Business Environment Analysis of British Telecom (BT) - Report

This report provides a comprehensive analysis of British Telecom's (BT) business environment. It begins with an introduction to the concept of business environment and its impact on companies, followed by a macro-environmental analysis using PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) factors, examining the external influences on BT's operations. The report then delves into a micro-environmental analysis of the British telecommunications industry, utilizing Porter's Five Forces framework to assess the competitive landscape and industry attractiveness. An internal environmental analysis explores BT's resources, capabilities, and core competencies. Finally, a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis synthesizes the findings, providing a strategic overview of BT's position and recommendations for future success. The report highlights the challenges and opportunities presented by the dynamic business environment, including technological advancements, economic fluctuations, and regulatory changes. This report is a valuable resource for understanding the complexities of the telecommunications industry and BT's strategic approach.

Business
Environments

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Macro environmental analysis of British Telecom............................................................1
2. Micro environmental analysis of British telecommunication industry..............................4
3. Internal environmental analysis of British Telecom..........................................................8
4. SWOT analysis of British Telecom..................................................................................10
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
The term business environment can be used for all the internal and external factors
which affects the functioning of the particular company. The supply, demand, customer
management in the company are affected due to business environment. All the political , cultural,
legal condition etc are included in business environment. The business environment is not static
or fix it changes after a particular time period and the any change in environment of business
cannot be predicted (Kumie and Gilliland, 2016). The business environment of all the places are
not same it changes from lace to place or from culture to culture. The political conditions of UK
or different form Australia so the way of operation of business will also be not same for both
these countries.
British Telecom company is a well-known Telecom company in UK. Around 180
countries across globe it provides its services (British Telecommunications plc , 2017). In the
UK it is one of the largest provider of fixed-line, mobile and broadband services. In his report
pestle analysis will be done of British Telecom company in order to see the impact of external
environment on this company. Also in order to assess the attractiveness of this industry porter
five forces framework will also be conducted in this report. Further more in this report the
internal factors such as resources, capabilities ,core competencies etc analysis will also be one.
This report will also conduct SWOT analysis of this company.
1. Macro environmental analysis of British Telecom
British Telecommunication company is also known as BT, in the UK it is one of the
largest company. In the year 1984 it was privatized and in more than 170 countries around the
globe it operates. The networked IT services, local, national and internal Telecommunication
services are the main activities of this company. The broadband internet services is also provided
by BT to its customers across globe. For the Olympics and Paralympic games that held in UK ,
2012 BT was the official commination service partner. In the coming year it wants to provide
bets communication services to its customers .
In order to service the impact of external environment on British Telecommunication company
pestle analysis will be done.
Political factors – For this industry of Telecom the political environment is full of risk.
In a diverse external environment BT group operates. At both international and local level it
proved its service. The business environment will be affected due to government regulations and
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legal factors. Suppose if there is any change in the laws of government then Telecom industry
also need to implement that polices or laws. The safety regulations, tax guidelines , political
stability etc ear address in the political factors in context of the company. The national trad
barriers, network licensing, regulations etc are some traditional political risks for BT group. The
network operators are mainly affected by this and on the equipment and the service provider the
effects that is felt is less (Špaček and Vacík, 2016). In the favour of Telecom industry the one
factors that works is the privatization and deregulation. In the process of globalization the
freedom was given to this industry . In last some years there are number of threats that have
been merges for this company .There is a rise of political risks. In this sector the control of
government is also high. For the Telecom industry the major sources of political pressure are the
political risks that is there in national security and human rights issue. The measures have been
launches by the government across globe in order to monitor and control communication that is
encouraged by political and security reasons. Against this company large number of countries
have maintained trade barriers. BT group is one of the highly regulated industry all the polices
that is been implemented by the government of UK is followed .
