Business Environment Analysis of BT Group: Stakeholders and Strategies

This report provides a comprehensive analysis of the business environment of BT Group, a leading telecommunications company. The report begins with an introduction to the business environment and the significance of various internal and external factors. It then delves into the different types of organizational structures and how BT Group meets the objectives of its diverse stakeholders, including employees, customers, shareholders, and the government, outlining the strategies employed to satisfy each group. The report further examines economic systems in resource allocation, the impact of fiscal and monetary policies on business organizations, and the influence of market structures on pricing and output decisions. It also explores how market forces and cultural factors shape organizational behavior, using McDonald's as an example. The report concludes by discussing the significance of international trade, particularly in the UK, and the impact of European Union policies on the UK's business environment.

Business enviornment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 Different types of organizational...........................................................................................1
1.2 Extent to which BT meets the objectives of different stakeholders ......................................2
1.3 Responsibilities of BT towards stakeholders and the strategies employed by BT to meet
these responsibilities ...................................................................................................................3
Keep satisfied...................................................................................................................................5
The government and the society has to be given satisfaction. All there requiremnet has to be
fulfilled as they are imporatnt aspects of the company. ..................................................................5
Monitor............................................................................................................................................5
The employees are integral part of the organisation and they hane to be monitored properly.
Regular monitioring will keep them happy and BT has done tha same thing.................................5
Manage closely................................................................................................................................5
Suppliers are the providers of the raw materials. Tey have the power to influence the business
and operations. They have to be maneged closely ..........................................................................5
keep informed..................................................................................................................................5
The shareholders have to be informerd about all the material information in the compay. BT has
been maintainin trasparency with its shareholders..........................................................................5
TASK 2............................................................................................................................................5
2.1 Explanation economic systems in resource allocation...........................................................5
2.2 Impact of fiscal and monetary policy on business organisations and their activities...........6
TASK 3............................................................................................................................................8
3.1 Market structure determining pricing and output decision of businesses..............................8
3.2 Ways in which market forces shape organizational responses..............................................9

3.3 Ways through which culture and business environment shape the behaviour of McDonald's
......................................................................................................................................................9
TASK 4..........................................................................................................................................10
4.1 Significance of international trade in UK............................................................................10
4.3 Impact of policies of the European Union on UK...............................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment plays an important role in the success any business or
organization. It is a combination of internal and external factors, which helps the organization in
providing all the essential information regarding the competitive market. In these factors
company includes customers, competitors, suppliers and legal and social factors. Employees are
the back bone of any business as they decide the goodwill of the business. For the same, it is
highly essential for companies to keep their customers satisfied (Jacobs and Nakata, 2010). In
this regards, the present study is based on the overall business environment of the BT group. It is
British telecommunication group which comes under the leading communication companies. The
company provides better communication services to all their customers by serving the
broadband, phone, TV and mobile needs of customers in the UK. Further, the present study
discusses the organizational purpose of business as well as nature of the national environment in
which businesses operates.
TASK 1
1.1 Different types of organizational
Business entities are not alike. They have different operations ans scale of business. The
different business organization provides more control, flexibility and better structure which is
best for the business. The tax treatments are also different. The small scale business can save
huge taxes if the correct business organization is selected. The rules and regulations regarding all
the business are different and the right type of organization would get lot of benefit from it. In
the process of achieving the business purpose, organizations are divided into various different
types, which are explained below:
Sole proprietorship: This is a first type of organization under which business run by a
single person. It is one of the simplest form of organization because all the liabilities owned by
the owner. Sole proprietorship includes some professionals, service providers and the legal
advisory (Cantwell, Dunning and Lundan, 2010). The legal advisers are responsible to take all
the legally decision which related to the firm. The purpose of Sole proprietorship is to earn own
profit.
Partnership: A general partnership is a contract between two parties or persons, who
joined together to carry the business. In this, they also divide all the profit and losses as per their
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capital ratio. Under this category, each member contributes their money, time, skills and profit.
