Analyzing British Telecoms' Business Strategy in the UK Market

This report provides a comprehensive analysis of British Telecom's (BT) business strategy within the UK mobile telecommunications sector. It begins with a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting BT. The report then applies the Ansoff's growth vector matrix to evaluate BT's strategic position, considering market penetration, market development, product development, and diversification. Furthermore, the concept of strategic capability is discussed, followed by the application of the VRIO/VRIN model to assess BT's strategic resources, including enhanced customer service, usage of optical fiber, and enhanced HRM software systems, ultimately determining the company's competitive advantages and areas for improvement. Desklib offers a wealth of resources for students, including past papers and solved assignments.

Business Strategy

Table of Contents
Introduction...................................................................................................................3
Task 1...........................................................................................................................3
TASK 2..........................................................................................................................9
TASK 3........................................................................................................................13
TASK 4........................................................................................................................16
Conclusion..................................................................................................................20
Reference List.............................................................................................................21
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Introduction
Business strategy is a strategy that is developed in order to maintain and control
business activities and earn profit. The aim of the assignment is to develop
awareness of different kind of strategies that can be possible tactical, operational or
strategic in nature within an organisation. It will help in assessing the macro and
macro environmental factors by addressing the key concepts of business strategies.
Various kinds of theories, models and concepts will be postulated that help in
enhancing the level of understanding and knowledge for support the organisation’s
strategic choice and direction. The sector that is being chosen for conducting this
assignment is mobile telecommunication sector in UK specifically focusing of British
telecoms.
Company’s Profile
British Telecom is a multinational telecommunications service that deals with TV,
fibre, fixed and mobile that primarily operates in UK. On a global basis, it is operating
in 180 countries in the world. The company is established in 1969 and
headquartered is located in London, UK. There are around 102000 employees as
per the report of 2016. In initial times, it was named as the General Post Office in
1981 afterward it became independent and was known as British
Telecommunications and its trade name became British Telecoms. BT is featured in
both New York Stock exchange and London Stock Exchange and is a part of Footsie
(Home.bt.com, 2018).
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Task 1
PESTLE Analysis of BT
Political Factors According to Morton and Nesi(2018),
political factors are considered to play a
significant role in determination of
factors are responsible for having an
impact on BT’s long-term profitability in
the market. BT is operating in
telecommunication sector in UK and
other countries. Thus, it is noted that the
exposure of different political situation
and system risk is associated with it. In
order to achieve success in this
dynamic telecommunication industry,
the company need to diversify the
system risk present in political
environment. For closely analysing the
factors that BT is operating at, it is
important to address certain factors that
include political stability that affect the
economy of the country, risk associated
with military invasion, level of
corruption, legal framework of the
country and IPR. Other factors also
have an impact on the political
environment are trade regulations of
different countries, trading partners,
pricing regulations on
telecommunications, mandatory
employee benefits, wage legislation and
taxation.
Economic Factors The economic factors that affect BT are
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inflation rate, interest rate, savings rate,
economic cycle, foreign exchange rate.
These are responsible for determination
of aggregate demand and investment in
term of economy. The competition level
of each country is responsible for
gaining competitive impact of the firm.
BT utilise economic factors are growth
rate, inflation and economic indicators.
Other factors that affect this aspect are
infrastructure quality for
telecommunication industry, education
level, labour cost, skill of workforce,
efficiency in financial markets and
government intervention.
