Business Strategies in the Telecommunication Sector: A BT Case Study

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BUSINESS STRATEGY

Table of Contents
INTRODUCTION............................................................................................................................. 2
TASK1............................................................................................................................................. 3
ANALYSIS OF THE MACRO ENVIRONMENT AND DETERMINATION OF ORGANISATION’S
STRATEGIC MANAGEMENT DECISIONS IN BT............................................................................3
TASK 2............................................................................................................................................ 8
EVALUATION OF THE ORGANISATION’S INTERNAL ENVIRONMENT AND ITS CAPABILITIES......8
TASK 3.......................................................................................................................................... 12
ANALYSING THE TELECOMMUNICATIONS SECTOR..................................................................12
TASK 4.......................................................................................................................................... 16
UNDERSTANDING AND INTERPRETING STRATEGIC DIRECTION...............................................16
CONCLUSION............................................................................................................................... 21
REFERENCES.................................................................................................................................22
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INTRODUCTION
Business strategies in telecommunication sector are playing a vital role in the global market. It
has become the most significant and influential in global industries. The technologies are
increasing day by day and the telecommunication sector is one of the sectors which have grown
at a rapid pace. There are many telecom companies which have shown a drastic change in the
telecom sector and made things easy to communicate with people. The British Telecom Group
(BT) is a multinational European telecom company in the United Kingdom that deals in fiber, TV,
and mobile across 180 countries globally including the UK. BT is also a well-known telecom
company which is dealing worldwide (Summanen and Pollitt, 2018). The challenges and
Strategies of BT will be discussed in this assignment. Learners will come to know about the
internal and external environment and organization's capabilities in order to analyze the
strategic decision making in management with the help of PESTLE Model and Ansoff’s growth
vector matrix that will help to analyze the strategic position of the organization also. The
organization's strengths and weaknesses will be discussed and will analyze the strategic
capabilities by applying the VRIO model in BT. In addition, the devise appropriate strategies will
be analyzed in order to improve the competitive market of organization and will interpret the
strategic direction.
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TASK1
ANALYSIS OF THE MACRO ENVIRONMENT AND DETERMINATION OF
ORGANISATION’S STRATEGIC MANAGEMENT DECISIONS IN BT
BT Company has developed in a wide range in order to provide the best and easiest services to
the customer. As per the study, it has found that the telecom sector increased the literacy rate
also in order to think about equality between genders, social class maintenance, and different
age groups in the demographic environment. Apart from this, it has shown the great growth in
inflation rates, exchange rates and interest rate in the economic market. A company is required
to analyze every possible aspect for the development of the company (Jenkins and Williamson,
2015). The main task for the company is unknown challenges that can exploit the well-prepared
strategies of the company can fall down the company with losses. Apart from this company
should have the proper knowledge and direction to grow so that the company can deal with
challenges as well as can utilize the knowledge and resources at the right time. Challenges of
the company can be analyzed by PESTLE analysis and the proper knowledge to use resources in
a particular direction can be analyzed by Ansoff’s growth of matrix.
Figure 1: PESTLE Analysis
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[Source: Abbott, 2015]
PESTLE analysis of BT
There were multiple challenges faced by the BT company in Political, Environmental, Social,
Technological, Legal and economic environment that impacted the whole strategy of the BT
initially. The strategies to re-position the company in telecom sector can be understood by
PESTLE analysis.
Political Environmental
The UK maintains a very good relationship
with several countries in order to maintain
humanitarian activities and to ensure political
stability with its strategic partners. BT
company can take advantage of these political
policies in order to maintain stability
worldwide and secure the company's future in
other countries.
BT company mainly focused on the reduction
of carbon emission and took the initiative as
well. Now the company is generating 100%
sustainable energy (Atighechian et al., 2016.).
Social Technological
BT came up with the strategy to provide the
superior quality to broadband customers by
providing the free bundling products and also
it has shown the growth in smartphones and
smart devices that gave the consumers a
‘connected mindset'.
BT invested for 5G development in order to
provide the high speed of networks to the
customers and Now it is capitalizing for make
services more easy by ‘cloud by clouds’
services that will help to increase the
economic scale of BT in future.
Legal Economical
Telecoms operator Ofcom ordered to separate
BT legally from the division of its Openreach as
the Openreach will be a distinct company
As per the new strategies of BT, the company's
scopes are increasing in terms of providing the
telecom services to the customers and
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within the BT group that will ultimately
Increase the company’s Infrastructure.
somehow these strategies are also increasing
the chances of merger and acquisition. The
recent mergers and acquisitions are EE in
mobile network operations, wire one
Communications in video conferencing
support Expertise, Ufindus in online business
directory segment (Zurkirch, and Reichart,
2017).
ANSOFF’S GROWTH MATRIX MODEL
IT is also necessary to decide the direction for growth and knowledge of the business. That can
be analyzed by Ansoff’s Growth matrix.
Figure 2: Ansoff's Growth of Matrix
[Source: Mahajan, 2017]
1) Market penetration- it mainly focuses to increase the sales of an existing product in the
existing market. This is quite easy to sell the product in the existing market to those
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customers who didn’t use the product yet. It will be beneficial for BT to sell the product
to new customers and will attract the customers as well.
