The objective of this report is to evaluate available strategic direction for British Telecommunication because there is a huge competition in the telecommunication industry. In this regard, it is required for firm to evaluate appropriate choice by considering:
- Identify the influence of external environmental factors over the business strategies of British Telecommunication.
- Determine internal environmental and organizational capabilities of British Telecommunication.
- Evaluate the competitiveness of UK’s telecommunication industry by considering Porter’s five force model.
- Explain the available strategic directions for British Telecommunication.
Business strategy is a process of measuring performance of an organisation at marketplace. It reveals actual position of a company as well as potential of competitors used to grab a marketplace. In addition to this, it helps a firm in developing effective strategies and policies through which it can obtain better outcomes in business (Williams and Figueiredo, 2011)
. This term aids employers in building long term action plan which is helpful in reducing risks of business and gain higher advantages. In context with understanding the procedure of business strategy, a report has been prepared on BT telecommunication. This firm is largest service provider of UK which provides various products like broadband, TV channels, IT solutions and more. In order to operate its business in many countries successfully, this assignment discuss about macro factors by using PESTLE analysis, Porter’s five force model along with SWOT technique.
P1 Impact and influence the macro environment has on BT organisation
Business environment of a company constitutes various factors which affect operational functions either internally or externally. Factors like political, economical, changes in technologies, business ethics and more are come in macro environment. Therefore, to run operations and functions of enterprises in a proper manner, managers are needed to evaluate impact of these (Klettner, Clarke and Boersma, 2014). As per present scenario, BT Plc. is a British multinational company of UK which deals in telecommunication sector. Currently, this firm is operating its business in 180 countries with 106,400 number of employees. It provides fixed-line, mobile and broadband services in UK. Along with this, it also provide IT services and television subscription. Due to distribution of wide range of products, this association has become the largest service provider in telecom industry. Since, this enterprise is running business at international therefore, it creates a large impact on operational activities. So, to understand these affects of macro-environmental factors, its managers has used following techniques:-
1) PESTLE Analysis of BT organisation:
Political factors- This kind of factor entails with political rules and regulations of a country which create a huge impact on operational activities of a company. In addition to this, such type of factors also help managers in exploring itself in terms of political issues. In context with BT Plc., this firm is currently running its business operations in various countries. So, its managers are required to follow all laws and legislation established by government of territorial regions in order to run business successfully (Li, Zhou and Si, 2010). Due to higher rate of interest of Brexit, help BT in reducing its pension liabilities. Along with this, managers of this company are needed to analyse some more concept which includes stability of industries in telecom sector, security in terms of intellectual property, taxation rates, trading laws and more before expanding business in other countries.
Economic factors- Economical condition of a country impacts a lot on financial growth of organisations which operated their businesses in its territorial regions. This factor includes interest or taxation rate, inflation, deflation, foreign exchange rate and more. All these attributes affect purchasing power of people which indirectly impact on sales performance of firms also. Therefore, high inflation rate creates benefits to BT and other companies in developing businesses as well. In telecom sector, it becomes more complex for earning high return on investment if they operate business in rural areas. Other factors on which such enterprises are needed to concern more on are employment rate, quality of products or services, level of education, economic growth and more. By focusing more on these elements, an association can earn profitability in a better manner.
Social factors- Behaviour of customers reflects taste and preference of them which are needed to be understand by companies for producing services accordingly. In context with telecommunication sector, growth of business is generally limited due to common products. In addition to this, conducting business in rural areas is not an easy task as it confines company to work properly because of the limited resources (Johnson, 2016). In context with BT Plc., this firm needs to be consider more on culture, leisure interests, product differentiation and more in order to get large number of customers. Along with this, it should conduct business with ethical laws in which employees are treated equally. So, it creates good image at marketplace.
Technological factor- Rapid change in technology impact business of a firm in both positive and negative manner. In telecom industries, high technologies help in providing good broadband services and provide information to various customers in a unique way which strengthen their business (Tavitiyaman, Qu and Zhang, 2011). So, BT Plc. needs to make investment in technologies which helps in providing high speed of network. But due to such development, price of services also raised which creates negative affect on sales performance as customers are started to move on substitutes which have less price.
