Business Strategy Analysis: BT's Macro Environment and Competitiveness

This report provides a comprehensive analysis of British Telecommunication's (BT) business strategy. It begins with an introduction to business strategy and its importance in a dynamic environment, focusing on BT's operations in approximately 180 countries. The report then employs the PESTLE model to evaluate the impact of political, economic, social, technological, legal, and environmental factors on BT's operations. Following this, it assesses BT's internal environment and capabilities using the VRIO model. The report also evaluates BT's competitiveness through Porter's Five Forces model, analyzing the bargaining power of buyers, threats of new entrants, and other competitive dynamics within the telecommunications sector. Furthermore, the report explores BT's strategic direction and options using Bowman's strategy clock model, including market development, penetration, and product development strategies. Finally, the report concludes by summarizing the key findings and strategic implications for BT.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Impact and influence of macro environment by PESTLE model for environmental
analysis .......................................................................................................................................1
TASK 2............................................................................................................................................3
P2. Conduct an assessment of the organisation's internal environment and its capabilities.......3
TASK 3............................................................................................................................................3
P3. Evaluate the competitiveness of British Telecommunication using Porter's five forces
model...........................................................................................................................................3
TASK 4............................................................................................................................................3
P4. Analyse the strategic direction and option using Bowman's strategy clock model..............3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................3

INTRODUCTION
Business strategy is a important concept that define the path through which final goals
and objectives could be achieved in set time period. Strategies are formulated for the future that
guide every individual entity towards single direction. As every business organisation have to
operate in dynamic environment which keeps on changing thus, it is important to assist overall
functioning according to the framed strategy. The company included in this report is BT(British
Telecommunication) which is a telecommunication company dealing in IT and communication
services operating in approx. 180 countries. This report highlight the impact and influence of
macro environment by performing PESTLE analysis and evaluation of competitiveness of the
company with the use of Porter's five force model.
TASK 1
P1. Impact and influence of macro environment by PESTLE model for environmental analysis
Every company have to face competition from number of competitors that are present in
same industry. Similarly, BT Group also faces various challenges and competition from their
rivalries thus, to evaluate the influence and impact of macro environment company they perform
PESTLE analysis. The business environment consists of number of factors that poses huge
impact on overall functioning of the company. (Ackermann, and Audretsch, 2013). Dynamic
environment includes several micro and macro elements that affect the organisational decision
making power. Thus, it is necessary for the management level to perform the environmental
scanning process to examine all the factors and elements that have direct impact on the overall
structure of the company.
British Telecommunication is operating in telecom sector and have to operate broadly in
different parts of the world. Thus, it become necessary for them to study macro environment
through PESTLE analysis that are discussed below:
 Political Factors: UK have faced several instabilities in political sector after the phase of
Brexit, in result of it various telecommunication sector companies have faced number of
issues related to it. There are several rules and regulations that have to be followed by the
telecommunication companies operating in number of countries. Government have
framed policies related to minimizing the usage of mobile phones so that health problems
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could not be raised (Klettner, Clarke and Boersma, 2014). Thus, it poses a negative
impact on the functioning of BT Group.
 Economical Factor: UK have faced recession phase that lead to change in purchasing
power of customers in market place. Hence, BT Group have to face condition of cost
pricing war that rises among several telecommunication companies that is operating
there. Formulation of inflation condition have pose the direct impact on prices of their
product and services
 Social Factors: Customers are the real kings in the market place hence, it is necessary for
every business organisation to work in accordance to the prevailing market condition. For
instance, the youngsters are attracted towards the use of mobile phones thus they are the
targeted clients for the company. BT company have to study the purchasing trends of the
customers so that they can execute their decisions considering it.
 Technological Factors: Technology is considered most important aspect that must be
focused by telecommunication sector as it is necessary to adopt modern and advanced
technology in frequent time period. BT have to make sure that proper advancement of
technology must be implemented in the working process so that customers get satisfied
with the services. Due to change in 4g and 5g generation system, company have to make
modifications accordingly.
 Legal Factors: This component include number of legislations and policies that have to
be incorporated by the company in to their system. For instance, BT Group have to make
decision in relation to Sales of Goods Act 1974 that have numerous guidelines regarding
sales and products. Hence, telecommunication sector also have to examine the strategies
of their competitors and then take decision according to it.
 Environmental Factors: Continuous Changes in weather conditions directly impact the
functioning of telecommunication sector. For instance, change in climate or global
warming has direct impact on the overall functioning of the organisation (Annabi, and
McGann, 2013). As it results into disturbance of communication path.
From the above discussion it can be concluded that PESTLE analysis helps in finding out
several areas that have to be examined properly so that final objectives can be accomplished.
Organisation's strategic positioning can be evaluated by performing Ansoff's growth vector
matrix, which is described below:
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Market Development: As BT Group is deciding to launch effective and efficient
services in the market place as well as they are coming up with the wireless facility in various
locations in Asia. Thus company have to face number of issues which is related to political,
economic and cultural aspects that need to be consider while carrying out such process in
effective manner.
