Business strategy is identify as the working plan of firm for accomplishing its vision, competing successfully, optimizing financial performance and prioritizing objectives with its business model. It influence the organisation's strengths, resources, opportunities and vulnerabilities as well as also reflect on its competitors and market. In simple word, business strategies is the science, craft and art of implementing, evaluating and formulating cross functional decisions (Ackermann and Audretsch, 2013).It is enable and essential for an enterprise to attain its long-term goals and objectives. It is an effective process of specifying the business's objectives, vision and mission, implementing plans and policies, which are planed to accomplish these targets. This assignment is based on the case study of mobile telecommunication sector. Thus, chosen organisation is EE (Everything Everywhere), it is a British internet service provider and mobile network operator of BT (British Telecom) group. This report is divided into different tasks which cover PESTLE model, Ansoff’s growth vector matrix, VRIO/VRIN’ model, Porter’s five forces model and Bowman’s strategy clock model. All these are help to gain competitive advantages and evaluate the organisation's strategic positioning in an effective and efficient manner.
P1 Impact and influence the macro environment
Case study of mobile telecommunication sector, it is a growing fastest industry in all over the world. As per the market research, 53% of olds in the United Kingdom use smartphones while walking; the equivalent of approximately 22 million people. The main mobile network operator in United Kingdom are; Vodafone's, EE, Virgin, O2, Three and BT and many other. But chosen organisation is EE which is a multinational telecommunication holding business with headquartered in London, UK. It was founded in 2010 by Jan du Plessis, Gavin Patterson, Simon Lowth (Annabi and McGann, 2013). They provide Fixed-line telephony, Mobile, Broadband internet, Fleet management, and many other telecommunication equipments.
Macro Environment: It is identified as a condition that present in the economy as an entire, rather than in a specific region or sector. It includes trends in GDP (Gross domestic product), employment, inflation, fiscal policy, monetary, spending and employments. There are mainly two macro environment such as PESTLE Analysis and Ansoff's growth vector matrix which are determined as below:
(I) PESTLE model for environmental analysis:
It is an analytical technique for strategic business planning. It is also identified as a strategic frameworks and structure for knowing external effects on a business operations. This factor includes different aspects as Political, Economic, Technological, Social, Environmental and legal and is applied for strategic and business planning, organisational change, marketing planning, product and business creation and research reports (Auzair, 2011). By knowing these factor, EE can increase the opportunities and decrease the threats to the enterprise. PESTLE analysis of the Everything Everywhere and its influence on organisation and its business strategies are determined as below:
Political Factors: There are various problems which are mainly related to the telecommunication services in the Urban place of United Kingdom. According to the market research of the UK authorities has been viewing while 76% gratification has been determined over the extent, the EE has been facing different issues one is diminishing of the clients satisfaction of 68% in the rural places. In this government of UK has been capitalise over the coverage renders of telecommunication sector in collaboration or cooperation with Ofcom to supporting them reportage in Urban areas.
Economic Factors: Current economic situation of United Kingdom is favourable and beneficial for mobile operators or promoter because of betterment after the recession time period of 2008 to 2010 year. In 2013, Gross domestic product also maximise by 1.9% and anticipated grow continue in next years. It also make important effect over the clients spending on a service (Azar, 2011). As the income of household that has been maximised the mobile service consumption.
Social Factors: Growing the youngster's population and their utilization in the social network as well as smartphones and many other aspects of the internet for example: text message, streaming websites, various kind of online tools and application for exchanging files and many other necessary documents. Beside this, EE have better advantages for attracting and approaching large number of customers towards business products and services.
Technological Factors: Goal of Everything Everywhere is to render best services to the target and potential clients. This factor highly effect on business operations and functions in an effective and efficient manner. Along with this, objective of the enterprise is to establish and enhance network coverage within United Kingdom via network service. By evaluating the needs and demands in the marketplace, EE established LTE 4G network at decreased cost. Thus, it highly effects on business operation and strategies when achieving of competitive advantages and better position in marketplace.
