Business Strategy Report: Analyzing BT's Internal and External Factors

This report provides a comprehensive analysis of British Telecommunications (BT)'s business strategy. It begins with an introduction to business strategy and its importance for organizational success, followed by an overview of BT. The report delves into the macro environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors influencing BT's operations. It then explores BT's internal environment and capabilities. The report also assesses the competitiveness of the UK's telecommunications sector and how BT positions itself within it. Strategic direction is also discussed. The report utilizes various strategic tools such as Ansoff’s matrix, SWOT analysis and VRIO matrix to evaluate BT’s market position, identify opportunities, and determine strategic direction. Finally, the report concludes by summarizing key findings and insights regarding BT's strategic approach and its ability to achieve its goals and objectives. The report is designed to provide a clear understanding of BT's strategic approach within the telecommunications industry.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
P1 Analysing macro environment and how it determines strategic management decisions.......2
TASK 2............................................................................................................................................5
P2 The internal environment and organisation capabilities........................................................5
TASK 3............................................................................................................................................7
P3 Competitiveness of UK's telecommunication sector.............................................................7
TASK 4............................................................................................................................................9
P4 Understanding and interpreting strategic direction................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business strategy is a very important part of every organisation since it plays a very
important role in helping the company achieving its goals and objectives in an effective manner.
It is being considered as a part of management plan which is designed inside the company by the
managers (Ackermann and Audretsch, 2013). It is considered as very much effective because
through this, the company can strive to achieve the goals and objectives but if these strategies are
not prepared in an effective manner then the company face many issues while doing their
business activities like facing the competition etc. Through effective business strategy, company
can strive to understand their internal and external environment as well through which they will
be able to improve their performance in the market. The company which will be referred in this
report is British Telecommunication (BT). It is having their headquarters in London and is
considered as the holding company of British Telecommunication plc. They are having their
offices on more than 180 countries. This report will include the PESTLE analysis, Ansoff’s
strategy, Swot analysis and Vrio matrix of the organisation.
TASK 1
P1 Analysing macro environment and how it determines strategic management decisions
In the telecommunication industry, there are various kinds of challenges which are being
faced by the companies in the market. PESTLE is considered as one of the most effective
strategy through which the company can understand the whole working environment in an
effective manner. PESTLE stands for Political, Economic, Social, Technological, Legal and
Environmental. Telecom sector is required to be understood by the company since because of
this, the company can do their socio-economic development and evaluation for the country. In
the international market, the telecommunication industries are doing their operations in most
effective manner as they make use of substantive reforms and bringing out effective
improvement as well (Annabi and McGann, 2013).
An association procures different assets from providers and the environments of various
products and enterprises inside the substantial market place. There are different components
which affect on capacities of business for offering items to their clients. Such components of
environment render dangers and open doors for some business association. Macro environment
comprises of outer powers which specifically impact on organization's gripping promoting
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methodology in wide range. There are predominantly two external environments, for example,
macro and micro that is impacting the basic leadership and making strategic marketing as well. It
is vital for understanding different elements of full scale condition and examination of PESTLE
investigation which is more reasonable (Auzair, 2011).
British telecommunication can be regarded as one of the largest telecom sector which are
doing their operations from London and are also handling various types of subsidiaries as well.
BT international services department are providing the telecommunication services to all of its
corporate clients which are located all around the world. It can be considered as one of the
strategic method through which they can make them reach different components which are
located in the business environment. The factors that are included on this process are as follows:-
Political factor – After the incident of Brexit, the political economy of United Kingdom
became politically in-stable. Therefore the referred company is required to make appropriate
strategies so that they can deal with such kind of issues which are prevailing in the political
economy in an effective manner. There are many times when the measures which are being made
by the government comes in the way of BT while providing their services like using mobile
phones in an excessive manner is very harmful for the health of an individual so it needs to be
taken care of by the company. It is compulsory for the company to follow all these regulations
while doing their activities in the county because then only they will be able to avoid further
issues. Country faces political unsuitability for some time that all create problem for BT also and
and from problem of corruptions that is major problem before BT while operating in country
and different laws in telecommunication sector which affects its economic stability and its
structure and there is harder trade regulations and tariffs in telecommunication in UK that affect
its economic stability. If environment is not suitable for business proceddings then it hinders self
interest of organisation and diversify from its goals and objectives.
