Business has various policies which are formed to run it business in better and effective way. As per requirement there are possibilities that company has to alter policies. There are some component with are associated with company directly or indirectly can have positive or negative impact. In business, there is use of factors which might get altered by management of company due to requirement (Aithal and Aithal, 2016). Hence there is requirement of proper planning to achieve goals and objectives. It is essential work as per external factors; hence there will achievement of targets in better and effective way. Mangers are responsible for proper planning and motivating workers to act in specified manner. This report is based on BT Telecommunication Company. This association has head quarter in London, UK. This operates in more than 18 countries. In this report there is discussion about Pestle analysis, Ansoff’s model, internal factors of business. In this there is analysis of telecommunication sector is done. There is discussion about strategies which are applicable to analyses m
Impact and analysis of macro environment of business
There are various factors which affect business in either positive or negative way. External elements are not part of company internally, but they affect business indirectly. It is essential to know what can be done and then this affects business policies. It is essential to know about policies which h can be performed in effective and efficient way. Telecommunication is the industry which has many factors which affects its operations. In this case, there is requirement of analyzing market and take actions which are beneficial for its growth. Macro environment includes external factors of business. so they can perform activities in better and efficient way. PESTLE is the technique which is used bty managers of BT in knowing factors external forces and its impact on business.
Political- In this factor, government related factors are involved. According to it, there are policies which are required to be performed with change in plans and policies. There is change in government, so they make their own plans and policies (Basco, 2015). These strategies are widely related to business. In case of BT group they have to fix network tower, so there is permission from political bodies. This is the factor which affect business adversely,. In case of government interference there are chances of impact on goodwill of BT group.
Environmental- BT group operates in various parts of country, so it is essential to work as per environment of concern place. There is difference in environment of various places. As BT group operates in telecommunication, in case of network issue due to environmental factor, then customer may get dissatisfied and switch to other operator. This factor affect business adversely as in case of mobile networks there is hurdle in operating business operations. This affect has impact on telecom company. This affects internet, call, etc. services which has impact on customer satisfaction.
Social- There is difference in culture of people living at different parts of country. There is difference in their demand also. As telephone services are widely used in different parts of country, hence BT group must focus on knowing demand of customer and then they must improve quality of their services. From, this factor, it is clear that consistency in operations does not give any worth. Manager of BT group has to make polices through which they helps to adopt policies alterations due to change in social need.
Technological- Technological factor affects business in efficient way. Due to change in technology, BT group had to alter their techniques. In this style there is use of policies which help to achiever targets in better and effective way (Temminck, Mearns and Fruhen, 2015). While change in technology, there id requirement of training of workers, this results in increment of cost for company. In case of technological changes, training is the cost which has to be incure by mangers. There are chances that employees are not ready to learn new ideas, as they think that this might affect their importance or in case they are not abler to learn new technique, they may be fired. So in this case manager has to motivate them in better n ad effective way.
Legal- BT group has business relation with various countries and there are some or other legal policies related to running of business. In this case, there is requirement of proper knowledge about rules and regulations, so there is no hurdle in running business. Manager can appoint some legal adviser which provide guidance to management of company (Rugman and Verbeke, 2017). Laws related to employees must be implemented in proper way and in case of alteration it must be altered by expert. While new employee is joining company then manager must tell them about rules and regulations so there are less chances of default.
Economical- This factor affects business adversely. As there is need of funds to run business, hence this must be available at effective way. There are many sources through which company can raise funds. In case of problem related to availability of raising funds, organization may feel problem in operating. BT group has good image in market, so it is easy for them to raise funds. In case of increment in interest rates of bank loans, redemption of shares, etc. are factors which affects financial component of organization.
Ansoff Growth Matrix
BT group has good image in market, as they keep eyes on demand of consumer. In telecommunication services, there is much competition, so it is essential to make strategies as per requirement (Aithal and Aithal, 2016). There are much climatic issues due to which services might get halt; hence these problems must get solved frequently. As per data there are various types of customer of BT group, there is difference in their demand, so they bifurcate them on the basis of demand, age, etc. This helps to satisfy them more efficiently. There is requirement of new network offers which give benefits to customer and hence they are ready to be part of BT Group. Satisfaction of customer is the key for growth and expansion of business. Ansoff matrix has four approaches, which are discussed as under-
Market penetration- Market penetration means there is division of customer on the basis of their demand. So this is one of the factors which have to be adopted to by company. If they distribute consumers, it is easy for them to anlayse demand and satisfies society. To penetrate market, there are chances to adopt other firm.
Market development- In this case, there is requirement of development of factors which help to analyse market and then take actions which are frequent for expansion of business. Market development is possible when managers have to frame policies which are effective in achieving business objectives. They have to frame attractive policies and then promote them, so consumer is ready to avail them (Basco, 2015). Through this there will increment in sales of BT group. It is essential to make policies which help to analyse market and then use factors through which they can get image more as compared to other competitors.