Further, limited partnership has some limited liabilities toward the business. In these kinds of
partnership employee's work as the amount they invest in the business. The main purpose to
adopt this type of organisational structure because it gives more flexibility in operations and the
resources of different partners can be combined together. This will increase the resources of the
organisation.
Franchise: In is another type of organization which is becoming quite popular these
days. They usually license the use of good ideas to other companies (Vernon, 2014). A franchise
grants permission to sell its product under a certain area. The purpose of using franchise is to
delegate the responsibilities and operations to other people. This is helpful in reducing the
workload on the company.
Under the given case scenario, BT group comes under the category of public limited
company and due to this they are able to offer its shares to the public.
1.2 Extent to which BT meets the objectives of different stakeholders
Stakeholder plays a most important role in any organization which includes different
customers, suppliers, government, bank as well employees. BT group is a holding company
which owns British Telecommunications (Benesch and et.al., 2014). They mainly use the
objective for the power of communication in order to make the world better. Company usually
fills the needs and demands of all its stakeholders and try to make them happy. There are mainly
two types of stakeholder’s i.e.
Internal Stakeholders: These stakeholders include all those people who work under the
company such as owners, managers and employees. BT group always keep their employees
motivate by giving them various intrinsic as well as extrinsic rewards. Through this, they are
able to meet out their needs and earn huge profit as well. Company also provides them regular
growth, health and safe working environment as well (Carter and Lorsch, 2013). On the other
hand, manager has the full authority to take various strategic decisions. In order to boost up their
confidence level BT group conducts several training sessions as well as provide them great
opportunities.
External Stakeholders: Other most important stakeholders of company are their external
stakeholders such as: customers, government, creditors, suppliers, community, society and
employees. Customers play a crucial role in the increasing sales margin of company. For the
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same, BT group always try to meet out the needs of customers and provide them quality products
and services such as: broadband, phone, TV and mobile needs of customers in the UK. These
stakeholders have to be included in the decision making of the organization. The employees are
given good working conditions and more opportunities to get in the decision making. They are
also rewarded from time to time by BT. The company also ensures that they fulfill the needs of
the society and fulfill their corporate social responsibilities. On the other hand, various rules of
government are also followed by them regarding employment rules, tax rates etc. All the
requirements of the nation's government is fulfilled. (Strong and Volkoff, 2010). Further, it can
be stated that company can effectively maximize their profit margin as they are able to fulfill all
the objectives of their customers. They are included from the beginning till the end in the
production process. BT also ensures that the products have the right quality and safety to
consume. Furthermore, the suppliers and creditors are also given importance. They ensure that
their rights have been complied.
1.3 Responsibilities of BT towards stakeholders and the strategies employed by BT to meet these
responsibilities
There are various duties of BT group towards its stakeholders which they need to be
fulfilled in order to achieve their objectives.
British Telecommunication Company leads to bring together the best networks, technology as
well as all the expertise within their area of field (Cantwell, Dunning and Lundan, 2010). They
give high importance to all the values of their stakeholders and employ various strategies for
them such as:
For all their customers they try to provide them high quality networking services in order
to keep them satisfied. Further, they have also planned the better customers support services and
take regular feedbacks from them. This is the most effective strategy by which they can keep
their consumers loyal (Björklund, 2011). On the other hand, employees play a crucial role in the
success and growth of any company. For the same, BT group employed several strategies to
make them happy and satisfied. Under this, they need to provide them several career as well as
growth opportunities. In addition to this, shareholders are the most important stakeholders and
the best strategy for company is to maintain long lasting and profitable relations with their
customers (Carter and Lorsch, 2013). They also need to give timely payment to all their suppliers
as well as various additional benefits in the company. The Influence and interest grid helps BT in
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keeping a close relationship with its stakeholders. If the stakeholders of BT are satisfied, timely
informed and their expectations are taken care of then they will be more satisfied with the
company.
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Illustration 1: Influence and interest grid
(Source: Stakeholders analysis, 2016)

Keep satisfied The government and the society has to be
given satisfaction. All there requiremnet
has to be fulfilled as they are imporatnt
aspects of the company.
