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Unit 3 Business Strategy Mont Rose College

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INTRODUCTION

Mobile telecommunication EE sector is growing in UK.According to this report, teen and younger people use smart phones. In this file also define the pestle model, Ansoff’s growth vector matrix to analyse the organisation’s strategic positioning, Strategic capability and Bowman’s strategy clock model, analyse the strategic direction and options for EE. These are models and factors effect this organisation and help to show actual position of the business. This company also develop their new product to their customer and developing its technology. Devising their product, an organisation markets its brand cell phones product to brand new target customer.

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TASK 1

1.PESTLE model for Environmental Analysis

PESTLE analysis is very important strategy it describes all the factors which is related to business model such as political, economical, social, legal, technical, and environmental.

  • Political factors there are different problems which are related to the services of the telecommunications in UK. The political condition of this country government showing 76% satisfaction are cover in urban area, EE has been facing diminishing of the customer satisfaction of 67% in the rural area (Ahmad and Peter, 2013 ). The UK authorities invest in some area but the purpose of investing to provide electrical engineering services in urban areas. Government increases their taxes services for this company and change some policy which is directly effect on the EE corporations.
  • Economical factors have great significant impact on the EE organisations and it includes UK economic growth, interest rate, exchange rates, inflations and income of consumers. This factor can be promoted macro and micro economic. Macro economical factors deals government expenditures and micro economic factor refer to people spend their incomes.
  • Social factors Each customer has different purchasing behaviours with telecom market, teen use smart phones from 61% to 80% in year 2011- 2013. This age group people use in mobiles in same tome and several ways of communications, they are using social network, testing free messages or making calls free by using various types of applications. These factors also include populations, growth, age distributions, health, career and it is related with specific interest as they have direct effect on the company markers.
  • Technological factors it refers to new ways of producing EE smart phones and new ways of distributing its services and new ways of communicating with target customer. This company is very fast technological change in UK market it is influenced by new technology and their goal to cover whole the market and earning more profit. They providing 4 G network in order to fulfil the need of the customer at low cost.
  • Legal factor refer to the rules and regulations determined that consumers have the righ ability of terminating their contact without penalties, under particular condition related to the price increase without any notification with month’s period. It refers to the health and safety of the customer, giving equal offers to the customer. EE telecom clear all the business need and they follow legal term to achieve their goal. They maintain their smart phones price, labelling and product safety.
  • Environment factor it is refer to the telecommunication environmental impact, this industry develop their service, infrastructure with giving better environment to the customer. It is very important for the growth of the company.

2. Ansoff’s growth vector matrix to analyse the organisation’s strategic positioning

Ansoff's matrix is very useful in telecom industry and other communication tools which help in the growth of the company. It includes four strategies such as market penetration, market development, product development, and diversifications.

Market penetration

· Company achieves their business target with exiting smart phones in their UK current market. This strategy refers current market and target customer

· Its main motive is to increase their market share and attract their customer's with new technological skills.

 

Product development

· This company develop their new products and developing new target customers also.

· It creates new cell phones with innovations or variations for their customer

· This firm making a strong strategy related to it particular customer rather than specific product

Market development

· Development of new smart phones, targeted to its existing market segments.

· Their approach is to attract new customer to an existing product.

· It refers to selling more smart phones s same product to existing customers.

· Company focus to improve their product quality and providing customers satisfactions.

· This company needs to find new ways to build-up a relationship with customer.

· Spread their business new market and showing a loyalty to their target customers.

Diversification

· they giving reasonable choice to the customer.

· They Promote their business and existing product also.

· Increasing their existing sales it is considered with highest risk market strategy by selling their new product

· company focus only expand their business and generate a more profit.

· Through Diversification EE doing work in effective manner and focus on modify their existing product

Ansoff matrixis very useful in business that gives complete information. EE Company use these strategies for growth their the business. This company also develop their new product to their customer and developing its technology. Devising their product for an organisation, they market its brand cell phones products to its brand new target customer.

TASK 2

1.Strategic capability

It can be referred as ability of a business for successfully employing competitive strategies which allows EE to survive and also helps to increase its value with the passage of time.

It focuses on all assets, resources and market position of the company that also projects the impactful implication of strategies for the future. There is no method for measurement of strategic capabilities (Badii and et.al, 2018.).

It is considered to be a major component because it helps to remain financially viable while growing and competing in a market with present competitors in a free market. These strategies may include investors who are the group of individuals who want to invest their money for business due to chances of getting success in the procedure of growth. Many business leaders not only track these strategic capabilities not only for their organisation, also to understand competitors better for effective operations. There are many elements that have a potential to contribute in EE's capabilities for business strategy. Assets which consist of cash, property, and patents has a contribution for organisation's ability for formulation and end strategies. It can also include human resources and structure for organisation including skills of employee.

There are three main key elements of strategic capabilities which consist of strategic analysis, strategic choice and its implementation.

Strategic Analysis

It provides assistance in understanding the strategic position of company. It is considered as important to analyse the changes which are occurring in the environment and gets acknowledged about its effect on EE and its employees.