Economic factors – On the industry of Telecom the economic factors such as inflation,
growth rate and interest rates have a great impact. In the context of Telecom industry such as
British Telecom the role of economic factors is essential. This sectors is been hurt deeply due to
recession in UK. There will be an impact on the company due to examining of economic
issues .The factors such as rates of unemployment and polices, inflation , economic growth etc
are included in the economic factors. The recession that is faced in UK due to this various
employees lost their job in Telecom company. So ,a major loss was faced by the company as
they were not able to afford so many employees during that time. As the purchase of Telecom
products was less during that time period. Many employees that are working in BT group loss
their job during recession in UK. But now in the year 2016 thins gave improved this company
sells are increasing so it is providing job opportunities for population of UK. The people were
not spending on the Telecom during this the period of recession (Business Environment of BT
Group, 2017.). There was a cut-down on manliness and the slow growth of cellular services was
there during this period. But now the customers are spending back on the Telecom industry as
the condition is between now in UK. Around the globe things are now changing. The customers
are now using Telecom service again.
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Social factors – The great influence is there on this industry due to social cultural factors.
By the elements such as demographics of customers, limitations of customers , lifestyles attitude
etc the socio-economic factors of their company can be analysed. The another medium to interact
is pored to customers due to emergence of social working platforms such as Facebook ,
twitter .In the work and entrainment connectivity is essential. There has been growth of the
internet based services. For fun and business purpose a number of people are making use of
internet. A very good connectivity is need for YouTube , video remaining services etc. There has
been growth of 4G network as people now prefer excellent connectivity (Vahlne and Johanson,
2013.). On their travel more and more people prefer to stay connected. Today more than 8
million people in UK are looking at their smartphones and mobile devices. There has been
growth of mobile computing and in the smartphones and tablets there are some features or apps
that cannot without a good connection. In order to track their physical activity many people area
also using wrist bands. This is due to the reason that people have become more conscious about
their health. So, the BT group need to improve their procedures of operation and loin order to
serve better to its customers it need to adopt IT.
Technological factors – The advancement in technology, life- cycle of technologies ,
the role of internet etc are included in these factors of technology. On this industry the impact of
the technology can be both positive and negative. On the technology this entire BT group is
based on (Rosenbusch, Rauch and Bausch, 2013). So, there is a deep influence on the company
due to change of any technology. There have been rise of mobile computing. The things are
changing as IT is used in all the work that is been done in this company. There have been
increase in the sales of smartphone and tablets . And without a fast connection both smartphones
and tablets cannot be used. The company is also launching 5G network and among the people
there is a lot of excitement due to this launch by the company. For the Telecom provider the
major opportunities that is been given rise is in the area of IoT. By using this smart cities,
wearables etc will be connected at its core. The things will be taken ahead by 5 G networks that
will reduce price fort the service providers and also the connections will be speed up from this.
The Telecom industry is greatly affected due to this technological forces .
Environment factors – This company is also surrounded by the environment related
factors. In order to excel in the market in the great way the company need to take into
consideration the opinion of public (Kuratko, Hornsby and Covin, 2014). The factors such as
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climate change, pollution and recycling laws , management of wastes, usage of eco-friendly
products etc can also affect the company. In order to reach out to the target customers global
warming and climate changes affects this company. The change in climate affects the new
technology that is been developed in this area. This company providers its customer with the best
quality services at a lower price. Under competitive and rapidly changing environment the
operation of Telecommunication company is taking place. Every ears a large part of the e-waster
is been produced from smartphones. By both services and providers of equipment e-waste is
generated. So, this company is now focusing on management of waste and also to reduce
environment footprint. The carbon intensity is been reduced by most of the provided. They are
also investing money to intensity of carbon. By 2025 Verizon is the in the process of
implementing its extra 24 MW of green energy. The company can also make use of devise
recycling in order to reduce the waste that is been gathered in this industry. The company can
also invest in recycling and also they can also reward they customers who recycle their devise
instead of throwing it into rubbish(Kumie and Gilliland, 2016).
