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British Telecom Group Inc.’s Corporate Strategies Report

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Introduction

This research will provide and examine the corporate strategies for British Telecom Group (BT Group) Inc; whereas the research will analyze the current environmental analysis and main factors that may have direct influences on the BT Group activities. Furthermore, this research will examine strategies that have been adopted by BT Group over the last five years and how these strategies are succeeded to develop and progress the company. Moreover, I will analyze the potential future strategies that should be adopted by BT Group. These strategies will be evaluated to show the best strategy. The key question raised in this paper how British Telecom strategies helped the company to utilize more advantages and their influences on the success and progress of BT Group. The research will answer also potential future strategies that should be adopted by BT Group according to recommendations suggested.

Scope of Organization’s Activities

BT Group is considered one of the leading companies in Britain and the world to provide telecommunication networks and communications solutions. It operates in more than 170 countries and hires about 100,000 employees in all branches. The main activities of the BT Group ire provision of networked IT services globally; local and international telecommunications services; along to broadband and internet products and services. BT Group used innovative programs; which are managed throughout external service providers. Today, the company serves about 70 % at least of British peoples. BT Group has a particular strategy for meeting all requirements with respect to IT solutions compared to other global companies; so that the company has a fixed method of innovative processes. The company has a broadband network, which aims to provide fast-speed services in companies, business stores and homes in the UK.

Environment Analysis

To analyze the business environment for BT Group, it is important to state the Macro environment and PEST analysis. PEST analysis will give an evaluation for the company in terms of internal and external factors of businesses. It has been established that businesses are impacted by both internal and external factors. Whereas businesses could devise ways to deal with internal factors, they could do little to minimize the impacts caused by external factors. Environmental and PEST analysis includes the evaluation of political, economic, social, cultural and technological forces in which the BT Group works (Downey, 2007, P.p 6). Furthermore, giving porter five questions is so necessary to analyze the environment in practice and analyze the suitability of corporate strategies.

Political Force

BT Group works in different political environments because of the company is global. Regarding the internal environment; the European Union states certain legislations for the framework of IT activities, for instance, fiber access, net neutrality along green ICT as the scope of operation. Furthermore, the EU supports new speeds of networks (BT 2011). Political relations between the UK and other countries in the world are related to mutual policies between governments, particularly in developing countries. It is worth mentioning that the United Kingdom owns strong relations between neighboring states and other countries worldwide. Activities and works BT Group affect mainly with the political stability of these countries and foreign investments and security as well. Moreover, governmental decisions and rules have direct influences on the expansion of BT Group for instance taxes laws, labor acts, and other fees.

Accordingly, could these factors allow entering other IT and telecommunication entrants in the market; so that the decreased price of products and high expenses of infrastructure as well as governmental regulations and laws represent a big barrier to entry for new competitors.

Economic force

Regarding economic forces, the economic status of countries has changed due to modern developments and improvements in infrastructure. Accordingly, it will increase the need for communication and IT solutions, the demand will be increasing and thus communication network will see noticeable progress based on mutual businesses and works between countries. The governments will also concern highly and put their interests toward new technologies and they will require well known IT service providers such as BT Group.

In other words, BT has a wide base of customers due to it has a various number of substitute products compared to its competitors; however, the biggest challenge for BT is to continue at low prices because the company needs improvements and expansion. Thus the bargaining power of customers encounters high risks risk. Furthermore, UK telecommunication markets have dropped in mobile subscriptions in 2013. United Kingdom Telecommunications Report Q4 2013 stated that” the mobile market lost subscriptions in H1 2013, primarily the result of prepaid subscription losses at Everything Everywhere, with total subscriptions dropping to 76.854mn and a penetration rate of 121.7% at the end of June 2013″(mynewsdesk.com, 2013).

Socio-Cultural

Concerning social and cultural aspects, there have been seen that social situations changed visibly because of influences emerging from the IT field. Today, all members of the family are keen on technological development in IT solutions and network services. Large–scale of people uses internet and technological advances. Accordingly, there are big changes in the lifestyle of people whatever their gender, age, and economic status. And hence, this shift produced a big demand for technological applications in the IT field and telecommunication.

Accordingly, BT seizes a wide base of different customers, for example, consumers, businesses, and enterprises. Bargaining power of customers will be high risk because BT has the largest number of fixed lines and BT faces strong competition by Virgin and SKY; which they provide various packages at prices comparative to BT. UK Government has said that BT has upgraded its national broadband network through publishing a study suggesting the government (Williams, C 2013).

