Business Strategy Report: BT Group Analysis and Evaluation

This report provides a comprehensive analysis of BT Group's business strategy, examining the impact of the macro-environment using the PESTEL model and evaluating strategic directions through Ansoff's growth matrix. It assesses BT Group's internal environment and capabilities using the VRIO/VRIN model, identifying strengths and weaknesses. The report further evaluates the competitiveness of the telecommunications sector using Porter's Five Forces Model, and analyzes strategic choices with Bowman's strategy clock. The analysis covers political, economic, social, technological, legal, and environmental factors affecting BT Group, and explores market penetration, development, diversification, and product development strategies. The report also explores the strategic capabilities of the company to sustain long term growth.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analyse the impact and influence of macro environment on organisation and its business
strategies......................................................................................................................................1
TASK 2............................................................................................................................................5
P2 Assessment of organisational internals environment and its capabilities..............................5
TASK 3............................................................................................................................................7
P3 Evaluate the competitiveness of telecommunication sector through porter's five force
model...........................................................................................................................................7
TASK 4............................................................................................................................................9
P4 Analyse strategic directions by using Bowman's strategy clock model................................9
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11

INTRODUCTION
Business strategy generally concerns as the company's high level plan to reach at
potential goals or objectives. Strategies consider various elements such as firm's strengths,
different resources, opportunities and number of competitors in the market place. For running an
effective business firm, there is requires to formulates best strategies by focusing on highest level
objectives or goals within the company. This is an essential for every firm to achieve
predetermined targets and increase more values as well as profits by adopting suitable strategy.
There must be necessary to analyse business environment with identify internals and external
factors so that better action plans can be made for getting success (Ackermann, 2013). This
report is based on BT group which is British multinational telecommunication company and its
headquartered in London, UK. This assignment will explain PESTEL model to analyse
environment and define Ansoff's growth matrix to determine strategic position of firm. It will
also apply the VRIO/ VRIN for defining the strategic capabilities and identify the organisation's
strengths and weaknesses. This will evaluate the competitiveness of UK's telecommunication
sector by using Porter's Five Forces Model.
TASK 1
P1. Analyse the impact and influence of macro environment on organisation and its business
strategies
In the present scenario, every firm is focusing on making better position in the market by
formulating strategies and finding suitable ways that can be effective for achieving best possible
outcomes. Business can be developed by considering forms of promotions, manufacturing
procedures and many activities that will support in surviving in the competitive environment as
well as tough competition. Therefore, strategies are depends on the various environmental factors
that directly affects on the business operations (Audretsch, 2013). It can be categorised in two
way such as micro and macro that must be considered by formulating strategies in more efficient
manner. Every organisation concentrate on these forces and try to manage or maintain in an
effective way by adopting several tools and techniques as well.
BT Group is a multinational telecommunication company that provide number of
products or services such as fixed-line telephony, mobile networking services, broadband
internet solutions, fibre-optic communication and many more in the market so that maximum
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customers can satisfied their desired needs and demands in well manner. There are around
106400 employees working in this firm. BT Group is dealing in international market so there are
various factors which can affects to the business and telecommunication sector. In this included
macro-environmental forces which have direct impact on the firm and it cannot be control by the
manager. This can be understood by considerings the PESREL model such as:
1. PESTEL model for analysing environment
There are number of factors available in the market which have huge impacts on the
business operations and these are related with environment fluctuations as well as changes.
Therefore, multinational companies are facing different issues regarding changing climates and
factors including Political, Economical, Social, Environmental, Legal and Technological.
Therefore, these forces have several impacts such as positive and negative that affects on the
profits or productivity of the organisation (Alsoboa and Aldehayyat, 2013). It is the major
responsibility of management that consider these factors while formulating strategies such as:
Political: This is an important element which is beyond the control and have direct
effects as in this included several political situations that exists in the country. These situations
can be arise while changing in environmental aspects so it influence the business and
management decisions regarding bringing innovations as well as various changes within the
firm. In this included different components like tax policies, stability of the government and
employment legislation etc. therefore, all these factors are required for running an organisation in
the competitive world. BT Group also dealing in global market so political factors can influence
its market shares and profitability as well (Bentley, 2013). There are number of factors available
which must be considered by the BT group so that they can attain their set targets and expand
business at different countries such as:
 Government stability in the particular country.
