Business Strategy Report: Macro and Internal Factors of BT Group

This report delves into the business strategy of BT Group, a major telecommunications company based in the UK. The analysis begins with an examination of the macro-environment using the PESTLE framework, assessing the impact of political, economic, social, technological, legal, and environmental factors on BT's operations. The report then applies Ansoff's growth matrix to evaluate strategic options for market penetration, market development, product development, and diversification. An assessment of BT Group's internal factors follows, utilizing VRIO analysis to evaluate the value, rareness, imitability, and organizational capabilities. The report further explores the competitive landscape of the UK telecommunication sector, discussing strategic capabilities and the strengths and weaknesses of BT Group. The conclusion summarizes key findings and offers insights into the strategic directions available to the enterprise, providing a comprehensive overview of BT Group's business strategy and its position within the industry.

Business Strategy

CONTENTS
Contents...........................................................................................................................................1
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
Impact and analysis of macro environment of business...........................................................2
TASK 2............................................................................................................................................5
Assessment of internal factors of business................................................................................5
TASK 3............................................................................................................................................7
Telecommunication sector of UK and its competitiveness.........................................................7
TASK 4............................................................................................................................................9
Strategic options and directions available to enterprise..............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
1

INTRODUCTION
Business has various policies which are formed to run it business in better and effective
way. As per requirement there are possibilities that company has to alter policies. There are some
component with are associated with company directly or indirectly can have positive or negative
impact. In business, there is use of factors which might get altered by management of company
due to requirement (Aithal and Aithal, 2016). Hence there is requirement of proper planning to
achieve goals and objectives. It is essential work as per external factors; hence there will
achievement of targets in better and effective way. Mangers are responsible for proper planning
and motivating workers to act in specified manner. This report is based on BT
Telecommunication Company. This association has head quarter in London, UK. This operates
in more than 18 countries. In this report there is discussion about Pestle analysis, Ansoff’s
model, internal factors of business. In this there is analysis of telecommunication sector is done.
There is discussion about strategies which are applicable to analyses market.
TASK 1
Impact and analysis of macro environment of business
There are various factors which affect business in either positive or negative way.
External elements are not part of company internally, but they affect business indirectly. It is
essential to know what can be done and then this affects business policies. It is essential to know
about policies which h can be performed in effective and efficient way. Telecommunication is
the industry which has many factors which affects its operations. In this case, there is
requirement of analyzing market and take actions which are beneficial for its growth. Macro
environment includes external factors of business. so they can perform activities in better and
efficient way. PESTLE is the technique which is used bty managers of BT in knowing factors
external forces and its impact on business.
PESTLE ANALYSIS
Political- In this factor, government related factors are involved. According to it, there
are policies which are required to be performed with change in plans and policies. There is
change in government, so they make their own plans and policies (Basco, 2015). These
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strategies are widely related to business. In case of BT group they have to fix network tower, so
there is permission from political bodies. This is the factor which affect business adversely,. In
case of government interference there are chances of impact on goodwill of BT group.
Environmental- BT group operates in various parts of country, so it is essential to work as
per environment of concern place. There is difference in environment of various places. As BT
group operates in telecommunication, in case of network issue due to environmental factor, then
customer may get dissatisfied and switch to other operator. This factor affect business adversely
as in case of mobile networks there is hurdle in operating business operations. This affect has
impact on telecom company. This affects internet, call, etc. services which has impact on
customer satisfaction.
Social- There is difference in culture of people living at different parts of country. There
is difference in their demand also. As telephone services are widely used in different parts of
country, hence BT group must focus on knowing demand of customer and then they must
improve quality of their services. From, this factor, it is clear that consistency in operations does
not give any worth. Manager of BT group has to make polices through which they helps to adopt
policies alterations due to change in social need.
Technological- Technological factor affects business in efficient way. Due to change in
technology, BT group had to alter their techniques. In this style there is use of policies which
help to achiever targets in better and effective way (Temminck, Mearns and Fruhen, 2015).
While change in technology, there id requirement of training of workers, this results in increment
of cost for company. In case of technological changes, training is the cost which has to be incure
by mangers. There are chances that employees are not ready to learn new ideas, as they think that
this might affect their importance or in case they are not abler to learn new technique, they may
be fired. So in this case manager has to motivate them in better n ad effective way.
