Business Strategy of EE Limited: A Comprehensive Analysis

Desklib provides past papers and solved assignments for students. This report analyzes EE's business strategy and competitive advantage.

BUSINESS STRATEGY
1

Table of Contents
Introduction...................................................................................................................... 3
Task 1 – The external environment..................................................................................4
LO1.................................................................................................................................. 4
P1 Apply appropriate frameworks to analyse the macro environment for a given
organisation......................................................................................................................4
M1 critically analyse the macro environment to determine and inform strategic
management decisions....................................................................................................6
Task 2 – The internal environment and organisation capabilities....................................7
LO2.................................................................................................................................. 7
P2 Using appropriate frameworks analyse the internal environment and capabilities of a
given organisation............................................................................................................7
M2 critically analyse the internal environment to assess strengths and weaknesses of
EE’s internal capabilities structure and skill set..............................................................10
Task 3 – Analysing the telecommunications sector.......................................................11
LO3................................................................................................................................ 11
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given
market sector for an organization...................................................................................11
M3 Devise appropriate strategies to improve competitive edge and market position
based on the outcomes..................................................................................................14
Task 4............................................................................................................................ 15
LO4................................................................................................................................ 15
P4 Apply a range of theories, concepts and models, interpret and devise strategic
planning for a given organization...................................................................................15
M4 Produce strategic management plan that has tangible and tactical strategic priorities
and objectives................................................................................................................ 17
D1 Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions....18
Conclusion..................................................................................................................... 19
References.....................................................................................................................20
2

Introduction
Business strategy can be defined by the design and execution of procedure in order to
attain the goals and objectives. Nowadays to hold a good position in the market the
leading companies are advancing and implementing their business strategies. The
strategies are being developed based on the analysis of the trend of the market and the
activities that possess remarkable impact on the process of the business and its growth.
The present assignment encloses an overview of the external and internal business
environment of a chosen organization EE Limited and also highlights its capabilities.
The study also devises suitable business strategies so that the market position and
competitive edge of the organization can be improved. Strategic directions of the
organization are interpreted by utilizing various theories, models and concepts
regarding business strategy.
Overview of the company
For completion of this assignment the UK based telecommunications organization EE
has been chosen. The organization has become one of the most advanced digital
communication company of the UK. The vision of the organization is to provide best
service and best network to their customers in order to generate trust. The organization
is motivated to achieve the vision by setting various objectives like developing an
advanced digital backbone in Britain, betterment of the service provided through the
stores and online centres (EE.,2019).The organizations wants to build trust and
relevance among the customers through offering personalised experience.
3

Task 1 – The external environment
LO1
P1 Apply appropriate frameworks to analyse the macro environment for a given
organisation
The various macro environmental factors that impact over the functioning of the
organization EE limited can be analyzed through PESTLE analysis. The macro
environmental factors that would be discussed under the PESTLE analysis are political,
economical, social, technological, legal and environmental factors (Sarsby, 2016).
PESTLE model for environmental analysis
Politic
al
factor
s
According to the various surveys performed by the government of the UK, it
has been come up that the organization has been able to generate 76%
satisfaction rate in the urban areas of UK (Rosamond, 2019). However in the
rural areas the satisfaction level in only 67%. Hence the government has
started to investigate the telecommunication network coverage providers.
The government has made its collaboration with Ofcom for betterment of the
telecommunication coverage.
Econo
mic
factor
s
In the year 2008, UK had come across recession and the UK government
implemented the plan of introducing VAT so that organizations can contribute
to the economy (Martin et al., 2016). This has impacted on the profitability of
the organization EE also. This incident also affected the spending of the
consumers on a particular service provided by the company. The initiatives
of the UK government after the recession, has influenced the organization
EE to flourish. The GDP growth of the country is 1.4% in the year 2018. The
gross income of the families in UK has also increased which has promoted
the usage of telecommunication services.
Social
factor
s
Due to the growth of UK population, the people belonging to young
generations have also increased. This increases the usage of smart phones,
tablets, 4G services as people are being more dependent on the internet and
the social networking platforms. Customers of UK also want the government
to admit that internet is one of the basic human rights as it is required for
career and education. This enhances the profitability of the organization.
Techn
ologic
al
factor
s
The greater technological development in UK influences the growth of all the
telecommunication organization including EE. For reaching its goal to
provide best services to the consumers, the organization implements the
recent technological advancements in UK. Using the better technologies at
workplace the organization is trying to improve the 4G network coverage in
various locations of UK.
Legal
factor
s
The communication regulator of UK, Ofcom along with the government has
set up a number of laws and legislation in the sector of telecommunication
(Kubal, 2016). The telecommunication organizations like EE are bound to
follow the telecommunication law such as the UK communication Act 2003.
4

