
product relating to existing product line. 4Com is entering into the market with
broadband services. Concentric Diversification: This involves entering into segments which are indirectly
related to the existing product line. 4Com launches a mobile handset which is indirectly
related to their carrier services.
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Modernising Strategy
This strategy is comparatively less preferred by the businesses. It focuses on the up
gradation of existing fixed resources such as plant or machinery. This is one of the costliest
method which helps a company in improving the output such as call quality, stability and call
switching (Kaushik and et al., 2012).
Integration Strategy
This growth/expansion strategy focuses on the integration of activities performed in a
firm which gives it a better outlook. The resources a firm possess can be utilized properly and
result in expansion of business operations. The integration is of two types: Horizontal Integration: It involves company entering into business which is closely
related to its existing operations. The telecommunication company enters in to the mobile
segment is an example of Horizontal Integration.
 Vertical Integration: It focuses on collaborating or taking over a firm which supplies the
input. Forward integration refers to the 4Com integrates its operations with a mobile
manufacturer and perform jointly for the purpose of market expansion.
2.2 Ways to enhance existing performance
Maintaining and strengthening the performance is an ideal task. The enterprise after
identification of its strengths and weaknesses focuses on how existing level of performance can
be improved and the way drawbacks of organisation can be turned into its core competencies. To
improve the level of operations, an enterprise requires resources such as finance, technology and
various inputs (Lambert and Davidson, 2013). To fulfil all these requirements, an enterprise can
opt for strategic alliances. It is a collaboration between two companies so that they can share the
knowledge, resources, skill and technology. This can be crucial when a business is looking to
maintain or improve the existing level of operations. If 4Com collaborated its operations with
Vodafone, the amount of resources and finance will be abundant for it to expand its market share
and operate at a larger scale. It will also have a favourable impact on the brand awareness of
firm. The ideal circumstances for a business are success, stability and constant development and
strategic alliance can facilitate the same.
Finance is the other major area of concern which is responsible for performing all major
functions such as procuring raw material, carrying day to day operations and marketing
activities. Strategic management can help a business to attain competitive advantage in the
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market. In an alliance, the resources and finance are equally invested. It involves risk sharing in
case of failure of one business.
Another crucial technique is that they can avail the funding schemes by government. The
government of United Kingdom is spending every pound out of three in funding SMEs. The
government is allotting central government projects to such enterprises which help them to carry
bigger share in the revenue. This increase in revenue can provide them the financial stability in
market and can protect them from mammoths in the telecommunication industry. The
government has spent whopping 26% of funds on the development of small and medium sized
enterprises. The prime focus of government is to provide them with a stable financial
environment so that they can operate in an effective manner.
2.2 Ways to enhance existing performance
Maintaining and strengthening of the performance is an ideal task. The enterprise after
identification of its strengths and weakness focuses on how the existing level of performance
can be improved and how the drawbacks of the organisation can be turned into its core
competencies. To improve the level of the operations a enterprise requires resources such as
finance, technology and various inputs (Longenecker and et al., 2013). To fulfil all these
requirements an enterprise can opt for strategic alliances. It is an collaboration between two
companies so that they can share the knowledge, resources, skill and technology. This can be
crucial when a business is looking to maintain or improve the existing level of operations. If
4Com collaborated its operations with Vodafone the amounts of resources and finance will be
abundant for it to expand its market share and operate at a larger scale. It will also have a
favourable impact on the brand awareness of the firm. The ideal circumstances for a business are
success, stability and constant development and strategic alliance can facilitate the same.
The Finances are the other major area of concern and which are responsible for
performing all major functions such as procuring raw material, carry day to day operations and
marketing activities. Strategic management can help a business attain competitive advantage in
the market. In an alliance the resources and finances are equally invested it involves risk sharing
in case of failure of one business (López Salazar, Contreras Soto and Espinosa Mosqueda, R.,
2011).
The another crucial technique is they can avail the funding schemes by the government.
The government of United Kingdom is spending every pound out of three in funding the SME's.
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The government is allotting the central government projects to such enterprises which helps them
to carry bigger share in the revenue. This increase in the revenue can provide them the financial
stability in the market and can protect them from the mammoths in the telecommunication
industry. The government have spent whopping 26% of funds on the development of the small
and medium enterprises. The prime focus of the government is to provide them with a stable
financial environment so that they can operate in the effective manner (Mason and Brown,
2013).
2.3 Areas of expansion
For development of the business it is necessary to expand into new areas or sectors of the
market. The critical factors are to be analysed such as level of competition, market research and
assessing of business's performance. Expansion is need to be carried out in a efficient manner so
that the business can get maximum benefit out of it.
The business which is already growing at a rapid scale and carries a full- fledged
marketing team can now discover some unexplored segments such as Mobile handsets. The
business at present works with other mobile manufacturer on the contract basis such as iPhone,
Sony and Samsung. The business should venture into the mobile manufacturing segment for the
purpose of Development. For its operations solely in the UK the company is offering 30%
savings when coupled with the mentioned smartphone. It is evident that the market today are
driven by the smartphones and data connectivity. The business house should conduct a
preliminary market research to understand the requirement and the factors of the ecosystem.
With the use of frugal innovation or forming an alliance with a mobile handset maker the
business house must launch its own range of smartphone with extra data benefits so that looks
like a complete deal to the consumers (Mason, 2015).
4Com has its own customer base in the market and carry its own brand image. So
consumers satisfied with the services will definitely opt for the newly launched product of the
enterprise. The sales of the handset in the market are most in 49 to 99 euros. Giving special
emphasis to this fact the business should launch a product in this price ranger or cheaper and
should carry all the feature which the competitor are offering. Since 4Com is a small business
enterprise therefore it is difficult for the company to fund such a big venture. The enterprise can
collaborate with Binatone to cater the smartphone segment in an efficient manner.
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TASK 3
3.1 Assessment of objectives and Plans
Business objectives refers to the targets which a business have to achieve in a specified
duration of time. These objectives are influence by the vision of the company. 4Com wishes to
be the best telecommunication service provider in the country (Mitchelmore and Rowley 2013).
To achieve the vision the objectives will be formulated such as market expansion and customer
satisfaction.
The objectives of 4com are:
 Cost effective carrier services
 Customer satisfaction
 Better services then competitors
 25% Market share
The goals are further classified into three broad categories:
Employee's Vision
The goals for the employees of the organisation is to provide a good environment to work
in. the another goal considering employees is to hire the the suitable people in the organisation to
be the best in the market. The company has won an award of the “Best place to work” this year.
This proves that the rapid increase in the performance is the contribution of the dedicated work
force.
Customer Vision
It is very crucial to keep in mind the customers. Customer are the most crucial component
of the business. They help the organisation to attain its objectives. The business should always
focus on exceeding the expectations of the consumer (Olszak and Ziemba, 2012). 4Com provides
its consumers with cost effective carrier and data services which ensures that they get the best
quality services without making a hole in their pocket. The company must maintain a desirable
list of it clients for the purpose of staying in touch and for their retention with the company.
Shareholders Vision
Shareholders are the individuals and financial institutions who possess a certain amount
of ownership of the company in exchange for their finances. The shareholders want a company
to be profitable in the financial manner. They want a company to grow or achieve its targets to
enhance its brand value which will have a direct impact on them. The company have won
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