Business Strategy Report: Macro and Internal Analysis of BT

This report provides a comprehensive analysis of British Telecom's business strategy. It begins with an introduction to business strategy and its importance, focusing on BT's operations in the telecommunications industry. The report then delves into the impact of the macro environment on BT, utilizing PESTLE analysis to examine political, economic, social, technological, environmental, and legal factors. It also explores BT's internal environment through a SWOT analysis, evaluating strengths, weaknesses, opportunities, and threats. Furthermore, the report applies Porter's Five Forces model to assess the competitive landscape and incorporates the Ansoff matrix to outline growth strategies. Various business theories, concepts, and models are also interpreted throughout the report to provide a complete strategic overview of British Telecom. The report concludes by summarizing key findings and recommendations.

BUSINESS
STRATEGY

Table of Contents
INTRDUCTION..............................................................................................................................3
TASK1.............................................................................................................................................3
P1. Impact of macro environment on British Telecom industry. ...............................................3
TASK2 ...........................................................................................................................................7
P2. Internal environment and capabilities of British Telecom....................................................7
TASK3...........................................................................................................................................10
P3. Porter's five forces model of British Telecom....................................................................10
TASK4...........................................................................................................................................12
P4. Range of theories, concepts and models.............................................................................12
CONCLUSION ......................................................................................................................14
REFERENCE ................................................................................................................................15

INTRDUCTION
Business strategy is the process which helps in designing the various plans and policies of
the business. It the plan of actions and decision taken by the organisation for the accomplishment
of business goals and objectives. Every successful organisation requires proper and effective
planning without which they cannot make their business successful in the market (Akter and. et.
al., 2016). It is the business plan which consist of establishing vision and mission for the
company, giving preferences to the business objectives, making optimum use of financial
resources, etc. Organisation undertaken in this report is BT that is British Telecom which was
founded in 1969 and deals in telecommunication industry. It serves various products and services
like fixed telephonic line, mobile telephone, broadband connections, digital television, etc. This
report will explain the impact of macro environment on the organisation. It will also explain the
internal capabilities of the organisation and porter's five forces model will be evaluated in the
forces of given market. The later part of the report will consist of different theories, concepts and
model with their interpretation.
TASK1
P1. Impact of macro environment on British Telecom industry.
The macro environment of the business is concerned with those factors which are
existing outside the business organisation. This business environment is very large in size and
factors which affects the business under this, are generally uncontrollable. Also the success of
the organisation is largely dependent upon the capability of the of the organisation in order to
adopt and accept the changes in the company. The macro environment of the business
organisation has a greater impact on the success of the business, strategies and decision making.
These factors will also have a crucial influence on the performance of the of the overall health of
the business (Ansoff and. et. al., 2019). For this purpose, it is essentially important that the
British Telecom company regularly monitors the factors of external business world so that they
can operate effectively and efficiently.
The British Telecom, for evaluating the external or macro environment will use PESTLE
analyses framework. This analyses helps in evaluating the various tools and instruments in order
to examine the macro environmental factors. This concept is largely used by various business

organisations in order to keep regular track on the external environment. The following is the
PESTLE analyses of British Telecom :
Political factors : Politics has a strong impact on the operations of the company. There
are various political instances which are required to be taken into consideration. It is concerned
with the various rules and regulations of the government and stability of the government in the
country. This involves various factors that can positively or negatively affect the British
Telecom. It involves factors like taxation, corruption, labour policies, foreign trade, etc. The
higher rate of taxation policies will discourage the working of British telecom organisation and
restricts them to earn greater amount of profitability (Anwar and Hasnu, 2016). Furthermore, the
internet is a very essential part in present business scenario which helps not only in establishing
social relationships but also for the education. Apart from this, even if a person wants to apply
for job then also they will have to use the internet in order to upload the curriculum vitae.
Therefore, government must take cheaper policies for internet because it is to be treated as the
basic rights and interest of concern of living beings. It enhances the neutrality of internet for the
British Telecom because customers assumes that internet and information content must be
considered equal by the government of the UK and service providers. This has a greater impact
upon the people, service providers and the government of the country. Lastly, there will be
positive impact on the UK after the Brexit as higher rate of interest will minimise the liabilities
of pension.
Economic factors : Economic term is related to the worth of something in the context of
finances and profitability. Every company is established for the purpose of attaining profitability
and maintaining financial stability in the company. It includes various factors that will have an
significant impact on the British Telecom like growth, exchange rates, inflation, deflation,
disposable income, etc. For instance, the interest rates charged in the country will have a strong
influence on the individuals and their willingness for borrowing and investing in the country. If
their will be higher level of interest rate than this will have a favourable outcome on more
investments which will have positive impact on the British Telecoms growth in the future
(Chang, 2016). Also, if there is lower level of rate of employment in the UK, then this will
signify that there are more jobs and people will be interested in working at lower salaries and
wages as well. When people will work at low pays then this will have positive impact on