Technological Force

Regarding technological force, it is noticed that technologies have progressed and developed increasingly but also there are technological innovations as well. Thus, BT Group has adopted technology as a critical key to competence; the company presents wireless services and faster internet speeds as well as other data services. All other businesses and activities are keen on this technology because they depend on technologies to do their works successfully.

Would the technological force help supplier power? BT is featured with strong rations with its suppliers; whereas the company deals with companies with the same products and other companies for enhancing technological expansion.

2- Strategies adopted by BT Group

British Telecom Group Inc. used and adopted a group of strategies that caused to own competitive advantage and helped the company to be the leading IT network provider in Britain and the world.

Over the five past years, BT Group unveiled new services and products that are based on particular strategies to achieve a desirable goal. It is worth mentioning that the company has put its eye on customer’s needs and desires. The following strategies are adopted by the company over the five past years:

Strategy 1: Innovation

Innovation will enable the company to develop products in the existing markets and also new markets. The company signed a contract with companies in the same products such as TATA Communication based in India. Thus the mutual relation will give more benefits for the company due to its wide-scale expansion and enhancing global network (ET Bureau, 2009).

Actually, new products and innovative services provided tangible manifestation to enter many countries and expand in Britain effectively. There is no doubt that innovation is regarded as the new currency of the BT Group. The company played an important role in developing new software and IT products, this increased customers’ interests with new solutions and products.

Due to innovation adopted by BT, the company was ranked as the best IT company done by a European survey of Telcos. In addition, the company earned many revenues and profits with thousands of millions because of giving the license of its inventions to external partners. Within 2012, the company experienced new patent applications of about 65 inventions. In addition, BT Group has a total portfolio of patents and applications with more than 5000 patents.

According to the innovation, the company has penetrated different markets and signed about a $ 1 billion deal. Among these suppliers is TATA Communications whereas the company has performed outsourcing its entire international voice traffic to TCM ( ET Bureau, 2009).

Strategy 2: Technology Turnover

BT Group develops tests and designs IT systems, networks and services. The company sought to provide new flexible solutions along to deliver a long-term technology strategy.

BT could improve market development throughout the strong competition with other competitors. BT market share has increased and then it ranked the top position in comparison with other competitors such as Sky, Orange, and Vodafone. This new technology enhanced cybersecurity and have developed advanced tools for the purpose of improving customer service to capture new markets out of Britain.

The company provided the best innovative services in Britain and other countries in the European Union, Asia, the Middle East, and Latin America. Digital literacy has made to enrich the interactions between peoples and gives them new essential services; which have become more available online ( Sarkar, R. 2012).

BT Group could access fiber broadband and increase digital literacy, theses technologies lead to obtaining significant economic benefits and they have contributed to access to new businesses and multinational companies.

Strategy 3: Building of Platforms

BT Group infrastructure is based on networks and platforms; these caused to connect customers and support services. Platforms of BT Group are based on technology for delivering products and services to all networks of the company. Platforms number that the company owns has increased due to a combination of acquisition and technology upgrades. The company adopted platform strategy and then improved platform throughout modernizing; so that these platforms could improve reliability and cost along with flexibility (BT Group, 2012).

Expansion of networks and platforms to enter new markets and capture new customers in different places; furthermore, it helped the company to build new services and products for customers, individuals, and businesses. BT Group has already reached to new customers and peoples.

Global network coverage for BT Group. Source BT Group plc; Annual Report & Form 20-F 2012
Figure 1: Global network coverage for BT Group. Source BT Group plc; Annual Report & Form 20-F 2012

Strategy 4: Strategy of Global Solution

BT is the leading network IT Company because it adopts a global network service provider. It presents professional services for people in different countries. The company invested in the network in key cities and built propositions regarding the fields of service. In other words, BT has adopted a strategy of product developments, BT contributed to Tech Mahindra’s revenues that have come down to 33 % of revenues in Sep 2012. Both Tech Mahindra and Mahindra Satyam merged and combined on BT Co. as a customer.

BT Company created opportunities throughout the use of fiber broadband and IP voice services as well as managed service solutions. Fiber broadband made new methods to use the internet; it has many benefits for businesses. BT is characterized by global reputation due to IT network services that penetrated many countries over the world such as Asia, Latin America, the Middle East region and Africa as well.

3- Analyze and Evaluate Potential Future Strategies Porter, ANSOFF

According to this study, the telecommunication market has witnessed great development and progress over the last ten years in Britain and the world alike. Hence, BT Group will find strong competition from other global telecommunication and IT companies, and for maintaining the global position of BT Group, there are some potential future strategies as follows:

Differentiate

BT Group should be characterized by differentiating throughout network quality. The company should commit to quality of service differentiation strategy for getting particular properties to enable it to access to the network and its differentiation in quality.

