Giffgaff: Macro Environment and Business Strategies

This report provides a comprehensive analysis of Giffgaff's business strategy within the UK telecommunications industry. It begins by examining the impact of the macro environment on Giffgaff, utilizing the PESTLE model to assess political, economic, social, technological, legal, and environmental factors. The report then evaluates Giffgaff's internal capabilities, strengths, and weaknesses using the VRIO model to identify sources of competitive advantage. Furthermore, it explores strategic options using Ansoff's growth matrix and Bowman's strategy clock to determine the company's strategic direction and potential for market penetration, product development, and diversification. The analysis highlights the challenges and opportunities Giffgaff faces, offering insights into how the company can improve its competitive edge and market position in a dynamic industry.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1. Impact and influence that macro environment has on giffgaff and its business strategies..1
PESTLE model for Giffgaff organisation's environmental analysis...........................................2
TASK 2............................................................................................................................................4
P.2. Critically evaluating the strength and weaknesses of an organisation's internal
capabilities, structure and skill set..............................................................................................4
TASK 3............................................................................................................................................7
P.3. Diversify appropriate strategies to improve competitive edge and market position of
Giffgaff organisation...................................................................................................................7
TASK 4............................................................................................................................................9
P.4. Using Bowman's strategy clock model, analyse the strategic direction and options
available for Giffgaff organisation..............................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Telecommunication industry is one of the largest industry in the UK, in which various
organisation are operating their business functions. In the report, the company has been chosen
which is Giffgaff company which is a UK based big organisation. In addition to this, this study
will be discussed about PESTLE and Ansoff's growth factor matrix of the organisation. In order
to strategic capabilities' identification of Giffgaff organisation, VRIO model will be applied.
Apart from it, the investigation will also be discussed about porter's five forces model in case of
assessment of telecommunication industry in the UK. Bowman's strategy clock model will be
applied in order to interpreting strategic direction of Giffgaff company.
TASK 1
P.1. Impact and influence that macro environment has on giffgaff and its business strategies
In UK, Telecommunication sector is rapidly growing in the nation and becoming more
competitive in market. In case of Giffgaff company is a one of the largest telecommunication
organisation in the UK which is facing wide range of competition in industry. The business
strategic management team are utilising effective approaches in order to keeping ahead in the
competition in market of the nation, because of technological changes in telecom industry,
numbers of issues and challenges are facing by the company and they need to identify these
factors which affecting its macro environment of Giffgaff firm. As per the analysis of macro
environmental factors of the company, they must need to formulate effective strategy at
workplace in respect to keeping itself ahead and maintain its top most position in the industry.
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PESTLE model for Giffgaff organisation's environmental analysis
PESTLE analysis of Giffgaff company is the most necessary part of company by which
they will be able to understand its various influences on organisation's strategy and macro
environment factors of the firm (Aharoni, 2015). With the assistance of this strategy, its strategic
management professionals would be able to understand the areas of business in which proper
focus is needed to be taken.
Political factors: Regulation issues come up frequently in the business and they have to
understand them. The government of UK has been released some important instruction towards
telecommunication sector of the nation, in which make positive and negative impact on business
environment (Amran, Ooi, Wong and Hashim, 2016). In addition to this, the government has
noticed that, internet and Wi-fi is most necessary part of each person lives, so this is the most
needed instrument for their educational and professionals lives in terms of making proper
communication among them. Some critical political norms and regulations are necessary to
follow by Giffgaff organisation in the industry in order to operating their business at competitive
level. So it makes negative impact on the sales criteria and business strategy of the business.
