Business Strategy Report: BT's Competitive Landscape

This report provides a comprehensive analysis of BT's business strategy, examining its approach to achieving its goals and gaining a competitive edge in the telecommunications industry. The report begins with an introduction to business strategy and its importance, followed by an in-depth exploration of BT's macro-environmental factors, including political, economic, social, technological, legal, and environmental aspects, and their impact on the company. It then delves into BT's internal capabilities using the VRIO model, assessing the value, rarity, imitability, and organization of its resources. The application of Porter's Five Forces model to evaluate the competitive landscape is also discussed, analyzing the threats of new entrants, substitutes, and competitive rivalries. Finally, the report interprets and devises strategic planning for BT, incorporating various theories, concepts, and models to offer recommendations for future growth and sustainable development. The report concludes with a summary of the findings and recommendations, supported by relevant references.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Impact and influence of macro environmental.................................................................1
TASK 2............................................................................................................................................4
P2: Analyse internal capabilities of an organisation..............................................................4
TASK 3............................................................................................................................................7
P3: Application of Porters five force model to evaluate competitive....................................7
TASK 4............................................................................................................................................9
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation..........................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The set of decision and course of action which helps an organization to
achieve its goal is known as business strategy. Strategy helps a business to extract
higher profits. An organization can survive longer and can attain competitive
advantage via business strategy(Lehmann, 2016). The management which is the
brain of firm is responsible to form plan, policies and action plan in order to
formulate effective strategy which results in success and growth of an organization.
To better understand this concept BT has been chosen, which is a Telecom
Company of United Kingdom. This report discuss about various topics such as: to
know the impact & influence of macro environment factors, to consider
organization’s internal environment & capabilities, porter's five force models to
analyse competitive forces. Also various theories are discussed which are helpful
for an organization for their strategic development
TASK 1
P1: Impact and influence of macro environmental
Political factors: includes factors such as regulations related to trade tariff
political stability intellectual property protection right and so on. BT has branches
in various countries so it is very significant for them to analyze the political
scenario of the country. In simple words this helps the company to identify the
diversifiable risk associated with political environment of different region.
Positive impact, with advancement in services associated with internet
connection has catered the reach for majority of the customer due to which
government restrict their regulation in telecommunication sector therefore this
gives the benefit to the company to expand their reach.
Negative impact, if company perform its operation in developing market
then it can gain good revenue from that market but 8 there r some risk associated
with the diversification of business in developing country as in developing country
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e the government control is high as well as they may suffer political instability that
hampers the operation of business
Economic factors: includes both macro as well as micro environment
factors such as interest rate, aggregate demand, inflation and so on that directly
affect the operations of business (Meckling, 2015). It is significant for the
organization to look after these factors before they expand their business in any
new market.
Positive impact, there is a huge growth opportunity in telecommunication
sector as majority of the businesses individual user depends on the Internet
Services as well as on mobile phone due to which BT has expanded its operation
which can helps the company to strengthen their relationship with the existing
customers.
Negative impact, there are various economic faces such as recession that
decline the profitability of company along with that inflation face restrict the
expenditure of customer that finally affect the existence of company.
Social factor: include the attitude, shared culture, believe, Ethics of people which
makes it essential for BT to understand the requirement of customer significantly
before running their operations in particular geographical area.
Positive factor, with the increase in use of internet connection and
dependency on smart phones for any electronic devices gifted power to the
telecommunication company including BT to charge the prices premium prices for
the services they are offering to the customer.
Negative factor, it is expensive as well as difficult for the company to
expand their operations in rural areas or in emerging economy because there
income is low due to which they cannot make huge expenditure on the services
related to internet connection this perhaps restrict the growth of company in
developing areas.
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Technological factors: it is essential for a company to be updated with the
technology they are using, it is significant for BT to speed up their Technology to
remain ahead of the competitors
Positive factor, BT has acquired large number of customers because they
keep on bringing innovative products by improving their Technology and
experience in relation to their competitors.
Negative factor, company has to Incurred huge expense while adopting to
the latest technology along with the cost even training the intern and employee.
Legal: BT has considered various factors such as intellectual property right,
discrimination and employment law before starting their operations to gain
competitive advantage over competitors.
Positive: They have always tried to maintain its image in front of its
customer by providing them best suited offer.
Negative: BT in its growth phase has faced legal pressure for not paying
much remuneration to its employees. This increased the turnover and absenteeism
rate of company.
Environmental factor: the purpose of each country is to protect the interest of
natural resources as well as society does organization make sure they should
perform their operation without hampering the external resources on Environment
Positive factor BT has make precautions against the pollution of against the
pollution of environment by avoiding the activities such as with the requirement
Negative factor, it can lead to restriction on using natural resource of any
country which may result in increased cost.