Product development- In this there is important role of Management of BT group. They have to analyse market and then come with offers which are beneficial for expansion of business. There are many competitors of BT group, it is essential to analyze their policies in better and effective way. R&D department plays vital role in achieving targets and hence they can enhance their customer range and quality of services. Product development is different from market development in this case there will use of internal forces which help to achieve targets. These days there is requirement of difference services which help to satisfy demand of consumer. As there are varieties of customer, some it is essential to have anlyse market and then require factors which help to achieve targets in appropriate way.
Diversification- As per this, there is use of data which divides customer as per their requirement. This can be effectively with the help of managers. Through this there is providing services to customer. Employees must be trained regarding handling of query and its proper satisfaction. It is important to work as per requirement of factors which are applicable in making changes in business operations.
Assessment of internal factors of business
BT Group ids the brand which has many competitors still they make their same image in market. This is tough to be best among all competitive brands, through this their will use of factors which are competent over others. There are chances of change in policies which are effective to judge to attain growth in business. Telecommunication is the sector which is very frequently used by every group which helps in satisfying demand of society. So it is essential to provide facilities which are competent for others. If BT group is not able to satisfy demand then customer will start switching to other brand.
Strategic capabilities- strategic capability is the element which is most effective to analyze market and then this helps to judge what can be done to improve image of organization over competitors. There are many ups and downs in business, to make good and long lasting image, it is necessary to make strategies which help to get edge over others. Strategies capabilities are strength of companies which are not present with others. EE, Virgin, Vodafone, etc. are core competitors of BT group (Smink, Hekkert and Negro, 2015). To make long and good relations with consumer, they provide attractive telecommunication offers to society. This is effective for analyzing market and hence this is impactful for society. As per data, every group of society is using phone for various purposes, so it is essential to take their feedback regarding services. In case of negative reviews correctives actions must be taken. Employees are trained how to deal with customer. As cool and calm customer handling is effective for customer and their queries must be satisfied.
Value- In this stage it is analyses that actions taken by company are whether valuable or not. It is important to know what activities can b done so it helps to analyse market in better and effective way. If there is no value division from new service, then it will not be acceptable by society.
Rareness- As per this factors, to make good image in market. It is essential to work on concept which are rare and not available in market. This can be done by R&D department of BT group. There have to analyse demand and take actions to take use of resources which are not available and whose requirement is there.
Imitate- As per this factors it is important to work on cost of resources which are effective for achieving targets. There are possibilities that due to change in technology, there are possibilities of increment in cost. So it is important to know what can be done to reduce cost of resources and hence profits will increase.
Organization- This is the last step which talks about use of resources which are capable of achieving targets in better and effective way. It is important to talk about structure, management, rules and regulations, etc. for achieving targets. Due to change in structure of organization, there are chances of negative result on operations. Managers are responsible for thinking about motivation and improvement of activities.
Strength and weaknesses of BT group
Telecommunication sector of UK and its competitiveness
When a business organization undertake a research to determine the competitiveness in which it operate then help in identify the current trends exist in market and support manager in take better business decision. For analyze the competitiveness of telecommunication sector there is a tool known as Porter’s five force model that can be utilize by BT.
Porter’s five force analysis: This tool indicate that entities require to keep a eye on external factors that affect the actions and decisions of company. Analyze the price of product offer by rival of entity is also come under this. Porter Michael concluded that mainly there are five forces that largely affect the actions of business firms and support them in get a competitive place in business environment. For take better decision, BT can undertake a research in order to examine the telecommunication sector of UK. As per this model, five major forces exist in market can be understood by the following points:
- Bargaining power of buyers: This force indicate the power that remain in hand of customers and that affect the decisions taken by firms operate in a specific industry. Customers in telecommunication sector enjoy a high bargaining power due to large number of firms operate in that sector (Lueg, 2015).. Various entities are there that work in this sector and offer large amount of different services to its customers at affordable prices. All this provide an opportunity to individuals to buy the service from so many This force serve a big threat to BT and to minimize this impact, entity require to offer something unique and effective to its customers. for achieve customer satisfaction, entity require to carry out research in order to identify the current trends exist in market and can collect information about the requirements of its customers. analysis of market help entity in formulate a better and effective strategy.
- Bargaining power of suppliers: This aspect cover the suppliers exist in industry and impact of them on actions of an organization. Suppliers in telecommunication sector are the one that provide basic infrastructure for set up mobile activities. Manufacturers of telecommunication sector also come under category of supplier. Large number of suppliers exists in telecommunication sector of UK and this indicate that supplier of this sector are not in a position to impact on actions of entities and this does not a serve a big threat to BT. But still actions and decisions of supplier impact on firm’s operations and affect its competitiveness in market.
- Threat of new entrants: This force reveal the threat related with new players operate in specific industry. This threat in telecommunication industry is very high because opportunity of generate large amount of profits encourage various individuals to join the industry. This increase competitiveness of this sector and serve a big threat to BT. It is very essential for entity to consider this factor while take business decisions. High potential of growth encourage large number of individuals join the sector but still various threats ate there that decrease the impact of this threat of telecommunication firms. One of the main factor why large number of individuals do not operate in this sector is that huge amount of funds are require to set up. Further, entities currently working in this enterprise enjoy a brand loyalty from its customers.