Economic factors: Varied of economic factors occur in the industry which affect
Giffgaff organisation external environment in the nation. Economic elements are interest rates,
inflations and taxation policies of the nation towards corporate sector in the UK (Armstrong,
Kotler, Harker and Brennan, 2015.). In the country, the population of the country increasing
frequently and that's why demand of telecommunication services also increasing therefore,
company's has been facing challenges of increment in their telecommunication resources at rural
areas, so it is becoming prime case of raising expenses of the company in the nation. Company
growth depending on the technological advancement in company's product and services, so the
business entity needed to analyse economic situations of the nation and as per their economical
norms and circumstances, they need to formulate an effective strategy in order to sustain in UK
telecommunication market.
Social factors: Social factor are more necessary thing for Giffgaff organisation in order
to identification of external environment factors on the company operational and strategic both
level. Often, it has been seen that, Giffgaff organisational professionals need to change in their
strategy in the industry as per demand and social needs in various communities of the country
(Buckley and Ghauri, eds., 2015). Most in the rural areas, people utilise telecommunication
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services less than urban areas, so it makes negative impact on the productivity and profitability
of firm in industry so they have no need to make more investment in rural areas in case of proper
establishment of their resources. It gets affect the strategic level of the business in industry.
Technological factor: This is most crucial factor for Giffgaff business, because of there
are numbers of changes could be seen in frequent transformation in technological section of the
industry. The business is needed to keep update their product and services as per moden
technological needs so they will be able to compete their competitors in the market. Basic needs
to today's world is that, smartphone uses has been become more necessary things for each one, so
as per demand of their customers, its professionals need to furnish some effective services and
require to changes in their strategy as per modern demand in its technology which influences on
firm's profitability and productivity (Johnson, 2016). The company has opportunity to making
implementation of various types of new technology which can affect the business performance in
positive manner.
Legal factor: In case of UK country, its legal factors always affect the Giffgaff
organisational performance and activities in the industry. There are some critical legal
regulations and norms has been provided by the nation which must follow by them while
working in the industry. As per government rules, they need to change in their strategy of
functioning business in the telecommunication market of country. The business have threats of
making consideration of variety of legal provision of UK in order to functioning of their business
activities. Legal factor negatively affect the business performance in industry.
Environment factors: Some environment factors directly effect Giffgaff organisation's
telecommunication services in the UK (Lawton, 2017). Climate has been changing frequently
and global warming also make influences on the business products and services in the industry in
proper way. Environmental factors such as adverse weather, stormy weather can destroy various
equipments of the business, so Giffgaff organisation have environmental threats within business
environment.
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Ansoff's growth factor matrix:
Market development:
In order to targeting new market in the UK, Giffgaff organisation need to find out some
new areas in which they can better exist in market. The company need to sell their product and
services to their new customers in new market (Yang, Kueng and Hong, 2015). They need to
identify the new geographical market at broad and existing in the home country, as per analysis
of the industry in the nation , they will be able to recognise the growth opportunities and some
effective threats of the business.
Diversification:
This strategy is risky for Giffgaff organisation, this is very difficult for the firm in order
to achieving economic scale of the company and gaining proper scope in the existing
marketplace. So they need to provide completely different products and services in the industry
and as per customer demand and diversify them, in this situation, they have to face adverse
circumstance in industry.
Market penetration:
In this type of strategy, Giffgaff will be able to selling of their products and services in
same market in more significant form so for that, they need to modify their market strategy as
per its requirements in the market (Linder and Williander, 2017.). They also have to reintroduce
attractive and impressive schemes of telecommunication services in market.
Product development:
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In this section, the firm is selling different products for the same peoples in the UK
telecommunication market (Malerba, Caloghirou, McKelvey and Radoševic, eds., 2015). In
which, they have to modification in their existing strategy and produce different variants to
introduce in the market in attractive form so they will be bale to achieve more success in the
marketplace.
TASK 2
P.2. Critically evaluating the strength and weaknesses of an organisation's internal capabilities,
structure and skill set
Strategic capabilities: Each organisation have different types of challenges such as
customers, market share and revenue and the business follow some effective strategy. The
processes of shaping strategies and putting them into action is the responsibilities of the business
leader (Meckling, 2015). Strategic capabilities is most necessary thing for the organisation in
case of proper formation of its strategic in order to survive and increase its value over time.