Market Penetration: This strategy involve company targeting the specific market and
make products and services for them. The basic aim of this is to gain high market share and
outcome. BT in order to successfully sell its product in market use this technique. A specific
market is targeted and increase in sales is assured by fixing the volume of sales that will be done
in that particular focused group (Murano and et. Al, 2011). Hence, BT have tried by introducing
number of marketing techniques like effective promotional functions and offers.
Product Development: In accordance to this tool BT always come up with new and
advanced products and services so that they can maintain competitive edge in the market place.
They proposed to introduce broadband services at affordable cost so that large number of
customers are attracted towards its facility.
TASK 2
P2. Conduct an assessment of the organisation's internal environment and its capabilities
Business organisation draft strategies for future period of time thus, it is necessary to
frame proper polices so that final goals and objectives can be achieved. Strategic abilities are
combination of different type of capabilities, skills and resources that is directly linked in
establishing long term relationship with the companies that is present beyond the boundary or is
internationally located. Different tools are used in order to analyse the internal environment of an
enterprise so that accordingly planning can be done. Thus, after analysing the strategic
capabilities of own company BT Group require to execute VRIN and VRIO model so that its
strengths and weaknesses of the organisation system can be identified. This model in discussed
below:
VRIO analysis: According to this analysis company is able to find out the competitors
that are present in the market place. This aid them to maintain their competitive advantage in
respect of other competitors that are present in the external surroundings. Its abbreviation can be
further formulated that is described below:
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V-Valuable: As the resources of referred enterprise are capable of achieving the desired
goals and objectives of an enterprise it is found that VRIO can be successfully implemented in
this company context. It involves grabbing number of opportunities that are present in business
environment that results in earning high revenues and outcomes for the company. BT group must
focused upon adding some values to their existing products and services and utilise resources in
optimum manner.
R-Rare: Beginners can be able to identify the BT brands that have high quality of specialized
materials that has to be implemented in the company. It involve that BT group must produce
products and deliver services that are unique in nature so that it could establish their competitive
advantage in customer's minds.
I-Inimitable: The well-established brand image which is easily help them to establish sustainable
image in customer's mind for longer period of time (Auzair, 2011). This factor of VRIO analysis
involve utilising unique and rare materials as resources will able to create sustainable image in
customer's minds. Hence, for this BT group have to introduce innovative work process in order
to use valuable resources of the company.
N-Non Suitable: nil
From the above discussion about VRIN model of BT company it has been concluded that
it is capable of increasing the framework of established competitive edge. Therefore, VRIO is
acceptable for BT group as it assists in analysing the internal factors and resources that is present
with the compnay. On the other hand, it is very much useful to locate strengths and weaknesses
properly so that particular steps can be taken in appropriate manner in order to consider various
factors that are present in business environment.
Strengths and Weaknesses of BT: BT is among the well-known brand in
telecommunication sector that supply different type of services to their customers in the market
place. Its further limitations and benefits are discussed below:
 It is considered biggest organisation operating in United Kingdom and is consider
amongst top 2000 telecommunication companies as well as it is known for their large
network facility and delivers its services in almost 25 countries all over the world.
 The working culture of this company is very strong and conducive in nature. They
always focus on increasing their sales volume so that they can able to maintain goodwill
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in the market place and remain for longer period of time (Oestreicher-Singer and
Zalmanson, 2012).
 The financial strengths of the company lead to facing of number of barriers and errors
without developing bankrupt conditions in BT group, as there are severe competition that
occur in Europe thus, the working of the telecommunication market does not get
affected.
 All resources and functions concentrates on research and development department but
not the extravagant movement in marketing process. Thus, the well-established image
allows the organisation to perform their work process without any problems.
 BT company earn high sales volume and is enlisted as 104 firms as compared to their
sales function. The main building block of nay organisation system is in the hands of
research and development department that continuously develop their organisation's
strategy. There are number of aspects that will pose a huge threat in front of them thus, it
may be consider big weakness to them.
From the above discussion it can be concluded that it is very much necessary to
determine the strengths and weaknesses of the particular company so that any improvements can
be made wherever bit is required (Schaltegger and Wagner, 2011).
TASK 3
P3. Evaluate the competitiveness of British Telecommunication using Porter's five forces model
Telecommunication sector is full of competition that exist among the companies that are
operating in same industry sector. It is very necessary to study the strategy of the competitors so
that work can be carried out while considering these concepts in effective and efficient manner.
Thus, BT Group have to evaluate the functions and strategies of their competitors and make
decisions in accordance to it so that ultimate goals can be reached efficiently. The competitors of
BT Group include EE, Vodafone, O2 that supply similar type of network services to their
customers at market place. The competitiveness of the company can be evaluated while
conducting Porter's five Forces model. That is briefly discussed below:
 Bargaining power of buyers: Buyers are considering most important resource that are
present in the market place. Thus they perform negotiation functions in order to gain high
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outcomes out of the price they pay in buying the particular products as there are number
of competitors that are present in telecommunication sector this results into setting up of
affordable price that can be paid by the customers (Azar, 2011). For this, BT will always
aim in developing other strategies as compare to its other rivalries.