Ansoff matrix:
Market Penetration: BT has adopted this strategy by setting the price strategy
based on their rivals. Thus, respective telecom industry makes sure they leverage
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their existing resources or capabilities to attain long term growth(Ansoff matrix,
2019).
Market Development: BT has made the use of economies of scale so that to
be exposed to untapped market. Thus, company is expecting huge revenue due to
market development.
Product Development: BT always try to come with new plans. Like,
initially people use to look for plans to make phone calls but now with change in
technology and innovation people are keen on internet services.
Diversification: BT is expanding their operation in UK they are also looking
to act globally which is their weakness currently
TASK 2
P2: Analyse internal capabilities of an organisation
VRIO model: the motive of BT is to achieve sustainable development that
too for a long period of time, for the same BT is following VRIO model.
Valuable:
The important assets of the organization which can help them to achieve
their goal comes under this. Thus, the valuable factors of BT are:
Global presence: As BT operate in multiple countries which leads to strong
presence and recognition by customer.
Intellectual property right: It is valuable for the company to enjoy the
monopoly rights of the product.
Financial resources: Financial resources owned by the company gives
them advantage over rivel firms.
Rare:
Rare means the resources or capabilities of an organization which are rare as
compare to organization competitors(Habiband Hasan,2017). In relation to BT the
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financial resources are not rare because the major telecom industry have plenty of
financial resources. Some of the rare resources which BT has are:
Global presence: Though BT competitors list is huge which include
Vodafone, Virgin and so on. But also have a huge share of worldwide presence
which is an advantage.
Intellectual property right: BT have its rare intellectual property right and
it also minimize the chances of competition.
Imitate:
Imitating means copying someone, here it means when the resources of the
company can be copied by the rival firm(Orna,2017). Herein, the financial
resources of BT are imitable as the competitor can easily imitate the resource as
they also have surplus capital to do so.
Global presence: due to economies of scale other companies can imitate
their resources.
Intellectual property right: The risk of imitating intellectual property right
is extremely low. This helps the company to leverage all its capital and resources
in its favor.
Financial resources: the competitor of BT are also financially sound due to
which such factor is an imitable factor.
Organization competencies and capabilities:
A competency of an organization helps to attain success by expanding its
capability with the passage of time. In relation to BT its global presence as well as
intellectual property right helps the company to overpower competitors by
achieving long term sustainable development.
Global presence: As selected company has systematic arranged in
operations in multiple countries due to which it gets long term competitive
advantage.
Intellectual property right: These rights give the advantage to company to
provide competitive advantage over competitors.
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Financial resources: Though Respective companies financial position is
sustainable but it does not give competitive advantage to company as the risk of
imitation is always there(Pisano, 2015).
Factors Valuable Rarity Imitable Organized What is the
result?
Global
presence
Yes Yes Yes Yes Competitive
Advantage
Intellectual
property
right
Yes Yes low Yes Strong
competitive
advantage
Financial
resources
Yes No Yes Yes Temporary
or short term
competitive
advantage
Strength and weaknesses of the organisation
Strength: Strong financial condition as respected company has huge
customer base in United Kingdom due to which it generate huge amount of capital
from the services it is offering to the customer, this result in healthy balance sheet
as well as strong cash flow operation of company(Prajogo, 2016). Therefore this
helps the company to take the advantage of its economy of scale and overpower the
competitors
Wide market share as British Telecom enhances the quality of their services
as per the requirement of customers due to which selected company has
experienced strong loyal customer base(Schaltegger,Hanseand Lüdeke-Freund,
2016). For instance it has the fastest broadband internet connection along with that
BT provides call protect services from nuisance or any spam call which not only
help the company to gain large market share but help customer as well to get
premium quality e of services at desirable prices
Company offers by spectrum of innovative product and services within UK there
are several independent units of BT that provide wide range of services to the
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customer for instance respected company is the largest provider of broadband
services as well as fixed line telephony moreover they are the second largest
provider of Technology such as Pay-TV Sports channel. Therefore this depict that
BT is the leading network within national as well as International market.
Weaknesses: No worldwide presence although company generate huge
amount of capital but still it has Limited presence in comparison to its other
competitive such as Vodafone. Thus, company should tap into the emerging
economy such as Asian market from where company can generate huge revenue
that will further help to built the strategy against the competitors of company.
TASK 3
P3: Application of Porters five force model to evaluate competitive
Porter's five force model:
Under this various external forces which affect the organization are analyzed
properly so that the profitability level of firm can be increased. By the proper
analysis BT can take proper action to eliminate its threats(Uhland Gollenia, 2016).