Legal Factors: The government of United Kingdom and Everything Everywhere have set rules and regulations by providing the empowerment or authority to the clients on retreating the agreement without providing any penalty. With the fast development of innovative phones model and communication devices, EE must have the modern and most up-to-date smartphones (Bharadwaj and et. al., 2013). So this factor also influence on business operations and business strategy for accomplishing of long term goals and objectives in limited time period.
Environmental Factors: Within the telecommunication sector there are observable environmental constraints and impacts. In order to increase their sales and revenues, EE recycle their sim-cards and old cell-phone, it can allows organisation to be in a better and effective variation for achieve further turnover and another advantages due to maximise environmental awareness and interest among individuals. Therefore, it also influence of business strategy while accomplishing vision, mission and objective of company.
(II) Ansoff’s growth vector matrix to evaluate the organisation's strategic positioning
Ansoff matrix is another part of the Macro factor that impact on business operations and strategy. This factor used by the EE with motive to analysis how each and every chance fits the business activities and strategy in terms of market and product (Bucolo and Matthews, 2011).It is main and essential tool for the telecommunication industry in order to expand their business operations and activities at large. This factors includes four parts which are determined as below:
Market Penetration: It is simply selling maximum number of same products or services to existing clients. For achievement of this, EE needs to analysis innovative ways in order to maximise loyalty of customers and develop its lifetime values. In this business entity having better image and strong market due to its Zoozoo and many other advertising campaign. Further, they are trying to maximise their presence and image in marketplace by enlarging their business activities and operation in urban place or distribution network. In country, Everything Everywhere is having large number of network that renders them competitive benefits and advantages over their challengers.
Market development: As per the market research, EE is one of the best telecommunication industry in United Kingdom. It is a best methods to attract maximum number of customers towards latest feature in smartphones and many other equipments. In the UK, various peoples are use EE business products and services thus they can gain higher number of competitive edge all over the country (Jocovic and et. al., 2014). Therefore, it can effects on business strategy and operations in a direct way. With the help of this aspect, company easily attract new customers towards smartphones.
Product Development: It is another part of the Ansoff’s growth vector matrix which is essential for developing innovative products and modifications of smartphones in order to sell this to present clients. In this business entity try to render new services and additional feature in their mobile phone to clients which help them to maintain long lasting relationships with them. It is the best part of achieving competitive benefits or edge over other present challengers such as Vodafone's, O2, Virgin etc.
Diversification:It is identified as a highest risk strategy which is available in selling innovative commodity into new marketplaces (Kalyani and Sahoo, 2011). In this role of business manager is to diversity their products and services as per the needs and demands of the customers. According to the research, large number of the populations are used smartphones.
M1 Macro environment determines business's strategic management decisions
Both PESTLE and Ansoff’s growth vector matrix are important and beneficial for the business to innovate their new products and services in marketplace. These factors identify business's strategic management decision in order to accomplish long term goals and objectives in an effective and efficient manner. Further, it also assist to attract large number of customers by providing quality products and services. It is the role of business manager to take an effective decision about attaining predetermined targets.
P2 Organisation capabilities and internet environment
Organisation capabilities: It is identified as a ability of business in order to handle resources such as workforce in an effective and efficient manner. Further, it can help them to gain maximum amount of competitive benefits over challengers. It must be focus on the enterprise ability to meet with customers needs and demands.
Internal environment: It is also important part of the business strategic capability. This factor includes SWOT analysis which consists Strength, weakness, threats and opportunities. It is essential for company to maximise benefits by introducing their strong products.
(I) Concept of strategic capability
It is identified as a set of capacities, skills and resources that develop a long-term competitive edge for an enterprise (Klettner, Clarke and Boersma, 2014). It mainly emphasis on the business's assets, market position and resources, projecting how it will be capable to utilize plan of action in the future. With the support of this tech, Everything Everywhere can evaluate their strategic value or plan of action in related to existing financial initiatives that require to be apply in proper manner.
