Analysis of BT Company's Business Strategy and Strategic Decisions

This report undertakes a comprehensive analysis of BT Company's business strategy within the UK telecommunications sector. It begins with an introduction to business strategies and their importance, followed by an examination of BT's macro environment using PESTLE analysis, exploring political, economic, social, technological, legal, and environmental factors. Ansoff Matrix is also employed to understand BT's growth strategies. The report then assesses BT's internal environment, evaluating its strategic capabilities, strengths, and weaknesses using the VRIO model. Strengths include global presence, financial stability, and a wide range of services, while weaknesses include limited mobile phone business and customer service issues. The report concludes by analyzing the telecommunication sector and devising strategies to improve BT's competitive edge and market position, including a strategic management plan. References to books and online resources are provided to support the analysis.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION....................................................................................................................... 1
TASK 1....................................................................................................................................... 1
P1 Impact and influence the macro environment has on organisation and its business
strategies............................................................................................................................. 1
M1. Critically analysing macro environment and the way it determines BT Company's
strategic management decisions.......................................................................................... 3
TASK 2....................................................................................................................................... 4
P2 An assessment of BT Company's internal environment and its capabilities ...................4
M2 Critically evaluating the strengths and weaknesses of BT Company's internal capabilities,
structure and skill set. ........................................................................................................ 6
TASK 3 ...................................................................................................................................... 6
P3 ANALYSIS OF TELECOMMUNICATION SECTOR.................................................6
M3 Devising appropriate strategies to improve competitive edge and market position :.....7
TASK 4....................................................................................................................................... 9
P4 Analysis the strategic directions :................................................................................... 9
M4 Strategic management plan :....................................................................................... 10
CONCLUSION ........................................................................................................................ 11
REFERENCES ......................................................................................................................... 12
Books and journals :.......................................................................................................... 12
Online .............................................................................................................................. 12

INTRODUCTION
Business Strategies is the summary how the company will achieve its goals and meet the
expectations of its customer and sustain a competitive advantages in the market. Businesses strategies is
generally long term business plan. The business strategies must be effective to the organisation. In
these assignment we will be taking the telecommunication sector of UK within which BT would be
analysed on the basis of their business strategies. The project is about the multinational
telecommunication industry BT Company of UK which is formally called as British Telecom. It is the
first telecommunication firm in Britain. It is a public limited company that was found in 1969 it
covered the world’s wide area. In this assessment, the impact of macro environment on BT, taking
Pestle Analysis and Ansoff Matrix would be studied. The Strength and weakness of BT is also analysis
in this assessment to understand the capabilities and internal environment, VRIO Model is taken.
TASK 1
P1 Impact and influence the macro environment has on organisation and its business strategies
BT Company is a group of global telecommunication company operating around more than 180
countries and facing cut-throat competition in external environment (Olawale and Garwe, 2015). BT is
also serving wholesale arms proving network services to other companies also by making efficient
business strategies.
PESTLE Analysis
PESTLE Analysis of BT Company.
Political Factors
The declaration of rules and regulations is very frequently. Telecommunication Company has
no idea how to control and follow. Internet is now routine part of life, as it is using for education
purpose, jobs and many other uses are there for internet which is important for every human being. So
customer wishes to government to acknowledge the internet as basic part of life but there is a big
political battle in between government and service providers. For example – Changing government
bring a drastic fluctuation in the policies and regulations which are required to trade such as Taxation
policies. Different governments implement distinct policies that influence business functions and
performance.
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Economic Factors
Inflation and taxes affect the BT Company. The pricing per plan is affected by the
expenses provided to customers. Customer who lives in remote areas are affected by the network
of BT Company as it is very expensive to build towers in remote areas. Market resources and
technological advancement are the key factors of economic development of BT Company. For
example – The market or nation having a low or underdeveloped economy affect purchasing
power of people living in that particular nation. Low economic condition influence organisation
to sell products and services at lower prices as compared to the price set for areas having sound
economic condition.
Social Factors
Any industry operating into market, should have to work socially to remain sustain
shares in the market. BT Company is doing very well keeping the social factor as the key
element. Horizontal growth is limited in Telecommunication Company as it is very expensive
task to develop and expand the network services in remote areas and triable zone. Another factor
which affects the social environment is their monopolies in the market which keep many
costumes away from using telecom services. For example – People living in a specific society
have certain values beliefs, they are much attracted towards or services which are suitable for
their society and its culture.
Technological Factors
Ecological environment, automation, innovation and research and development (R&D)
environment comprises Technological environment (Van and et.al, 2006). In sourcing out
sourcing consideration, and entry barriers are much influenced by technological factors. The cost
and quality of goods and services and doing innovation is greatly affected by technological
factors. Every day there is innovation in Telecommunication Company, which led to increase in
the cost of BT Company. For example – Increasing use of smartphones and internet influence
organisation to enhance or improve their online present in order to attract more customers.
Organisation uses various social media websites as well as online portals for building a good
online presence.
Legal Factors
The legislation issues of government affect telecommunication company in large. The
issues with government, service provider and customers are main factors of legal environment.