Legal- BT group has business relation with various countries and there are some or other
legal policies related to running of business. In this case, there is requirement of proper
knowledge about rules and regulations, so there is no hurdle in running business. Manager can
appoint some legal adviser which provide guidance to management of company (Rugman and
Verbeke, 2017). Laws related to employees must be implemented in proper way and in case of
alteration it must be altered by expert. While new employee is joining company then manager
must tell them about rules and regulations so there are less chances of default.
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Economical- This factor affects business adversely. As there is need of funds to run
business, hence this must be available at effective way. There are many sources through which
company can raise funds. In case of problem related to availability of raising funds, organization
may feel problem in operating. BT group has good image in market, so it is easy for them to
raise funds. In case of increment in interest rates of bank loans, redemption of shares, etc. are
factors which affects financial component of organization.
ANSOFF GROWTH MATRIX
BT group has good image in market, as they keep eyes on demand of consumer. In
telecommunication services, there is much competition, so it is essential to make strategies as per
requirement (Aithal and Aithal, 2016). There are much climatic issues due to which services
might get halt; hence these problems must get solved frequently. As per data there are various
types of customer of BT group, there is difference in their demand, so they bifurcate them on the
basis of demand, age, etc. This helps to satisfy them more efficiently. There is requirement of
new network offers which give benefits to customer and hence they are ready to be part of BT
Group. Satisfaction of customer is the key for growth and expansion of business. Ansoff matrix
has four approaches, which are discussed as under-
Market penetration- Market penetration means there is division of customer on the basis
of their demand. So this is one of the factors which have to be adopted to by company. If they
distribute consumers, it is easy for them to anlayse demand and satisfies society. To penetrate
market, there are chances to adopt other firm.
Market development- In this case, there is requirement of development of factors which
help to analyse market and then take actions which are frequent for expansion of business.
Market development is possible when managers have to frame policies which are effective in
achieving business objectives. They have to frame attractive policies and then promote them, so
consumer is ready to avail them (Basco, 2015). Through this there will increment in sales of
BT group. It is essential to make policies which help to analyse market and then use factors
through which they can get image more as compared to other competitors.
Product development- In this there is important role of Management of BT group. They
have to analyse market and then come with offers which are beneficial for expansion of business.
There are many competitors of BT group, it is essential to analyze their policies in better and
effective way. R&D department plays vital role in achieving targets and hence they can enhance
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their customer range and quality of services. Product development is different from market
development in this case there will use of internal forces which help to achieve targets. These
days there is requirement of difference services which help to satisfy demand of consumer. As
there are varieties of customer, some it is essential to have anlyse market and then require factors
which help to achieve targets in appropriate way.
Diversification- As per this, there is use of data which divides customer as per their
requirement. This can be effectively with the help of managers. Through this there is providing
services to customer. Employees must be trained regarding handling of query and its proper
satisfaction. It is important to work as per requirement of factors which are applicable in making
changes in business operations.
TASK 2
Assessment of internal factors of business
BT Group ids the brand which has many competitors still they make their same image in
market. This is tough to be best among all competitive brands, through this their will use of
factors which are competent over others. There are chances of change in policies which are
effective to judge to attain growth in business. Telecommunication is the sector which is very
frequently used by every group which helps in satisfying demand of society. So it is essential to
provide facilities which are competent for others. If BT group is not able to satisfy demand then
customer will start switching to other brand.
Strategic capabilities- strategic capability is the element which is most effective to
analyze market and then this helps to judge what can be done to improve image of organization
over competitors. There are many ups and downs in business, to make good and long lasting
image, it is necessary to make strategies which help to get edge over others. Strategies
capabilities are strength of companies which are not present with others. EE, Virgin, Vodafone,
etc. are core competitors of BT group (Smink, Hekkert and Negro, 2015). To make long and
good relations with consumer, they provide attractive telecommunication offers to society. This
is effective for analyzing market and hence this is impactful for society. As per data, every group
of society is using phone for various purposes, so it is essential to take their feedback regarding
services. In case of negative reviews correctives actions must be taken. Employees are trained
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how to deal with customer. As cool and calm customer handling is effective for customer and
their queries must be satisfied.
VRIO Analysis
Value- In this stage it is analyses that actions taken by company are whether valuable or
not. It is important to know what activities can b done so it helps to analyse market in better and
effective way. If there is no value division from new service, then it will not be acceptable by
society.
Rareness- As per this factors, to make good image in market. It is essential to work on
concept which are rare and not available in market. This can be done by R&D department of BT
group. There have to analyse demand and take actions to take use of resources which are not
available and whose requirement is there.