Social Factors In accordance to Morton (2017), social
culture and the ways have an impact on
the culture of the company. Attitude and
shared belief of the population of the
country is found to play an important
role for marketers at BT for
understanding the customers of each
market and thus, design marketing
message for each Telecommunication
industry in different countries. The
social factors that are help for BT in this
context are:
 Skill level
 Demographic factors
 Education level
 Leisure interest
 Culture
 Attitudes
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 Entrepreneurship opportunities
Technological Factors Technological development is rapidly
evolving and had caused disruption in
various industries in the board. For
example transportation industry, that
depicts this factor. In the past 5 years, it
is seen that telecommunication industry
is evolving at a rapid speed and thus,
did not have any chance to other layers
to cope up with the chances. Various
companies such as Vodafone, Virgin
have dominated in this sector and are
fast moving in nature. The technological
development not only allowed the sector
to gain advantage in UK but also in
various other countries. As per the
viewpoint of Morton (2017), a firm need
to analyse technological aspect as well
as speed that the technology has been
able to disrupt the industry. It is seen
that if the speed is slow there will be
more time required and vice versa. This
is required for coping up and gaining
profitable by a company.
Legal Factors It is seen that there are number of
countries where the legal framework is
not robust in nature thus, there is no
provision of protecting IPR of the
company. It is important for the
company to carefully assess before
entering into the market and gain
competitive edge. The factors that BT
need to consider before entering into a
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new markets are:
 Anti-trust for telecommunication
industry of a country
 IPR
 Discrimination law
 Data protection
 Employment law
 Health and safety law
Environmental Factors According to Marino (2017), different
market has different environment norms
and laws that affect the profitability of an
organisation within the context of a
market. It is seen that within a country
there are various states that have
different laws and standards in respect
to environment. Thus, various European
countries have giving healthy tax break
to number of companies for operating in
a renewable manner. Thus, for starting
a business, BT needs to evaluate the
environmental standards that help in
operating in the market.
Ansoff’s growth vector Matrix for analysis of BT’s strategic position
The Ansoff Matrix mainly uses their respective product portfolio that helps to analyse
the necessary risk that are associated with four elements. As said by Mitra et al.
(2014), the four elements are market development, diversification, market
penetration and product development. Each time the products moves to new
quadrant the number of risk increases.
Market Penetration
 The British telecoms are building
new fibre optic to penetrate in the
Market Development
 The company British Telecom has
announced about 20,000 towns in
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new market.
 The British Telecom are investing
about 3 billion pounds for the
extension of the cable network for
providing more faster internet
speed.
 The company aiming to deliver a
speed for about 76 mbps
 The company will put fibre directly
to the building like the other major
competitors.
UK.
 The British Telecom will provide
more outsourcing operation to
provide better service to their
customers.
 As said by Grout and Houlden
(2014), the British Telecom had
able to undertake the nationwide
commercial roll out for the
conferencing mobile.
 More new internet packages and
contract system for the
Smartphone
Product Development
 The British Telecom will launch
4G and 5G service for both pre-
paid and post-paid plan.
 The BT will offer more
comprehensive international and
national long distance voice, data
and video network services in
more integrated scalable platform.
 More comprehensive portfolio for
the enterprise of data, video,
voice, IT infrastructure and
internet
.
Diversification
 The new services for the British
Telecom will offer more unique
and value added products for
large, medium and small
enterprise for the respective IT
infrastructure, networking and
communications.
 The British Telecom will launch
nationwide satellite TV service.
 The fibre optics will produce more
better service and new opportunity
for the company.
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TASK 2
Explain what strategic capability means
Alongside the various external factors that play a major role in the functioning of a
business, the internal factors too have their significance and impact. For any
organization, the internal environment consist of various components such as the
employees of the organization, the organizational culture and structure they follow
and bring into their working and the shareholders of the company. In the case of
British Telecom, the scenario is no different. The United Kingdom based organization
must employ and implement various strategies that shall help the company to
establish, maintain and develop its internal environment. It has to be noted that for
any company or organization, only when it manages to maintain and improve its
internal environment, shall it succeed to achieve its short term as well as long term
goals.