Legal factors – There is big risk that is been provided to the Telecom providers through
legal compliance. The laws that is been made by government of UK need to followed at this
company. The laws such as discrimination law , health and safety law, consumer protection law
and copyrights and patent law need to be followed. All the laws related to employment laws and
several other laws also need to be followed at this company. British Telecommunication have
impact due to legislation factor. The environment of business of Telecommunication area gets
affected due to certain laws.
2. Micro environmental analysis of British telecommunication industry
British Telecommunication is the largest provider of fixed line, mobile and broadband services in
the UK. This is one of the most famous brand of Telecommunication it operates around 180
countries in all over the world. This company also provides the television and IT services.
Porters five force process can beused by the British Telecom UK to analysis competition
of business. It is a tool to analysis competition of business. Porters five factors is based on
industrial organisation economics (Dobbs, 2014). In order to compete effectively in the
marketplace British Telecom has to understand the factors related to his industry of market. To
study the industry and market it is required for British Telecom to use porters five force
investigation. For understanding the competitive positions and micro environment forces British
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Telecom use this tool. These forces will affect the firm position and decides its profitability
level. This process determines the ability of British Telecom to earn and evaluate the rate of
return on investment. This is useful because for British or any organisation to understand the
forces in company environment and industry that can affect profitability of business.
These five factors for British Telecom are as follows:
Bargaining power of supplier: This force determine the power of supplier's on the
industry. As supplier increases the cost of their row material than company will affect.
Investment cost of company will increase. British Telecom is not so much affected from this
factor because there are availability of many Telecom supplier. So if one supplier increases its
price of material than British group will deal with other supplier who provide the material with
low cost and high quality. British group uses standardization process and data sheets process so
this process helps the mentioned organisation to prevent form forward integration (Haucap and
et.al., 2013). Another plus point for the British group is that there is lack of differentiation among
the suppliers. Means suppliers also have the compition with each others so when one supplier
increases his price at same time another supplier reduces his price to attract the companies.
Barging power of customers: This model is used to analysis the competitive
advantageous. When a new entrant is come in the market he provides the product at very low
price that time the customer have power of bargaining. This factor can affect the productivity and
benefits of mentioned company. Because in this the organisation have risk to lose the customer.
If the number of customers are decreases the profit of organisation also decrease. Another thing
is that buyer has all information about the product cost and other companies. Customers have so
many sources from there they can have full knowledge about the product cost. Customer have
power to choose another company to buy the product they can go with the low price companies.
It can affect the industry by increasing the prices and reduce the quality of product. As this
power of buyer is increase the profitability of mentioned organisation is affected. So this is factor
which really affect the British Telecom.
Threat of new entrant: When a company analysis threat of new entrant there are two
main issues occurs. First issues which is occurred in the British Telecom is the impact of market.
When threat is high than mentioned group has to hold down their price.(Sharma., 2015) Means
whenever new company come in the market than mentioned company have to hold down or
boost their prices. And second issue is that new entrant has to face and his strategy will be
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formed accordingly. The main entry barriers in the Telecommunication market such as high
license fees, rapid technology setup cost etc. Strong brand positively affect the British Telecom.
Apart from this high capital requirement also affect the mentioned company. High capital
requirement means spend a lot of money to in order to compete in the market.
Advanced technology make it difficult for new competitor to enter the market. British Telecom
is one of the most famous brand in UK. So it has low risk of new entrant because British
Telecom already have new technology. In Telecommunication sector there is low risk of new
entrant barriers because to enter in this market new entrant have to follow so many rules and
difficulties. British Telecom is already famous company with good reputation so this company
will not affect so much by new entrant. British Telecom the power of locality of his customer's.
Client always go with high and famous brand name. Customer will not belief on new entrant
they take some time to belief on another brand. So it is very difficult for new entrant to build a
good image in the market.
Threat of substitute products: This factor can affect the business of British Telecom.
There are so many companies which are providing the same product with the same services. So
this factor can affect the benefits of mention company because when same product is available in
the market with same services than customer try to reach to them. Substitute provides the same
as alternative for the original product. There are some factors such as the quality provided by
substitute, the customer willingness to change, the price for substitute and switching cost are uses
to determine the level of this threat.