Effective strategies are formed via this model, so that business of company can
sustain for a long run and it can earn higher profits. Therefore, external factor in
context to BT that can affect its business process are defined below:
Threat of new Entrant: BT experience low pressure of threat of new
entrant as telecommunications industry require huge capital as company has to
invest in promotional tool, licensing, service management as well as developing
infrastructure. And innovations in telecom industry happens frequently, it is tough
for a new entrant to upgrade regularly(Evans and et.al., 2017). Hence, respective
company has not only adopted technology but also maintained its regulation in
order to provide use maximum level of efficiency.
Threat of substitute: The threat of substitution for BT is high as there are
other competitors which comparatively sell services at low price in comparison to
selected company. Though BT is doing well in UK but still there is large number
of substitute for them.
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Competitive rivalries: Recently, because of the huge competition BT is
trying to bring attractive offers for their customer so that to overcome competition.
They need to be very careful in pricing as high pricing as compare to competitor
can lead to switch of users. On other side if they offer low price in comparison to
its competitors then company will experience loss. Thus, competitor analyzes each
other strategy on order to operate smoothly.
Bargaining power of buyer: In term of telecommunications industry within
UK the purchasing power of customer is high. Along with that they various
alternatives from which they have to choose and at very reasonable rates. This
depict that the trend of switching from one company to another is high. Thus, BT
understands the need of people and provides them premium quality services at
nominal rates. Further, as the bargaining power of buyer is relatively high, selected
company motive is not only to attract new buyer but also to retain existing ones in
order to gain competition edge over the competitors(Teece,2018).
Bargaining power of supplier: The various competitors of telecom
industry within UK such as Virgin, Vodafone etc experience high profit this lead to
high bargaining power of supplier. The company to remain in the competition has
to provide services on a reasonable rate. Furthermore, due to high bargaining
power or demand of suppliers the company profit is in stake. This lead in high cost
services of customer care, network maintainer, marketing and so on.
Balanced Scorecard:
This technique is followed by the company to achieve the main or high
objective of the organization. It helps the organization to know that if they are
achieving their important objective on time or not. Various initiatives are taken so
that the goals of the organization can be achieved (Wirtz and et.al., 2016).
Balanced Scorecard can be prepared by using excel, Google sheets or PowerPoint.
So, balance Scorecard is an effective tool to keep the team on a same page while
forming strategy and it also help in focusing in the main objective of the
organization.
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TASK 4
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation
Bowman's Strategic Clock model is helpful in strategic planning and it
emphasis on how a product should be positioned in the market which can build
relation with the customer which can help company for a long run(Yuliansyah,
Gurd and Mohamed, 2017). The model is mainly based on two parameters which
are price & perceived value. It is a marketing model which is used by BT to
analyze its position in relation to the position of its competitors. A company can
achieve competitive advantage after following this model. It has 8 component, they
are as follows:
Low price and low value added: This strategy is not beneficial for the
company because in this product is not differentiated & consumer’s perceives very
little value, despite a low price.
Low price: If the company wants competitive advantage than it have to
reduce the price of its products and to emphasis on economies of scale so that
company can generate higher profits.
Hybrid: As hybrid position includes some elements of low price but also
some product differentiation. As BT should provide attractive plans to its customer
and with that better network coverage too, it can help the company to gain more
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customers. So this strategic planning is helpful for the company to get the
advantage of competitiveness.
Differentiation: To make differentiation it is important for BT to offer
highest level of perceived value to the consumers.
Focused differentiation: As per this strategic planning it is important for
the organization to provide high perceived value and position a product at highest
price level. BT can launch 5G services in UK to make differentiation. They can
become first mover by that they will get competitive advantage for a period of
time. They can charge premium price in that period of time.
Risky High margin: under this the company can earn profit for a short run
but not for a long run. As customer will switch to a company who are proving
better value at lower rates.
Monopoly pricing: Monopoly is a situation in which there is single seller
and many buyers and company can charge higher price for its products. If BT can
be a first mover to provide 5G services then they can afford to charge higher prices
for a period of time.
Loss of market share: It is the situation when company provides its
products at high price with low perceived value. If BT provides 2G services at
higher rates, customer will switch to other options. Company need to study
properly what customer wants and serve them accordingly.
Porter's Generic Strategic: This model has emphasis towards mainly two
factors such as: low cost and differentiation.
Low Cost strategic: cost minimization is a motive of firm so that sales can
increased and via that increase in profits(Chen,Eshlemanand Soileau, 2016). So BT
should follow this strategy as the competitors are doing well in the market.
Reducing price will lead to increase demand so BT should focus on that to sustain
competition and survive for a long period.
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