Economical factor – In this factor, the state of economy is being measured through the
changes that are happening in the company. In the recession period, it is very much required that
the purchasing habits of the customers of UK should be judged because they are generally not
willing their spent their income on any such elements happening in the economy. This has
become a major factor for the companies that re operating UK as they would have to lower down
the prices of their products so that more customers can get attracted towards them (Azar, 2011).
British telecommunication acquired EE from Deutsche telecom and Orange in the year of 2015.
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the economic system of country in which the BT operates is economic stable which impacts on
its profitability level and growth rate, inflation and spending power of consumers also affect
purchasing behaviour of consumers in their right manner. Economic stability in country also
affect the condition of organisation while operating in unstable economy it hinders its economic
power and creates loop falls in economy.
Social factors - Purchasers needs viable and best administrations which can render
individual instead of entire society. phones and mobiles are in trend in the current era which is
one of the main division of sales and work media transmission firms. Yet at the same time, there
are more matured individuals rather youths who principally pulled in towards organization
administrations and offices. BT understands the needs and wants of consumers by different
marketing campaigns that gives them characteristics of people, education level, culture and
attitude of people while expansion of people while operation in market. If BT not understand the
perception of masses in which it particularly deals then it affects whole business chain of BT and
affects its self interest.
Technological factors - BT association likewise needs to receive diverse strategies and
methods which help in expanding their development and advancement in legitimate way. It is
necessary to dependably change in innovations and make suitable adjustments for creating
propelled innovation. For breaking down the progression of business association, organization
can make their sites so clients can helpfully purchase their administrations or products on online
premise. BT supplies the opportunities for investigating a few highlights previously acquiring
their offices or administrations (Bharadwaj and et. al., 2013). BT industry not only going for
technological analysis but also adopt different technologies at different levels. It adopts many
technological advancements that helps to beat its competitors and give them to achieve their
objectives and goals. Technological up gradation is very necessary for to being relevant in
market so BT in competitive world have to launch some new technologies that beneficial for
their operations.
Legal factors – In the country, British telecommunications are facing various kinds of
issues while providing their services to its customers because of the legal constraints. Therefore,
various kinds of laws have been designed through which all these issues will be diminished. It
has also been recommended that Sales of Goods Act 1974 should be followed by BT through
which it can be determined that there are various products and they can be used for specific
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purpose only. On another hand, the organisation requires to fulfil two diverse codes of practices
of advertisement which can control the growth of British telecommunication. The rivals and
competitors have been facing certain rules and regulations. Organisation have to face different
types of regulations while operating in different codes and conducts while operating in
competitive scenario. Different rules also increase the operating cost in business scenario. So it is
very difficult to pace with types of rules and regulations simultaneously.
Environmental factors - Environmental change and a global warming can specifically
influence how the media transmission items reach with the coveted clients. In setting of business,
the various types of advancements in technology should be utilized for changes. Then again, the
high cost of forces for the company is the principle reason for an association which making more
greenish house gas immersion. When an organisation have to operate in different countries it has
to follow different environment laws and regulations and understand the norms related to eco
that impacts on economic stability of BT.