Monitor The employees are integral part of the
organisation and they hane to be
monitored properly. Regular monitioring
will keep them happy and BT has done
tha same thing.
Manage closely Suppliers are the providers of the raw
materials. Tey have the power to
influence the business and operations.
They have to be maneged closely
keep informed The shareholders have to be informerd about
all the material information in the
compay. BT has been maintainin
trasparency with its shareholders.
TASK 2
2.1 Explanation economic systems in resource allocation
There are four major types of economies that exist in the world. Each country has its
own positives and negatives and they have to itself decide the economic system that would be
beneficial for them (Cavusgil and et.al.,2014). The economic system that decide the fate of the
country are:
Command : In this type of economy all the decisions are taken up by the government. They are
the one who has the complete power and control within a country. This type of economy if
found in counties which have ample of natural resources and they step in to control the use and
allocation of the resources (Crai and Campbell, 2012). The government only controls the most
important resources in the country and the rest are left for the market forces to decide. The
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resources are allocated by the government which makes the use of resources more efficiently in
the economy.
Free Enterprise: Under free market economy the decisions are taken up by the individuals and
the market forces. The government does not intervene in between (Ferraro and Brody, 2015).
Usually this type of economy is difficult to find these days. The type of resources are decided as
well as produced by the market forces and the producers. The resource allocation decision lies
with them.
Mixed Economy: The mixed economy is a combination of free market and command economy.
It has both the characteristics of the two economies (Finch Wagner and Hynes, 2010). Most of
the decisions are taken up by the market forces and the government has the control over few
areas. So the private sector can enjoy the decision making power with less involvement of
government. The resources are produced and allocated by market forces with the partially help
from the government. The need of the resources are expected and decision are taken (Jacobs and
Nakata, 2010).
Transitional system: It is most conventional form of economy and it is the one which is changing
from central decision making to free market forces decision. This type of economy face lots of
problems as new private forces are getting more stronger. The resources are allocated in the
hands of market forces slowly (Muhammad and et.al., 2010). The government takes the major
decision to give what rights to private sector in terms of specific resources.
2.2 Impact of fiscal and monetary policy on business organisations and their activities
Fiscal Policy: It means how a country changes its expenses and revenues in order to accelerate
the growth of the country. A change in fiscal policy has a huge impact in the business and its
activities (Richards, Mychasiuk, Kolb and Gibb, 2012). Higher taxes means less profits and
revenues which would slowdown the growth of the business. High interest would make the credit
more costly available and all the activities of the business would suffer from this. Privatisation
would further increase the competition and the company would have to cut down its profits to
survive. Fiscal policy does play an important role in the working of the business (Robbins,
Judge, Millett and Boyle, 2013). A favourable policy would boost the business while the
unfavourable one will result in downfall of the company.
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Monetary policy: Monetary policy means the changes that are done by the Monetary
authority of a country to ensure stability and changing the flow of money in the country. If the
interest rate decreases the business can take advantage of this as the credits would be available
cheaply (Shropshire, 2010). This would reduce the cost and overheads for the company. The
economy would go up helping in the trade from other countries and there will be more
investment opportunities. The strict and tight Monetary policy would create lots of problems for
the business and its day to day activities. There would be less trade and the overall economy
would decrease (Xue, Shen and Ren, 2010 ).
2.3 Letter to the CEO of BAA evaluating the impact of competition policy and other regulatory
mechanisms.
To,
CEO of BAA
March 11, 2106
Subject- Impact of regulatory mechanisms and competition policy
Dear Sir,
The competition Act came into force because of Competition Act 1998. The act provides
guidelines and rules to ensure that ensure fair competition in the country. It prohibits anti
competition activities and creation of dominant position by any company which would have
negative effects on the trade. This ensures competitiveness in U.K markets. According to the
case study, BAA was told to sell off their two out of seven airports in order to ensure
competitiveness as they were dominating the airport business. It is for the same reason that the
name of airport was also changed.