(II) ‘VRIO’ model to determine the strategic capabilities
‘VRIO’ model: It is analysis as a business framework that related with the larger strategic scheme of company. It is essential and beneficial process which support organisation to meet with their objectives, vision, mission and continues on via external and internal analysis, business and corporate level and strategic development. With the help of this model they can achieve competitive edge in given time period. It include rareness, value and limitability which effects on business operations and functions.
VRIO model used by the EE with motive to evaluate all resources in an effective and proper manner. With the use of this factor business entity understand regarding their all resources such as human, knowledge, information, material, financial and many to gain competitive benefits effectively (Köseoglu and et. al., 2013). This model includes different parts which are determined as below:
Value: It is identified as a capability or resource of company in order to maximise sales and revenues in a given time period. It includes threats and opportunities which are threat of buyers, suppliers, entry, rivalry, substitutes and different chances such as technological, cultural, demographic, specific international events, political and legal condition.
Rarity: It is a part of business to achieve long term competitive benefits. It is apply when an enterprise has a valuable capability and resource that is perfectly unique between potential and current challengers. It must be short in persist and supply over time of period to be a rootage of sustained competitive benefits.
Imitability:In this capability or resources is not easy to imitate. For achievement of this, business entity can generate cost disfavour to the competing business. In order to overcome this, company try to obtain, duplicate and develop this with aim to accomplish long term goals and objectives in a given time duration.
Organisation: It is the last part of the VRIO model which is beneficial for them to achieve competitive edge (Murano and et. al., 2011).In this business entity is based approximately management structure, policies, process, systems and culture.
Everything Everywhere apply this model with motive to deal with difficult situation which are arise in the enterprise. Further, this framework also set strain on following aspects:
- If business resources or capabilities are expensive, rare and valuable to imitate but EE is not capable to apply it in proper manner within an organisation.
- It is also beneficial and essential for the Everything Everywhere to gain maximum amount of competitive benefits in allotted time period.
- If resources of EE in invaluable, then the firm requires to outsource it in an effective and efficient manner.
(III) Identification of organisation' s strength and weakness
EE is a internet service provider which is founded in 2010. they provide different products such as Fixed line telephony, Broadband internet, digital television, mobile telephony. Main aim and objectives of this business is to accomplish predetermined goals and objectives. Goal of the business entity is to gain competitive advantages in a given time period (Oestreicher-Singer and Zalmanson, 2012). Strength and Weakness of the EE which are determined as below:
- Strong Brand Portfolio:Business entity has capitalised in making a strong and better portfolio of brand. It can be highly useful or helpful if the firm wants and needs to enlarge their business operations into innovative product categories.
- Higher level of clients satisfaction:It is another important and strong point of the EE in order to gain competitive advantages in given time period. EE provide valuable and better quality in its smartphones and many other equipments which assist them to make long lasting relationships with customers.
- Reliable suppliers:It is another strength of the Everything Everywhere in order to overcome supply chain bottlenecks effectively. Thus it help to expand their business in different location as well as gain maximum amount of money.
- Highly Skilled and knowledgeable employees through successful learning and training programs:It is another important and main strength of the company in order to establish long term goals and targets (Schaltegger and Wagner, 2011). All workforce are knowledgeable to deal with difficult situation in an effective and efficient manner.
- Financial planning is not completed effectively and properly. The liquid and current asset ratios declare that the EE can apply the amount of money or cash in more efficient manner.
- Everything Everywhere is chiefly targeting the segmentation of business and therefore losing out on different person.
- Brand recall of the EE is not strong due to its modern set up compared with developed brand name.