For example; Company can decrease the product's amount in order to increase the sales
Volume. This will attract the customers and it will be the opportunity to build a new
relationship in the market with new customers.
2) Product Development- Product development is all about finding new markets for
existing products. BT should find out the new markets to sell the Existing products that
will provide an opportunity to expand the business in a new place and develop the
range of strategic partnership.
3) Market development – when a company starts selling the existing products in the new
market is market development. This strategy is quite profitable for customers. If the BT
will develop in the market then it would be the expansion of BT Telecom Company
regionally as well as internationally (Gurcaylilar-Yenidogan and Aksoy, 2018).
For example; Nike and Adidas started working with the Chinese market for expansion.
4) Diversification- Though it is really tough to create an existence in the market because
diversification is all about a new product in the new market. This is quite risky in order
to develop the product. Diversification has divided into two parts.
 Related diversification- It creates the same range of products in one line. One line
products involve the same category of products like electronic products including
washing machine, Air conditioner, etc.
Example- Company is selling the Televisions only in the market.
 Unrelated diversification- it has a wide range of products in the market.
Example- Company is selling Phones, TVs, Wallets, watches and all other kinds of
products in the market.
BT has expanded its business in a wide range with related diversification. Now BT Company
should focus on unrelated diversification in order to expand the business in a new market with
new products (Dawes, 2018). Unrelated diversification will help the company to expand in
different segments also and customers will easily be attracted towards their new products in
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the market because it is well-known brand and this can increase the profitability in unexpected
ways.
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TASK 2
EVALUATION OF THE ORGANISATION’S INTERNAL ENVIRONMENT AND ITS
CAPABILITIES
This is not important that the external strategies only affect the business but also it gets
affected by internal strategic capabilities. Internal strategic capabilities include Physical assets,
financial and human resources. Physical assets of the company will always be tangible like
finance, plant, and people where the Brand BT, relationship with customers, 4G spectrums are
non-tangible assets of the company. Apart from this, the abilities and skills use by the
employees and optimum utilization of resources in business activities in order to provide the
best services to the customers are the internal strategies to develop the Company. There are
some competitive advantages also that can be performed within the organization. This can be
evaluated by the VRIO framework.
 Value- BT is a well known Multinational Company. It is mandatory to check the value of
resources used to create a new unit in a company (Lopes et al., 2018). BT is quite
focused these days in order to maintain the value of resources in the global market.
 Rare- It identifies the unit innovation’s value and cost. It finds out that innovation is rare
or not. BT is concerned with its new innovations in the market in order to expand the
new products. This includes the proper research of the market in order to know about
the market competitors and new entrants so that the value of innovation is rare or not
can be identified.
 Imitate- it has found that many companies are imitating the products of well-recognized
companies. So it is becoming quite difficult for the companies to change the strategies
over and over again. The company can make changes in the strategy of price and can
advertise the brand awareness in order to stop the imitation in the market.
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Figure 3: VRIO Framework
[Source: Sánchez, 2018]
 Organizational competencies- This identifies the level of exploitation in order to
innovate new units from the available resources. Execution team and their strategy
decide the capability to exploit the potential of resources and ultimately provide the
result to take action in order to create new strategies for resources.
SWOT analysis of BT
SWOT analysis is quite helpful to find out the Company's Strengths, Weaknesses, Threats, and
opportunities (Ahmed, 2016). If the company is well aware of these factors then the company
can easily fix the problems and maintain a competitive position in the market.
Strengths Weaknesses
BT has Strong prospects for growth in the
market.
BT also providing flexibility and diversity to
BT has reciprocity in the market of UK.
It is decreasing the efficiency and
profitability by providing low-cost
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the customers.
BT has created an extensive physical
network in the market.
BT has maintained a better relationship in
different countries and also diverse the
portfolio for trustworthy customers.
products.
BT is facing a shortfall in pension
increment.
The portfolio of customers has been
overstrained.
Opportunities Threats
BT has shown great growth in terms of
providing services in mobile phones. Now
the demand is increasing for mobile
applicants in the market.
BT has created a positive effect on the
market through the development of new
products and the development of a new
market in different regions and countries.
It has now strategic alliances and
competitive contracts by which they can
expand their business wider.
The customers are on demand for wireless
internet connections so this is also a great
opportunity for BT to develop this
particular segment.
Competitions have increased in the
international market.
Demand is increasing day by day and lack
of employees.
The telecommunication policies are also a
big threat for the company as companies
are bound with certain policies that can't
be breached off.
The cost of operations is rising and
employees are not ready to work with less
salary (Deshpande, 2018).
As per the evaluation of VRIO framework it has been found that BT is focusing on the
competitive advantages also. The services and the products are providing by the Company
should be rare with a better value in the market. As it has also found that the Imitation of
products and services are increasing day by day. It can't be stopped but there are certain
chances to keep the services of the company on top by preparing some attractive and different
strategies for the customers at a low cost. As BT has a great relationship with stakeholders and
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