Accordingly, BT has wide variations of products and services, for example, broadband and Wi-Fi and other new differentiations so that the company can enter new markets.

BT Group will open new fields of IT networks and telecommunications services and development of the current applications such as fiber and wireless services. The company can regard many actions to offer strong services. BT Group should be access to network operations for prioritizing the traffic based on its type.

Segment customers and Service Quality

BT Group has certain segments of customers, as well as other new segments, thank new technology and modern applications done by BT. Thus, any entrants in the IT and telecommunication market can’t capture BT’s’ customers and clients. It is not easy for any company can match the requirements of customers and consumers such as BT.

BT Group highly regards with circumstances of customers and peoples; besides the large scale of services of packages, it will give different varieties for customers as well as segmentation can offer increased revenues in comparison to the traditional method of providing averaged services at average prices.

Furthermore, the company will accomplish these advantages by low prices; along to the company can sell its services throughout unaffiliated brands (Hellofs, L. 2011).

Improve pricing structure

BT Group adopts a new strategy regarding improving price structure to ensure that costs drive measured prices. Thus, this strategy will be in defiance in highly competitive markets. At the same time, telecommunications companies may not offer quality because of a customer’s willingness to pay may be low. Prices structure is a new strategy and will be applied based on the needs of customers and their capabilities to pay.

Conditions of the external market for instance global economic stagnation are a potential risk factor for BT. The present recession has greatly influenced on market demand and total sales as well; accordingly, it may affect the purchasing power of customers in general. Therefore, BT should adopt a particular strategy for pricing structure, whereby the company will be supported.

Brand equity based on quality attribute

BT Group will achieve brand equity based on quality attributes outside of conventional network service. This strategy will be available in facilities having resellers. Besides, BT Group can be differentiated on other networks because it has enhanced call management services and message services along to other new advantages; these have not been imagined yet (Hellofs, L. 2011).

BT’s position encounters strong competitors in the IT and telecommunication sector; so that the company has a competitive edge thank different advantages of its products and services. Therefore, BT has the ability to attract new customers and clients as a result of different services and quality of products. It is characterized by differentiation from its competitors by integrating processes aiming to maximize the number of customers and entering new markets.

Enhancing priority fields

BT Group should give more priorities for customers and business opportunities. Diversification in products and services will enter the new arena and fields in the new markets. In consideration of that PT should provide 4th generation applications to a wide base of customers for addressing diverse and sophisticated customer needs in response to expand use computing services.

Enhancing of Global Supply Chain

BT Group management implements a strategy for managing a company’s interaction with customers, clients and sales prospects. Due to technological force, the company enhances its operations by expanding its products in different places and regions (Hitachi, Ltd (June 2013).

Social and cultural forces also represent a strong factor for BT because all different groups and peoples have admired to the latest technology. Research shows that business organizations that adopt technological approaches in their operations perform well.

It would be important for the company to adopt the Ansoff Matrix to position itself strategically in the future. By adopting the Ansoff Matrix, the company would utilize four tested strategies so that it can achieve its goals. The first strategy would be geared toward penetrating the market. The strategy would target customers who are already buying products of the BT Group. The Group would achieve this by positioning its goods to compete effectively with those made by its competitors. The second strategy would be geared toward extending the existing market. The BT Group would scan the environment for potential markets for its products. If markets are identified, the Group would introduce its products which have not been modified in any way.

However, some products might require some slight modifications to satisfy consumers who have different needs due to cultural backgrounds. The third strategy would be the introduction of new products on both new and existing markets. In existing markets, the new products would be sold through established channels. This approach would go a long way in saving costs incurred in the distribution of products. However, distribution costs would be incurred to introduce new products to new markets. The fourth approach would involve diversifying the products that the BT Group produces. Horizontal diversification would involve the production of products targeting old customers. Conglomerate diversification would involve the production of products for various new markets. Concentric diversification would involve the BT Group using technology to improve some of its products so as to increase sales among existing customers.

Strategic Choice for Strategies

(Chosen Strategy: Pricing Restructure Strategy)

Today, the global economy provides many avenues for expansion and diversification. The primary reason for this is that demand trends differ greatly across different demographic regions. In many Asian and Eastern European countries, the value of telecommunication and IT network applications is increasing at a rapid rate.