EE is facing changes which occurs in the surroundings and their related impacts which helps in the process of making strategies that would help to sustain with respect to changes. These effects which are external are known to be threat and weaknesses (Kessler and Wahidi, 2018). The resources of the company have a great influence on the internal environment of EE. A strategic capability of company is considered to be its strength and weakness. There are different expectations of every stakeholder such as the development of this organization depends upon their expectations. It may influence and can create a great impact on the strategies which is totally dependent on the group which consist of stakeholders.

Strategic Choices

After the proper analysis of the strategies, the company is able to make a choice which can be defined as the procedure of selecting the best choice among the possible course of action which is purely based on the evaluation of available options of strategy.

Strategic Implementation

It is the final step and is known to be the major one as it will help in the translation of the chosen strategies into actions which would further help in careful planning and deployment of company's resources with the possibilities (Ariffin and Sahid, 2018).

2.‘VRIO/VRIN’ model of EE

EE is considered to be largest voice and data communication services providers to customers. It has employed about 66,000 employees across the world.

Its strategic objectives are:

  • Stimulation of Revenue and reduction in cost
  • Innovation and delivering according to the needs of customer
  • Strong growth in markets which are emerging
  • Managing the portfolios actively
  • Alignment of capital structure

VRIO framework of EE

It is considered to be analytical technique which is most suitable for evaluating resources of a company with the acknowledgement of competitive advantageous is known to be an acronym from the initial of the evaluation dimensions such as Value, Rareness,Imitability and Organisation where

  • Value is the measure of expensiveness of the resources and how easily can it be accessed on the market.
  • Rareness includes how much the resource provided is limited or rarely present.
  • Imitability includes the rate of difficulty to imitate the provided resources.
  • Organisation includes whether the resources are supported by other organisation which is in existence and can it used that properly or not (Marshall, 2018)

One of the major factors of EE success is the structure of the network which has great support for operations. It is considered to be a resource which is valuable which enables the organisation to respond customer's needs which are growing very frequently.

Diversified revenue Base

With having stakes in companies and acquisitions on partner networks, it has been strategically expanded their presence in the whole world to get recognition. It has a diversified revenue base which is considered to be rarity.

Leading marketing position

EE is a leading telecommunication company which has undertakings of subsidiary and investments. It has a huge share in the market which makes them a strong market leader.

3.Strength and Weakness

Strength

  • It has about 27 million customers since it came into existence
  • It has a largest coverage
  • It has largest amount of retail stores operated by company
  • It has launched 4G services much earlier as compared to other rivals.
  • It sponsors big events such as football and movies which has increased their visibility of brand.

Weakness

  • Recalling of brand is very weak due to recent launching as compared to brand names which are already established.
  • It only targets business associate segments which lead to losing out of consumers which are individual.

TASK 3

1.Porter's five forces model for evaluation of the company

Bargaining power of Suppliers

It is considered to be high risk as EE is considered to be the market leader in the market which provides 4G network. The company faces a tough competition from its competitors. EE has HUAWEI ICT as its technological partner which provides a strong support for its fastest network for mobile. It has also upgraded its network that features double speed and their coverage is limited in some locations. It has also decided to work with NSN for providing LTE network which is very huge and continuing to expand its 4G network (Parnell, 2018).

Bargaining power of buyers

It is considered to be medium risk. It faces an intense competition in the telecom market while considering the fact that every individual has the right of changing their providers of network so that they can obtain the best offer which is their in the market, which has negative impact on other mobile networking operators which results in the pressure for introducing new products and services which can attracts every mobile users therefore retaining the trust and loyalty of a customer. For the same reason bargaining power of per customer is lower

Threats of new entrants

It is considered to be a low risk because telecom industry is very effective and known to be one of the most profitable markets. Requirement of capital for entering the market is very intensive. In addition to, there are majorly four players who are already established in market and having strong base of loyal customers and features attractive product differentiation. For example while other competitors are introducing 4G networks, EE has already done that very earlier providing an advantage over them. Therefore, it would be a tough decision for a new entry to enter in the telecom market and provide a tough competition (Chereau and Meschi, 2018).

Threats of substitutes

It is considered to be a medium risk as many mobile networking operators are known to be no longer sole providers of communication services for messaging and voices which has lost its exclusivity to services which are internet such as skype and viber and other messaging applications such as Whatsapp. The single advantage that every mobile network operator possesses is the concept of interruptibility. Network operators tends to remain most cohesive and simplest way for customers for providing service of talking to each other based on the single identity which is their phone number which impacts EE a lot.

Rivalry within the market

It is the highest risk EE faces in the market as all other networking operators who are tend to be its competitors are also well established in the market and holding a large consumer base which are loyal to them. This company also develop their new product to their customer and developing its technology, devising their product, organisation market brand cell phones product to brand new target customer, network criteria which includes aspects like coverage and speed (Spyropoulou and et.al, 2018).