Imitate- As per this factors it is important to work on cost of resources which are
effective for achieving targets. There are possibilities that due to change in technology, there are
possibilities of increment in cost. So it is important to know what can be done to reduce cost of
resources and hence profits will increase.
Organization- This is the last step which talks about use of resources which are capable
of achieving targets in better and effective way. It is important to talk about structure,
management, rules and regulations, etc. for achieving targets. Due to change in structure of
organization, there are chances of negative result on operations. Managers are responsible for
thinking about motivation and improvement of activities.
Strength and weaknesses of BT group
Strength Weaknesses
This is the biggest and leading company which
deals in various parts of company. It has good
image in market.
They have national wide telecommunication
coverage which helps to have good quality
services to customer.
They have take EE telecommunication, so they
empire become vast.
There main aim is to provide broad ban
services to society, due to this they are not able
to grab opportunity from small customers.
There main aim is to gain profits so they are
not able to solve problems faced by consumers.
Quality of voice call of BT group is cheap, so
people ignore to use services from BT group.
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TASK 3
Telecommunication sector of UK and its competitiveness
When a business organization undertake a research to determine the competitiveness in
which it operate then help in identify the current trends exist in market and support manager in
take better business decision. For analyze the competitiveness of telecommunication sector there
is a tool known as Porter’s five force model that can be utilize by BT.
Porter’s five force analysis: This tool indicate that entities require to keep a eye on external
factors that affect the actions and decisions of company. Analyze the price of product offer by
rival of entity is also come under this. Porter Michael concluded that mainly there are five forces
that largely affect the actions of business firms and support them in get a competitive place in
business environment. For take better decision, BT can undertake a research in order to examine
the telecommunication sector of UK. As per this model, five major forces exist in market can be
understood by the following points:
 Bargaining power of buyers: This force indicate the power that remain in hand of
customers and that affect the decisions taken by firms operate in a specific industry.
Customers in telecommunication sector enjoy a high bargaining power due to large
number of firms operate in that sector (Lueg, 2015).. Various entities are there that work
in this sector and offer large amount of different services to its customers at affordable
prices. All this provide an opportunity to individuals to buy the service from so many
sellers. This force serve a big threat to BT and to minimize this impact, entity require to
offer something unique and effective to its customers. for achieve customer satisfaction,
entity require to carry out research in order to identify the current trends exist in market
and can collect information about the requirements of its customers. analysis of market
help entity in formulate a better and effective strategy.
 Bargaining power of suppliers: This aspect cover the suppliers exist in industry and
impact of them on actions of an organization. Suppliers in telecommunication sector are
the one that provide basic infrastructure for set up mobile activities. Manufacturers of
telecommunication sector also come under category of supplier. Large number of
suppliers exists in telecommunication sector of UK and this indicate that supplier of this
sector are not in a position to impact on actions of entities and this does not a serve a big
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threat to BT. But still actions and decisions of supplier impact on firm’s operations and
affect its competitiveness in market.
 Threat of new entrants: This force reveal the threat related with new players operate in
specific industry. This threat in telecommunication industry is very high because
opportunity of generate large amount of profits encourage various individuals to join the
industry. This increase competitiveness of this sector and serve a big threat to BT. It is
very essential for entity to consider this factor while take business decisions. High
potential of growth encourage large number of individuals join the sector but still various
threats ate there that decrease the impact of this threat of telecommunication firms. One
of the main factor why large number of individuals do not operate in this sector is that
huge amount of funds are require to set up. Further, entities currently working in this
enterprise enjoy a brand loyalty from its customers.
 Threat of substitutes: Due to existence of large number of similar products this force
serve a big threat for BT. Further, imitate the products offer by an organization is not a
hard task. In order to deal with this situation, entity requires to take help of new and
effective methods to add more features in its products. With this, organization can attract
more customers and at the same time can maintain its market share. Further, it is
significant for entity use new and latest technology to better satisfy the needs of its
customers.
 Rivalry within the market: Competition in telecommunication industry of UK is very
intense. In this situation, all the firms operate in this sector use effective strategies for
maintain its position in market and to attain its sales target. It is very essential for
organization to carry out promotion process in an effective manner as with this, entity can
make large number of customers aware about its products and at the same time can
influence them to buy the same (Quirke, 2017). For increase customer base, entities
require to carry out research on continuous basis and this require that entities should have
large amount of funds. All this serve a big threat to BT so proper analysis should be done
by organization to take right and effective business decision.