For any firm, Strategic Capability refers to the ability and capability of an
organization to successfully bring in and employ certain strategies that shall help it to
not only create a market for itself, but also maintain it and bring in improvements to
enhance it (Ghezzi et al., 2015). In the case of British Telecom, it has to be
highlighted that the company that has to face immense competition from the likes of
Vodafone, Virgin and others who have created a name for themselves in not only the
local and regional market, but have also established themselves in the global
market. Hence for a company like British Telecom, it has to mentioned that it has to
come up with certain competitive advantages that shall make it easy for the
consumers to choose the brand over its competitors. In today’s world of fierce
competition and infinite substitutes, it has to be understood by the companies that in
order to survive and prosper in the market, they must comprise of certain
advantages and uniqueness in its business. Only when the company manages to
point out its Unique Selling Propositions (USPs), shall it be able to differentiate itself
from its competitors.
A unique component of the Strategic capability of a firm lies in the fact that it cannot
be measured by the companies. The main advantage of assessing the strategic
capability of a firm lies in the fact that with it, the companies are able to figure out the
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strengths of its resources and have the exact idea of its market value. Further, it
helps companies to understand whether they have the ability to undertake and
implement certain strategies.
Apply the ‘VRIO/VRIN’ model to determine the strategic capabilities possessed
by your chosen organisation
The VRIO is a conceptual framework that comprises of and tabulates a set of four
questions that helps an organization to design its strategic capability and to have a
clear understanding of its resources and current market value. The four questions
that from an integral part of the model are:
The question related to the resource’s valuable quotient. It analyses whether or not a
particular resource is valuable
 The second question analyses whether or not these resources are imitable by
the rival companies
 The third question assesses whether or not the resources are substitutable
 The final question deals with the rareness of the resources of the company
Resource Nature of the
strategic resourceEnhanced
Customer
Service
Usage of optical fibre Enhanced HRM
software system
Yes Yes Yes Valuable
Yes Yes Yes Imitable
No Yes Yes Non Substitutable
No No No Rare
In the case of British Telecom, three of the main resources of the company has been
chosen for the VRIO analysis. They are:
 Enhanced Customer Service
 Usage of optical fibre
 Enhanced Human Resource software systems
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From the above-created table, it can be stated that for the company that is one of the
key players in the United Kingdom’s telecom market, there remains a lot of work and
tasks for them to achieve. It can be viewed that the company has the provision of
providing its customers with enhanced services. Not only this, but it also has the
financial strength and capacity to employ the usage of optical fibre in order to provide
the consumers with faster and more efficient communication ways. In addition, it has
understood that the company has been implementing an enhanced HRM software to
maintain its daily business activities in the most optimum manner possible.
Even though these resources are valuable and integral for the company, none of
them fulfil the rarity criteria. This implies that British Telecom needs to build up and
maintain certain USPs that shall help the company to have certain components,
which are unique to the company and not present among the competitors (Morton
and Nesi, 2018).
Identify the organisation’s strengths and weaknesses
In order to conduct its businesses in the most efficient manner, it becomes a must for
a company like British Telecom to have a detailed idea and concept of its own
strengths and weaknesses. If any organization has idea related to its strengths and
awareness about its weaknesses, it helps them in various ways. By having a clear
perception about one’s own strengths and weaknesses, it becomes possible for the
companies like British Telecom to focus and build up on its strengths (Marino, 2017).
In addition, it also makes it possible for them to work on their weaknesses and
eliminate them ultimately. In the case of British Telecom, the key strengths and
weaknesses of the organization are as follows:
Organization: British Telecom
Strengths Weaknesses
Strong consumer base in the United
Kingdom
Not much awareness in the global market
Provision of enhanced consumer service Has been involved in scams that has
brought down the brand value of the
company
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Extensive and wide range of products Bowing down to competitors due to lack of
strategies
It can be stated that in the case of British Telecom, the brand’s main strength lies in
its enhanced brand value in the United Kingdom market. Apart from that, the
services it provides to its consumers also contribute towards its success. On the
contrary, the main weakness of the company is the fact that it lacks strategies
required for its effective functioning (Btplc.com, 2018).
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