M2 Critical evaluation of strength and weakness of an enterprise's internet capabilities, structure
Strength and weakness of the business entity is highly effects on its operations and functions in direct way. These are identified as a ability and structure of company to deal with difficult situation and gain maximum amount of money (Scholes, 2015). Further, it is also essential for the enterprise to attract large number of the customers towards business products and services. Better brand portfolio of the organisation assist them to maintain long lasting relationships with customers as well as gain competitive edge in given time duration. Structure of the enterprise is also attractive which support to establish new products and services in marketplace.
P3 Porter’s five forces model of telecommunication sector
In United Kingdom, Telecommunication industry is one of the leading and growing sector. It is important and essential for the each and every business to identify their competitors. Thus, they can understand about this, so that they can tries to achieve long term goals and objectives in limited time period. It is one of the beneficial model which support to accomplish their predetermined targets and objectives. With the use of this model, challengers evaluation can be complete in a proper manner as well as support in knowing how the threat of other entrant and substitute goods, bargaining power of suppliers and buyers and rivalry threats. All these are consider in this model (Slack, 2015). These model are used by the EE limited with motive to analysis market information in detail manner. These are determined as below:
(a) Rivalry with Existing Competitors:
It support in identifying the level to which worth impelled by organization will be degenerate via large number of competition. Currently Everything Everywhere play role as a leader of cost in the marketplace. There challenger are cladding hard time period related their skimming pricing scheme. In addition, their challenger will tumble on their aspect if any parts of the business operation as well as logistic department which are inferior.
(b) Bargaining power of Buyers:
In mobile sector, there are large number of the buyers who prefer to use smartphones. Power of customerscan cut down cost leaders prices in an easy manner, but all the same, they cannot pass out the ground of their nearest challenger (Svee, Giannoulis and Zdravkovic, 2011). As an output, Everything Everywhere will gain profit and competitive advantages in continue basis at above fair return as differentiate to its nearest or strong challengers.
(c) Bargaining power of Suppliers:
It is another part of the Ansoff's matrix which is essential for the EE to identify its bargaining power effectively and efficiently. Supplier of Telecommunication industry are strong preference in all over the world. State a cost leader, EE work with higher margin ratio as compared to another challenger which in move to assimilate maximise suppliers price easier than its challenger. Everything Everywhere is the biggest telecommunication industry in United Kingdom. From the same, they can manage cost down of suppliers and could yield gross profit.
(d) Threat of new entrant:
It is another important factor which is important and essential in mobile industry. The business requires to reduce its cost price comparison to its challenger. By conformity higher level of efficiency, they develop homely market approach for possible challenger.
(e) Product Substitutes:
The EE is facing different issues in its product substitutes. Everything Everywhere cost leadership scheme develop it not easy to likeness commodity with other competitors brand that render same kind of services to customers (Ackermann and Audretsch, 2013).With its fabulous purchasing power, economies of standard and their assimilation of transient price increase that straight come from different providers and that don't necessity to be progressed on the actual buyers.
M3 Devising proper strategies to enhance competitive edge and market position of company
Porter’s five forces model is one of the best and essential strategies which is important for the company in order to gain long term objectives and targets. With the use of this model they easily identify power of suppliers and buyers. So that they are understood, they tries to set product price as accordance. Further, it will support to maximise their position in marketplace as well as gain competitive benefits in given time period. Another of threats of new entry that also effects on business operations and performance. It is also effective for them to improve their productivity and performance in market.
P4 Applying Bowman’s strategy clock model, examine the strategic direction and options
Bowman’s strategy clock model is identified as an effective framework that investigate availability of various options (Bowman's Strategic Clock (Strategic Positioning), 2015). In this product of the company is do not differentiated as well as clients perceives minimum value. The main aim and motive of applying this model is to attain higher competitive advantages and better position in marketplace (Annabi and McGann, 2013).This framework is used by the Everything Everywhere to increase their sales and revenues in a given time period. This model includes different steps which are determined as below:
Low price and low value added (Position 1): At this position, EE do not apply any kind of option or choice. They mainly apply such kind of position when the Smartphones are selling few differentiate value. Everything Everywhere can use this framework mainly via cost effective sales volumes and by attracting large number of new and potential buyers in continue basis. For example: under this, EE is selling their products and services at minimum cost (Auzair, 2011)(Azar, 2011). However the service quality, that they are rendering also devalued but its impressive enough to straight away attract clients.