Through this, British telecommunication can understand this situation in a very effective
manner and because of this they will be able to achieve their goals and objectives in the most
effective manner as well. But only doing PESTLE analysis is not enough for the company so
they need to conduct the ANSOFF MATRIX strategy as well so that their way to increase sales
can be determined. The concept of Ansoff’s Matrix appraising for driving ring strategic
positioning of company which are describe as under:
Market penetration – It can be defined as that factor in which the company is able to
present their products in the existing market place (Bucolo and Matthews, 2011). The British
telecommunication company are launching their products in the existing market by taking help
of appropriate competitors. Itg is very good opportunity for the company as through this they
will be able to develop their income by expanding their services in the existing market. BT can
also make use of this opportunity to customise their services as per the trends which are going on
in the market. Through this, they will be able to gain a large market share and a leader as well.
Product development – As per this concept, the company should think of making new
products and services in the existing market place (Grover and Kohli, 2013). For this, BT will be
required to enter into a new market segment so that it can hep the in attracting more amount of
customers. They can also make use f effective tools and techniques so as to conduct this process
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in an effective manner and in case of BT they can plan to improve their network services by
making use of innovative techniques.
Market development – It can be considered as one of the most effective tool through
which BT can develop their business. In this strategy, basically a market area is developed so as
to develop the current product in the market. Here, company will have to focus on those
customers which are currently not connected with the company and along with this, they are also
focussing to target new customers in the new market. BT can make use of this strategy very well.
Diversification – In this strategy, the organisation will have to focus on expanding their
services in new nation so that they can bring growth and development in the marketplace. But
while conducting this process, there will be so many challenges that will come in the way and
that moment company will have to apply appropriate strategy so that all these issues ca be
removed. Under this, BT should try to sell those products in the new country which is very
famous in their native country and are liked by the customers as well. Through this, their sales
will be enhanced and they will be able to give tough competition to their rival parties as well.
Therefore, every company is developing in the market with the help of these strategies
only and they are also helping them in grabbing more no. of customers, increasing the
geographical area, increment in facilities and retention of employees as well. So, by conducting
the micro-environment analysis, company will always be in profitable situation and can achieve
their goals and objectives as well (Jocovic and et. al., 2014).
TASK 2
P2 The internal environment and organisation capabilities
In order to develop the business strategy in every organisation, it is very important that
the management must focus on the elements which can be used to make changes in the
strategies. This is a very essential process of the company and it needs to be conducted on a
continuous manner as well. The strategic capabilities of the company can be referred to as the set
of resources, capabilities and the skills which can be used by the company to achieve higher
competitive advantage in the market (Kalyani and Sahoo, 2011). Through this, the company will
be able to effectively employ various kinds of activities and functions of company and
implementing correct plans as well through which their marketing value also gets enhanced and
company will be able to survive in the market for longer period of time. Therefore, to identify
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the strategic capabilities of BT, the company is required to analyse and implement VRIO model
through which they will be able to examine their strengths and weaknesses. This will discussed
VRIO model for determining strategic capabilities possessed with the cited firm which are as
follows:
VRIO Analysis – This is a kind of strategy in which it is stated that the rivals of the
British telecommunication company are enjoying the competitive advantage in the market on
temporary manner. It is also suggested that these advantages can be taken back from the
competitors of the services which are being offered to the competitors are better than them.
V- Valuable- Here, it is stated that the economies of scale is developing the
infrastructure of the company on the large scale. In valuable includes the products and services
should be provide as much valuable that enchanted the attraction of consumers towards BT's
products and services by providing different and useful features, and apps that make their life
comfortable.
R- Rare- Due to the presence in international market , the early entrants will be able to
identify the brands specified by BT which is mainly provided to united services of
telecommunication and mobile. In rare includes that BT have to provide goods that competitor
not able to provide their customers and that increase standard of consumers life style. BT
inclusion phones, BT you view box, BT baby monitors etc. are rare gadgets that other
competitors are not provide.
I- Inimitable- The company will have more effective entrance in the new market
segment where the company will make a culture of being a leader.
N- Non suitable- None
From the above model, it can be analysed that BT group is continuously developing on
the grounds to achieve sustainable competitive advantage. This will be very effective in
understanding the internal environment of the company as well (Klettner, Clarke and Boersma,
2014).
