EE Business Strategy Analysis: A Comprehensive Report

Desklib offers solved assignments and past papers to help students succeed.

BUSINESS STRATEGY
1

2

INTRODUCTION
The telecom sector in the UK is growing continuously with the changing technologies and
growing needs of consumers. It has been able to adopt the changes competently. It is one of
the major contributors to the economy of the UK. And its contribution to GVA is
approximately 4.1%. It is a critical part of the UK’s economy and one of the largest
employers in the UK.
This assignment is prepared to analyze the business strategy and other operational details of
an organization. It covers the examination of the business tactics and its effectiveness in
harvesting the desired results. The examination will be conducted with the help of different
models and theories as PESTEL and VRIO framework. And their implications will be
interpreted by using some relevant framework. And in the end, this assignment will deliver
useful inputs for further expansion of business unit (EE logo, 2019.).
3

Overview of the company
EE (everything everywhere) is a telecom service provider established in the year 2010. Its
inception can be attributed to the merger of Orange and T-Mobile. It the first company in the
UK to offer fast networking services like 4G. It delivers its networking services to more than
25 MVNOs and offers its services through 574 stores and it also uses online services mode.
EE holds approximately 31% market share as per the survey conducted.
Vision: they have decided to offer the best network, best service and build the customer
trust.
Mission: they aspire to become one of the leading network services providers globally.
Objective: their objective is to build the trust of its consumers. They treat their employees as
their strong asset and aspire to empower them to get success in the business (EE logo, 2019).
4

L01
PESTEL analysis can be explained as the impact macro environment on the working of the
functioning of the business unit. It comprised of six factors that are: political, economic,
social, technological, environmental and legal. Their explanation is as follows:
Political factor
Political factors like changes in federal policies and regulation and their impact on the
business operation. The EE is least affected by the Brexit and migration crisis because it has
an independent regulator. The federal government’s trade regulations and the government's
decision to invest in the telecom sector for boosting the growth in the developing regions of
the UK (Bull et al., 2016).
Economic factors
The economic factors are the rate of inflation, contribution in GVA, rate of employment
growth and purchasing power of consumers etc. They can have both positive and negative
impact on the functioning of the business unit. The business of EE is recovered by the
recession and post-recession cash crunch (EE logo, 2019)
Social factor:
The main reason responsible for the growth and development of the telecom sector in the UK
is its increasing education level and influence of social media platforms. The users of telecom
services especially the young generations have replaced their way of interaction from offline
to online mode. And for that, they are increasingly using the internet and telecom services.
So, this is impacting favourably. Another reason is mobile services are now becoming part of
everybody's day to day life and helping in the growth of the telecom sector (EE logo, 2019).
Technological factors
5

Technology is an integral part of the telecom sector and it requires to be augmented in a
business model for the growth and expansion of it. The EE being mobile and internet service
provider get the immense benefit of technology (EE logo, 2019).
Environmental factor:
The telecom companies together with EE have an impact on the environment in the form of
e-waste and the harmful mobile radiation they generate. They can offer the reprocessing
feature to its products in order to increase environmental awareness in its consumers with the
augmentation of cutting edge technology. And it increases the revenue generation for the
business unit.
Legal factor
The legal factor that affects the functioning of telecom sector in the UK is the regulations
related to this industry as well as some rules of EU as “Digital Europe” etc. the regulator
ensures the quality of telecom services as well as the price structure followed by companies
including EE. And these regulations sometimes affect the growth of the business unit (Bull et
al., 2016)
SWOT ANALYSIS
Strength Weakness
 Prevalent exposure due to
interoperability and absence of
roaming services.
 Diverse product portfolio as per the
changing market dynamics.
 It has successfully developed a new
range of product and services.
 IPR and revenue generation from
them (Gaudin, 2017).
 Weak brand name because it is
relatively new in the market.
 Lack of effective financial planning.
 Moderately Small investment in
innovation and exploration.
 The attrition rate is more in
comparison with other telecom
companies (Gaudin, 2017).
Opportunities Threat
 Government of UK is supporting
environment-friendly products and
services that are in line with the
 Lack of investment in research and
development.
6

mission of EE.
 The changed taxation policy is in
favour of EE.
 The strong financial position provides
an opportunity for further investment.
 Mode of transport is becoming
affordable.
 The volatility of the exchange rate.
 Lack of availability of a skilled and
educated workforce.
 Sometimes, environmental
regulations like the Kyoto protocol,
the Paris agreement also poses threat
(Nurmi, and Niemelä, 2018
CRITICAL EVALUATION OF MACRO ENVIRONMENT FACTOR:
Macro environment factors affect the functioning of business and the examination of their
influence on business functioning is as follows:
Political factors: political factors affect are affecting the business of EE positively in a way
that there exists an independent regulator for this sector which keeps it least affected by
political measures. But recent political instability affected the business for a while negatively.
Economic factors: With the increase in purchasing power of communication services users
the business unit gets benefitted desirably. But rise in prices and unemployment amongst the
population of the UK affecting undesirably (Bull et al., 2016)
Social: the availability of a skilled workforce is contributing positively. But the high attrition
rate in the UK is affecting the business negatively. A rise in PP led to the increased attraction
for mobile and internet services influencing the business desirable.
Technological: The advent of 3G, 4G and now 5G services has influenced the user to use the
internet services more and it has brought many business opportunities for mobile
manufacturers and telecom operators (Cave, 2017).
Environmental: EE is also focusing on reducing carbon emission as a part of its
environmental responsibility as it affects the business positively. But another international
norm like Paris Agreement is a cause of concern for EE.
Legal: the regulator ensures the quality of telecom services as well as the price structure.
These factors are affecting positively as the government of the UK has decided to make
further investments in the telecom sector as a part of its recent policies to develop rural areas
(MindTools, 2019).
7