Low price (Position 2): Under this, cost minimisation scheme is needed for this. In this profit margin of smartphones and many other commodity are less, but the output of high volume can still create overall profits.
Illustration 1: Bowman's Strategic Clock
(Source: Bowman's Strategic Clock, 2015)
Hybrid (Position 3): It involves some components of low price or cost relative to rivalry, but also similar product differentiation. The motive is to influence customers that there is better added value via the combination of acceptable product and reasonable price differentiation.
Differentiation (Position 4): Main aim and motive of this position is to attract large number of audience towards business products and services (Bharadwaj and et. al., 2013). In this strategy, branding play an essential and vital role to improve product quality. Better product quality of products increase customer loyalty and long term relation in organisation. So it is beneficial for the organisation to accomplish their predetermined and desire goals effectively.
Focused Differentiation (Position 5): Main aim and motive of this strategy is to position a commodity at the highest levels of price, where buyers purchase the smartphones due to high perceived cost value. It is adopted and applied by luxury branded company, who motive to attain premium prices of the products which are highly targeted distribution, promotion and segmentation (Bucolo and Matthews, 2011). For completing this, such kind of scheme can lead high profit edge, but only the effective brands and products that can maintain the strategy or scheme in long term.
Increased Price and Standard Product (Position 6): At this phase, business takes a possibility and simplex gain their prices values without doing any kind of creation or adding additional features or characteristics. If the maximised price which is offer by Everything Everywhere is recognized by customers, an organisation will utilize high gainfulness and if in case, product prices aren't recognized by clients than the organization may face enormous market fall inferior they develop an accommodation regarding price.
High Price/Low Price (Position 7): At this stage, an individual organization regulation the market. State a monopolist, the business did not obsessed regarding adding extra worth in the commodity that directly prepend the aid of buyers. Fundamentally at this phase, the business entity mainly render such kind of products and services that meet customer needs and requirement in an effective and efficient manner. But such kind of organization do not run in marketplace for long time period (Jocovic and et. al., 2014).
Low Value/ Standard Price (Position 8): Under this marketing strategy, EE will decidedly lose its share in marketplace. If the an organisation is having few services and product, it is a best way for the EE to attract maximum number of clients by rendering quality products and services at reasonable price.
M4 Strategic management plan
It is one of the best and essential plan that has tactical and tangible strategic objectives and priorities (Kalyani and Sahoo, 2011). It is document which is used by the business to meet with their goals, configure resources, set priorities, strengthen operations, focus energy and many other that help to gain maximum amount of money. The Plan that identify to comprehensive aggregation of ongoing process and activities that the business entity will apply to consistently organize and adjust actions and resources with mission, strategy and vision (Klettner, Clarke and Boersma, 2014). So it is important for the organisation to maximise their sales and revenues in an effective and efficient manner. It provide best framework and direction for prioritizing projects, programs, facilitating the attainment of business objectives and goals, controlling development regularly, ensuring utilisation of resources.
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From the above mentioned report, it can be concluded that business strategy is more essential and beneficial part for the organisation to achieve competitive advantages in limited time duration. For attainment of this, an organisation can apply different tools and techniques such as PESTLE model, VRIO/VRIN’ model, Ansoff’s growth vector matrix, Bowman’s strategy clock model and Porter’s five forces model. All these are essential for the business to gain competitive edge by providing quality products and services. These factors also effects on business performance and profitability in a direct way.
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