Detailed Business Strategy Report: Giff-Gaff's Market Analysis

This report provides a comprehensive analysis of Giff-Gaff's business strategy, examining its internal and external environments using tools like the PESTLE model for macro-environmental factors and Ansoff's growth vector matrix for strategic positioning. The report further applies the VRIO model to assess Giff-Gaff's strategic capabilities, identifying its strengths and weaknesses. It explores various strategies to enhance the company's competitive edge, focusing on market penetration and diversification, particularly in the telecommunications sector. The report concludes with a strategic management plan, outlining key actions to achieve the company's objectives, emphasizing the importance of adapting to technological advancements and customer preferences within the dynamic UK market. The analysis highlights the importance of understanding economic, social, technological, legal, and environmental factors to foster growth and maintain a strong market position.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
a) PESTLE Model for environment analysis..........................................................................4
b) Ansoff's growth vector matrix to analyse organisation's strategic positioning..................6
TASK 2............................................................................................................................................7
a) Applying VRIO model to analyse strategic capabilities possessed by organisation..........7
b) Strengths and weaknesses of organisation.......................................................................10
TASK 3..........................................................................................................................................11
a) Strategies to improve organisation's competitive edge....................................................11
TASK 4..........................................................................................................................................13
a) Strategic Management Plan for organisation...................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

Executive summary
Chosen organisation for this report is Giff-Gaff that has formulated various business
strategies so as to running their business operations. It is a high level plan which is formed by
managers of organisation for gaining competitive advantage. There is numerous analysis formed
by Giff-Gaff so as to gaining sustainability or profitability in market place. PESTLE and Ansoff
analysis are used for identifying external factors and several strategies that can be implemented
by firm. It has applied diversification marketing strategies so as to enhancing market share and
profitability in new marketplace along with new market. Resources and capabilities are used for
earning profit. It is very important for the organisation to making strategic management plan so
that all functions should be functioned in easy manner.

INTRODUCTION
Business strategy is a combination of various actions and plans that are used by business
organisations for attracting customers, enhancing productivity and achieving goals or objectives.
This strategy mainly outlines that how business will carry out the works for achieving desired
outcomes. It is also known as set of actions or decisions that are made by managers so as to
achieving desired objectives of firm in a specific time period. In addition to this, it is a master
plan that is effectively followed by all the employees of organisations so as to increasing
customer base and achieving competitive advantage in marketplace. Present assignment is based
on Giff-Gaff that was established in 2009 at UK. Organisation mainly provides its services in
telecommunication sector and part of Telephonica. The firm is also known as largest operator of
UK. Present report will discuss about the internal and external factors of environment along with
capabilities of organisation which will be explained by using various kind of models and
theories.
TASK 1
a) PESTLE Model for environment analysis
PESTLE analysis can be defined as an effective tool of analysing macro environmental
factors which can influence the decisions or profitability of firm in positive or negative manner.
This is an analysis which enhance the understanding of managers about external factors so that
they can make further decisions. it can be used by the managers of Giff-Gaff for analysing the
factors of market where new business has started or the new foreign country where the business
will be expanded in future. Factors are given as below:
Political Factors-It is mainly related with those elements which provides opportunities or
pressure and that is passed by governmental authorities on the business and its activities. These
factors mainly consists of government policies, tax duties, corruption etc. political factors can
possess their influence on the business operations of Giff-Gaff in positive or negative manner so
that, it is the main obligations of the managers of Giff-Gaff organisation to properly follows the
legal laws and legislations so that better outcome can be received in future. New and upcoming
technology should be made by the managers as per the new governmental laws and regulations
so as to preventing any kind of penalties (Amran, 2016).

