Implementing Business Strategy - British Telecommunications

TASK 1

P1 Impact of Macro Environment on British Telecom

While formulating any business strategy, firms are required to conduct an external environmental analysis so as to recognise those factors which affect its market position. In UK, telecommunication sector has been developed from the early days of telegraphs to modern broadband and mobile phones networks with internet services. Here, telecom market is largest in Europe which defined by intense competition in mobile and broadband sectors. Telecommunication industry of the nation involves several companies in which British Telecom is a leading networking service provider company which operates in 180 countries. Main services of the firm are – subscription television, broadband, fixed line services and IT related services (Annabi and McGann, 2013). The overall revenues of BT are - £24.062 billion whereas its current operating income is £4.135 billion; there are over 106,400 employees are presently working it. The prime objective of the company is to provide better quality services to its clients so as to satisfy their needs and wants in the best possible manner. Due to its global market presence, business operations and activities of BT group get affected by several external factors in positive and negative manner. Below is defined numerous factors which turns out successful evaluation of firm's business strategy, such as -

Political factors – These factors has a significant role in order to identify those political factors which can hinder long term success or profitability of BT group in UK. The firm is operating numerous countries and expose itself to diverse nature of political environment as well as risks which occurs due to political system. British government has set a framework for telecommunication industry, it involves fibre access, net neutrality, spectrum, expansion of green ICT. Another government policy is – the Digital Agenda which confirms high speed network over the world (Auzair, 2011). Along with this, strategic political relationship between UK and BT group are strong which helps company to diversify political risks and uncertainties.

Economic factors – It encompasses with saving rates, interest rates, inflation rates, foreign exchange rates and economic cycle so as to identify actual demand and investment of an economy. Economic factors like – fierce competition affects defensible advantages of the nation. On the other hand, globalization has raised up transformation of business economics, now firms are trying to enter into international arena.

Legal factors – Issues with laws and regulations are being come up with frequently. As BT group operates worldwide, thus it faces several issues regrading monopolies, government and customers. For example- regulatory bodies of some nations has retained strict laws and legislation on importing and exporting through which telecommunication firms cannot expand its services in those areas. Thus, it is essential for BT group to consider some legislations while enter into new markets; it will lead to secure organisation's secret sauce (Bharadwaj and et. al., 2013). Different laws should be taken into account while entering into new markets, such as- discrimination law, anti-trust law, copyrights, patents, e-commerce and consumer protection law, healthy and safety law, data protection law etc.

Environmental factors – Every country and organisation has its own environmental standards which affects its profitability and revenues. Due to changes in climate and weather, telecommunication services also get hampered because people cannot get proper networking into their cellphones. Apart from this, laws should be also regulated for environmental pollution, wastage and development of ecological products.

Strategy to analyse organisation's strategic position: -

Ansoff's growth matrix -

It is known as product or market grid by considering four strategies in order to develop new goods to enter into new markets. Ansoff matrix supports to enlighten future market risks which are associated with specific growth strategy. Along with this, future strategic position of telecommunication sector involves different aspects, i.e. diverse nature of environment and internal factors. Although, the positioning strategy of BT group clearly expressed its strength and weaknesses which aids to develop better marketing strategy for attaining strong marketplace over rivals. This has put a positive influence on profits and growth of the firm (Bucolo and Matthews, 2011). Following is defined four strategies which entails in Ansoff matrix, such as -

Market penetration – BT group has entered in broadband and fixed product line market. It also provides IT services so as to increase market area. For this purpose, organisation needs to search better and innovative ways to improve customers' trust or loyalty ; it will develop consumers' lifetime value. Market penetration aids BT group to grab better market opportunities and driven up market goodwill in Europe market. Basically, the strategy helps to make necessary adjustments which improves long term appeal of firm's offerings.

Market development – British Telecommunication is now looking towards overseas markets, the firm already has made its presence in developed countries, i.e. US, Australia etc. Thus, market development is one of the best approach which supports a firm to attain new customers towards existing offerings. New consumers are defined through geographical location and a specific region (Grover and Kohli, 2013). Although, risk in market development strategy is also higher because there is required vast amount of investment while entering into new markets.

Product development – Creation of IPLC products can be a good example of product development. This marketing strategy focuses on generating new products for existing markets so as to attain and retain customers for long term period. In this case, telecommunication firms will attempt to raise its profitability by launching new and innovative products which are able to satisfy customers needs' in the best possible manner. After launching 5G networks, BT group also starts working on 6G and 7G networks so as to provide fastest data speed to customers.

Diversification – BT group is now outsourcing sum of its services, like customer services with IBM. The firm has also entered into IT services so as to fulfil needs of target audiences in an imperative manner. In addition to this, diversification strategy can be acquired by firm when it wants.