The company can be in competitive position if they try to amend their policies and plans
to capture more market. This type of competition has no adverse effect on the business and it is
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for the same reason that the BAA was intimated to sell off their other 2 airports and was told to
focus on the other left ones.
Furthermore, Civil Aviation Authority (CAA) is among the leading aviation brand who
does all the ethical practices and follow rules and regulations to ensure there is competitiveness
in the aviation industry.
Yours Sincerely
ABC
TASK 3
3.1 Market structure determining pricing and output decision of businesses
Market structure can be defined a market place in which buyers and sellers have close
interaction with each other. Following are the different types of market structure:
Perfect competition: It is a market structure where there are large number of buyer and sellers.
Buyers have vast knowledge regarding the product which they deliver to their customers. Service
user have wide options in which they select the product or service which are been delivered to
them with high quality (Strong and Volkoff, 2010). Change in price do not make any difference
as there are many firms which provide similar products. Customers prefer to buy the product or
service which provides them high quality. The output is homogeneous and has less difference in
the content. It is also produced in large quantity.
Monopoly competition: In this competition all the there is only one seller and large customers. In
other words, there will be only one organization which delivers similar products or services
(Szell, Lambiotte and Thurner, 2010). Making changes in price does not make any difference as
customers have not other substitute for it. The output produced is according to the demand of the
customers as the monopolistic firm is the only producer of the product.
Oligopoly competition: There are few organizations which falls under this competition. All the
companies which falls under this competition provides similar product and services. Firms adopt
different strategies in order to attain competitive advantages. Further, change in price has a great
impact over the buying behaviour of customers (Thornton, Ribeiro-Soriano and Urbano, 2011).
If any firm make reduces its price, then all the other customers of other organization will shift to
that company which provides them services or products at low cost. The output is produced in
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large quantity and according to the needs of the customers. There are only few producers in this
type of market.
3.2 Ways in which market forces shape organizational responses
It is very essential for the organization to make changes according to the needs and
requirements of customers (Vernon, 2014). According to the changes which takes place in
market forces, firm has to respond to it accordingly. Following are the market forces which
shape the organizational responses:
Demand and supply: It is very essential for the organization like ASDA to make changes
according to the market conditions. Firm should be able to maintain their supply according to
customers demand (Wild, Wild, and Han, 20). In case the demand of the good are high, then
organization should be able to increasing their productivity accordingly. The demand and supply
can affect the decision of an organization. The low demand would mean that the company has to
produce less and look for opportunities to increase their sales. While more supply in the market
would reduce the prices of the product as it is available in abundance.
Customers perception: One of the best way through which customers can be attracted it by
providing them high quality products. Through which ASDA will be able to develop good
perception among customers (Xue, Shen and Ren, 2010 ). If the perception of customers is not
good, then it will highly affect the business operation. On the other hand, if the perception is
good, then firm will gain huge profit.
Price of the goods: Customers prefer to buy the product or services which provides them high
quality but in low price. ASDA falls under oligopoly competition in which there are only few
organizations which deliver similar products or services. If ASDA delivers its product at low
price, then it will be able attract new customers effectively. Price plays a vital role in shaping up
the behavioural responses (Benesch and et.al., 2014).
3.3 Ways through which culture and business environment shape the behaviour of McDonald's
Before adopting any strategy it is very essential for McDonald's to consider regarding
their cultural and business environment. With this respect, PESTLE will be helpful in identifying
the factors, which are as follows:
Political factor: Government imposes taxes and duties which has a great impact over the
business operation of McDonald's (Björklund, 2011). If the changes are frequent, then
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organization has to make changes on their prices of the product and this would have been a
negative impact over the firm. Factors which fall this are Fiscal policy, tax rates, etc.
Economic factors: This includes recession, inflation rate, etc. If these rates increases, then this
would affect the firm negatively. Customers will not be able to purchase effectively and this
would affect the sale and growth of the company. Other factors which include are foreign
exchange, interest rates, etc (Cantwell, Dunning and Lundan, 2010).