Economic Factors- This factor is related with economic structure, policies, inflation rate
that can impact on the business operations or functions of firm. Economic growth, inflation and
interest rates highly influences the telecommunication sector in negative manner. At the time of
recession, management of Giff-Gaff have to make plans and maintain their cash reserves so as to
remaining in competitive market. In recession, prices of tariffs plans are raised which can’t be
afford by each individual so that management of Giff-Gaff should provide their services or
products in the market at cheaper price so that sales figures would be maintained in proper
manner.
Social Factors- This factor is comprising of attitudes, attributes, taste and preferences of
customers that can affect the demand of services of firm. As the demand of telecommunication
services are high then the supply would also rise in market which is a positive sign for the Giff-
Gaff in form of increasing profitability. Many individuals of UK are using mobile networks for
calling, e-mailing, gaming, uploading etc. Therefore, managers of Giff-Gaff have opportunities
for gaining competitive advantage for which they can provide best plans as per the need and
wants of customers.
Technological Factors- These factors are mainly related with barriers, innovations and
their impact on the activities of business. It mainly comprises of emerging technologies,
technology legislation R&D which can affect the business operations in positive or negative
manner. As youngsters mainly prefers new technology such as smartphone and communication
due to which there is growth in telecommunication sector. For fulfilling these kind of needs,
management of Giff-Gaff should make modifications in their existing services and provide new
technologies in market. Consumers wants internet access at each location so for this they can
provide data plan for their customers at affordable prices (Barberá, 2012).
Legal Factors- Laws and regulations that can influences the way of doing business is
called legal factors. These elements can be consumer protection, money laundering, tax
regulations etc. Due to fair trade legislation in some nations import and export is free which can
provide opportunity of gaining high profitability for the mangers of Giff-Gaff in expanding their
market share in these nations. By following laws of telecommunication sector in proper manner,
Giff-Gaff can also make their positive brand image in front of their customers.

Environmental Factors- These are environmental aspects of organisation that can influence
demand and supply of offerings of firm. This factor includes environmental legislations, adverse
weather, ecological situations etc. for expanding business operations in new market, Managers of
Giff-Gaff should consider climate change and nature aspects of these nation. As Giff-Gaff
operating its function in rapidly changing environment then they can easily expand their market
share in new areas and provide better plans for the customers of new market. In order to gaining
high profitability after expansion they can provide their products and services at lower prices
than the existing competitors of market.
b) Ansoff's growth vector matrix to analyse organisation's strategic positioning
Ansoff model is a strategic planning tool that helps the managers, executives and marketers
for gaining growth in future. This model was given by Russian investigator Igor Ansoff. There
are mainly four kinds of strategic positioning strategies that can be used by managers of Giff-
Gaff, types of model are given as below:
Market Penetration- According to this strategy, Management of Giff-Gaff should
provide their existing products at affordable prices to their customers. As this is less risky and
prove effective tool for attracting the customers because it does not require too much cost of
promotion. Therefore, management can use this strategy for building their huge customer base in
UK market.
Market Development- This strategy states that organisation have to find growth in new
market with their existing products. It can prove profitable for the Giff-Gaff because if they will
supply those products in new market which have provided effective results in existing market
then chances of gaining competitive advantage will be higher. It can prove more risky for the
organisation than the market penetration because firm is expanding their market share in new
market with same products (Bharadwaj, 2013).
Product Development-In this kind of strategy, managers of Giff-Gaff Should develop
new products in existing market for their customers. It is proving profitable for those
organisations whose strength are related to particular use than specific product. It can increase
the strength of firm through development of new products for existing customers. But it can
provide negative outcomes for the firm in a situation when products are disliked by customers.
Diversification-This is most risky strategy because in it, organisation have to develop
new products and provide them into new market areas. This is riskier than other types of growth