Legal factors- This factor includes various laws such as intellectual property law, anti-discrimination act, e-commerce and customer protection rights, data security etc. So, all these laws help in getting high security of business as well (Kernbach, Eppler and Bresciani, 2015). Therefore, it is necessary for BT Plc. to examine importance of these laws and legislations made by government to operate business in a perfect way.
Environment factor- Climatic condition affect business of telecommunication sector. As due to bad weather, speed of network gets disrupt in a large manner. Along with this, usage of carbon in wires and cables emit poisonous gas in renewable process. Therefore, BT Plc. and this type of industries are required to switch 100% renewable energy. In addition to this, they should use proper techniques for reducing wastage of products as well as recycle them in appropriate manner.
2) Ansoff matrix:
This matrix is used as a strategic planning tool which gives a framework for managers to formulate strategies for future development. It includes a 2x2 market/product grid in which four different options are available for developing marketing strategies of a company. This method considers various factors which are match up with business strategies in order to improve brand image of a company. Using this model, a firm can determine in which it is going best. Along with this, it also reveals position of an association at marketplace and gives techniques to improve marketing image (Grover and Kohli, 2013). This would help in gaining competition advantage from rivals as well as gain high attention of customers. So, all these things impact positively on performance of an organisation.
Ansoff matrix of BT organisation :
Market penetration- Under this factor, a company can identify various ways through which it can enhance brand image and gain loyal customers in an effective manner. It focuses more on existing marketplace where an industry already operates its business and wants to increase sales performance in same area. Therefore, it evaluates the way through which people can be attracted and become a part of regular customers. So, by using this strategy BT Plc. encourage its customers to do more phone calls on low cost.
Market development- This matrix helps a firm in finding new marketplace where it can sold existing products easily. It helps in identifying areas of different places where demand of similar products are arising. In addition to this, it also evaluates those people who never use such type of products and want to use. So, through both ways, a company like BT can sale its commodities in a better way. But this firm focuses more on grabbing more attention of new customers rather than opening business at new marketplace.
Product development- This option is useful to develop products of a company in order to sell in same marketplace (Firnkorn and Müller, 2012). Therefore, its is necessary for organisations to create modifications in techniques and adopt new technologies so that new products can be manufactured as per customers demand. In context with BT, it needs to access 5G technology in broadband services which provide high speed of networking.
Diversification- This is the final option for a firm to produce innovative products for new market. It is useful for new ventures who have sufficient amount of money for investment as well as seek to get opportunity (Porter, 2011). Although making diversities includes greater risk but it generates higher profitability also. Thus, BT Plc. needs to expand its business in new market area and creates modifications in existing products by adding more valuable features in them. It will help in earning more and more profitability in business.
P2 Internal environment and organisation capabilities
1) Strategic capabilities
This factor reveals the capabilities and abilities of employers which they used in formulating strategies. Along with this, how they implement the same into organisation system through which better outcomes can be occurred. Therefore, BT Plc. builds strong strategies in order to grab a largest market share (Sumer and Bayraktar, 2012). This form concerns more on resources available at such marketplace where it can operate business in a more profitable way. In order to evaluate effectiveness of strategies, this company needs to make proper analysis which helps in evaluating strengths and weaknesses of business as well as opportunities and threats present at marketplace.
2) Application of VRIO model on BT
VRIO stands for Value, Rareness, Imitiability and Organisation. This model is used to make a proper analysis about resources of an enterprise. As per current scenario, BT Plc. is one of an establish organisation of UK which reveals good financial condition of this firm. In addition to this, having a large number of employees in various branches of this company also shows its major effectiveness (Scholes, 2015). Therefore, main resources of present enterprise are its large working organisation and sufficient funds which is its main value. In terms of rareness, workers of BT have gained high experienced and skills through which they are able to provide good services to customers. Since, finance cannot become a valuable or rare resource therefore, unique strategies of this firm shows that this firm has shown imitablity. In addition to this, managing entire operations and resolve all problems in a quick time proves that BT Plc. is good in all terms of manner.
3) Strengths and weaknesses of BT: