Business Strategy Report: Analysis of EE Telecommunications Company

This report provides a comprehensive business strategy analysis of EE, a telecommunications company. It begins with an introduction highlighting the growth of the mobile telecommunications sector in the UK and outlines the report's objectives. The report then delves into a PESTLE analysis to examine the political, economic, social, technological, legal, and environmental factors impacting EE. It uses Ansoff's growth vector matrix to analyze the organization's strategic positioning, exploring market penetration, market development, product development, and diversification strategies. The report then assesses EE's strategic capabilities, including strategic analysis, choice, and implementation, followed by a VRIO/VRIN analysis to evaluate its resources and competitive advantages. It identifies EE's strengths and weaknesses and concludes with an application of Porter's five forces model to evaluate the company's competitive environment, considering the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and competitive rivalry. The report provides insights into EE's strategic direction and options within the UK telecommunications market.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.PESTLE model for Environmental Analysis......................................................................1
2. Ansoff’s growth vector matrix to analyse the organisation’s strategic positioning...........2
TASK 2............................................................................................................................................4
1.Strategic capability .............................................................................................................4
2.‘VRIO/VRIN’ model of EE.................................................................................................5
3.Strength and Weakness........................................................................................................1
TASK 3............................................................................................................................................1
1.Porter's five forces model for evaluation of the company...................................................1
TASK 4............................................................................................................................................3
REFERENCES................................................................................................................................6

INTRODUCTION
Mobile telecommunication EE sector is growing in UK.According to this report, teen and
younger people use smart phones. In this file also define the pestle model, Ansoff’s growth
vector matrix to analyse the organisation’s strategic positioning, Strategic capability and
Bowman’s strategy clock model, analyse the strategic direction and options for EE. These are
models and factors effect this organisation and help to show actual position of the business. This
company also develop their new product to their customer and developing its technology.
Devising their product, an organisation markets its brand cell phones product to brand new target
customer.
TASK 1
1.PESTLE model for Environmental Analysis
PESTLE analysis is very important strategy it describes all the factors which is related to
business model such as political, economical, social, legal, technical, and environmental.
 Political factors there are different problems which are related to the services of the
telecommunications in UK. The political condition of this country government showing
76% satisfaction are cover in urban area, EE has been facing diminishing of the
customer satisfaction of 67% in the rural area (Ahmad and Peter, 2013 ). The UK
authorities invest in some area but the purpose of investing to provide electrical
engineering services in urban areas. Government increases their taxes services for this
company and change some policy which is directly effect on the EE corporations.
 Economical factors have great significant impact on the EE organisations and it includes
UK economic growth, interest rate, exchange rates, inflations and income of consumers.
This factor can be promoted macro and micro economic. Macro economical factors deals
government expenditures and micro economic factor refer to people spend their incomes.
 Social factors Each customer has different purchasing behaviours with telecom market,
teen use smart phones from 61% to 80% in year 2011- 2013. This age group people use
in mobiles in same tome and several ways of communications, they are using social
network, testing free messages or making calls free by using various types of
applications. These factors also include populations, growth, age distributions, health,
1

career and it is related with specific interest as they have direct effect on the company
markers.
 Technological factors it refers to new ways of producing EE smart phones and new
ways of distributing its services and new ways of communicating with target customer.
This company is very fast technological change in UK market it is influenced by new
technology and their goal to cover whole the market and earning more profit. They
providing 4 G network in order to fulfil the need of the customer at low cost.
 Legal factor refer to the rules and regulations determined that consumers have the righ
ability of terminating their contact without penalties, under particular condition related to
the price increase without any notification with month’s period. It refers to the health and
safety of the customer, giving equal offers to the customer. EE telecom clear all the
business need and they follow legal term to achieve their goal. They maintain their smart
phones price, labelling and product safety.
Environment factor it is refer to the telecommunication environmental impact, this industry
develop their service, infrastructure with giving better environment to the customer. It is very
important for the growth of the company.
2. Ansoff’s growth vector matrix to analyse the organisation’s strategic positioning
Ansoff's matrix is very useful in telecom industry and other communication tools which
help in the growth of the company. It includes four strategies such as market penetration, market
development, product development, and diversifications.
Market penetration
 Company achieves their business
target with exiting smart phones in their
UK current market. This strategy refers
current market and target customer
 Its main motive is to increase their market
share and attract their customer's with
Product development
 This company develop their new
products and developing new target
customers also.
 It creates new cell phones with
innovations or variations for their
customer
2