- Threat of substitutes: Due to existence of large number of similar products this force serve a big threat for BT. Further, imitate the products offer by an organization is not a hard task. In order to deal with this situation, entity requires to take help of new and effective methods to add more features in its products. With this, organization can attract more customers and at the same time can maintain its market share. Further, it is significant for entity use new and latest technology to better satisfy the needs of its customers.
- Rivalry within the market: Competition in telecommunication industry of UK is very intense. In this situation, all the firms operate in this sector use effective strategies for maintain its position in market and to attain its sales target. It is very essential for organization to carry out promotion process in an effective manner as with this, entity can make large number of customers aware about its products and at the same time can influence them to buy the same (Quirke, 2017). For increase customer base, entities require to carry out research on continuous basis and this require that entities should have large amount of funds. All this serve a big threat to BT so proper analysis should be done by organization to take right and effective business decision.
All these are the five major force that largely affect the actions of a business organization. By analyze all these, BT can take better and effective business decision.
Strategic options and directions available to enterprise
Due to large number of rivals exist in business environment, various type of situations are face by entity such as introduction of a new product from rival, changes in prices and many more. In all this, it become more difficult for organization to maintain its market share so it is very important that right decision should be taken by entity so it can get desired goal and can maintain its position in market. For this there is a tool known as Bowman’s strategic clock model that can be use by manager in BT in order to take better decision.
Bowman’s strategic clock model: This is used by large number of enterprises and one of the main reason behind this is that it provide so many directions to a business entity for its strategic positioning. One of the main feature of this is that it support entity in position its product in market which help in attract large number of customers. All strategies indicate in this model are mainly rely on two factors known as price and value perceived by customers (Matt, Hess and Benlian, 2015). As BT firm offer its different services to large number of individuals living in various area of world. With help of this model, management can determine the 8 strategies which can be use by firm.
- Low price and low value added (Position 1): This is the position in which entity manufacture unique and creative services to its customers but they receive less value in turn. In this, entity does not have a competitive position in market and require to do more efforts to achieve the same.
- Low price (Position 2): This is another strategy and under this enterprise position itself in the market as low cost leaders in order to get the attention of various customers. One of the main focus of enterprise remain to achieve economies of scale as this help in reduce the final prices of product. In this entity generate low revenues but same amount can be increased by produce more products.
- Hybrid (Position 3): This is the third strategy and is known as a mix of two. This is known as a combination of both product differentiation and low price. One of the main aim of entity behind use of this strategy remain to persuade customers so entity can achieve its set objective and sales target. This is one of the effective strategy that can be use by BT firm to serve its customers.
- Differentiation (Position 4): In this strategy, organization offer products to its customers that are perceive as high in value. Branding of product play a big role in this strategy further, it is also remain essential for organization to offer quality products and services to its customers (Akter and et. al., 2016). By manufacture and offer quality services to its target customers, BT can satisfy the needs of its customers and at the same time enhance their trust towards the brand.
- Focused differentiation (Position 5): Under this strategy, organization offer its products to its customers at high prices. This strategy is more reliable for luxury goods. For generate more number of profits, premium brands first carry out segmentation and then perform various other functions such as promotion and distribution of goods. This strategy is effective for only those brands that offer featured services to its customers.
- Risky high margins (Position 6): Under this strategy, organization offer its products and services to its clients at high prices without offer any extra feature or quality to them. This is known as one of the risky strategy because in today’s business environment, it is not easy for a business enterprise to charge prices from its customers. number of enterprises are there which offer featured services to its clients in order to retain them for a long time period (Cascio, 2018). This strategy is not effective for BT due to existence of large number of competitor in business environment. In order to generate a large amount of profits, it is very important for organization to offer something unique or extra to its clients.
- Monopoly pricing (Position 7): In this, only a single seller exist in market and sell the products at the price he wants and does not think about the value receive by customers. Individuals have only two option that they can buy the product or not because they cannot buy it from other sellers. One of the main benefit of this is that it help in generate large amount of profit as monopolist have the opportunity to charge high prices.
- Loss of market share (Position 8): Under this strategy, a standard price is set by firm for all its products and services (Scholes, 2015). With right price entity can gain trust of large number of customers and this is very effective strategy for firm to remain competitive.
All this are the major strategies that can by utilize by organization to operate in market. By choose right strategy BT can increase its customers base and at the same time can satisfy their needs. From all above given strategies position 7 and 8 is not effective for BT because under that prices of product is more as compare to the value perceived by customers. in today’s business environment, a firm can survive in long run by offer more value to its customers and by charge less prices for the same.
From the given project report, it can be summarized that it is very essential for business enterprises to formulate a effective strategy. This provide direction to both employees and managers to perform their job roles at workplace and support entity in achieve its set goals and objectives. Before formulate strategy, it is very essential for manager to undertake an analysis of macro environment as with this manager identify the major forces that affect business operations. In this way, organization can respond to the changes take place in business environment in effective manner and can better satisfy the needs of its customers.
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