Enviro
nment
al
factor
s
The major environmental issues like global warming and climate change
have great impact over the telecommunication services and products. The
organizations like EE possess noticeable impact and constraints over the
environment. The company is under the pressure to improve the process of
the production of handsets and improve their infrastructure so that it
possesses a minimum impact over the environment, fauna and flora of the
country.
Table 1: PESTLE analysis
(Source: Created by Author)
Ansoff’s growth vector matrix to analyse the strategic positioning of EE
Ansoff’s matrix is a model that is used by organizations generally as a marketing
planning tool which helps them to identify the products and services and the growth
strategy for sustaining in the market or entering in new markets (Loredana, 2016).
Ansoff’s Matrix helps the company EE limited to determine four strategies which have
been discussed below:
Figure.1- Ansoff’s growth vector matrix
(Source-Loredana,2016)
Market penetration
Market penetration is a strategy of growth which is used by organizations to market
existing product in the already existing markets. The market penetration strategy that is
used by the organization EE is enhancing and holding the market share of the already
existing product in the UK market. EE achieves this by advertisements in newspapers,
TV, radio as well as in websites. It also focuses on the competitive pricing strategies in
order to drive out the existing competitors.
Market development
5

Market development strategy is the growth strategy for the organizations when they
want to sell existing products and services in the new markets. The organization EE
accomplishes this strategy by selling its products via online websites to new locations,
exporting their products in new countries.
Product development
Product development strategy is adopted by organizations when they want to market
new products in existing market (Loredana, 2016). EE implements this strategy by
understanding the current market trend and need and requirements of the consumers in
UK through proper market research. The organization also invests huge amount in R&D
and makes use of advanced technology in order to meet the satisfaction level of the
customers by developing innovative products.
Diversification
Diversification is the growth strategy which is used by organizations to sell new products
in new markets (Murdock, 2017). This strategy is very risky for any business including
telecommunication business of EE. For implementing diversification strategy, EE
gathers adequate knowledge about the new market and makes assessment of risks in
the new market. It is highly influenced to maintain a balance between the reward and
risks in the new market.
6

M1 critically analyse the macro environment to determine and inform strategic
management decisions.
It has been stated by Chang (2016), that the impact of political factors such as the
political instability of a country negatively impacts the growth of every business.
However, EE understands the value of such political factors and thus when it is
determined to sell its product in new markets it gathers clear idea about the political,
economical and social structure of that market. This helps the organization to enter in
the new market successfully and also to attain a good position in that market. According
to Jansen (2017), every business organizations must keep their employees updated
about the legal structure of the country and the impact of the laws and legislation on
various business activities. Thus when the company EE chooses to introduce a new
product into the market, it makes sure that if any of the rules and regulations are getting
hampered by its activities or not. EE also takes account for the environmental impact of
its business activities.
7

Task 2 – The internal environment and organisation capabilities
LO2
P2 Using appropriate frameworks analyse the internal environment and
capabilities of a given organisation
Strategic capability
Strategic capability can be defined by a composition of skill, resources and capacities
that is able to generate competitive advantage to business organizations on a long term
basis. Business organizations belonging to similar sector use to compete among
themselves for gaining more customers, capturing maximum market share and
generating more turnovers. For this purpose business organizations use various tactics
based on purposeful strategies. The procedure of giving shape to the various strategies
and implementing them in activities is the ultimate goal of the business leaders. It is
found that every business organizations are not similarly benefitted by developing and
implementing business strategy.
Application of the ‘VRIO’ model to analyse the strategic capabilities possessed by
EE
VRIO model is an analytical tool that is used by business organizations for evaluating
the resources of the company and its competitive advantage. VRIO stands as the
acronym for the four dimensions of evaluation that are Value, Rareness, Imitability and
Organization (Knott, 2015). Using VRIO model the micro environmental resources of the
company EE such as Human Resources, Financial Resources, material resources and
non-material Resources can be evaluated easily.
8