new technological skills.  This firm making a strong strategy
related to it particular customer rather
than specific product
Market development
 Development of new smart phones,
targeted to its existing market
segments.
 Their approach is to attract new
customer to an existing product.
 It refers to selling more smart phones s
same product to existing customers.
 Company focus to improve their
product quality and providing
customers satisfactions.
 This company needs to find new ways
to build-up a relationship with
customer.
 Spread their business new market and
showing a loyalty to their target
customers.
Diversification
 they giving reasonable choice to the
customer.
 They Promote their business and
existing product also.
 Increasing their existing sales it is
considered with highest risk market
strategy by selling their new product
 company focus only expand their
business and generate a more profit.
 Through Diversification EE doing
work in effective manner and focus
on modify their existing product
Ansoff matrixis very useful in business that gives complete information. EE Company
use these strategies for growth their the business. This company also develop their new product
to their customer and developing its technology. Devising their product for an organisation, they
market its brand cell phones products to its brand new target customer.
3

TASK 2
1.Strategic capability
It can be referred as ability of a business for successfully employing competitive
strategies which allows EE to survive and also helps to increase its value with the passage of
time.
It focuses on all assets, resources and market position of the company that also projects the
impactful implication of strategies for the future. There is no method for measurement of
strategic capabilities (Badii and et.al, 2018.).
It is considered to be a major component because it helps to remain financially viable
while growing and competing in a market with present competitors in a free market. These
strategies may include investors who are the group of individuals who want to invest their money
for business due to chances of getting success in the procedure of growth. Many business leaders
not only track these strategic capabilities not only for their organisation, also to understand
competitors better for effective operations. There are many elements that have a potential to
contribute in EE's capabilities for business strategy. Assets which consist of cash, property, and
patents has a contribution for organisation's ability for formulation and end strategies. It can also
include human resources and structure for organisation including skills of employee.
There are three main key elements of strategic capabilities which consist of strategic
analysis, strategic choice and its implementation.
Strategic Analysis
It provides assistance in understanding the strategic position of company. It is considered
as important to analyse the changes which are occurring in the environment and gets
acknowledged about its effect on EE and its employees.
EE is facing changes which occurs in the surroundings and their related impacts which helps in
the process of making strategies that would help to sustain with respect to changes. These effects
which are external are known to be threat and weaknesses (Kessler and Wahidi, 2018). The
resources of the company have a great influence on the internal environment of EE. A strategic
capability of company is considered to be its strength and weakness. There are different
expectations of every stakeholder such as the development of this organization depends upon
4

their expectations. It may influence and can create a great impact on the strategies which is
totally dependent on the group which consist of stakeholders.
Strategic Choices
After the proper analysis of the strategies, the company is able to make a choice which
can be defined as the procedure of selecting the best choice among the possible course of action
which is purely based on the evaluation of available options of strategy.
Strategic Implementation
It is the final step and is known to be the major one as it will help in the translation of the
chosen strategies into actions which would further help in careful planning and deployment of
company's resources with the possibilities (Ariffin and Sahid, 2018).
2.‘VRIO/VRIN’ model of EE
EE is considered to be largest voice and data communication services providers to
customers. It has employed about 66,000 employees across the world.
Its strategic objectives are:
 Stimulation of Revenue and reduction in cost
 Innovation and delivering according to the needs of customer
 Strong growth in markets which are emerging
 Managing the portfolios actively
 Alignment of capital structure
5

VRIO framework of EE
It is considered to be analytical technique which is most suitable for evaluating resources
of a company with the acknowledgement of competitive advantageous is known to be an
acronym from the initial of the evaluation dimensions such as Value, Rareness,Imitability and
Organisation where
 Value is the measure of expensiveness of the resources and how easily can it be accessed
on the market.
 Rareness includes how much the resource provided is limited or rarely present.
 Imitability includes the rate of difficulty to imitate the provided resources.
 Organisation includes whether the resources are supported by other organisation which is
in existence and can it used that properly or not (Marshall, 2018).
Features of EE Value Rarity Imitability Organisation Competitive implications
Network
infrastructure
Yes No No Yes Competitive parity
Diversified
Revenue Base
Yes Yes No Yes Temporary competitive
advantage
Leading Market
Position
Yes Yes Yes Yes Sustained competitive
advantage
Network Infrastructure
One of the major factors of EE success is the structure of the network which has great
support for operations. It is considered to be a resource which is valuable which enables the
organisation to respond customer's needs which are growing very frequently.
1

Diversified revenue Base
With having stakes in companies and acquisitions on partner networks, it has been
strategically expanded their presence in the whole world to get recognition. It has a diversified
revenue base which is considered to be rarity.
Leading marketing position
EE is a leading telecommunication company which has undertakings of subsidiary and
investments. It has a huge share in the market which makes them a strong market leader.
3.Strength and Weakness
Strength
 It has about 27 million customers since it came into existence
 It has a largest coverage
 It has largest amount of retail stores operated by company
 It has launched 4G services much earlier as compared to other rivals.
 It sponsors big events such as football and movies which has increased their visibility of
brand.
Weakness
 Recalling of brand is very weak due to recent launching as compared to brand names
which are already established.
 It only targets business associate segments which lead to losing out of consumers which
are individual.
1