All these are the five major force that largely affect the actions of a business organization.
By analyze all these, BT can take better and effective business decision.
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TASK 4
Strategic options and directions available to enterprise
Due to large number of rivals exist in business environment, various type of situations are
face by entity such as introduction of a new product from rival, changes in prices and many
more. In all this, it become more difficult for organization to maintain its market share so it is
very important that right decision should be taken by entity so it can get desired goal and can
maintain its position in market. For this there is a tool known as Bowman’s strategic clock model
that can be use by manager in BT in order to take better decision.
Bowman’s strategic clock model: This is used by large number of enterprises and one of
the main reason behind this is that it provide so many directions to a business entity for its
strategic positioning. One of the main feature of this is that it support entity in position its
product in market which help in attract large number of customers. All strategies indicate in this
model are mainly rely on two factors known as price and value perceived by customers (Matt,
Hess and Benlian, 2015). As BT firm offer its different services to large number of individuals
living in various area of world. With help of this model, management can determine the 8
strategies which can be use by firm. Low price and low value added (Position 1): This is the position in which entity
manufacture unique and creative services to its customers but they receive less value in
turn. In this, entity does not have a competitive position in market and require to do more
efforts to achieve the same.
 Low price (Position 2): This is another strategy and under this enterprise position itself in
the market as low cost leaders in order to get the attention of various customers. One of
the main focus of enterprise remain to achieve economies of scale as this help in reduce
the final prices of product. In this entity generate low revenues but same amount can be
increased by produce more products.
 Hybrid (Position 3): This is the third strategy and is known as a mix of two. This is
known as a combination of both product differentiation and low price. One of the main
aim of entity behind use of this strategy remain to persuade customers so entity can
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achieve its set objective and sales target. This is one of the effective strategy that can be
use by BT firm to serve its customers.
 Differentiation (Position 4): In this strategy, organization offer products to its customers
that are perceive as high in value. Branding of product play a big role in this strategy
further, it is also remain essential for organization to offer quality products and services
to its customers (Akter and et. al., 2016). By manufacture and offer quality services to its
target customers, BT can satisfy the needs of its customers and at the same time enhance
their trust towards the brand.
 Focused differentiation (Position 5): Under this strategy, organization offer its products
to its customers at high prices. This strategy is more reliable for luxury goods. For
generate more number of profits, premium brands first carry out segmentation and then
perform various other functions such as promotion and distribution of goods. This
strategy is effective for only those brands that offer featured services to its customers.
 Risky high margins (Position 6): Under this strategy, organization offer its products and
services to its clients at high prices without offer any extra feature or quality to them.
This is known as one of the risky strategy because in today’s business environment, it is
not easy for a business enterprise to charge prices from its customers. number of
enterprises are there which offer featured services to its clients in order to retain them for
a long time period (Cascio, 2018). This strategy is not effective for BT due to existence
of large number of competitor in business environment. In order to generate a large
amount of profits, it is very important for organization to offer something unique or extra
to its clients.
 Monopoly pricing (Position 7): In this, only a single seller exist in market and sell the
products at the price he wants and does not think about the value receive by customers.
Individuals have only two option that they can buy the product or not because they
cannot buy it from other sellers. One of the main benefit of this is that it help in generate
large amount of profit as monopolist have the opportunity to charge high prices.
 Loss of market share (Position 8): Under this strategy, a standard price is set by firm for
all its products and services (Scholes, 2015). With right price entity can gain trust of
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large number of customers and this is very effective strategy for firm to remain
competitive.
All this are the major strategies that can by utilize by organization to operate in market. By
choose right strategy BT can increase its customers base and at the same time can satisfy
their needs. From all above given strategies position 7 and 8 is not effective for BT because
under that prices of product is more as compare to the value perceived by customers. in
today’s business environment, a firm can survive in long run by offer more value to its
customers and by charge less prices for the same.
CONCLUSION
From the given project report, it can be summarized that it is very essential for business
enterprises to formulate a effective strategy. This provide direction to both employees and
managers to perform their job roles at workplace and support entity in achieve its set goals
and objectives. Before formulate strategy, it is very essential for manager to undertake an
analysis of macro environment as with this manager identify the major forces that affect
business operations. In this way, organization can respond to the changes take place in
business environment in effective manner and can better satisfy the needs of its customers.
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