Social factors: Changes related to tastes and preferences takes place frequently and it is very
important for McDonald's to understand their customers needs and wants. In order to satisfy
them, they should be able to develop products accordingly (Carter and Lorsch, 2013).
Technological factor: It is very essential for the firm to make changes according to change in
technology as it will be helpful in understanding and in providing better services to customers. In
this context, McDonald's should update their technology according to changes which takes place
(Cavusgil and et.al.,2014).
Environmental: There are many cases in which organization face losses because change in the
climate. In this context, it is important for the organization to make necessary step with the help
of which they will be able to protect their products.
Legal: McDonald's should operate their business in a legal way. All the policies or law given by
government should be followed or else it would be punishable and it would also affect the
customer's perception towards the firm. Along with, McDonald has to follow the companies
rules, health and safety rules,Food act, advertisement guidelines, employee regulations, contract
and agreements guidelines laid by the country which it is doing business(Ferraro and Brody,
2015).
TASK 4
4.1 Significance of international trade in UK
International trade can be defined as process in which business activities takes place
among different countries. It has both negative as well as positive aspects, which are as follows:
Following are the benefits and merits of international trade:
It is very helpful in optimum utilization of resources. Organizations get huge opportunity
as they will be able to attract new customers. In this context, it important for the firm to
understand their customers needs and wants. Accordingly, products and services should be
developed so that customers could be satisfied. International trade can help UK to improve its
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economic conditions. Furthermore, it opens up market for them as the whole world becomes a
market for them. The Pound and Euro would strengthen and there would be more investment in
the country. UK has been among the top countries of the world in international trade and it has
helped the country to grow at a rapid pace. The people of UK has also been benefited as they are
able to sell their goods across the world. It may further aid the company to broaden its horizons
as well as markwt. A steady trade may further be receive foprm the consumers. International
trade is very helpful in fluctuating the prices of the commodities. Other issue which arise because
of international trade is high competition. In this context, it is essential for the firm to make use
of different promotional tools so that competitive advantage can be achieved.
4.2 Analysis of the impact of global factors on UK business organizations
The factors and environment around the globe also have an impact on the business established in
UK. The changes in technology have to be seen and proper up gradation with it is required
(Jacobs and Nakata, 2010). The business in UK would not want to see themselves in the position
where there are left with outdated technologies. Not only the technological factors affect the
business but also the social, political and economic environment around the globe impacts the
business. The changes in interest rate, exchange rates and competition force the business in UK
to adjust themselves with it. The World bank has helped in removing the trade barriers across
countries to ensure that there are no restriction in the trade. It also helps in trade relating
activities by facilitating countries to freely trade. Along with this IMF (International monetary
fund) provides credit facilities to the needy countries at a lower rates. Both these institutions
have helped in streamlining the trade activities around the world. These institutions act as a
mediator and facilitator of the international trade.
4.3 Impact of policies of the European Union on UK
The EU policy was introduced to rejuvenate the overall economy of UK. The investment
and trade related activities has multiplied after the implementation of the policy. It has open up
market for many countries as well as UK as it has made trade much more easier than before. The
WTO has also helped them in doing global business. The UK government has also conducted
many trade and investment agreements on the basis of this. The policy ensures tat there is
sustainable development in UK and more opportunities are given to businesses to carry out their
operations outside the European Union.
Following are the impact of policies of European Union on UK:
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 Taxation policies: By paying off all the taxes which are imposed by government,
organization can support the nation in development of road, maintaining heritages, etc
(Shropshire, 2010).
 Inflation policies: With the help of Monitory policy committee prices of the commodities
can be controlled effectively. During inflation rate prices of the goods can be reduced and
this will be helpful in maintaining a balance.
 Environmental policies: European Union is very helpful in providing proper education
for the country and this helps in developing employment opportunity and in reducing the
unemployment rate.
CONCLUSION
From the above report it has been concluded that BT group is easily able to achieve its
target market and enhance their profit margin with the help of fulfilling all the responsibilities of
their stakeholders. However there are some fiscal, monetary, European and the competition
policies which affect the performance and business activities of organizations.
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