STRENGTH AND WEAKNESS OF COMPANY - From this, it can be analysed that
 British telecommunication is biggest organization which is situated in United kingdom
that has been named as best 395 business association among top 2000. It is extremely
renowned firm for their more extensive system and furthermore disseminate their
business in excess of 25 nations in entire universal market.
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 BT make in excess of billion dollar in every year. It is enrolled as 104 firm as far as sales
of services. For doing solid research and development empower firm to increase their
focused edge with the assistance of turning into the market leader in term of technology
and techniques. The saturated exchange will make and make significant boundaries and
clashes for organization among intense contenders (Köseoglu and et. al., 2013).
 Solid culture of BT has been allowing the organization which is being fruitful with
M&A. Administrative assets has diminished and which has turned out to be difficult to
want cause for keeping up expedient development which lead towards non stop brand
recognizable proof inside substantial gathering.
 Solid budgetary has been given to organization to confronting obstructions and blunders
without creating bankrupt conditions to BT and reinvestment capacities. Because of
expanded rivalry in Europe, British telecom does not influence the working business
sector.
 BT has some adaptability for controlling the cost and furthermore give more sensible
value telephones as firm will creating and exchanging their own particular cell phones.
This will permit them for outlining plans and make successful methodologies of business
that help with expanding their picture of brand. Then again, it can hurt the ID and brand
picture. It can make more unsafe for organization.
 An association assets are principally centre around their Research and improvement
instead of extreme development of advertising (Köseoglu and et. al., 2013). The solid or
viable picture of firm will permit them for doing it without disturbance. On the opposite
side, venture has focus to the age Y which lead towards for poor showcasing strategy for
British Telecom.
TASK 3
P3 Competitiveness of UK's telecommunication sector
In the UK market, the telecommunication industry is facing competition in to various
segments like broadband and mobile industry (Murano and et. al., 2011). There are so many
companies that are present in the market which are making use of high quality of technology and
these companies can be specified as Vodafone, O2, EE etc. They are making use of 5G
technologies for innovating their products and services. Therefore, if any company wants to
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grow and develop in the marketplace then it is very essential for them to follow these strategies
in an effective manner. For conducting this, they can make use of Porters five force model to
analyse the competitiveness in the telecommunication market (Oestreicher-Singer and
Zalmanson, 2012). This is conducted as under:
Bargaining power of buyers – In every market, customers are considered as the ultimate
leaders and each and every product is being sold as per their wish and demand. If any
organisation is doing this then they are on the verge of achieving competitive advantage in the
market. But they need to make sure that they always have the support of the buyers as then only
this position can be maintained. On the other hand, BT will help in creating and developing
appropriate benefits in compare with other competitors or rivals. Due to large no. of competitors
in market it enhances chance for consumers that they easily skip any product and take another
one at relatively low price that creates hurdles for BT.
Threats of new entrants- This factor is also required to be considered ina very effective
manner because then only the company will be able to survive in the marketplace for longer
period of time. Here it is believed that if any new company will enter into new market then they
will come up with new techniques and technologies through which they will strive to achieve
high position on the market so it is a kind of dangerous situation for the companies that are
currently working in the business environment. In case of BT also, if any new
telecommunication company will enter then it will a threat to them as they will be more efficient
and innovate from them. But this threat can be removed as well by putting high investment on
capital and connecting the customers with the brand as well (Schaltegger and Wagner, 2011). in
that fierce competitive world there is large no. competitors in world for BT that creates in
smooth operations of business and its proceedings. Name of competitors are china mobile,
varizon, AT&T, N Ippon etc. are fierce competitors that creates hurdle in BT progress.
Bargaining power of suppliers - In this, it is specified that the suppliers which are
present in the business environment are having their bargaining power of high and low prices.
