Business Strategy Report: BT Group's Strategic Direction and Options

This report provides a detailed analysis of BT Group's business strategy. It begins with an introduction to business strategy and then focuses on BT Group, a multinational telecommunications company. Task 1 examines the impact of the macro environment using the PESTLE model and Ansoff's growth matrix. Task 2 analyzes the internal environment and capabilities using the VRIO model and SWOT analysis. Task 3 explores models for evaluating competitive edge. Task 4 focuses on producing a strategic management plan, outlining strategic direction and options for the organization. The report covers various aspects of the business environment, including political, economic, social, technological, legal, and environmental factors. The report also discusses market penetration, market development, product development, and diversification strategies. The analysis includes recommendations for improving BT Group's competitive advantage and achieving its strategic objectives.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Impact and influence of macro environment...............................................................................1
TASK 2 ...........................................................................................................................................6
Analyse the internal environment and capabilities......................................................................6
TASK 3..........................................................................................................................................13
Appropriate strategy to improve the competitive edge by using tools in the market ...............13
TASK 4 .........................................................................................................................................16
Produce strategic management showing clear strategic direction and option to the organization
....................................................................................................................................................16
CONCLUSION .............................................................................................................................21
REFERENCES .............................................................................................................................23

INTRODUCTION
Business strategy refers to a strategy of an organization that consists of various actions
and decisions that a business will achieving its objectives in the future. Strategy helps a business
to achieve its goals in an effective and efficient manner. Due to intense competition in the
market, the importance of strategy of the business has increased. Business strategy plays an
important role in overall plan of the business. There are different levels of business strategy such
as corporate level strategy, strategic business unit strategy, functional level strategy etc. (Awan,
2016).
The Report is based on British Telecommunication Group plc. that was founded in year
1969. The company belongs to telecommunication industry. It is a multinational company that
operates in more than 180 countries. Headquarter of company is located in London, U.K., key
products of company are mobile telephony, digital television, information technology services,
supply chain management etc. The key peoples of British Telecommunication are Philip Jansen,
Jan Du Plessis. There are various subsidiaries of the company like BT Italia, Plusnet etc. The
Report will outline the impact of macro environment through PESTLE analysis and Ans-off
growth matrix. The Report will also analyse internal environment of the company through
VRIO/VRIN model and SWOT analysis. The Report will also describe models for evaluating
competitive edge in the market, strategic management plan by applying various theories and
models.
TASK 1
Impact and influence of macro environment.
Business environment consist of different factors and forces that may impact the
operations of the business directly or indirectly. Business environment can be divided in two
parts that is micro and macro environment.
Macro environment- It refers to the factors that exist outside the organization and
indirectly affects the working of the company. These factors cannot be fully controlled by the
business. The impact of macro environment on the operations of the business can be analyse
through different models. They are a follows-
PESTLE model- PESTLE analysis is a tool that helps the business to determine the
impact of external factors that exist in business environment that may impact the performance of
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the organization. This model is very useful at the time of entering in a new business or when a
company is launching new product or service in the global market.
Political-
There are various political factors that may impact the performance and profitability of
the company. British Telecommunication is having its operations in more than 180 countries.
Therefore, the stability in Government of different countries will affect the operations of
telecommunication company because when government changes policies related with wage rate
of labour, policy towards business will also change. It may be possible that political factors will
impact all the countries in which British Telecommunication is operating or it may also affect the
companies that are involved in trade with the company (Eaton, 2015).
There are various political factors that must be considered by British Telecommunication
while operating in any country. The level of integrity of the political party, there are various laws
that are enforced by the Government of U.K. Related with business will affect the working of the
company. For example- contract law that provide the things that company is not allowed to do. If
British Telecommunication is operating in such a country in which there is no law for protecting
Intellectual property rights then entrepreneurs will hesitate to invest in the company.
Economic-
Economic factors that are related with the economy of the country in which British
Telecommunication is operating will also impact the working of the company in different ways.
There are various economic factors that can impact the operations of British Telecommunicate
are the rate of inflation in the country, exchange rate of foreign currency, development stage of
economy and rate of interest etc.
The rate of interest in U.K. will impact the level of borrowing and investment by the people. For
example- If, the rate of interest on the investment is high in the countries where British
Telecommunication is operating it means different investors will invest in the company as a
result the growth of organization will also improve.
Social-
There are various social factors that not only affects the operations of British
Telecommunicate but also impact the marketing of the company. The demographic factors of the
population such as age, gender also impact the marketing strategy of the company. The nature of
society in which company is operating also affects the level of investment in the company. For
2

example- some societies in U.K. promotes spirit of entrepreneurship while some societies do not
promote. British Telecommunication must be aware of the standards related with health that are
prevailing in the industry.