TASK 3
1.Porter's five forces model for evaluation of the company
Illustration 1: Porter's Five Forces Model
Source:(Porter’s Five Forces,2016)
a. Bargaining power of Suppliers
It is considered to be high risk as EE is considered to be the market leader in the market
which provides 4G network. The company faces a tough competition from its competitors. EE
has HUAWEI ICT as its technological partner which provides a strong support for its fastest
network for mobile. It has also upgraded its network that features double speed and their
coverage is limited in some locations. It has also decided to work with NSN for providing LTE
network which is very huge and continuing to expand its 4G network (Parnell, 2018).
b. Bargaining power of buyers
2

It is considered to be medium risk. It faces an intense competition in the telecom market
while considering the fact that every individual has the right of changing their providers of
network so that they can obtain the best offer which is their in the market, which has negative
impact on other mobile networking operators which results in the pressure for introducing new
products and services which can attracts every mobile users therefore retaining the trust and
loyalty of a customer. For the same reason bargaining power of per customer is lower
c. Threats of new entrants
It is considered to be a low risk because telecom industry is very effective and known to
be one of the most profitable markets. Requirement of capital for entering the market is very
intensive. In addition to, there are majorly four players who are already established in market and
having strong base of loyal customers and features attractive product differentiation. For
example while other competitors are introducing 4G networks, EE has already done that very
earlier providing an advantage over them. Therefore, it would be a tough decision for a new
entry to enter in the telecom market and provide a tough competition (Chereau and Meschi,
2018).
d. Threats of substitutes
It is considered to be a medium risk as many mobile networking operators are known to
be no longer sole providers of communication services for messaging and voices which has lost
its exclusivity to services which are internet such as skype and viber and other messaging
applications such as Whatsapp. The single advantage that every mobile network operator
possesses is the concept of interruptibility. Network operators tends to remain most cohesive and
simplest way for customers for providing service of talking to each other based on the single
identity which is their phone number which impacts EE a lot.
e. Rivalry within the market
It is the highest risk EE faces in the market as all other networking operators who are
tend to be its competitors are also well established in the market and holding a large consumer
base which are loyal to them. This company also develop their new product to their customer and
developing its technology, devising their product, organisation market brand cell phones product
to brand new target customer, network criteria which includes aspects like coverage and speed
(Spyropoulou and et.al, 2018).
3

TASK 4
P4 Bowman’s strategy clock model to analyse the strategic direction and options for EE
Bowman's strategy clock referred with a model that is used in marketing to analyse the
competitive position of a business. The purpose of Bowman strategic clock is to explain the
business illustration; it is based on dimension price and perceived value. It is a model that
explores the options for strategic positioning (EE) mobile phone should be more is competitive
position in the market
 Low price and low value added (position) EE organisation is not a very competitive
position for smart phones business. Smart phones, tablets, computer or other products are
4
Illustration 2: Bowman's Strategic Clock
Source: (Bowman's Strategic Clock (Strategic Positioning).
2018)

not differentiated and the customer are not easy understand the value of product, and
product prices are very low (Kahlenberg and Kaplan, 2013). This is only bargain
basement strategies.
 Low price (position 2) EE Company as a low cost leader in market. The strategies of
its business are required minimised its cost. Profit margin on each smart phone is low,
but the high volumes of its output can still increasing their overall profit.
 Hybrid (position 3) it refers to involvement of some smart phones of low price. The
aim of the company is to stimulate consumer that provide the combinations of a mobile
reasonable price and cells phones are very different. It refers to effective position
strategy, in their market.
 Differentiation (position 4) Aim of this company is to make differentiation strategies to
offer its customer highest level of perceived added product quantity. They include
mobile brand name as it has a key role in this strategy, they also provide product quality
(Lam and et.al. 2013). the high quality of mobile with string its brand name very help
full for achieving the goal of business and it shows the loyalty related with product.
They focus on product quality at a relatively price sells their mobiles phones.
 Focused differentiation (position 5) this strategy main motive is to position smart
phones product at highest prices, where customer buy mobiles phones because of the
high-perceived value. This is positioning strategy it is related with luxury brand, this
company aim to achieve premium process by highly targeted segmentations, promotions
and distribution of mobiles.
 Risky high margin (position 6) EE takes a high-risk strategy of business and they set
their high prices without giving an offer to the customer. If customer continue buy their
product with high prices, profit are automatically generate. It is very short term and
uncompetitive strategies.
 Monopoly pricing (position) it refers to the where there is no monopoly market in UK
there is only one telecommunication company which is offering their products. They sell
their phones own choice, there are no alternatives choices (Cave, 2016). This strategies
are monopolist set their prices own choice.
5

