Strategic Analysis and Plan: A BT Business Strategy Assessment

This report provides a comprehensive analysis of British Telecom's (BT) business strategy, examining the impact of the macro environment using PESTLE analysis and Ansoff Matrix. It assesses BT's internal environment and capabilities through SWOT and VRIO/VRIN models, evaluating its strengths and weaknesses. The competitiveness of the UK's telecommunications sector is analyzed using Porter's five forces model, and Bowman's strategy clock model is employed to explore BT's strategic direction and options. The report culminates in a strategic management plan with tangible objectives, highlighting BT's strategic capabilities, including its workforce, technology, CRM, and data centers. The analysis includes critical evaluations of BT's strengths and weaknesses, considering factors like market dependence, accounting scandals, and competitive pressures.

Business Strategy

Contents
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................2
P1 Analyze the impact and influence the macro environment has on your chosen organization
and its business strategies............................................................................................................2
Brief introduction of BT..............................................................................................................2
M1 critically analysis the macro environment and how it determines your chosen
organization’s strategic management decisions...........................................................................7
Task 2...............................................................................................................................................9
P2 Conduct an assessment of the organization’s internal environment and its capabilities........9
M2 critical evaluation of the strengths and weaknesses of an organization’s internal
capabilities, structure and skill set.............................................................................................14
Task 3.............................................................................................................................................16
P3 Evaluate the competitiveness of UK’s telecommunications sector using Porter’s five forces
model.........................................................................................................................................16
M3 devising appropriate strategies............................................................................................18
Task 4.............................................................................................................................................19
P4 Using Bowman’s strategy clock model, analyze the strategic direction and options
available for chosen organization..............................................................................................19
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................21
Conclusion.....................................................................................................................................23
References......................................................................................................................................24

Introduction
Technology is growing everyday with new inventions and innovations and these technological
advancements create lots of challenges for the businesses. The businesses which are capable
enough to tackle these challenges by its strategic capability can run or can sustain for long run. In
case the businesses are not capable enough to handle the challenges they face difficulties to
survive. Businesses need to frame a business strategy which works as tool to give potential or
strength to overcome the challenges and to make stand in increasing competition. The present
study would be focussing on the different aspects of business strategy with respect to British
Telecom which is one of the leading market players in United Kingdom.
1

Task 1
P1 Analyze the impact and influence the macro environment has on your chosen organization
and its business strategies.
Brief introduction of BT
British Telecom is a multinational telecommunications service provider company that deals with
fibre, fixed and mobile and TV in UK and across 180 countries worldwide. This company has
established in 1969 and now working globally with its 102,000 employees. In terms of revenue
generation the last year revenue was about 24,062 pounds million (About BT, 2018).
At Glance;
Parent company BT group plc
Category Mobile service provider
Sector Telecommunications
Slogan Connected world; Bring it all together
Unique selling point Oldest telecommunications organisation in world
2

PESTLE model for environmental analysis
PESTLE analysis represents the macro environment factors influence on the business;
Figure 1: Pestle Analysis
(Source: Author)
Following is the PESTLE analysis for BT:
Political: British telecommunication industry is highly regulated industry and it needs to comply
according to the government rules & regulations such as Brexit is beneficial for BT because the
higher interest rates helpful in reducing its pension ability (Irwin, 2015).
Economical: Economical decision as synergy through acquisition of EE really helps for
improving cost efficiencies and low churn rate. Telecom industry is increasing its scope by the
economic decision of the government it has many opportunities for merger & acquisition (Irwin,
2015).
Social: The free bundling of products for broadband consumers is providing product
differentiation at superior level. Increased growth of living styles of people gives growth to smart
phones, wearable and smart devices gives customers a connected mind set.
3

Technological: Technological advancement works as wonder for telecommunication sector if
applied positively as a result it provides investment in high speed network and various alliances
for 5G development (Iden and Methlie, 2012). Keeping capitalization on cloud of clouds service
by BT global services division would be helpful for BT for attaining economies of scale.
Legal: There is legality in every sector of business as it is necessary to operate fairly; ruling by
Ofcom, the regulation of UK is providing a path to be separate of Open reach from BT.
Environmental: Every organisation has to work in a way as not to hamper the ecological
environment and that is why BT has taken initiative for reducing carbon emissions.
The other initiative is taken as switching to 100% renewable energy.
4