strategies which is outside core competence. Because it carries high return with high risk. For
applying this strategy, managers of Giff-Gaff have to analyse the market areas in effective ways
so that needs and taste of customer can be identified in easy manner. As Giff-Gaff is engaging in
telecommunication sector then they have duty to evaluate each factors so as to gaining better
outcomes
From the above all growth strategies, it has been identified that managers of Giff-Gaff have to
adopt diversification strategy for their business. In this kind of positioning, managers have to
develop new products for the new market. As Giff-Gaff is offering various products and services
to their customers like fixed line, mobile, network services etc. then managers have duty to
conduct market research in the new market so as to identifying the core competencies of specific
product and service that can be provide suitable growth or profitability to firm after expansion.
As it is renown brand in UK market then they can make expansion in new market with electronic
products like washing machines, Television and refrigerators. The organisation has built their
strong image as a telecommunication service provider then it is easy for them in diversifying
their service range. As it is profitable and less risky because they have no need to perform more
promotional activities because their brand image has already developed. While diversifying the
products and services, management should setup effective pricing strategies so that better
outcomes will be received in future period. As the management of Giff-Gaff have decided to
introduce new washing machines and refrigerators then they have obligations to provide timely
services to their customers so that better image in diversified industry can be built in easy
manner (Blackburn, 2013).
TASK 2
a) Applying VRIO model to analyse strategic capabilities possessed by organisation
Strategic Capabilities
It can be defined as the abilities of organisation which makes strengthen of firm in market. It
includes human resources, skills and technological resources that are valuable for an organisation
and provide support in remaining competitive in marketplace. In addition to these, these are also
known as the capabilities of members of enterprises that encourage the managers to form
strategies so that suitable advantages can be gained in marketplace.
VRIO Model

VRIO model is an analysis tool which is a big part of strategic plans or schemes. It is a process
which is used by the firms in order to developing their vision statement, objectives, internal and
external analysis etc. in addition to this, it is an internal analysis of organisation which is used for
evaluating capabilities and resources. This model can be used by Giff-Gaff for identifying their
resources and capabilities. Main capabilities of Giff-Gaff are accessibility, network systems and
telephone. There are mainly four elements thorugh which evaluation can be done by Giff-Gaff
that is given as under:
Resources Valuable Rare Inimitable Organised
Telephone Telephone - - -
Network System Network System Network System - -
Spectrum Spectrum Spectrum Spectrum -
Accessibility Accessibility Accessibility Accessibility Accessibility
Valuable- First kind of this model includes those resources which are valuable in nature.
It can provide profitable outcomes if management of firm implement strategies that can improve
efficiency and effectiveness of firm by finding opportunities or mitigating threats. There are four
resources are evaluated by the managers of Giff-Gaff like accessibility, spectrum, telephone and
spectrum. At the time of providing connections to the customers management should have duty
to provide accessibility along with making good spectrum in networking systems. In relation
with this, telephone is also required in business for connecting people with each other. Network
system that have provided by Giff-Gaff should be very strong for connection.
Rare- Second step of this model includes those resources which are not only valuable but
also rare in nature. There are various capabilities that are using by Giff-Gaff are very rare in
nature. Giff-Gaff has strong network system which is valuable and rare for other competitors as
they can’t imitate it. Main rare resources of Giff-Gaff are accessibility, network systems,
spectrum because their rivals can’t copied it easily. Main reason behind rarity of these resources
are that, company have invested lots of investments for strengthening their capability. Telephone
resource is not rare because it is the main requirement of each organisation of telecommunication
sector (Blackburn, 2013).

Inimitable- When resources are easily imitated by other then it is called imitable
situation. As it is very hardly and costly to copy other capabilities for organisation. Resources of
Giff-Gaff can’t be copied by others easily because they have invested lots of money in it. But
there are some imitable resources of Giff-Gaff that are spectrum and accessibility as high cost
occurred in it but can be copied easily by the same organisation of this sector so as to making
their high customer base in market.
Organisation-Wide Supported- Resources of organisation doesn’t create any value itself
unless managed by organisation in effective manner. It is very essential for the managers of Giff-
Gaff to allocate or arrange their resources in efficiently and utilise them in optimal manner so
that competitive advantage can be maintained in marketplace. For effectively utilisation of these
resources, management can use formal reporting structure, proper budgeting tools, compensation
policies etc. and provide better training to their employees so that better contribution can be
taken for utilising these resources. When all resources will be organised in effective manner then
it will lead the firm towards gaining competitive advantage. Main organised resources of Giff-
Gaff are accessibility as it is rare and valuable in nature and can’t be imitate by any of their rivals
so the managers have responsibility to organise such capability so as to gaining better
sustainability in market (Drnevich, 2013).
(Source: VRIO Model, 2019 )
Illustration 1: VRIO Model, 2019