 Loss of market share (position 8) this is related with recipe for disaster in uk
competitive market. Setting a middle range price of a mobile very low it is not best
many customers will have much better options from other competitors.
Evaluating and analysis its strategic position using the Bowman's clock Three position (6, 7
and 8) are less competitive. These are the only one where price is high than its perceived value.
Market need to operate competitively, because many competitors present in the market they offer
same higher perceived value for the same price, at lower prices (Lam and et.al, 2013). It is
useful for gaining a profit by offering consumer in greater value and providing lower price for
the benefits of higher prices. This model helps to increase their market share and expand their
business in high value. From assessment, it has identified low pricing positioning strategy will
prove to be more beneficial for the firm. Moreover, by offering services to the customers at
lower price level firm would become able to enhance market share. Thus, cost minimization
strategy will assist firm in gaining high economies of scale and generating higher margin. Hence,
using low pricing strategy firm would also become able to gain competitive edge over the rival
firms. By laying emphasis on the aspects of technological advancements business unit would
become able to perform activities more efficiently.
CONCLUSION
It can be concluded that the impact of the macro environment of EE telecommunication
organisation influences their factors. These are factors are effective and help to identifying the
business need and improving the performance of the company. These factors are directly impact
on political, economical, social, technological, legal and environment conditions of the company
Bowman strategy clock is effective on business position and help to lead their business.
strategies clock is important for giving a option to create customer potential they easily ready to
purchase their product at possible price. EE enterprise facing high risk in the market as well as
the other networking operators are also face some issues.
6

REFERENCES
Books and journals
Ahmad, F. and Peter, J., 2013. Ribonuclease H2 mutations induce a cGAS/STING‐dependent
innate immune response. The EMBO journal, 35(8), pp.831-844.
Ahmad, F. and Peter, J., 2013. STRATEGIC GROUP MAPPING A STRONG INDICATOR IN
MEASURING THE PERFORMANCE OF THE INDUSTRY: A CASE APPLIED ON
THE EXPORT PERFORMANCE OF THE TEXTILE INDUSTRY IN
PAKISTAN. Islamic Countries Society of Statistical Sciences, p.263.
Ariffin, A.S. and Sahid, M.L.I., 2018. Competitiveness Analysis of ASEAN Automotive
Industry: A Comparison between Malaysia and Thailand. Journal of Science, Technology
and Innovation Policy.3(2).
Badii, L. and et.al., 2018. SMART SPECIALISATION–A COLLECTIVE AWARENESS
PLATFORM AND TOOLSET FOR RIS3 STRATEGY IMPLEMENTATION. In
Economic and Social Development (Book of Proceedings). 27th International Scientific
Conference on Economic and Social (p. 700).
Cave, M., 2016. 40 years on: An account of innovation in the regulation of UK
telecommunications, in 3½ chapters.Telecommunications Policy.
Chereau, P. and Meschi, P.X., 2018. Defining Strategic Positioning. In Strategic Consulting (pp.
39-79). Palgrave Macmillan, Cham.
Kahlenberg, J.M. And Kaplan, M.J., 2013. Mechanisms of premature atherosclerosis in
rheumatoid arthritis and lupus.Annual review of medicine, 64, pp.249-263.
Kessler, E. and Wahidi, M.M., 2018. The Business of Bronchoscopy: How to Set up an
Interventional Pulmonology Program. Clinics in chest medicine.39(1).pp.239-243.
Lam, and et.al., 2013. When telcos become banks: sociotechnical control in mobile money.
In ISIS Summit Vienna 2015—The Information Society at the Crossroads.
Lam, and et.al., 2013. Securing a better living environment for left-behind children: implications
and challenges for policies. Asian and Pacific Migration Journal, 22(3), pp.421-445.
Marshall, S.J., 2018. Strategic Planning as Sense-Making. In Shaping the University of the
Future (pp. 413-436). Springer, Singapore.
Parnell, J.A., 2018. Nonmarket and market strategies, strategic uncertainty and strategic
capabilities: Evidence from the USA. Management Research Review.41(2).pp.252-274.
7

Spyropoulou, S. and et.al., 2018. Strategic goal accomplishment in export ventures: the role of
capabilities, knowledge, and environment. Journal of the Academy of Marketing Science.
46(1). pp.109-129.
Online
Bowman's Strategic Clock (Strategic Positioning). 2018. [Online]. Available through
<https://www.tutor2u.net/business/reference/strategic-positioning-bowmans-strategy-
clock>
8