Strategic Analysis of British

Telecom & Verizon

Group: 4
Bhaskar Kumar (28)
Prerna Malhotra (30)
Aakanksha Vats (61)

British Telecom
Established in 1980
Headquarter- London
Chairman- Sir Michael Rake
CEO- Gavin Patterson
Operating in 170 countries
Revenue of 18 billion in 2013
Profit of 2 billion in 2013
90,000+ employees in 65 countries
Worlds leading supplier of
communications solutions and
services
Provides IT services, broadband and
Internet Products and services


British Telecoms History &
Milestone
1878
UK telephone
services
provided by
private sector
companies
1912
General Post
Office becomes
a monopoly
supplier of
telephone
service
1969
Post Office
becomes a public
corporation &
retains tele-
communications
monopoly
1980
Post Office
Telecommunic
ation renamed
British
Telecom
1984
British
telecom
privatized
1991
Competition
introduced to UK
telecoms market.
British Telecom
renamed to BT
1994
BT & MCI
launch
Concert
2003
BT unveils current
identity and brand
values
BT Ignite changes to
BT Global Services
2004
Consult 21
launched
industry
consultation for
BTs 21
st

Century
Network
Program
2005
BT acquires
Infonet,
Albacom and
Radianz
Openreach
launched
2006
BT acquires
Dabs.com
Home Hub
launched
2007
BT acquires
INS & Comsat
International

Mission & Vision
Mission
Total dedication to the quality of service and
experience our customers receive from us
Vision
To make complexity transparent , to make things
easier; to enable every individual, organization and
business to realize their potential through
communications

Organization Structure at BT


A Global Presence
Operating in 170
countries

90,000+
employees in 65
countries

#1 in UK with
30% market
share

Revenue
18 billion in 2013

Profit 2 billion in
2013



Business Portfolio & Key Financials
BT Group is organized into following divisions:

BT Global Services- provides IT and telecoms services to
multinationals
BT Retail- provides retail telecoms services to businesses and
consumers
BT Wholesale- operates BT's networks
BT Technology, Service & Operations- responsible for the innovation,
design, test, build and running of BTs global networks and systems.
[

Source: BT Annual
Report, 2013

BT GROUP
Consumer facing
BT
Glob
al
Serv
ices
BT
Ret
ail
BT
Wh
ole-
sale
Ope
n
rea
ch
Interna
l
service
unit
BT
techno
logy,
service
and
operati
ons
Upstream
Customers
BRITISH
TELECOM
Downstream
Customers
Vertical Scope Horizontal Scope

BT-Purpose and Strategy
Purpose
To use the power of communications to make a
better world
Goal
A growing BT: To deliver sustainable profitable
revenue growth
Broaden and deepen customer relationships
Strategy
Deliver superior
customer service
Transform
Costs
Invest for
growth
Fiber
TV and
content
Mobility
and
future
voice
UK
business
markets
Leading
global
companies
Culture
A healthy organization

Key Innovations: British Telecom

BT Customer Innovation Showcase
Launch in Dubai: High definition immersive
video Telepresence suites in more than 50
cities around the world to hold a regional or
global business meeting.
Demonstrations include:
Network & applications,
Unified Communications &
Collaboration,
Contact Centre services,
Security, Mobility and Vertical
solutions.

BT Innovation: Network Function
Virtualisation (NFV):
With NFV, the vendor of the Virtual
Network Function may be different from
the vendor of the servers and a single
server can implement multiple network
functions, from multiple vendors
simultaneously.




BT-SWOT ANALYSIS
Strengths:

(1) Competitive pricing
(2) Top leadership
(3) Telecom expertise for the past 150
years
(4) Manpower to support products
(5) Excellent network coverage
(applicable for UK markets only)
Weakness:

(1) Network based on copper
(2) With existing infrastructure, it
cannot reach high speeds.
(3) Lack of innovation at right place and
time.
(4) Bureaucracy






Opportunities:

(1) Untapped market of superfast
broadband.
(2) Technology convergence- next big
thing with internet at its core
(3) Globalization: More demand for
broadband.
(4) Innovative trends toward cheaper
modes of communication.

Threats:

(1) Increasing use of mobile broadband.
(2) Average revenue per user is on a
decline.
(3) Competitors offering mobile
solutions.


BT-Current Strategic Overview
In the past BT Global services strategy has experienced hard times, resulting in the
company incurring high levels of debt through the heavy use of joint ventures.

In recent times, BT Global Services have adapted from this past by offering more
homogeneous products, leading to a needs-based strategy focusing on multinational
corporations instead of products intended for domestic use, as they offer in the UK.

Their strategy is based on their strategic position in the telecoms industry: Hard for
new competitors to enter, however they have a competitive parity with their main
competitors AT&T, Verizon Business and Orange Business Services.

Their large client base and brand image has played a key role in their strategy for
targeting multinational corporations and world governments. However, they show a
weakness that they have a relatively high senior management turnover which may
have had a negative effect on their strategy formation process.