b) Strengths and weaknesses of organisation
Internal analysis of Giff-Gaff can be explained through its strength and weaknesses that
are defined as below:
Strengths-. It is the main power of organisation that helps in achieving goals and
objectives. It is mainly founded within the organisation which can be evaluated through
identifying their actual financial position in market. There are various strength which are carried
by Giff-Gaff that are given here. Company has more than 280000 employees in around 28
nations across the world. Company has a wide customer base of 29 million customers who are
using their services. Company is providing 3G and 4G services across the world. Giff-Gaff has
made their strong financial position in their home nation due to which they can expand their
market in global market. Company have also sponsored various sports activities in different
nation due to which their positive image is maintained in the mind set of their customers.
Company mainly focuses on research and development of their products due to which their
image is built as an innovative service provider in market. Organisation uses different kind of
advertising and branding strategies due to which their strong position is maintained in market
among their competitors.
Weaknesses- It can be defined as the negative aspect of organisation which can adversely impact
their profitability and make restrictions in achievement of goals and objectives. By analysing
these aspects and taking correctively measures for it, can be overcome in easy manner.
Weaknesses of Giff-Gaff are given here, As company is mainly targeting business persons due to
which they have lost all their individual customers. Brand reinforcement is weak because of
which their newly introduced plans are not sustained for long time period in market. As financial
ratios are not good of firm therefore, management should make focus on these aspects so as to
preventing difficulties in upcoming time period. Forecasting of demand are not so good due to
which many opportunities are missed out. Giffgaff is successful in its home nation but have
limited presence in Africa and China countries. Global competition is very high in market due to
which their competitors are highly influencing their profitability and sales figures. Employees of
firm are not performing well as compared to their rivals because other competitors of firm are
providing better training programmes to their employees so as to gaining better outcomes in
market (Ghezzi, 2013)

.
TASK 3
a) Strategies to improve organisation's competitive edge
Competitive Edge
It is an attribute which enables the organisation to over perform its functions so that
competitive advantage can be gained by it. It includes various kind of resources like highly
skilled labour, trade barriers, access to new technology etc. for improving efficiency and gaining
competitive edge in marketplace Porter’s five force model can be used by Giff-Gaff which is
briefly explained as below:
Porter's five force model
This model is used by organisation for analysing and evaluating competition level of its
business functions. By analysing actual position of firm managers can easily form effective plans
or strategies so that competitive advancement can be gained in proper way (Grover, 2013). With
the help of this model, company can also identify those factors which are influencing their
business operations. Giff-Gaff can use this method for conducting market research which is
briefly explained as below:
Illustration 2: Porter’s Five-Forces Model
(Source: Porter’s Five-Forces Model, 2013)

Bargaining power of suppliers: This situation is related with bargaining power of
suppliers in it suppliers can demand for more amount of funds for supplying products. In context
of Giff-Gaff, bargaining power of suppliers are very high because there are low number of
suppliers are available in telecommunication sector. In this condition, managers of Giff-Gaff
have duty to make better relations with the suppliers so that products and services should be
supplied in effective prices.
Bargaining power of buyers: This situation is related with power of buyers in which
buyers can demand for purchasing quality products and services at lower prices. For building
better customer base in market company have to make compromise with quality of product and
provide it to lower prices than their rivals. In reference with Giff-Gaff, power of buyers are very
low because their competitors are offering same products and services at high prices whereas,
Giff-Gaff is providing better quality products at affordable prices to their customers.
Threats of entry: It can be defined as those situation that is related with threat of new
entrants in the industry in which company is operating its operations. In other words, it is related
to how easy for a new company that they can enter in the market and survive in market. In the
reference with Giff-Gaff, threat of new entrant is very low because it is not easy for new firm to
enter into telecommunication sector and perform all the functions. This is difficult because it
requires huge amount of funds for operating business activities in effective manner which is not
possible for everyone who wants to perform their functions in this sector (Hoejmose, 2013).
Threats of substitutes: This part of five forces model describes about the duplicate or
alternative products which are available in the market. These products are generally same or can
be said as the alternative of a particular firm’s goods. In respect of Giff-Gaff there are various
players are available in market who are providing same services at affordable prices to their
customers. It can attract more numbers and retain them for long time period. Hence, it can be
said that there are various players are present in market but due to well brand image of firm its
manager has to face medium challenges from substitute products.