 Issues regarding increasing corruptions.
 Proper protection and regulation about intellectual property.
 Laws and legal regulation for pricing strategies.
 Employment acts.
 Minimum wage acts.
 Tax policies and provisions
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Hence, all these requires for making favourable decisions so BT group can run business
in more appropriate manner.
Economical factors: It is another important factor that can affects on the business as it
effects the economies of firm through various changes within the country. It also depends on the
environmental situations which also must be considered by the organisations for making better
strategies to achieve competitive advantages. In this included several elements such as inflations
rates, foreign exchanges, level of income of people, interest rates, saving rates and cash flow of
the particular country (Omer, 2013). BT group also have to undertake the economical factor for
formulating business strategies in telecommunication sector. They requires proper infrastructure,
better skilled labours, economic growth rate, GDP of the nation and many more so that negative
effects can be reduced.
Social factors: In this considered several cultures and society impacts that directly affects
on the organisational structures and customs in various ways. Social factor is one of the major
factor which should be undertake while running the business as in this included different aspects
as like gender, age, people's religion, caste, educations and behaviours etc. these all required to
make decision regarding producing of particulars goods and services in well manner. BT group
can also provide appropriate products and services such as mobile, telecommunication services,
television, broadband internet solutions and many more as per the customers requirements so that
they can satisfied in better ways.
Technological factors: In the present era, there are various new techniques launching
that helps in reducing work loads and remove stress of the employees by making every task in
easy way. It also can affects on the business performance by using the appropriate technologies
within the firm. Therefore, it is necessary for every organisation that to bring various changes
and apply tools or techniques so that operations can be run in better manner (Sharp, 2013). BT
group also adopted several technologies and try to bring changes such as focus on high speed
networks and develop 5G technology, cloud computing and many more so that BT can attains its
economies of scale.
Legal factors: In this defined various laws and legal legislation that exists in the country
and must be followed by every organisation for operating their activities or functions as well.
Therefore, BT group requires to undertake the Anti-trust law which formulate by the UK
government for telecommunication industry, as well as discrimination acts, employment acts,
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consumer protection law that will support in making better decisions regarding employees and
customers as well.
Environmental factors: This is also an important element of the macro-environmental
factors as it is related with climate safety and make it more effective and efficient (Cadle, 2010).
It is major responsibility of the organisation that to protect atmosphere by protecting from
harmful aspects and care of natural resources. BT group undertakes some main steps for
protection of climate such as reduces the carbon emissions etc.
2. Ansoff's growth vector matrix
In this defined the appropriate strategies that must be formulated for creating better
positions in the future and achieve competitive advantages by considering several components
such as environmental changes as well as micro and macro factors. Ansoff's matrix is one the
best method for making better plans regarding building brand image in the market place so that
goodwill can be increased. This strategy also will support in competing with strong competitors
and increase markets shares in an effective manner (Paul, 2010). This theory can be beneficial
for BT group in achieving competitive advantages and growth within defined time period.
Different steps of Ansoff's matrix:
Market penetration: It is very useful as company sell its more products and services in
the same market with the help of this approach. In this required to develop the new market
strategies and attracts huge audiences towards organisation so that they will be able or
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encouraged for buying particular products. BT Group should take support of market penetration
as introduce a loyalty scheme provide various products or services through effective promotions
that will helps in increasings the sales volume in more efficient manner.
Market development: In this phase, organisations have to understand the particulars
market and find the targeted audiences as well as potential customers by identifying new market
for the purpose of selling company's same products or services to the different people. In this BT
group has to considered various geographical markets by conducting the PESTEL analysis and
also use number of channels for selling like online or direct sales and many other for reaching at
potential customers (Turner, 2010). Market segmentation and marketing mix also can be
undertake by BT group to increase sales.