Ansoff growth vector matrix to analyze the BT’s strategic positioning
This matrix is a strategic planning tool which gives a framework to help executives, senior
managers and marketers devise strategy for growth.
Figure 2: Ansoff Matrix
(Source: Author)
Penetration
It is the strategy where the organisation tries to sell its products or services that are current to the
current customer. The BT use penetration strategy in various ways such as; by changing pricing,
by adding minor features, changing the packaging or highlighting alternative uses (Sveiby,
2001). This strategy usually adopted by the company when it wants growth strategy for an
existing market.
5

Product development
It is the strategy where an exactly new product or service is introduced by the organisation in
terms of sustaining in the market to overcome the competition. This kind of strategy is adapted
when company enjoys good market share in existing market and that is why it needs to introduce
new product for expansion purpose (Teece, 2010). BT is working with multi brand strategy as it
is offering TV, internet, mobile and landline services to the customer.
Market development
Introduction of current product in new market or in different market is very well known strategy
of the business to grow or to expand (Teece, 2010). The market can be national, international or
local to introduce the existing market. It is also a growth strategy as organisation wants to
increase its market share. BT’s acquisition of EE is part of its growth strategy that is big reason
for increased revenue.
Diversification
It is the strategy where an organisation introduces a very new product or services into new
market. BT has introduced its new customer handling services at new base in UK that is a part of
its growing strategy.
6

M1 critically analysis the macro environment and how it determines your chosen organization’s
strategic management decisions.
BT is operating in diverse external political environments at both local and international level.
The UK’s government maintains good relationship with both neighbours and the other countries
with the trade link or the other activities. The political power of UK wants stability and security
in terms of healthy relations with other countries and these kinds of political efforts provides
advantages to the BT but on the other hand the political issues that arises in the country affects
its relationship with other countries and the business of BT in negative manner (Irwin, 2015).
UK is developed economy and that is why the buying or purchasing power of the people here is
really high and that is why the prices of telecommunication sector is regulated which is good for
the customer. Transforming economies of business and globalisation helps BT to generate more
revenue and expanding its operations but it also increases competition and the other competitors
are also utilizing the economic benefits.
On social basis also BT is very much developed country and at least one gadget is available per
household, this social factor promotes BT to think in designing or introducing new product or
services so it can enjoy more customer base but with the more utilization it also creates some bad
influence in social terms as the youth are using more phones more negative influence can be
occurred and only a single incident can hamper the entire business of BT (Dollinger, 2008)
Technology is advancing day by day and this advancement enables BT to have new improvised
products and services with more effective technological changes but this advancement creates
more competition and competitors.
Legal environment includes the legal compliances which BT needs to follow such as usage of
phones and regulation regarding the telecommunication sector these compliances helps to reduce
negative incidents but these compliances also hamper the business as some policies does not
work in favour for BT.
7

Environmental factor works for protecting the environment from the waste as it puts some
regulation in order to have safe environment BT that is why has introduced many activities and
project regarding that but on other hand these issues can be the reason for stoppage of some
services which are profitable in terms of revenue but harmful for environment.
8

Task 2
P2 Conduct an assessment of the organization’s internal environment and its capabilities.
Explain what strategic capability means
A company’s competitive position is enabled by its capabilities for performing in differentiated
way at high level. These abilities allow organisation to apply or to implement strategies for
sustaining in the market for long run purpose.
BT’s strategic capabilities;
Workforce Technological CRM Data centres Unified
communication
Flexibility at
workplace is
very important
and BT has very
flexible
workplace
(Schuler, et.al.
2011)
It is very capable
to perform its
operation in
terms of usage of
advanced
technology.
BT has great
customer
relationship
management as it
has various
contact centres
which are
efficient in their
work.
It works for its
energy efficiency
improvement
program so can
perform in better
way.
BT
communicates in
unified way it
means it has one
voice that shows
unity at every
level and
locations.
.
It uses
conferences at
every level and
collective basis
that enhances the
creative thinking
BT is integrating
network and IT
services.
All the internal
people are very
well trained to
have smart
customer
interaction to
give positive
perception about
the organisation
(Raman, et.al,
2006).
It encourages
lower carbon
hosting and
storage.
It uses video
conferencing to
communicate
with every
location and
internal people
9

Workforce is
very active and
put efforts to get
quick solutions.
It enables IT
audit as
professional
service which
provides scope
and area for
further
improvements.
BT’s application
generally has low
carbon managed
system.
BT has unified
infrastructure
services so no
clashes can be
emerged because
of this (Dutrénit,
2000)
Field force
automation.
10