Competitive rivalry: It is related with ability of company in which they have to identifying their
strength and develop plans accordingly so as to gaining competitive edge in marketplace. In this,
competition is conducted on several bases like size, scope or offerings of the firm which is
similar with the respective organisation. In telecommunication sector, there are various players
like Vodafone, EE, O2 who are large in size and providing tough competition to Giff-Gaff in
marketplace. As company has renown brand image in marketplace but still they should arrange
their resources in effective manner so that competitors can’t influence their profitability and
strategies in negative manner.
TASK 4
a) Strategic Management Plan for organisation
Strategic management plan can be defined as document that is used by managers of
organisation for defining strengthen operations, goals, targets, prior tasks etc. to the employees
so as to gaining better efforts from them. There are various kind of tools or analysis of Strategic
management plan that can be used by Giff-Gaff for gaining better outcomes. It is explained with
Bowmans’ strategic Clock model which is given as below:
Bowman's Strategic Clock
Main purpose of this model is to guide the managers about positioning of their products
so as to gaining competitive advantage in market. There are two kind of dimensions like
perceived value and price along with eight position in market which are briefly described as
below:
Low Price and Low Value Added- It is not an effective position of Giff-Gaff because
product is not differentiated and customer received products at low prices. Therefore, company
have to charge for offerings are low with low value added.
Low Price- For gaining better sustainability and growth managers of Giff-Gaff should set
low prices of their products so as to gaining competitive advantage. There is margin figures on
sold products are low but sales figures are high so that profitability is maintained because of low
margins (Köseoglu, 2013).
Hybrid- It is a combination of low price and product differentiation which is an effective
positioning strategy and can be adopted by Giff-Gaff so as to generating high profitability or
customer base in existing market.

Differentiation-It is the fourth position in which organisation aims to offer products at
better quality products which will provide better value. Product quality and branding will be
helpful in such strategy.
Focused Differentiation- This strategy can be aimed to positioning the product at high
price level where users can easily purchase the products due to receiving high value of money
from it. Giff-Gaff can use this strategy for enhancing their profit margins.
Risky High Margins- This positioning strategy has high risk that can leads organisation
towards failure. In it, Managers of Giff-Gaff have to set high prices for products so that chances
of failure can be reduced in effective manner.
Monopoly Pricing- As Giff-Gaff can charge Monopoly prices for their goods and
services so this kind of strategy will be useful for new markets in which network services are low
in nature.
Loss of Market Share- It can be defined as disaster for competitive market in which high
prices are charged by competitors for same products.
Example of strategic management plan is given as under:
Aim: Main aim of Giff-Gaff is to make their global presence in world.
Organizational structure: Management of Giff-Gaff uses flatter or matrix kind of organisational
structure due to which they can easily adopt above bowman’s strategy so as to achieving
objectives in easy manner.
Vision: Vision of organisation is “To focus on establishing sustainability in marketplace along
with utilizing resources in optimal resources”
Mission statement: Mission of Giff-Gaff is to providing excellent quality in network services to
their customers.
Values: Giff-Gaff belives in providing products to their customers along with providing value of
money.
Problems: Major issues or difficulties which are faced by Giff-Gaff higher prices of competitors
and technically inefficient staff members (Li, 2013).
Goals: Basic goals of Giff-Gaff is to win trustworthiness and loyalty of customers. In which,
they provide products to their customers which are well-being and providing value of money to
them. Mobilising is an effective strength which supports them in achieving their goals and for