But this threat can not affect so much the business of British Telecom because the customers
have knowledge about the product they know the quality provided by the substitute is not
guaranteed. British Telecom providing the products at higher price but still customers prefer to
get the product from this company.
Competitive rivalry : In this process the company looks at the number and strength of
its competitor. In this process the company determine how many rivals they have, how the
quality of their product and services compare with the organisation.(Markman., Gianiodis and
Panagopoulos., 2016) After determining all these factors mentioned company try to implement
some changes in their product cost and process of production. Vodafone is most competitor of
this organisation. Vodafone is most famous Telecom company of UK.
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This company operate with lower price and more exciting services. This company gives
the tough competition to the British Telecom. (Adi, 2015)This trends to drive British Telecom
profitability down. It also suffers from high exit barriers. By this affect the British company
suffers from low benefits because to give the competition to other companies the mentioned
company trying to decrease their product price. Apart from this there are so many small and
Chinese companies which are directly affect the growth of British Telecom. Chines companies
generally providing the same product with advance features to the customers at very low price.
When customer feel that they are not getting good product from you buyer can go elsewhere.
This process increases the competition in the Telecommunication market.
So by using above factors British company can analysis competition of business. By this
process the British company can get its benefits level. As we mentioned above there are two
major factors which really affects the growth and benefits or British Telecommunication are
bargaining power of customers and competitive rivalry. Bargaining power of supplier affects a
small company's. British Telecom is a big multinational company so it is not affected from
bargaining power of supplier. Because this company has a good relation with financier and other
supplier all over the world. (ohnson., 2014) So to increase the growth this company should
overcome the two major problems that are competitive rivalry and power of customer's
bargaining.
To over come the problem of competitive rivalry the mentioned company should firstly
analysis all the factors about its competitor. After analysing about competitor mentioned
company should try to offer some discount system to attract their customers and to get them
back. To give the competition to the Vodafone the mentioned company should focus on deliver
chain and new product. By launching the new products with different features mentioned
company can attract their customers again. To compete with Vodafone this company have to
focus on high quality services.
Apart from this some discount and sell system on the special occasion can also attract the
customers. (Abubakar and Bello, 2013)As British company provides products on the higher rates
so customers are trying to go with other companies so to attract the customers and to bring them
back mentioned company should try to focus on productivity cost and online marketing.
Online marketing is also a simple and good way to increase the number of customers. By using
the social media such as Facebook, twitter this company can improve its marketing skills. By
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advertisement of its product this organisation can improve the number of customers. Apart from
this organisation can attract the customers from TV or FM advertisement.
New technology are takes main parts in the Telecommunication market. British Telecom
must use the new technology and process for the product. Besides this by improving the
management this company can increase its benefits. A good management is very necessary for
success of company. Some management changes are very necessary in the British Telecom to
compete in the industry. A good management will provide the all services to the customers.
Customers satisfaction is very necessary for the growth of this organisation.
3. Internal environmental analysis of British Telecom
Core competencies
In comparison to rival companies the analysis of competencies will help to establish the
activities or skills of the company in greater ways. The unique and different aspects of the BT
group will be revealed through analysis of competencies. It is good and better due to is unique
aspects (Galperina and Klen, 2017). The aspects that affected the competitive advantage of the
company will be focused by the management. The mode of operation of BT group provide
details of various aspects that make its competitive in this industry. The level of services that is
been given by their company to its wide range of customers is excellent and efficient. The
efficient services to retails, international and wholesaler consumer is ensured by the BT group
business structuring. The requirements of the target group is fulfilled through the services that is
been given by this company. For an instance there is a bespoke solution for its business
customers .It also has BT trade space portal for business customer. For the BT group technology
is a critical key to competence. For an instance in order to speed up the speed of internet and
efficient data service it introduces copper and fibre access in the 21 st century. BY this the faster
access to network is been given to its customers. In the UK an across the globe its wireless
technology is also popular (Cohen and Kietzmann, 2014). The some of its wireless technology
are BT open zone and BT fon. In order to cope up with environment related issues this company
also developed its smart metering technology. By using this all the carbon related issues were
solved and also the competitive advantage were also gained in comparison with other Telecom
companies .The key competencies of this company are the in marketing, providing facilitating
services to its customers and strategic alliances .By unique performance all these are
characterised thus putting this company ahead of its rivals. The leader of this company make sure
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that more uniqueness and distinctness is there in the company. This will help the company to
develop more competencies which will increase its comparatives.