When strategic capabilities does take into consideration in the firm, it assists them to make focus
on the organisation's assets, resources and market positioning and market projection of the
company as well.
Key components of strategic capabilities:
This is most essential terms for the business in which its business professionals can
measure the effective performance of business in industry and as per its requirements in current
market make modification in them in proper way, so the business will be able to gain more
competitive advantage in the market.
It assists the business leader to tracking their strategic capabilities in the market by which
they can understand the strategy of the corporation and its competition as well as, in respect to
proper industry analysis.
VRIO model: In terms of getting proper source of competitive advantage of each firm, its
professionals utilise many tools which can better understand the external and internal
environments of the business (Pisano, 2015). In case of proper analysis of strategic capabilities
of Giffgaff organisation, its professionals need to use of VRIO analysis. The tool was developed
by J. B. and it assists for gaining competitive advantage for the business in the
telecommunication competitive complex market in the nation. It original framework was called
VRIN. VRIO analysis is stands for four question as if the resources is Varuable?Rare? Cosly to
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limitate? And Giffgaff enterprise need to capture the value of the resources? In the business. A
resources and capabilities of the company assist them to meets all four necessity of the company
which can bring more effective competitive advantage for the firm in telecommunication
industry.
Valuable:
The first question of the model is that, if the Giffgaff firms are adding more values of its
available resources in the market, then they would be able to gain more competitive advantage in
the market. On the other hand, competitive parity of same products' availability in the industry
can increase the possibility of raising competition level. So they need to add more value to their
existing resource in the firm.
Rare:
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Some resources are occupied in the business environment in very rate so that rate and
vauable resources furnish grant temporary competitive advantage for the business. There are
very few companies working in the industry who has similar ways of uses of resources in the
company (Scholes, 2015). So it could be said that, Giffgaff organisation need to utilise some
effective performance of the business in order to achieving superior execution.
Costly to lmitate:
In case of Giffgaff firm has vauable, rate and costly to imitate resources could
accomplish sustain competitive advantage from the marketplace. Historical condition of the
resources occupied when a historical event are occupied over a long tine period (Aithal and
Aithal, 2016). There sources and capabilitiesof the companies are based on the company's culture
and interpersonal relationships with each other in industry.
Strength and weaknesses of Giffgaff organisation:
Strengths:
 The major strength of Giffgaff business is that, its strategic management departments are
making major focus around the things in which business could get better success in easy
way.
 The company has more skilled and exercised employees at workplace who are
performing well in the company for increase its performance in better manner (Torrent-
Sellens, 2015).
 The company has strong international brand name, by which they can get more positive
response from their loyal customers from the market. Giffgaff business has been using more innovative technologies as per modern needs in
industry which increase its quality and brand equity in the market.
Weaknesses:
 The business have weaknesses is that, the company is losing its money in some areas
because of its weak performances in the marketplace.
 The company does not have proper development plan in current market by which they are
getting lose their values in the industry.
 The company has very high rate of telecommunication services rate in the market, so its
customers are switching to using its competitors valuable telecom services in industry.
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TASK 3
P.3. Diversify appropriate strategies to improve competitive edge and market position of
Giffgaff organisation
A Giffgaff company is also known as a telecommunication operator, is the services
provided of communication services as a telephony and data communication. A giffgaff
telecommunication company provides as also wireless provides and internet service. Porter's five
forces is useful the company because understand the environment the affect of profitability. In
UK mobile market Giffaff successfully launched new brand in high congested. Porter's five
forces introduction in 1979. Business strategic tools highly is become one of the most popular of
Giffaff telecommunication company (Rosemann, and vom Brocke, 2015). Porter's five forces is
model that looking for strength that affect of competition and the help of Giffaff determine
competitions in marketplace. Porter understands the competitive forces and the effective of
strategic decision making. Porter;s five force is very useful in formulating firms strategic and the
five key of forces in a telecommunication industry.