INTRODUCTION

 In the present business scenario, every corporate association is tend to acquire an effective strategy or policy so as to compete with all environmental factors which has a vast impact on firm's market position. Business strategy is a long term action plan which is designed in order accomplish specific goals and objectives. In other words, its a management policy which strengthen the performance level of entire business organisation. Along with this, business strategy is a core management function which ensure firm's growth and success at marketplace. Apart from this, telecommunication sector is rapidly growing but also faces higher market competition (Ackermann and Audretsch, 2013). Every firm faces these kind of challenges so as to manage its market position over the world. According to the survey, mobile technology has generated £3.8bn revenues in 2017; the sector also contributes 5 Billion Euros in UK's economy. The present assignment is based upon BT group; its a one of the largest telecommunication company which renders networking and IT services to multinational companies. BT group is operating in 180 countries by having an aim to connect all people through a single chain of network. The report enlighten influence of macro environment on business organisation and its strategies. Readers will also come to know about nature of competitiveness in telecommunication industry.

TASK 1

P1 Impact of Macro Environment on British Telecom

 While formulating any business strategy, firms are required to conduct an external environmental analysis so as to recognise those factors which affect its market position. In UK, telecommunication sector has been developed from the early days of telegraphs to modern broadband and mobile phones networks with internet services. Here, telecom market is largest in Europe which defined by intense competition in mobile and broadband sectors. Telecommunication industry of the nation involves several companies in which British Telecom is a leading networking service provider company which operates in 180 countries. Main services of the firm are – subscription television, broadband, fixed line services and IT related services (Annabi and McGann, 2013). The overall revenues of BT are - £24.062 billion whereas its current operating income is £4.135 billion; there are over 106,400 employees are presently working it. The prime objective of the company is to provide better quality services to its clients so as to satisfy their needs and wants in the best possible manner. Due to its global market presence, business operations and activities of BT group get affected by several external factors in positive and negative manner. Below is defined numerous factors which turns out successful evaluation of firm's business strategy, such as -

 Political factors – These factors has a significant role in order to identify those political factors which can hinder long term success or profitability of BT group in UK. The firm is operating numerous countries and expose itself to diverse nature of political environment as well as risks which occurs due to political system. British government has set a framework for telecommunication industry, it involves fibre access, net neutrality, spectrum, expansion of green ICT. Another government policy is – the Digital Agenda which confirms high speed network over the world (Auzair, 2011). Along with this, strategic political relationship between UK and BT group are strong which helps company to diversify political risks and uncertainties.

 Economic factors – It encompasses with saving rates, interest rates, inflation rates, foreign exchange rates and economic cycle so as to identify actual demand and investment of an economy. Economic factors like – fierce competition affects defensible advantages of the nation. On the other hand, globalization has raised up transformation of business economics, now firms are trying to enter into international arena.

Legal factors – Issues with laws and regulations are being come up with frequently. As BT group operates worldwide, thus it faces several issues regrading monopolies, government and customers. For example- regulatory bodies of some nations has retained strict laws and legislation on importing and exporting through which telecommunication firms cannot expand its services in those areas. Thus, it is essential for BT group to consider some legislations while enter into new markets; it will lead to secure organisation's secret sauce (Bharadwaj and et. al., 2013). Different laws should be taken into account while entering into new markets, such as- discrimination law, anti-trust law, copyrights, patents, e-commerce and consumer protection law, healthy and safety law, data protection law etc.

 Environmental factors – Every country and organisation has its own environmental standards which affects its profitability and revenues. Due to changes in climate and weather, telecommunication services also get hampered because people cannot get proper networking into their cellphones. Apart from this, laws should be also regulated for environmental pollution, wastage and development of ecological products.

Strategy to analyse organisation's strategic position: -

Ansoff's growth matrix -

 It is known as product or market grid by considering four strategies in order to develop new goods to enter into new markets. Ansoff matrix supports to enlighten future market risks which are associated with specific growth strategy. Along with this, future strategic position of telecommunication sector involves different aspects, i.e. diverse nature of environment and internal factors. Although, the positioning strategy of BT group clearly expressed its strength and weaknesses which aids to develop better marketing strategy for attaining strong marketplace over rivals. This has put a positive influence on profits and growth of the firm (Bucolo and Matthews, 2011). Following is defined four strategies which entails in Ansoff matrix, such as -

Market penetration – BT group has entered in broadband and fixed product line market. It also provides IT services so as to increase market area. For this purpose, organisation needs to search better and innovative ways to improve customers' trust or loyalty ; it will develop consumers' lifetime value. Market penetration aids BT group to grab better market opportunities and driven up market goodwill in Europe market. Basically, the strategy helps to make necessary adjustments which improves long term appeal of firm's offerings.

Market development – British Telecommunication is now looking towards overseas markets, the firm already has made its presence in developed countries, i.e. US, Australia etc. Thus, market development is one of the best approach which supports a firm to attain new customers towards existing offerings. New consumers are defined through geographical location and a specific region (Grover and Kohli, 2013). Although, risk in market development strategy is also higher because there is required vast amount of investment while entering into new markets.

Product development – Creation of IPLC products can be a good example of product development. This marketing strategy focuses on generating new products for existing markets so as to attain and retain customers for long term period. In this case, telecommunication firms will attempt to raise its profitability by launching new and innovative products which are able to satisfy customers needs' in the best possible manner. After launching 5G networks, BT group also starts working on 6G and 7G networks so as to provide fastest data speed to customers.

Diversification – BT group is now outsourcing sum of its services, like customer services with IBM. The firm has also entered into IT services so as to fulfil needs of target audiences in an imperative manner. In addition to this, diversification strategy can be acquired by firm when it wants.