Diversification: In this defined that most of businesses are going to expand as they focus
on business expansion in totally new market with new products development as well. It also very
beneficial for BT group as they can achieve competitive advantages by expanding the business at
number of countries in more effective way. It will support in increasing market share within the
firm.
Product development: It generally considered as the set of procedures and systems for
developing new products in the market so that customers can fulfil their needs or demands in an
appropriate manner. It is very easy process as BT group can adopt this strategy and innovate its
services or products for attracting customers towards organisation (Curwen, 2011). BT company
is concentrating on making alliances for accessing 5G technologies.
TASK 2
P2 Assessment of organisational internals environment and its capabilities
In this describe that assessment of internal environment consider for identifying the
strengths and weaknesses of company that have possessed by the people within the firm. There
are number of factors available which must be undertaken while making business decisions and
these are related with internal factors such as culture, skilled workforce, capital, organisational
structure and efficiency of management technological aspects and many more that can affects on
the company performance. These elements directly affects on the work productivity and
profitability because internal environments are related with these aspects. It can be possible to
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make appropriate strategies for managing any critical situations so that organisation can achieve
predetermine goals or objectives with higher market shares.
1. Strategic capability
This is an important aspect that provide the abilities to company for the purpose of
implementation of defined strategies and contributes more so that they can achieve long term
growth and sustainability in the market place (D'Aveni, 2010). Therefore, in this required
appropriate resources and their effective utilisation such as proper assets, funds, tools or
techniques etc. for attaining set targets and also for surviving in the dynamic environment.
BT group usually formulates these strategies and make decisions for adopting different
techniques for satisfying customers needs or desired expectations in the field of communication
sector. Company have to consider proper environmental study and define the major factors that
can be controllable for developing the firms and operate business in an efficient manner. The
main factor is technological changes which generally happens in this sector, therefore BT Group
requires to adopt best techniques and advanced technologies for running the business in better
ways.
2. VRIO/ VRIN model
This model is explain about the proper utilisation of available resources for the purpose
of achieving sustainability and long term growth in the marketplace. Every organisation focus on
improving its business performance by utilising human resources as well as manpower so that
they will be able to accomplish set targets. BT group also consider the employees development
for bringing more creativity and innovative ideas so that better products and services can be
provided to customers (Dagnino, 2010). They provide adequate training and development
programs to employees so that they will be able to perform every tasks in well manner and
achieve set targets. human resource is most important component in the organisation that support
in attaining goals and developing firm. It also helps in improving the strengths abilities through
utilisation of various tools such as:
Valuable: This related with important aspects that helps in providing emphases for the
purpose of getting success. It is very necessary for every firm which support in optimising
available resources and reduces chances of risks or uncertainties as well as avoid delays in well
manner. This is also beneficial in removing the threats and negative impacts to promote the
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business in the competitive world. BT group have to focus on allocation of resources and get
maximum outcomes with minimum inputs as well.
Rare: it is defined that company has rare chances regarding having adequate resources in
the company for providing better quality of products and services in the market. Therefore,
company have to consider the available resources regarding telecommunications sector so that
better solutions can be provided through better formulation of strategies.
Imitability: It is defined as the important and best suitable resources that required for
making effective goods and services and also that cannot be steal by other person (Smith, 2010).
BT group is most famous firm who provide better quality of internet solutions, mobile networks
and many more through available resources in more effective manner.
3. Organisation's strengths and weaknesses:
The best strategies can be formulated by analysing the particular strengths and
weaknesses of the organisation because it is necessary to identify the major points of the firms.
This will support to BT group in finding the various opportunities to attain set targets and
objectives while running an organisation.
Strengths: Strong base in UK with large customers: BT is serving various products in the market
such as telephony, fixed-line telephony, internet solutions, broadband and many more.