Technological-
There are various technological factors that can impact the operations of British
Telecommunicate such as continuous innovation in providing services to the customers, access
of the population to information etc. British Telecommunication is using advance technology for
meeting out needs of existing and targeted customers.
Company is making efforts for restructuring its management of supply chain so that,
expectations of the customers from telecommunication company can be satisfied. Technology is
creating pressure on marketing department of company for developing and offering new
products.
Legal-
There are various legal factors that may impact the working of British
Telecommunication. Company operates in different countries therefore, company has to comply
the laws related with environment.
Laws related with intellectual property, patents are different in different countries and if
British Telecommunication is not having these rights it will suffer. Company have to follow laws
related with data protection and it should also consider the process of protecting the breach of
data, company also have to consider the norms related with health and safety of workers etc.
Environmental-
There are various norms of Government of U.K. related with environment that, British
Telecommunication need to follow. Government has provided norms for managing waste in
urban areas that are to be followed by company for its operations near urban areas.
Environmental standards and norms have an impact on the process of innovation in the products
of British Telecommunication.
Nowadays, customers are becoming more and more aware regarding the impact of
activities of company therefore, company have to comply all the legal norms for meeting
expectations of the customers.
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Ans-off's growth model-
It is a tool that helps the management, marketing manager and other peoples that are
working in the organization to develop different strategies so that, sales and profitability of the
company will grow in future.
Market penetration- Market penetration refers to the strategy that can be used by British
Telecommunication for selling its existing products or services in the existing geographical
segments (Yuliansyah, 2016). For example- British Telecommunication can offer its existing
products such as broadband services, information technology services to the existing customers
of the company in different ways such as by decreasing the prices of products in respect of
competitor products. Company should invest more funds in promotion of goods and services
such as it can invest in advertisement of telecom services through magazine, social media
platforms etc. and supply chain management of British Telecommunication(Pisano, 2015).
For successful implementation of market penetration strategy, company can enter into
partnership or joint venture with other top companies. British Telecommunication have to
modify its supply chain management or it can access to different distributors for providing
existing products and services to the customers.
Market development-
4
Figure 1 : Ans-off matrix
Source : (Ans off matrix, 2018)

British Telecommunication can also use market development strategy for offering its
existing products in new geographical areas. To sell the existing products of the company,
British Telecommunication has to invest funds for conducting research activities so that,
company can identify new markets in which company can offer its existing products and services
(Gangotra, 2016).
Company has to make strategic plan for entering in global markets so that, demands of
the customers can be satisfied. To provide existing products in new areas, company has to invest
large sum of money for improving its broadband network and to provide better customer
experience. British Telecommunication should identify different segments of customers in which
the company can offer its existing products and services. For successful implementation of
market development strategy, company should increase its level of production so that it will get
benefits of economies of scale. Company should provide its existing products in such market
where it has opportunities for improving the profits. The strategy will be successfully
implemented only when British Telecommunication is having a unique and advanced technology
of offering telecom services.
Product development-
British Telecommunication should use product development strategy for developing new
products and services so that, it can sell it to the existing customers of the company. Company
can also extend the existing range of products and services (Shamsuzzaman, 2018). For example-
British Telecommunication should invest funds for conducting research so that, company can
innovate new products. Company has started technology headquarter in U.K. Company is
collaborating with Cambridge University, Khalifa university etc. for conducting programmes for
research and development activities. British Telecommunication will use new business models
such as Personalised Compute Management System (PCMS) so that, company can innovate
digital services on continuous basis.
Diversification
It is the riskiest of four growth methods since its needs both good and market
development. It can be external the core competencies of the company. The company grows by
diversifying into new companies by evolving the new goods for new markets. However,
diversification can be reasonable choice if the high risk is remunerated by the chance of large
rate of returns. Other benefits of diversification involve possible to earn foothold in attractive
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business and decrease of overall business portfolio risk. Therefore, company needs to introduce
the new products in the new market which help to increase sales and profits of business. Also,
this can aid to raise the market share and create the large position in the industry in which they
operates.
M 1
Macro environment that incudes political, social, economic, technological, legal and
environmental factors will help Tesco to determine the impact of changes occurring in macro
environment . This will help the company to develop strategies like product development etc. So
that company will gain competitive advantage.
TASK 2
Analyse the internal environment and capabilities.