Figure.2- ‘VRIO’ model to analyse the strategic capabilities
(Source- Knott, 2015)
Value
The human resource department of EE is
motivated to use the data of human
capital management for recruitment and
selection of productive, creative and
talented employees. The more efficient
employees are able to develop innovative
products and services that are offered to
the customers to meet their requirements.
The financial resources of the company
help it to promote its business, invest in
the R&D and install advanced technology
at the organization which helps in gaining
competitive advantage. The organization
also invests in CSR approaches which
earn it competitive advantage.
Rarity
The competitors of EE in UK do not invest
a huge amount of money in the CSR
approaches. It has been also noticed that
the organization is able to generate a
sense of trust with their advanced
technologies among the consumers which
is not generated so extensively by any
other telecommunication organizations in
UK. EE was the first to introduce 4G
services in UK which adds value to its
capability (EE., 2019). The features such
as mobile security application were also
introduced first time by EE in the sector of
telecommunication. The organization has
also launched 5G.
Imitability
The human resource approach of EE of
using data of human capital management
is very costly and thus it is very difficult for
imitating. Thus the unique approach of
human resource management is very
efficient in earning the organization a
competitive advantage. The unique
working style of the R&D team of the
organization and innovative ideas of
products and services are also very
difficult to imitate by any other
organizations
Organization
The organization of various departments
within the company EE is very efficient in
capturing value. The marketing
department collects information regarding
the current market trends and the needs
and demand of the people. The
information is transferred to the
department of R&D who produces
innovative product and services based on
the demand (EE., 2019). The finance
department handles the budget for
implementation of the new project. Thus
the organized way of business operations
helps the organization to succeed in
gaining competitive advantage.
Table 2: VRIO model OF EE to analyse the strategic capabilities
(Source-Loredana, 2016)
Analysis of the strengths and weaknesses of EE
The internal environment of the organization EE can be evaluated with the help of the
analysis on the various strengths and weaknesses of the company. The analysis and
9

strength and weakness would help the organization to modify its business strategies in
order to sustain in the market for longer period of time.
Strength
The major strength of the organization EE is its greater network coverage. The
organization is well known in UK offering the biggest network access across the
country. It has more than 27 million customers which is a great strength of the
organization (EE., 2019). The organization has greater market share in the industry of
telecommunication over other organizations. The great services and products such as
4G services, smart phones, and tablets are potential to deliver strong customer
experience and thus exceed the expectations of the customers. The wide range of
products enables the customers to select from various options. The organization has
been chosen as sponsor of some reputed events like big football, movies which also
increased the visibility of the brand.
Weaknesses
Various technical failures are affecting the brand image of the organization negatively
and the customers are gathering negative perception about the brand. The targeted
segment of the company is the businesses and this is resulting in the loss of individual
customers. The negative feedback of the customers regarding the customer service
decreases the satisfaction level of customers. A huge number of customers are
reporting against the unsolved issues regarding billing.
10

M2 critically analyse the internal environment to assess strengths and
weaknesses of EE’s internal capabilities structure and skill set.
According to Zinovchuk (2016), before developing business strategies and
implementing them into the actions of businesses, every business organizations must
have to make an analysis of its internal or micro environmental factors. The business
organizations must analyse the capability of their various resources such as finance and
human resource, material and non-material resources in order to achieve competitive
advantage. Hence, EE is known to be very eager to deliver unique product to their
customers and thus they have launched first 4G networks in UK and also has
developed 5G network recently. The organization is thus able to attract the customers.
However it can be also noticed that there are some major weaknesses of EE, which
impact on its business and can affect its sustenance in the long run of business. As
opined by Huang et al. (2015), businesses must have to eliminate its weaknesses using
the various resources available and utilizing the strengths of the company. However, EE
is also trying to improve their businesses through development and implementation of
updated business strategies.
11

Task 3 – Analysing the telecommunications sector
LO3
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a
given market sector for an organization
The competitive forces of the telecommunication sector in UK for the organization EE
can be evaluated by the Porter’s five forces model. The analysis of the five forces is
given below:
Figure.3- Porter’s five forces model
(Source- Harding, 2017)
Bargaining power of buyers
The customers of telecommunication services posses the right to change the network
operator without any prior notice. The customers always find new exciting offers so that
they have to spend less in communication services. Thus they change operators very
frequently. To cope up with this situation, the operators such as EE have to hold its
customers by introducing new exciting offers in their services and new products for
attracting the mobile users. However it has been noticed that portability of mobile
number is a long process and need prior notification to the operators. So, the bargaining
power of the customers is reduced. It has been seen that EE has a greater number of
customers than the other telecommunication organizations which is advantageous for it.
12