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 Bargaining power of buyer : The power of the buyer is affect of the pricing and quality.
Is the power of telecommunication industry the quality higher produce and demand lower
price the bargaining power strong. The easy of switching the high bargaining power of
buyer. Buyer power is low the bargaining of products in small amounts. Strong
bargaining power only few buyers exist and the buyers are price sensitive. Bargaining power of suppliers : Suppliers have strong negotiation power and there are
few supplies but many buyers and the cost of switching raw material is high. It could be
said that, the power of buyers can affect the business performance in the industry. Its
buyer have sufficient power by which they can make impact on the sales volume of the
company in the market.The analysis the power of business supplies it's the potential to
raise its price. Bargaining power of supplies is moderate when bargaining power is high
for seller for the mobile devices and latest technological (Yang, Kueng and Hong, 2015).
Giffgaff telecommunication company lose of the competitors can not afford in the front.
There are many contractors willing to the supply of goods in the bargaining power of
seller is low. Threats of new entrants : There are numbers of competitors are running their business in
the telecommunication market and providing facilities. In addition to this, entrance of
new competitors in the market is one of the most threat for Giffgaff company. In
telecommunication industry, this strategy examine about competitor how easy and
difficult level can enter in marketplace. Another telecommunication company entrants in
the industry is the great risk of Giffgaff telecommunication company if market share
being deplete the high barriers of entry. The competitor entrants of such barriers include
telecommunication tower for mobile consumer and high infrastructure cost, the cloud
storage managed of data centers. The threats of new competitors entrants its difficult to
stay in the industry. When more telecommunication company entrants the competition of
the same market share the fall of the profit. Giffgaff telecommunication company is
existing organization so that the new entrants of same industry to create high barriers. Threats of substitutes: In this case, the business have threat to entering new
telecommunication company in the market by introducing innovative services at cheaper
rate. So it can affect the marketing strategy of the business in possible manner. The high
threats of substitutes the buyer easily find the other substitutes products in industry.
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Giffgaff telecommunication company's products of attractive price and better quality of
the product so the buyer can't switch from another substitutes products (Rugman and
Verbeke, 2017). In the telecommunication industry the many competitions there are the
price and quality of products.
 Rivalry within the market : Numbers of competitors are running in the market which is
furnishing effective services in the industry. So Giffgaff telecommunication company
need to comply with the market and frequently keep ahead in the rivalry in the market in
order to gaining competitive advantage. The force determine in the telecommunication
industry in the current competition in marketplace. Rivalry within the telecommunication
industry there are many competitors. The telecommunication companies is stiff
competition of undifferentiated products. The equally selling a product or services the
rivalry competition high of the marketplace
TASK 4
P.4. Using Bowman's strategy clock model, analyse the strategic direction and options available
for Giffgaff organisation
Bowman's strategy is one of the best approach of assessment of strategic direction and
positioning of the business in order to gaining the most competitive positioning in the market. In
case of Giffgaff company, its professional need to implementation of Bowman';s strategy of
clock model in terms getting variety of option to reaching to an appropriate positioning on its
several products base on two dimensions price and perceived vales in the industry. This is an
appropriate strategy of strategic formation about the company by which they can gain proper
success in systematic form.
Low price and Low Value added:
This is not a vert competitive positioning for the business, in these terms of the firm.
Giffgaff organisation need to offer its existing services in the market with very low prices and
low value added in the business (Wu, Gao and Gu, 2015). It could be said that, the business in
needed to introduce its various telecommunication services to their customers in market so, they
will attract more towards gaining competitive advantage from market.
Low price:
Business need to introduce their telecommunication facilities in the industry with very
low prices rather than its competitors in the market. Addition to this, for making lower prices of
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