this, they mainly focus on developing better collaboration with local manufacturers so that they
can easily build their positive image in front of their customers.
CONCLUSION
From above report it has been concluded that the business strategies are helpful for the
organisations in order to survive in the market as well as to accomplish their goals and objective
as well of the firm. The organisations need to analyse the internal and external environment
which can impact the business operations from smoothly running their activities in competitive
market. PESTLE analysis is useful for determining the factors of external environment which
can negatively impact the organisation. Vrio model is used by the organisations for determining
the internal resources and capabilities of firm in order to use optimally. Organisations can also
use porter five forces model for determining the threats, suppliers, buyers and other for survival
and growth of market.

REFERENCES
Books and Journals
Amran, A. and et. al., 2016. Business strategy for climate change: An ASEAN
perspective. Corporate Social Responsibility and Environmental Management. 23(4).
pp.213-227.
Barberá, L. and et. al., 2012. Advanced model for maintenance management in a continuous
improvement cycle: integration into the business strategy. International Journal of
System Assurance Engineering and Management. 3(1). pp.47-63.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of
insights. MIS quarterly. pp.471-482.
Blackburn, R. A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Drnevich, P. L. and Croson, D. C., 2013. Information technology and business-level strategy:
toward an integrated theoretical perspective. Mis Quarterly. pp.483-509.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.
Grover, V. and Kohli, R., 2013. Revealing your hand: caveats in implementing digital business
strategy. Mis Quarterly, pp.655-662.
Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the
relationship between business strategy and socially responsible supply chain
management. International Journal of Operations & Production Management. 33(5).
pp.589-621.
Köseoglu, M. A. and et. al., 2013. Linkages among business strategy, uncertainty and
performance in the hospitality industry: Evidence from an emerging
economy. International Journal of Hospitality Management. 34. pp.81-91.
Li, Y. and Tan, C. H., 2013. Matching business strategy and CIO characteristics: The impact on
organizational performance. Journal of Business Research. 66(2). pp.248-259.
Maté, A., Trujillo, J. and Mylopoulos, J., 2012, November. Conceptualizing and specifying key
performance indicators in business strategy models. In Proceedings of the 2012
conference of the center for advanced studies on collaborative research (pp. 102-115).
IBM Corp..
Murthy, V. P., 2012. Integrating corporate sustainability and strategy for business
performance. World Journal of Entrepreneurship, Management and Sustainable
Development. 8(1). pp.5-17.
Oestreicher-Singer, G. and Zalmanson, L., 2013. Content or community? A digital business
strategy for content providers in the social age. MIS quarterly, pp.591-616.
Reich, B. H. and Benbasat, I., 2013. 10 Measuring the Information Systems–Business Strategy
Relationship. Strategic Information Management. p. 265.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Wang, J. and Verma, A., 2012. Explaining organizational responsiveness to work‐life balance
issues: The role of business strategy and high‐performance work systems. Human
Resource Management. 51(3). pp.407-432.

Online
PESTEL Analysis of Telecommunication Industry. 2018. [Online]. Available through:
<https://www.bestessayservices.com/blog/pestel-analysis-of-telecommunication-
industry/>.
PESTLE Analysis of the Telecommunication Industry. 2019. [Online]. Available through:
<https://pestleanalysis.com/pestle-analysis-of-the-telecommunication-industry/>.
STRATEGIC CAPABILITIES. 2019. [Online]. Available through:
<https://managingresearchlibrary.org/glossary/strategic-capabilities>.
Porter’s Five-Forces Model. 2013. [Online]. Available
through:<http://www.businessbankingcoach.com/porters-five-forces-model-works-for-
lenders/>.
EE marketing report. 2019. [Online]. Available
through:<https://www.slideshare.net/VasilikiEvangelou/ee-marketing-report>.