Resources
In order to add its competitiveness the resource audit will help to recognize the resources that is
available for business by the company. In this basically the finance, human, intangible resources
are included (Charter, 2017).The strategic capability both BT group will be defined from
resource audit. The physical resource base of BT is expansive. AS across the globe over 21270
cities its IP network is connected. Currently the ADSL copper broadband is in circulation and
around 54% households it had been reached. In the coming year its coverage area will be
increasing . The fibre optic is the most optimistic physical resource of this company. It is the
superfast fibre based broadband in the UK. This company also have a good marketing strategy
that help to reach out to its target customers. For internal and external use it has well-laid system
of IT. All the needs and requirements of customer are taken care by this company. The activities
of production and management is done internally and for external use it links BT to marketing,
supply and expansion.
The competitiveness of any company increase if it have effective human resource
management team. An expansive, dedicated resource management team is there in this company.
Based on different skills and knowledge the recruitment is been given to people in this industry
(Boons and Lüdeke-Freund, 2013). This company develops win-win relationship with the
employees in which both employees and the company will be benefits. The growth opportunities
to the employees is given by this company. This company has the lowest employees turnover.
The feedback to employees regarding their work and performance is given by BT group. The
flexibility is given to its employees to work form home or any other location. The constant
services delivery is been provided by this company (Bocken, Short and Evans, 2013).
In order to execute the strategy of businesses the financial resource are needed. In a
super-fast fibre BT group is investing about 2.2 bn pounds. In defining its financial resources the
positive picture of this company is of great importance for its investors. The funders are being
attracted towards its investment portfolios as it is quite impressive. In order to deliver a
businesses' strategy intangible resources are of great importance. The reputation of BT in the
market is good. In the world around 170 countries it is operating. This company deliver high-
quality services.
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Skills and capabilities
In this company the highly talented and skilled employees are working and also te
delivery of services that is been given to the customers is also excellent. The capability of this
company is that it know what will be preferred by the customers. In order to find out the ends of
customers the promotions done by using social websites such as Facebook ,twitter etc .By doing
this the needs of customers are discovered easily (Bacaj, Çelo and Dumi , 2017).
4. SWOT analysis of British Telecom
in swot analysis we discuss about company's strengths, weakness, opportunities and threats
Strengths: British Telecommunication is the UK's one of the best lead broadband
internet provider
 Its brand image is so strong in all over the world it provides Telecommunication services
more than 170 countries. Because of high level production it builds good reputation in
UK's market it make large number of customers.
 British group focuses on internal and external customers equally so it has strong cash
flow from operations. Clients are loyal to British group this power of British group
continuous increase its image in market. By focusing on internal and external customers
it builds strong base in UK.
 British group attracts its customers by providing the wide products and service range. In
addition, British group offers different services to their customers such as broadband
internet, digital services, it services etc. by providing these all different types of services
British group improves its productivity and benefits in business. This group has the best
employee in its establishment. Employees of these groups are providing best services to
the customers. British Telecommunication provides the unique products. By providing
unique product the British group is distinguished from competitor company.
Weakness: British Telecom is depended only on UK market. British Telecom has limited
liquidity.
 High staff turnover is also a weakness of British Telecom. Valuable and experienced staff
left the job due to high work load and pressure. Some time employee does not satisfy
with job conditions in mentioned undertaking so they left the job. When employee is
unhappy with his/her job he will not performance at high level. This will decrease the
benefits of this organization. So the lack of good staff member is main weakness of this
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