This firm has acquired EE limited for maximising wealth so that they can occupy good
positions in the market in an efficient way.
 Focus on customers satisfaction by providing better products or services: BT group is
also try to serve best facilities and services in the market place (Dobbs, 2014). It is an
essential for increasing growth and sales volume because satisfy customers needs and
make strong relationship with them.
Weaknesses: Based on UK market: In this considered that BT group has generated more revenues in
the market of UK. There are huge people who are taking these products and using
services but they are serving only UK. This is not much famous in other market areas
such as in the Asian countries. Therefore, they are not able to generate higher revenues
and profits in the other market place.
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 Separation of open-reach from BT: This is another weak point of the company as their
brand image is declining and also costs are increasing in the firm. It has direct impacts on
the company because BT is loosing its profitability and productivity as well.
TASK 3
P3 Evaluate the competitiveness of telecommunication sector through porter's five force model
For analysing the environmental aspects and formulate strategies within the firm for
achieving set targets or goals can be possible by the applying porter's five forces. This an
essential which support in evaluating the competitiveness within telecommunication sector.
Therefore, in this requires adequate strategies and appropriate plans for surviving in the
competitive environment. This model can be understood by following aspects such as: Competitive rivalry: In this process, company try to finds its competitors by analysing
environmental stud. They also find out the competitors strengths and weaknesses in the
field of telecommunication (Firnkorn, 2012). BT group is dealing with providing various
products or services such as broadband, internet solution, fixed-line telephony and many
more in the market place so it is necessary to identify strong competitors. There are some
competitors of telecommunication sector like Vodafone, O2, EE limited and Virgin who
are providing mobile networks. Threats of new entries: In this, company always focus on new entries who are coming
with new ideas, innovation and creations in particular products or services that can
attracts number of customers towards firm. BT group provides several products and
services regarding telecommunication sector so they have to manage and maintain the
brand image among competitors in the market place. Bargaining power of customers: This is another important aspects of the porter's five
forces as in this defined that buyers have rights as well as powers of bargaining while
buying any products or services in the market place (Müller, 2012). On the other side,
customers used to compare the prices and quality of same products or services which
serve by different companies. They can make purchasing decisions for fulfilling their
demands and desired expectations as well. Suppliers powers: This component is related with the production departments or
manufacturing process in which goods and services are produced and also defined the
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delivering process so that those products can be provided to the right customers.
Therefore, BT group is focusing ons building good relations among peoples for making
strong networks and maintain the supply chain relations for the purpose of avoiding delay
in the production process.
 Threats of substitution: in this defined that every firm can be affected due to threats of
substitutes products and services in the market (Grover, 2013). There are various
substitutions can be seen in the global marketplace but there are less substitution of the
BT group because it is selling best quality of products and services such as television,
internet solutions, broadband services, fixed-line telephony and many more in more
effective way. It is UK's best firm ins the sector of telecommunication.
TASK 4
P4 Analyse strategic directions by using Bowman's strategy clock model
In this describes that every business firms required to formulate the strategies and adopt
effective tools or techniques for achieving competitive advantages and long term benefits in well
manner. There must be required to consider appropriate plans and corrective actions such as
bring innovations, create or develops new products and modified existing one so that customers
can be satisfied. Every firm wants to create its value into customers mind by analysing their
needs or demands and provide them best effective items as per their expectations in more
efficient manner.
BT Group also try to make better positions in the market by undertaking the Bowman's
strategy clock model because it is an essential in providing several dimensions. There are define
some strategies such as:
Position 1, Low price and low value added: This is an effective and best strategy which is
beneficial in identifying the position of the firm in the competitive market (Kohli, 2013). BT
Group is dealing with variety of products or services as they provide these in best quality with
lower prices. It can affects on the customers buyer decisions so it is necessary to formulate
pricing strategies in better ways.
Position 2, Low price: In this defined that every firm required to focus on minimising costs or
expenses that can be occur while running the business. This another important strategy that can
be adopted by the BT group as they are providing several products and services in the market
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