company as British Telecom will experience lower cost. The acquisition of EE telecom network
will also help the company in improving financial efficiency by minimising the cost.
Social factors : It is also referred to as socio cultural factors which will include the
shared belief, attitudes and population. There are various factors which will have a crucial impact
on the British Telecom company like demographics, various norms, characteristics, values and
customs. It also involves various tendency of population like growth rate, distribution of age,
income, social status, lifestyle, attitudes, etc. The impact of social factors is not only essential for
the British Telecom but also for the different business and marketing strategies of the company
(Evans and. et. al., 2017). People are highly using the British telecom services and they expect
the proper protection and secrecy of various information like financial statements, bank account
information, protection from sharing data, etc. For this purpose, British Telecom must
concentrate on learning about the various health standards, different responses on harassments,
value of environmental protection, etc. The British Telecom company must design their services
and policies by keeping in mind the different set of customers with different needs and
requirements like lower income group of people will simply wants basic telephonic services at
minimum price while the higher income group of people wants extra ordinary services like 4G
connection, roaming free, international calling rate, etc. so for such group the company must
design separate set of services and products.
Technological factors : In present business world, no individual person or organisation
can work without effective technology. It is emerging day by day and making the work easier by
improving the efficiency of the same. It involved various factors which are related to the
different kinds of innovations, inventions, research and development, etc. Being in the telecom
industry, The British Telecom will need to closely work with mobile phone industries in order to
insure that the services which they are planning can easily be provided by the mobile phones
produced by different companies (Grant, 2016). If the competitors of the British Telecom
introduces new technological services than it will have a strong impact on the company and
without any wait the company will examine the impact of new technology on its revenue and in
order to meet with the competitors the company will develop an alternative solution or new
innovative product or services which will be effective enough to compete with the rival
company. Furthermore, the profitability will also have huge impact on technology because if the

profits are higher in the British telecom then the company can invest the money in research and
development department.
Environmental factors : Environment is surrounded by various things which affects it to
the greater extent. They have become important aspect of every day life due to the limited
resources available, carbon footprints and increasing pollution in the country. Therefore, every
industry has norms for environmental protection. The aims of British telecom industry regarding
the environment is concerned with the protection of becoming the target of pressure groups and
boycotts due to lack of environmental conscientiousness. In British Telecom industry, the impact
of environmental factors like poor climatic conditions during winters will affect the delivery and
transportations of various products and services.
Legal factors : Legal aspect of the organisation is related to the protection of individual
in and outside the organisation. This is linked with various laws and regulations that aims to
prevent the individual and companies from unethical practises which may be prevailing in the
businesses (Lawton, 2017). There are various laws which are required to be taken into
consideration by the British Telecom such as employment laws, equal opportunities, standards of
advertising, customer protection laws, etc. Therefore, the company will adopt various data
protection act and laws so that privacy and confidentiality can be maintained. Discrimination
laws will have impact on British telecom which will provide an assurance that everyone is
treated fairly and experiences the same level of opportunities without any discrimination relating
to the gender, age, disability, etc.

Ans off growth matrix
Ansoff matrix is a framework which helps the managers in formation of certain strategies
that help in growth and development of an organisation. This matrix is divided into four
strategies which clearly defines how company is able to attain the success in long term.
Managers of BT group make use of Ansoff matrix in order to develop strategies that works best
towards the development (Leonidou and. et. al., 2017). Moreover this tool is used to evaluate
about the opportunities in order to increase sales against the product or service. The four
strategies used in Ansoff matrix are mentioned below:
 Market Penetration : The main concentration of this strategy is to improve the current
services which is provided by the company in the existing market. For instance, the
British telecom sell the fixed lines connection in the market of UK.
 Market development : Under this strategy, the company will sell the existing products
in the new market. For this purpose, the company will require to expand its operation in
the other countries (Linder and Williander, 2017). Therefore, the British telecom will
commence and expand its services to those areas where it is not operating currently.
 Product development : Under this strategy, the organisation will aim to sell new
products in the existing market. This is possible only when the company has strong brand
image and financially capable enough that the customers will attract towards the
offerings. For instance, the British telecom will introduce 5G mobile services in the
existing UK market.
 Diversification : This strategy is highly risky because the company will aim to introduce
new product into the new market. For instance, the British telecom can enter into retail
industry and sell the products and services of retail industry rather than
telecommunication in the new country. Then this will considered as diversification.