But this situation can be improved when BT group will create an effective supply chain with the
help of several providers available in the market. The suppliers are mainly included in the sort of
enterprise which render mobile operator with technical infrastructure need for functioning setup
in the country. By improving supply chain it can improves the situation of bargaining power.
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Threat of substitutes – The replacement threat is higher when other companies are
present in the business environment providing same kind of services to its customers. Therefore,
organisation can make and create innovative and new techniques for increasing competitive edge
against strong competitors. There are large no. of similar products in market with different
features that impacts on profit of BT.
Rivalry within market - Because of a portion of the substantial organizations and least
number of telecommunication enterprise in the United kingdom, rivalry is higher in the part of
United kingdom. In telecom division, rivals make both non-cost and value techniques for
accomplishing potential focused limits inside entire telecom association. Then again, intense
rivalry pointer is appointing budgetary level for doing promoting and publicizing technique
(Scholes, 2015).
TASK 4
P4 Understanding and interpreting strategic direction
Strategic direction can be defined as a course of action through which the various
activities and operations of an organisation is being achieved in an effective manner. BT group is
also having various kinds of marketing strategies but if compared to their market positioning
then it is little weak. So, if the company wants to understand the whole strategic path Bowman's
strategic clock model will be used. It is described as follows:
Bowman's strategic clock model – This can be considered as one of the most effective
model which is normally being used by companies when they have to identify the actual position
of the competitive companies and measure the effectiveness of products and services being
offered by them in the market. This model was founded by David Faulkner and Cliff Bowman
for explaining three major strategies of Porters generic. The model can be understood in the
following manner :
Position 1 (Low cost & Low added value) – It can not be considered as a competitive
position for the business where the products are being sold at a reasonable rate so as to give
tough competition to the competitors in the market. In that case BT have to cut cost by adopting
new technologies and functions that enables to reduce cost that helps in grab large market share.
Position 2 (Low price) – There are many times when this position is resembled to
economies of scale model in which the strategies are prepared so as to minimise the cost for
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achieving the desired growth and success. In that case BT can low their prices by different
operating system that low their margin but it enhances overall profit of organisation.
Position 3 (Hybrid) – In this situation, the customers are being presented with more
effective cost and in an reasonable price as well through which the company can achieve better
positioning in the market (Slack, 2015). By adopting different features that differ from their
competitors and by adopting economies of scale helps in gain competitive advantage.
Position 4 (Differentiation) - The principle point is give different administrations on
powerful merchandise, it will give abnormal state of significant worth added administrations and
items to their coveted clients. Marking and nature of administrations will assume a fundamental
part in this. BT is strong brand name and by availing it can give additional value such after sale
services that makes strong connection with customers.
Position 5 (Focused Differentiation) - This is situated procedure for received through
extravagance firm who fundamentally centre around meet with their top notch esteem whose
point are dissemination, advancement and division (Svee, Giannoulis and Zdravkovic, 2011). in
scenario BT have to build high perceived value to give extra services that enhace faith toward
brand.
Position 6 (Hazardous High Margin) - At the point when shopper constantly buy their
products, it will make and make in more focal points, yet at the same time purchasers discover
fitting merchandise at sensible esteem. It is here and now and non-aggressive technique. In that
case BT have position high price that are only suitable for rich people but not others that impacts
on business.
Position 7 (Monopoly pricing) – In such state of imposing business model of business
association, they doesn't have to center or worry against particular merchandise and enterprises
so clients have decision to left the acquiring items or with no adjustments. Monopoly creates
right to occupy whole market that helps in grab large market share in BT.
Position 8 (Market share loss) – This position can be allude as that formula which get
by in substantial focused market fiasco. Likewise they require to decide the standard cost with
centre scope of merchandise and low nature of administrations or items will lead towards loss of
their potential shoppers and furthermore diminished in piece of the overall industry of an
association. In that case BT have to give products on high perceived value on moderate and low
price that helps in capture high market share.
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