 Threats of new entrants: Telecommunication is identified by the new innovation and
technology which is highly implemented by the company in advanced and modern
manner. Hence, BT Group can face challenges in relation to it and have to formulate
some policies and steps in regard to it so that no negative impact can be posed upon it.
There are some steps that can be adopted in order to minimize the threat level by applying
following steps that are described below:
 The recent and current brands of the company is totally focused upon fulfilment of
consumer's demands and needs in sustainable manner.
 Organisation always aims to capture benefits and advantages of the economies of scale in
the present market condition.
 They also perform high investment functions in capital in order to carry out their
operations and transaction of the telecommunication sector (Kalyani and Sahoo, 2011).
From the above discussed steps it can be concluded that the level of threats of new
entrance can be reduced in minimum level (Jocovic and et. Al 2014).
 Bargaining power of suppliers: Every company require some raw material that is
required to carry out their day to day operations and activities that has to be properly
maintained by the management of the organisation. BT Group Plc have to acquire
number of raw materials from prospective suppliers. Thus, it is find out that supplies have
their own bargaining power in response to high and low price or cost. Hence, BT Group
can face this issue by developing effective supply chain system with their suppliers.
Suppliers can be of different type that supply proper infrastructure that is required for
setting up of the company and financial help and many other.
 Threat of Substituents: Companies of the same industry faces high competition from
their rivalries. As customers have several options to replace their product and services of
the same industry. Hence BT Group have to face this type of threat, it is necessary for
them to develop their current plan of actions in order to gain high competitive edge each
other competitors so that they can able to stand apart in the current market place.
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 Rivalries within the market place: Company have to make huge investment in research
and development phase so that. they focus on the continuous improvements in order to
gain high competitive position at market place.
The growth in telecommunication sector is continuously increasing from day to day thus
contributing in increasing their growth and place in that country. As there are number of changes
that has to be incorporated in the system so that final work can be conducted in effective way
(Bharadwaj and et. Al, 2013).
TASK 4
P4. Analyse the strategic direction and option using Bowman's strategy clock model
Strategic direction provides the path that leads every activity and action to be
concentrated towards the single direction that is to achieve final strategic goal and aims in set
time period (Bucolo and Matthews, 2011). British telecommunication may lack in several
strategies as compared to their strong position in the market place. Thus, in order to understand
the strategic direction of the company can be understood by Bowman's strategy clock model that
are discussed below:
Bowman's strategic clock model: This model was coined by David Faulkner and cliff
bowman in which define the competitive position of the company in the market place. Thus, this
model is used to determine the actual position of the company in respect to their products and
services that are offered by them to their customers. It is further being explained as follows: Position1 (Low cost and low added value): This phase does not contain competitive
position of the company and all services and products are not different. It is complied
with supportive strategy so that products can be marketed at affordable price. Posituion2 (Low price): It is concerned with economies of scale concept in which overall
costs have to be reduced so that they can reach high growth and success. This lead to
generation of price wars that may occur between competitors of the same industry. Position 3 (Hybrid): In this, company charges low price for their products so that they
can attract large number of customers to avail their services and goods.
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 Position4 (Differentiation): According to this element, BT Group have to come up new
and advanced technique so that they could able to build strong and loyal image in the
customer's mind. Position5 (Focused Differentiation): Under this, company frame positioned strategy that
is adopted by the high and luxury company that focuses on increasing the premium value
that focuses on segmentation, promotion functions. Position6 (Hazardous High Margin): It is characterised with having high risks for
performing positioning function. This strategy is having non- competitive and short term
scope. Position7 (Monopoly Pricing): in this type of strategy company do not focus upon
certain goods and services hence, customers are not provided with any choices.
 Position8 (Market share Loss): This phase lead to facing of several disaster and
problems in front of the company. They have make decision regarding standard cost in
relation to middle range of goods so that losses of the customers can be determined
(Grover and Kohli, 2013).
As per the discussion about this model, it has been concluded that 6,7,8 phases of it is
non-competitive that only consider quality products and do not focused upon price, cost. BT
adopted 1,2,3,4 for delivering services in support with products and services.
CONCLUSION
From the above prepared report, it has been concluded that every organisation has to
frame strategies that guide their future plan of actions so that final goals can be achieved in set
time period. It highlights the BT Group which is a well-established telecommunication company
and have to develop strategy in response to the external and internal factors that are available in
the business environment. On the other hand, it is important to analyse all these elements by
conducting PESTLE analysis. There is need to make strategic decision so that final and ultimate
objective can be achieved in effective and efficient manner. Apart from it, it is necessary to
conduct internal audit so that strengths and weaknesses can be find out and proper decision
should be taken.
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REFERENCES
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Online
Deloitte predicts UK telecommunications sector trends for 2018. 2018. [Online]. Available
through:<https://www2.deloitte.com/uk/en/pages/press-releases/articles/uk-
telecommunications-sector-trends-for-2018.html>.
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