In accordance with environmental analysis, I see that the strategic choice of these strategies is improving pricing restructure. There are some approaches for pricing restructure including flat pricing and tiered pricing. Flat pricing will enable customers to more services and what they will pay for the use of service easily in comparison to a fixed price that is restricted and hampers the expansion of services. Many customers and clients desire to pay more provided that they find better services. Furthermore, flat pricing facilitates the pricing of vendors (Harmon, R, Raffo, D, and Faulk, S. 2009).

The second approach is tiered pricing because it tries to get benefits as per the requirements and needs of users and they’re willing to pay. Tiered pricing approach joins between IT network and telecommunication costs and customer value. This approach is so flexible and more favorable since customers see increasing in value received easily. Accordingly, there are three global objectives for pricing restructure namely differentially pricing objectives, competitive pricing objectives a product lie pricing objectives (Harmon, R, Raffo, D and Faulk, S. 2009).

Conclusion

In conclusion, I can say that BT Group adopted many strategies according to the circumstances of the market and customers cases. There is no doubt that these strategies served BT and caused great progress and development and thereby the company has become the premier IT network and telecommunication in Britain other countries.

In accordance with the strategic vision of BT, the company owns particular innovations and technologies such as wireless, broadband internet and vibe along to other innovations. And thus it has witnessed ongoing development and improvement for supporting the positive strategy of the company. In addition, BT Group maintains the continuous improvement for services and offers.

Today, British Telecom (BT) is the biggest telecommunications services in Britain and the world as well; taking into consideration the company operates in more than 170 countries. The company has many activities and services such as telecommunication and broadband online. BT has different segments of customers and peoples ranging from 17 to above 60 years old from two genders and various social and economic classes.

Furthermore, the company is characterized by many advantages and attributes; which have to result in great development and progress. Among these attributes are brand image, network coverage, price based on suitable pricing and speed.

Recommendations

In light of the analysis of this study, I suggest long and short recommendations for the BT Group to maintain the global position and market share along to increase its expansion and services as well.

Short term Recommendations

  1. Connect customers anywhere at affordable prices

BT should own hotspot technology to connect gadgets, devices with superfast broadband.

  1. Provide broadband anytime

BT should have a big workforce and technology for providing broadband to customers over 7 days a week.

Long Term Recommendations

  1. Leverage network for BT clients

It is coping with long term objectives that BT should be characterized by global services as being the main leader.

  1. Innovate to be a key player and driver in the market trends

According to the newest and the most advanced technologies along with current changes; it is so important and necessary to innovate at an incremental pace.

Analysis and evaluation

According to the study that I made about BT; I concluded that BT highly concerns customers and stakeholders to sustain the market share and positioning in the market. The marketing strategy achieved great progress and improvements to expand in different countries and regions. The corporate strategies over the five past years achieved desirable goals for the company during this time. These strategies gave competitive advantages for the company. Strategies helped to build a new image and enhance its expansion.

On the other words, BT nowadays needs modern and new strategies to meet a lack and shortage. BT has encountered a lack of promotion of products and problems of occasional payphones along to high rates of dissatisfaction of customers; so that BT should do the best for caring with product quality and sales customer services for its future products.

BT made infrastructural actions for providing superior broadband service than its competitors so that efforts are now embodied in providing uninterrupted internet services at much better speeds.

BT should recognize that its sustainability in the market cannot be done except adopting new strategies and having sustainable competitive advantages over its present or potential competitors.

References

British Telecom Inc. 2006. Embracing Open Innovation A new approach to creating sustainable value.

Brightidea Inc. 2010. . Web.

Hitachi, Ltd (2013). Cost structure Reform and strategies for seven businesses toward achieving ” 2015 mid-term management plan”. Tokyo. Japan.

Harmon, R, Raffo, D, and Faulk, S. 2009. Value-Based Pricing For New Software Products: Strategy Insights for Developers. Portland State University, School of Business, Portland, University of Oregon, Department of Computer Science, Eugene.

Hello, L. 2011. Market Share and Customers’ perceptions of Quality, Journal of Marketing, Vol. 63, No. 1. P.p. 16.

Sarkar, R (2012). BT Broadband Strategy for the UK for regaining number 1. Tata Consultancy Services. The UK.

Summanen, T& Pollitt, M. (2003). British Telecom: Searching for a winning strategy. Cambridge CB2 1AG. The UK.

ET Bureau (2012). British Telecom exists Tech Mahindra sells 9.1 % stake for Rs 1.011 crore. The Economic Times. Web.

Mishra, P. & Thimmaya, PP (2009). British Telecom to move back 4k Job. The Economic Times. Web.

Williams, C. (2013). Government claims economic boost from £1.2 bn BT rural broadband subsidy. The Telegraph. Web.

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