L02
The internal capabilities of an organization can be assessed with the help of VRIO model
developed by Jay Barney. Its application on the resources of EE is as follows:
Resource Valuable Rareness Imitation risk Structured to
use
Impression
on
commercial
gain
Monetary
asset
Yes Yes No Yes Long term
Network
strength
Yes Yes No Yes Midterm
Employees’
competence
Yes Yes Yes Yes Temporary
technological
advancement
Yes Yes Yes No Midterm
Resources of the EE are assessed with an application of EE and if all the constituents of the
table show desirable outcome then the resources can be termed as rare and difficult to imitate
or ready to use for the growth of the business. And they are sustainable resources with a
competitive advantage. Resources of are monetary assets, the strength of network services
and integration of advanced technology etc. (Cave, 2017).
8

Fig 1: VRIO Model
[Source Gaudin, 2017]
Valuable: the financial power of EE is its precious resource and gained a strong sense of
market dynamics and other valuable resources are: skilled management, distribution network
technology and innovation.
Rareness: rareness is the uniqueness in the product and services of an organization. And lack
of rareness can be the reason for less competitive advantage for an organization. Network
strength and rapid development in technology power are in favour of EE's revenue
generation.
Imitation risk: it is a threat that any product and service attract in the market by its
competitors. It can lead to a loss of revenue. Monetary asset and IPR are the resources that
cannot be replicated easily as they require huge time and investment from the competitors.
And financial power is achieved over time and needs hung investment also (Gaudin, 2017).
Systematized: the strong financial strength and the strong network created with the constant
up gradation of technology are put in use for the further growth and development of resources
of EE. And if they used effectively will enhance the value of other resources also.
Organizational support: the management and the top leadership are equipped with strong
business skills and capabilities and guides skillfully in the time of adversities. And the work
environment and culture is also employee-centric and provides ample opportunities for
individual growth and development (Cave, 2017).
9

VALUE CHAIN ANALYSIS
This analysis is helpful in identifying the internal capabilities of an organization. It can apply
for assessing the capabilities of EE in the following manner:
Primary activities: the primary activities included efficient data handling and data and
network security. It also considers the protection of private data of its consumers as its
primary responsibility. It actively performs education and health-related CSR as a primary
duty.
Secondary activities: the secondary activities of any organization are equally important as
primary activities and their secondary activities are reducing the damage done to the
environment and making a further investment for the causes of social importance. Some
CSR activities for the stakeholders are a part of secondary activity.
Fig 2: Value Chain Analysis
[Source: MindTools, 2019]
EVALUATION OF INTERNAL CAPABILITIES OF EE
The organizational capabilities can be evaluated in order to analyse the strong and weak areas
of strategy and operations. The analysis is as follows:
Infrastructure: the organization’s infrastructure is its critical asset and the EE has large,
strong and competitive infrastructure due to the large investment made in it and also it gained
a part of it from its parent companies. As EE in recent years has diversified its business it has
upgraded its core infrastructure constantly (Cave, 2017).
Digital infrastructure: digital infrastructure is the combination of technology and its
services in a desirable proportion. Digital setup of EE is very strong as it augmented the latest
10

technologies like 5G in its business model. It also focuses on investing more in the search of
the latest technology as the telecom in itself is a technology-driven sector.
Leadership: the experienced and strong leadership contributes to the internal strength of EE
as in the time of change in business dynamics and market completion has managed to
conquer the adversities (MindTools, 2019).
Management: The management and the top leadership are equipped with strong business
skills and capabilities and guides skillfully in the time of adversities. And the work
environment and culture is also employee-centric and provides ample opportunities for
individual growth and development (Gaudin, 2017).
Stakeholders: the stakeholder of EE is employees, employer, shareholder and consumers’
etc. skilled management and leadership and with the cooperation of all stakeholders can
contribute in the form of monetary benefit to the organization.
Financial place: the financial power of EE is its precious resource and gained a strong sense
of market dynamics and other valuable resources are: skilled management, distribution
network technology and innovation. Strong financial strength can only be achieved with long
and dedicated efforts (MindTools, 2019).
Organization culture: the culture of an organization is very inclusive and flexible. It also
offered equal pay for equal work. And they also offer senior leadership roles to female
employees in order to bring the culture of gender neutrality. The environment of EE is
employee friendly and flexible and offers immense opportunities for individual growth and
the expansion of the business unit.
Resources: Resources of EE are monetary assets, the strength of network services and
integration of advanced technology and a strong distribution network for delivering the
product and services. The resources are the use of immense importance for the growth of the
business (MindTools, 2019).
11

L03
PORTER’S FIVE FORCES MODEL
Porter’s five forces model is used to assess the competitiveness of an organization. The five
forces of porter help in market forces analysis.
The threat of entry: the telecom sector attracts the threat of new entrants due to the MNP and
relatively less flexible rules for new entrants in the market. Earlier the rules were very
stringent for the entry of new companies and the infrastructure needed to be created was also
very costly. But in the present situation, there are many innovative mechanisms are available
for funding as well as there are companies that provide supporting infrastructure for telecom
companies and eliminates the need for creating infrastructure. They just need to deliver their
services according to their business model. EE ha low threat of entry in a sense that it is one
that company who has already established itself in a market (Ghezzi et al., 2016).
12