TASK 4

P4 Bowman’s strategy clock model to analyse the strategic direction and options for EE

Bowman's strategy clock referred with a model that is used in marketing to analyse the competitive position of a business. The purpose of Bowman strategic clock is to explain the business illustration; it is based on dimension price and perceived value. It is a model that explores the options for strategic positioning (EE) mobile phone should be more is competitive position in the market

  • Low price and low value added (position) EE organisation is not a very competitive position for smart phones business. Smart phones, tablets, computer or other products are not differentiated and the customer are not easy understand the value of product, and product prices are very low (Kahlenberg and Kaplan, 2013). This is only bargain basement strategies.
  • Low price (position 2) EE Company as a low cost leader in market. The strategies of its business are required minimised its cost. Profit margin on each smart phone is low, but the high volumes of its output can still increasing their overall profit.
  • Hybrid (position 3) it refers to involvement of some smart phones of low price. The aim of the company is to stimulate consumer that provide the combinations of a mobile reasonable price and cells phones are very different. It refers to effective position strategy, in their market.
  • Differentiation (position 4) Aim of this company is to make differentiation strategies to offer its customer highest level of perceived added product quantity. They include mobile brand name as it has a key role in this strategy, they also provide product quality (Lam and et.al. 2013). the high quality of mobile with string its brand name very help full for achieving the goal of business and it shows the loyalty related with product. They focus on product quality at a relatively price sells their mobiles phones.
  • Focused differentiation (position 5) this strategy main motive is to position smart phones product at highest prices, where customer buy mobiles phones because of the high-perceived value. This is positioning strategy it is related with luxury brand, this company aim to achieve premium process by highly targeted segmentations, promotions and distribution of mobiles.
  • Risky high margin (position 6) EE takes a high-risk strategy of business and they set their high prices without giving an offer to the customer. If customer continue buy their product with high prices, profit are automatically generate. It is very short term and uncompetitive strategies.
  • Monopoly pricing (position) it refers to the where there is no monopoly market in UK there is only one telecommunication company which is offering their products. They sell their phones own choice, there are no alternatives choices (Cave, 2016). This strategies are monopolist set their prices own choice.
  • Loss of market share (position 8) this is related with recipe for disaster in uk competitive market. Setting a middle range price of a mobile very low it is not best many customers will have much better options from other competitors.

Evaluating and analysis its strategic position using the Bowman's clock Three position (6, 7 and 8) are less competitive. These are the only one where price is high than its perceived value. Market need to operate competitively, because many competitors present in the market they offer same higher perceived value for the same price, at lower prices (Lam and et.al, 2013). It is useful for gaining a profit by offering consumer in greater value and providing lower price for the benefits of higher prices. This model helps to increase their market share and expand their business in high value. From assessment, it has identified low pricing positioning strategy will prove to be more beneficial for the firm. Moreover, by offering services to the customers at lower price level firm would become able to enhance market share. Thus, cost minimization strategy will assist firm in gaining high economies of scale and generating higher margin. Hence, using low pricing strategy firm would also become able to gain competitive edge over the rival firms. By laying emphasis on the aspects of technological advancements business unit would become able to perform activities more efficiently.

CONCLUSION

It can be concluded that the impact of the macro environment of EE telecommunication organisation influences their factors. These are factors are effective and help to identifying the business need and improving the performance of the company. These factors are directly impact on political, economical, social, technological, legal and environment conditions of the company Bowman strategy clock is effective on business position and help to lead their business. strategies clock is important for giving a option to create customer potential they easily ready to purchase their product at possible price. EE enterprise facing high risk in the market as well as the other networking operators are also face some issues.

REFERENCES

  • Ahmad, F. and Peter, J., 2013. Ribonuclease H2 mutations induce a cGAS/STING‐dependent innate immune response.The EMBO journal,35(8), pp.831-844.
  • Ahmad, F. and Peter, J., 2013. STRATEGIC GROUP MAPPING A STRONG INDICATOR IN MEASURING THE PERFORMANCE OF THE INDUSTRY: A CASE APPLIED ON THE EXPORT PERFORMANCE OF THE TEXTILE INDUSTRY IN PAKISTAN.Islamic Countries Society of Statistical Sciences, p.263.
  • Ariffin, A.S. and Sahid, M.L.I., 2018. Competitiveness Analysis of ASEAN Automotive Industry: A Comparison between Malaysia and Thailand. Journal of Science, Technology and Innovation Policy.3(2).
  • Badii, L. and et.al., 2018. SMART SPECIALISATION–A COLLECTIVE AWARENESS PLATFORM AND TOOLSET FOR RIS3 STRATEGY IMPLEMENTATION. In Economic and Social Development (Book of Proceedings). 27th International Scientific Conference on Economic and Social (p. 700).
  • Cave, M., 2016. 40 years on: An account of innovation in the regulation of UK telecommunications, in 3½ chapters.Telecommunications Policy.
  • Chereau, P. and Meschi, P.X., 2018. Defining Strategic Positioning. In Strategic Consulting (pp. 39-79). Palgrave Macmillan, Cham.
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