BUSINESS STRATEGY IN A GLOBAL ENVIRONMENT

Business Strategy in a Global Environment

Business Strategy in a Global Environment

INTRODUCTION

BT Group plc (formerly British Telecommunications plc, abbreviated to BT or British Telecom) is the privatised former state telecommunications operator in the United Kingdom. It is a fixed line telecommunications and broadband Internet provider in the UK, and also operates in more than 170 countries around the world. It is headquartered in the BT Centre in the City of London.

BT Group is one of the largest communication companies in the world, with over a third of its revenue now coming from its Global Services division. A public limited company, the Group is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index, upon which the shares lost 85.94% of their value between 8th March 2007 and 8th March 2010. It is one of the major global brands (including only 4 Telecom operators) to be in the VB.com Internet Hall of Fame owning a two letter domain name. BT has the largest defined benefit pension scheme of any UK public company: as at 31st December 2009 the scheme had a deficit of £9 billion.

The British Telecom brand was introduced in 1980. On 1 October 1981, this became the official name of Post Office Telecommunications, which became a state-owned corporation independent of the Post Office under the provisions of the British Telecommunications Act, 1981. In 1982 BT's monopoly on telecommunications was broken, with the granting of a licence to Mercury Communications (Schnoring 1989).

ANALYSIS OF CURRENT SITUATION

INDUSTRY ENVIRONMENT

The largest market share in the communications industry is, held by Nokia, with British Telecom trailing in second place. In general economic conditions in most global industries have hit a point of stagnant or declining sales (Kary 2009). In today's world, businesses need to somewhat accurately forecast the future outlook for global economies and then make investments and decisions accordingly. The communications industry is dependent on vendor financing and has taken a big hit because of it. "Vendor financing is an important part of the purchase decision for buyers. Vendor financing helps equipment makers capture large contracts even when capital is scarce while allocating carriers to build out their networks more quickly and cheaply". (www.activemedia-guide.com/telecos_equipment.htm)

Due to main reliance on vendors, this industry has substantial risks. "The biggest threat to telecommunication hardware vendors may be the growing clout that cable companies have with high speed Internet access using cable modems" (www.activemediaguide.com/telecos_equipment.htm). If Nokia and British Telecom do not stay ahead of the cable companies in technology, their position in the market will be highly threatened.

Communication hardware companies are benefiting from "worldwide deregulation in telecommunication services and intense competition among industry players" (www.activemedia-guide.com/telecos_equipment.htm). By deregulating the industry, companies will have more freedom in their decision-making processes.

In addition, there is intense pressure on demand for changing technologies. Communications hardware companies need to ensure that their products are compatible with the newest features. Many are trying their best to differentiate their product from their ...