Source : Ans off matrix.2019
TASK2
P2. Internal environment and capabilities of British Telecom.
Internal environment refers to the elements which are present inside the organisation and
this has a effect on the decision of the company. The vision and mission of organisation, its
culture and leadership style are the considered as the part of internal environment. In order to
analyse the internal environment, BT group must should conduct SWOT analysis (Moseley III,
2017). This analysis is done to study about the changes hat have occurred in an organisation.
SWOT Analysis:
SWOT analysis is referred as a tool which is used by an organisation in order to know
about the strength and weakness which affect the internal environment and threat and
opportunities which affect the external environment. It is a planing process which helps the
company in overcoming of the challenges and determining of the factors which leads to the
success. This framework can be applied to the whole organisation or single department. Being
BT group is multinational telecommunication sector but despite of this has faced several
challenges in the past few years. Following is the SWOT analysis of BT group:
Strength Weaknesses
Illustration 1: Ans off matrix.2019

 BT group is a multinational
communication sector which offers
number of services like broadband
internet, IT services, digital television
etc.
 It is powerful brand having a large
number of customers base.
 BT group has strong distribution
channel which means the company is
having reliable suppliers for supplying
of goods and services.
 BT group is mostly dependent on the
market of UK and has limited presence
in other market.
 The company failed to tackle some of
the challenges of other company as its
marketing skills are not so good as
compared to other.
 Due to the emergence of new
competitors in the market, the brand
image of BT group is decreasing.
Opportunities
 Investment of BT group in online
channels create an opportunity to boost
up their sales.
 Launching of new services or products
helps in the expansion of BT group.
Threat
 Development of new technologies by
other competitors is a threat for the
industry.
 Availability of substitute in the market
offering similar type of services and at
nominal price is a major threat for BT
group.
VRIO Model
VRIO analysis is tool which helps in knowing about the capabilities which gives a long
term advantage to the organisation (Noe and. et. al., 2017). The four factors through which BT
group can do their evaluation is mentioned below:
Factors Valuable Rarity Inimitable Organized What is the
result?
Global
presence
Global
presence
- - - Competitive
Disadvantage

Broad band
services
Broad band
services
Broad band
services
- - Partially
competitive
Software Software Software Software - Competitive
advantage for
temporary
basis
Employees Employees Employees Employees Employees Competitive
advantage
Valuable: It defines as the factors which helps the organisation in achieving the goals
and objective efficiently and also within the specified time. Some of the factors of BT group are
mentioned below:
 Global presence: The company has very strong global presence which help in gaining of
the competitive advantage. By its major presence, company is able to attract large
number of customer base.
 Broadband service: BT group provides number of telecom services of which broad
services is also provided (Peng, 2017).
 Software: The software which are used by BT group are managed effectively in the
organisation in order to achieve the goals and objectives of the organisation.
 Employees: The employees of BT group are very valuable as they operate in such a
manner that provides assistance to the organisation and help in achieving of the set
targets timely.
Rarity: It refers to that factors of an organisation which are rare and has a competitive
benefits at the market. In context of BT group, global presence is not found as rare factor
because large number of competitors available in the market that are having a global presence.
Some of the rare factors of BT group are mentioned below:
 Broadband services: The service provide by the company is in accordance with the new
latest technology, thus it is hard for the rivals to copy them.

 Software: The software developed by BT group for execution of its operation is rare
because every time it is updated with technology and is developed keeping in view of
customers.
 Employees: The employees of BT group are rare as they have their own skills which
help the organisation in achieving the goals of an organisation.
Inimitable: It defines as those resources of the company which cannot be copied by other
competitors available in the market. This feature is not hold by the broadband services (Razak
and. et. al., 2016). As now a day many company is providing the similar service with new
technology.
 Software: This are designed according to the needs of organisation. Thus it is hard to
traced
 Employees: The employees of BT group are highly knowledgeable and have certain
skills because they are provided with the training on regular basis.
Organised: It refers to the elements which are organised in a manner that provides that
provides advantage to the organisation. Employees are the most organised resource of the
company because with the change in technology they are provided with the effective training.
Measures should be taken in context of global presence. Software and broad band services also
need to be developed with technology advancement in order to run organisation smoothly.

Source : VRIO Model. 2019
TASK3
P3. Porter's five forces model of British Telecom.
Telecommunication is very crucial in present business scenario, it helps new and
emerging technologies to enter into the telecom sector and telecom providers are flourishing at a
greater pace in UK. British telecom is a multinational company which provides numerous
services to the customers. The market share of the telecommunication sector has a huge network
providers operating in UK. In this, British telecom holds the highest position in the market of
UK. The total revenue which is generated by the telecommunication industry in UK is £54.7bn.
Out of every 10 individuals, 7 of them uses mobile phones for various purposes. 78 percent of
the total adult population uses smartphones (Take-up of communications services, 2019).
Illustration 2: VRIO Model. 2019