Importing and exporting products as well as services of telecom are also the legal factors.
Company has to pay taxes and many other formalities for doing trade with other firms. For
example – There are various legal issues or legislations such as employment law, equality act etc
that influence organisation's strategic decisions and are important to be considered.

Environment Factors
Environmental changes play a vital role in telecommunication companies as these affect
the telecom network in large. In terms of needs of customers which changes very fast, BT
Company is making efforts in satisfying customers to a great extent. According to the changes
and wants of customers, BT Company works in advance. For example – Natural disaster,
unavailability of raw materials etc are certain environmental elements that also influence an
organisation's performance.
ANSOFF MATRIX

BT Company also takes use of the technique of Ansoff Matrix to analyse and understand
growth and opportunities of company in long term. BT Company has its framework according to
Ansoff Matrix which helps the executors and senior managers as well as marketers for
evaluating future growth. For the growth of company, Ansoff Matrix provide Product Market
Strategy which states that commodity are designs according to the requirements of customers.
Market penetration strategies is also used by BT Company by which company try to increase and
maintain its market share. Market development and diversification techniques are also being
used by BT Company to improve its position in the market.
Illustration 1: ANSOFF MATRIX
[Source: Internal and external factor and Business Strategies, 2018]
M1. Critically analysing macro environment and the way it determines BT Company's strategic
management decisions.
In above discussion, as per Van and et.al, (2006) it was stated that if the inflation rate is
increased in the countries, the profit of BT is affected. The growth rate of company is decreases
because of inflation. According to Capron and Mitchell, (2009), if the technology environment
does not changes fast than the sales of BT rises and market share remain sustain.