‘VRIO’ model- It is a tool developed for the organization to help them in securing their
capabilities and different types of resources so that, company can get the benefits of competitive
advantage over its competitors. The framework will be developed and implemented after
determining the vision of the company and after developing process of strategic planning. The
main components of VRIO model are as follows-
 Value-
The term value refers to the resources that, company is using for providing value added products
and services to its customers. It helps the company to determine whether it has ability of taking
advantage of the opportunities or not (Yuliansyah, 2016).
 Rarity-
Rarity refers to whether the resources that company is having is difficult for other companies to
get. If, the resources of the company are such that they can be easily access by other companies
then, it will hard for the company to give tough competition to other companies.
 Imitation-
Whether it is easy or difficult for other companies to copy or duplicate the capabilities of the
organization. If, company is having resources that are valuable but, other companies can easily
copy it then company will get competitive advantage for short period of time (Talib, 2017).
 Organization-
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It refers to whether, the company is having talented employees, systems for taking the advantage
of the capabilities.
British Telecommunication will use VRIO model to determine the resources and
capabilities that will help it to gain competitive advantage.
Value Rarity Imitation Organizati
on
Resource Competitive
advantage
1) Yes
supply chain
management
is valuable
for the
company.
This will
help British
Telecommun
ication to in
providing
valuable
products to
the
customers.
Yes The risk of
imitating
supply chain
management
of British
Telecommuni
cation by the
competitors is
medium
because, some
of the
suppliers of
company are
similar.
Capabilities are
fully utilized
Supply chain
management
Company will
get strong
competitive
advantage over
competitors.
2) Yes No Financial
resources like
financial
instruments
can be easily
accessible by
the
competitors(S
harma, 2015).
British
Telecommunic
ation has better
financial
position
Funds It will provide
advantage for
medium term
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3) Yes, these
rights are
very
valuable for
facing
intense
competition
from other
companies.
Yes, it is
very difficult
for other
companies to
copy because
these rights
are rare.
There is a low
risk of
copying the
rights of
British
Telecommuni
cation by
other
companies.
Right now,
company has
not fully
utilized these
rights.
Rights such as
Intellectual
property rights
etc.
Provide
sustainable
advantage.
4) Yes Yes, it is rare Leadership
skills of
leader of
British
Telecommuni
cation cannot
be copied by
other
companies.
Yes Leadership
team It will provide
strong
competitive
advantage.
5) Yes,
brand
identity of
the company
is very much
valuable for
maintaining
the loyal
customers of
British
Telecommun
Yes, the
brand
identity of
British
Telecommun
ication is
rare because
it is among
the top
brands of
telecom
No, the brand
identity of
yes, the brand
identity of
British
Telecommuni
cation cannot
be imitated by
other
companies.
Company is
fully utilizing
its brand
identity in
different
divisions of the
company.
Brand identity
and awareness
It will provide
strong
competitive
advantages
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ication. sector in
U.K.
(Schaltegger,
2016)
5) Yes,
digital
strategy is
very
important for
the company
to compete
with other
companies.
No, the
digital
strategy of
British
Telecommun
ication is not
rare because,
most of the
companies in
telecommuni
cation sector
of U.K. are
making
efforts for
digitalizing
their
operations.
Yes, it is
possible for
other
companies to
imitate the
digital
strategy of
British
Telecommuni
cation.
Company is
one of the top
telecom
company in
telecommunica
tion sector.
Digital strategy Advantage for
temporary
period.
SWOT analysis-
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SWOT analysis is a tool that helps the organization to determine its strengths,
weaknesses, opportunities and threats. So that, company can use its strengths for taking
advantage of the opportunities that are existing in the market. The model also helps the company
in reducing the impact of threats on the performance of organization. Internal environment is
consisted of strengths and weaknesses of the organization and external environment is consisted
of opportunities and threats that exist outside the organization. The internal and external
environment of British Telecommunication can be analysed with the help of SWOT analysis.
Strengths- Strengths refers to the capabilities of an organization that differentiate it from other
companies. There are various strengths of British Telecommunication they are as follows-
 One of the major strength of the company is that the position of balance sheet of British
Telecommunication is very healthy and cash flow statement has shown positive cash
inflow on consistent basis. Revenue of the company in year 2017 was more than £19000
and cash inflows in year 2017 is more than £18000 (Smith, 2017).
 British Telecommunication is among top company of U.K. that is providing voice
telephony and broadband services. Due to the acquisition of EE service provider, the
market share of the company has also increased (Pisano, 2015).
 Company has a wide range of services such as Global services, Openreach etc. in its
business portfolio and broadband of British Telecommunication has more than 5.9
10
Figure 2 : SWOT analysis
Source : (SWOT analysis, 2018)