BT Consumer Strategy - Book Report/Review Example

Executive summary Overall strategy of BT broadband strategy BT Group, known as British Telecom when the company began operations in 1980 has grown over the years to become the sole supplier of telephone related services in the United Kingdom despite its privatization earlier in the 1980s. As part of its overall strategy, BT believes in diversification and has several products under its scope of operations, hence influencing the company to maintain monopoly over its UK market. One key area that BT has diversified into in BT Consumer, that has been significant in influencing the growth of BT Group, which deals in the selling of television sand broadband services to a majority of households in the UK. Detailed analysis and appraisal of BT strategy As per the case study, BT appears to have concerted its efforts on BT Consumer as part of its strategy by establishing a niche in the market especially in the fixed-line telephony services. BT Consumer enjoyed monopoly for a number of years until later when the government discouraged this and influenced other companies to venture into this market. As a result, new entrants into the telephony services that focused on providing voice over internet services such as Skype gave strong competition against BT Consumer by resulting in decreasing the charges for these services. Based on this, BT Consumer moved from just providing efficient connections to selling services to their target market, which enabled them to establish themselves anew in the market. BT Consumer ventured into providing pay TV services to its UK market in which its reception was quite overwhelming in terms of consumer response to the product. From the beginning, BT Group applied the same strategy in the other products, which was to diversify in order for the company to continue staying relevant in the telephony business and also capture or retain consumers that were aware of their product’s existence. The strategic resources and capabilities Part of the strategic resources that BT Consumer applied was that of recruiting known personalities to join the sports wing of the pay TV that BT Consumer planned to establish, which was a great move because this would have attracted a significant percentage of consumers because of their ratings and following. Essentially, this was somehow an affordable way of marketing their new sports channel as compared to investing in other forms of advertising, but this was not to mean that they should not have marketed themselves in any other way. The prize that BT Consumer sought was that of airing the Champions League in which this market was already ripe and the benefits that the company would have reaped were quite attractive. Therefore, BT Consumer invested in building itself an ultra-modern studio in Olympic Park, London that would be able to meet the goals that the company had in mind and in order for it to edge out competition from rival companies such as ESPN and BSkyB. The differentiation advantage that BT has One factor that BT Consumer took pride in and used it as a differentiation strategy was that it was a British business unlike Setanta and ESPN whose owners were not from Britain, which explains why the their target population would have preferred this company to provide them with the sports channel. Therefore, BT Consumer banked on the fact that the British market was theirs and that no foreign owned pay TV stations would be able to outshine them in their own backyard (BT Case study 2014, p. 2). The value chain that BT is following The most critical fact that BT Consumer has put in to mind is that the consumer comes first and have strived to understand their needs before embarking on the process of service or product delivery. For one, the company invested in up to date technology through the YouView set-top box that would have enabled BT Consumer to broadcast its services to their targeted consumers who acquired these devices hence applying the technology tool in the value chain. In order to understand their competitors better, BT Consumer hired Bushnell Delia who formerly worked at BSkyB and Sky Italia so as to understand how they operate and also beat them at their own game by improving on what they had to offer as presented by their former employee. Other factors such as procurement of the needed equipment to ensure that BT Consumer’s broadcasts met quality standards and making sure that the human resource management team was an effective one also complemented this company’s intention of achieving value chain supply. Others include adequate sales and marketing, services, procurement among a list of other services influence an increase in the profit margins and increased output for the benefit of the company. BT value proposition A few glitches were experienced by the broadband telephony giant that had ventured into pay TV services such as the quality of the broadcast in comparison to the quality delivered by BSkyB, which they later improved on. Essentially, BT Consumer spent a lot of money in an attempt to improve the quality of services that they offered, but they improved the quality of service by imploring the services of Lord Alan Sugar, a renowned businessperson in the UK. BT key activities The areas that BT has diversified into have yielded the establishment of products and services such as BT Global Services, which deals in providing networking solutions for renowned companies that operate on an international platform. Other activities that BT ventures into include the Open reach arm for providing telephony linkages between subscribers and telephone exchanges, BT Business for providing broadband and other telephony services for business and also BT Wholesale that deals in selling communication products to mobile partners within the UK. BT Key partners As per the case study, BT draws strength from within as it relies on the support of the other arms of the Group, which explains why the company has remained successful through the years. Therefore, BT Consumer relies on BT Service, operations and technology as a strength and also has collaborated with universities in the US, Asia, the Middle East and in Europe (BT Case study 2014, p. 4). It also collaborates with its consumers in order for the company to deliver as per the needs that they present. BT customer relationship BT Consumer values the input that customers can provide to an organization hence explaining the reason as to why they have them as partners when it comes to product development. The implication of this is that BT Consumer focuses on influencing customer satisfaction by developing products that are in line with their needs. BT Channels BT Sport is the main channel that BT Consumer has invested in, which mainly broadcast the Champion’s league matches. BT revenue streams BT acquired Plusnet, a company that sold broadband services meaning that it used to compete with BT through the supply of branded internet broadband to renowned companies in the UK such as John Lewis. Other lines of revenue include BT Technology, Service and Operations whose services include managing systems and networks for the entire BT arms of operations and BT Sports that provides pay TV services. BT customer segments BT’s main customer segment is the UK population as it mainly broadcasts in Britain. Porter’s five forces As per the Porter’s five forces, BT appears to be facing the threat of new entrants such as Skype that threatened to topple its market positioning. For a long time, BT enjoyed a monopoly in the telecommunications market in Britain, but the British government encouraged new entrants to penetrate the market hence inclining that government policy presented the threat of new entrants. The other force affecting BT is that of bargaining power of the customers as the company has made them partners meaning that they have to consult them before setting prices for products. Threat of substitute products and services from firms involved in the broadcast of the Champion’s League matches as customers have a choice as BT no longer enjoys monopoly in the industry like before. Further, BT has been able to sustain competitive advantage by using innovation through innovation campuses that operates across a number of continents hence applying the force of competitive rivalry. The last force that BT has applied is that of bargaining power of suppliers through the degree of differentiation of inputs as it banks on the fact that its rivals are not UK owned. Conclusion As per BT’s case study, the strategy applied By BT Group seems to be effective based on the annual financial reports that indicate that the company has been able to accrue profits. The move by the UK government to encourage competition as a way of increasing national efficiency in the communication sector did not hinder BT from achieving profits as they applied innovation so as to continue being relevant in the market. In terms of revenue collection, BT was ranked 18th among the largest telecommunications companies in the world after Vodafone, meaning that its financial performance is desirable (BT Case study 2014, p. 3). Essentially, BT was able to make investments that totaled 2.5 billion British pounds that also signified a cash flow of almost the same amount by 31 March 214. Based on these figures, it is safe to say that the strategies applied by BT have been successful as they have been able to yield significant profits for the company, meaning that there can only be slight changes if any so as to foster more positive results. Bibliography BT Case study 2014, BT, BSkyB and the UK broadband/pay TV industry in 2014 (B). P 1-6. Read More