TASK 2
P2 An assessment of BT Company's internal environment and its capabilities
Strategic capability
The strategic capabilities of BT Company are competitive advantages, resources-based
strategies, organisational capabilities and venture which are the various schemes of company.
Being the best provider of communication and services as well as solutions, BT Company is
using a base line strategy to create value to shareholders (Capron and Mitchell, 2009). Company
also have capabilities to focus on global market, real-time and open platform for customers. BT
Company is increasing capacity to enhance the capabilities to expand range not only in urban
areas but also in rural and remote areas. BT Company is expanding online services to serve the
small scale businesses and it ties up with more overseas companies to expand businesses to
global level. BT company is fighting with the threats of its business like long-term vision, stiff
competition and global economic depression. BT Company has strategic capabilities to
overcome with all the factors affecting internal environment of business.
VRIO/VRIN Model
VRIO Model is a framework to use to analysis the internal capabilities and resources of
to evaluate them ether they can be a source of the sustainable competition. VRIO Model is firms
largest strategic scheme. It is a framework of four questions- question of value, question of
rarity, question of imitiablity and last is question of organisation.
Question of VALUE
The basic question asked in VRIO Model is the resources available in the firm is
valuable to the firm. The resources and capabilities should be the strength of the company.
Wasting of resources is not good for the firm. The resource should grape the opportunities of the
company. BT company is fully utilizing its resources available in the environment. Company is
graphing opportunities very fast.
Question of RARITY
BT company has rarity in the business which lead to strength of the business and lead to
competitive advantages. Rarity in the BT Company is its network quality. No telecommunication
company can beat the network quality of BT company (Wadhwa and Kotha, 2006). With this
advantage company is growing very fast as compare to other.
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Question of IMITABLITY
Any company without resources and capabilities have to face cost advantages in
obtaining and maintain its market share. Imitation appears in two ways, direct duplications and
submission. BT Company has high imitation cost by which its market share and competitive
advantage is maintained. BT company's products cannot attempt to use substitute. In order to
gain the advantages of competition, the cost of imitation is quite high.
Question of ORGANISATION
If the resources and capabilities are properly utilize in efficient manner than company has
to organize all the resource. The resources of BT company is fully organize, it shows from its
growth reports. Human resources, financial resources any any other resources should be well
organize according to VRIO Model.
Organisation’s strengths and weaknesses
Strength
BT Company is the provides global telecommunication services in more than 175
countries. It also provides IT services globally. BT company has healthy balance sheet and
strong financial reports. BT company has large number of customers. BT Company's products
range are very wide. BT Company is proving great services to their customers and the customers
are fully satisfied by the services of telecommunication company which can be seen by the
market share of the company in the market. BT company is listed in the stock exchange in the
FTSE 100 index. Company works both in local sector and corporate sectors. BT company is
operating in more than 28 telephone lines. The coverage of BT company's network are world
wide and it is largest among other telecommunication company. BT company invest in new
protocol century network 21CN. BT company is expanding its networks in the rural area also.
BT company is contracting more with overseas partners to further its global expansion. The
services provided by BT company is highly dynamic. The quality of internet broad band is very
high compare to other telecommunication company. BT company is serving online platforms for
micro enterprises. BT company has development of 5G through partnership with Nokia and
Huawei.
Weakness
Their is lack of convergence of BT Company in fixed-mobiles. The business of mobile
phones of BT company is under develop. Their is no business strategies of promotion of cheap
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voice calls. Occasionally there is a problem of payphones due to BT operators. The customer
services of BT company is not quite well, customers is not satisfied by the service of BT
company. BT Company is largely dependent on the market of UK. BT company has limited
presence in the growth of Asia Pacific Region. Loss of branding and increase in cost is caused
by the separation of open reach from BT. Due to intense competition, BT company's profit is
decreases in fighting with competitors. Pressure of government regulations and licenses also
become barriers in the management of BT Company. Devaluation of British pound also affect
the profit of BT Company. BT company increases its cost of products and services which
decreases the market share in the market (Dholakia and Kshetri, 2004). BT Company also
greatly influenced by the global crisis.
M2 Critically evaluating the strengths and weaknesses of BT Company's internal capabilities,
structure and skill set.
In above discussion about the strength and weaknesses of BT Company which affect the
internal capabilities, structure and skills of the company. BT company has adorable strength
which proves the company the best telecommunication company of the world. the weaknesses
of BT company affects its profit and market share in the market.
TASK 3
P3 ANALYSIS OF TELECOMMUNICATION SECTOR
BT company is facing high level of interview as because in the telecommunication sector
has cut through competition. BT company is leading in the world only because of its power and
strength. BT us taking full advantages of opportunities in the market efficiently. BT is using
Porter's fiver forces model to identified the competition in the market.
Porter's Five Forces Model- it is nominal tool to understand where the company is lying in the
business, what is position of BT in the business. And what is the competitive position in the
business. It has total five forces which includes bargaining power of supplier, bargaining power
of supplier, threat of substitute threat of new entry and rivalry.
In the telecommunication industry, there are several activities consider to focus on the
business development. In this regard, UK consider more growing in the market through focuses
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on the different activities and innovative results as well. It is the best way to regulate internet
services in the environment. Furthermore, it also assists to attract new customers in the business
environment.
Porter's five forces model for analysing the competitiveness of BT telecommunication
sector. Telecom sector is the one of the fastest growing sector because of the competition level.
Then it is necessary to analysis the competitive factor(Martinez-Simarro, Devece and Llopis-
Albert, 2015.). Porters five force model include four types of aspects such as :
 Bargaining power of customers (Moderate): It is necessary for telecom industry to
analysis the bargaining power of consumers. Because this factor affect the productivity of
any organisation. Before making strategies to handle customers, it is required to
understand the different types of consumers. There are different types of buyers such as :
innovators, adopters, early majority, late majority and excessive traditionalist. When in a
market, strong group of consumers exist, then it is significantly affected a company's
selling power. Consumers in telecom industry can be divided into two parts :
 Bargaining power of suppliers (Low): this is main force in the porters five force model.
Suppliers in the telecom industry may be classified as companies of mobile tower, sim
cards, mobile phone handset. For BT company, the competition level is higher because
many companies are using different types of strategies to maintain their level.
 Threats of new entrants (Low): this is a main factor which shape the level of
competitiveness. When a new competitor enter into the market then it will become threat
for existing company's because new enterer will come with new offers and strategies.
 Threats of substitutes (Moderate): substitute product means a product which offer
similar benefits or qualities to a consumer or company. The threat of substitutes will be
higher in these types of conditions like switching cost, product price, product quality,
product performance and substitute availability. To find out the threat of substitutes are
often difficult because it is not immediately recognizable, it is may be outside from the
operation area. BT industry can find the threat of substitutes by following these process :
first identify the problems, second identify the solution of the problem, third identify
substitute appeal and last is to make strategies.
 Rivalry within the market (High): there are most of the two factors which influence the
competitive level of BT industry such as bargaining power of buyer and competitive
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