The deregulation of telecommunications has had a large impact on their global
strategy as governments in developing countries lift competition rules to end state
owned monopolies .This deregulation has allowed BT to branch out internationally
and to set up global networks to offer their prospective clients

Core Competency : Robust telecom infrastructure and brand equity






Porter five forces Model-BT
Supplier power is LOW
There are several suppliers
for BT. Ex: The physical
components and product
providers are from Far East

Highly Competitive Industry
The Buyer power is
HIGH due to high
competition
Threat of new entrants is
LOW
BT already has a robust
infrastructure which is difficult
considering the cluttered
telecom market today.
Government licenses and
Ofcom regulations

Threat from
substitutes is HIGH
VoWifi and VoLTE
Increase mobility
Virgin scores high on some
product offerings like broadband
Virgin is high in speed while BT
is high in network coverage due to
its robust infrastructure

Steps taken to mitigate the impact of Porters 5 forces
model-BT

Reduce the buying power
Reduce the threat of substitutes
Focus on apps and better management of user data . This will serve as a
psychological barrier and increase the switching cost.
Better services and CRM to ensure customer connect.
The two biggest advantages with BT are its highest number of fixed lines
and low cost. The price sensitivity of the budget customers is however
higher which is often compensated by the high range of products with less
price variance.

British telecom has one of the most robust telecom infrastructures that act
as a competitive advantage.
Fiber Optic Broadband services that offer high speed access not
experienced in the competitors.
Having the highest number of fixed lines provides an advantage to BT. The
major substitutions, are accredited to the poor customer service and
unacceptable quality of products.
The switching cost is comparatively higher, as buying a new broadband
means paying for the installation charges again to the new provider.


Long term and Short Term
recommendations for BT

Connect customers anywhere at affordable prices
Use BT hotspot technology to connect gadgets, devices with
superfast broadband services. No competitor infrastructure
to emulate
Provide Broadband anytime.
selling off or reducing its participation / stakes in other
telecom operators in the slow-growth countries of the
developed world.


Truly differentiate themselves by innovating to create a
temporary competitive advantage.
Maintain key senior management staff.
Focus on European based multinational corporations to
take advantage of BT's brand power that it has developed
in that region

Verizon
Founded in 1983
Headquarter- New York
Chairman & CEO- Lowell McAdam
#16 in Fortune 500 companies
Operating in 150 countries
Revenue of $120 billion in 2013
Profit of $23 billion in 2013
99% of Fortune 500 companies
using Verizon Enterprise Solutions
Products: Fixed-line and Mobile
telephony, broadband services,
global Internet Protocol backbone
network


A Brief History and Milestones
1984: Verizon was founded as Bell Atlantic, which was one of the seven Baby Bells that
were formed
1997: Merged with fellow Baby Bell NYSEX to expand into New York and New England
states
2000 : Bell Atlantic and Vodafone combine U.S. wireless operations to form Verizon
Wireless
2000: Verizon Communications Inc. formed with merger of Bell Atlantic Corp. and GTE Corp
2004: Verizon embarks on next generation broadband services (EV-DO, FiOS)
2005: Verizon becomes first wireless provider to offer a nationwide broadband service
2006: Acquired competitor MCI Inc for $7.6 billion expanding its presence into global
markets
2009: Acquired Altel for $28.1 billion to surpass AT&T in number of customers and also
making it the largest wireless carrier in US
2011: Acquired Terremark Worldwide for Verizon to lead global managed IT infrastructure
and cloud service market
2012: Acquires Hughes Telematics for $612 million in cash

Mission & Vision
Mission
Verizons mission is to enable people and business to
communicate with each other. We are also committed to
providing full and open communication with our
customers, employees and investors.
Vision
For our core goals, we decided on just one: To create the
most respected brand in communication

Organization structure at Verizon


Market Share
Domestic Telecom
covers 67 out of top 100
markets
Footprints cover 90% of
US population

Source: Bloomberg(June, 2014)

Wireless
Residential and
Small business
services
Enterprise
services
Vertical Scope Horizontal
Scope

Verizon-Purpose and Strategy
Vision
To create the most respected brand in communications
Mission
To enable people and businesses to communicate with
each other. We are also committed to providing full and
open communication with customers, employees and
investors.
Culture
A place to grow
Highest
network quality
Target new
business segments
Focus on
efficiency
Objectives
Fiber
to
home
Customer
focus for
Digital age
Create
open
network
Expand
coverag
e area
Verizon
Communication
Verizon Wireless
Strategy

Key Innovations: Verizon
VISIONARY SOLUTIONS FOR THE
VISUALLY IMPAIRED:

Powerful combination of wearable
computing and the 4G LTE wireless
network,

Verizon is partnering with Visus
Technology to empower the visually
impaired by helping them see the world
in a whole new way.

XLTE: THE NEED FOR SPEED NOW
FULFILLED:

Verizon XLTE , America's largest,
most reliable 4G LTE network to
the next level.

With faster peak speeds and
greater capacity, users can
increase their ability to stream,
share and do more.


Verizon-SWOT ANALYSIS
Strengths:

(1) Reliable/Robust wireless network
(2) Strong financial performance
(3) Corporate strategy- Joint venture
(4) Brand Awareness
Weakness:

(1) CDMA technology
(2) Declining access lines (wire)
(3) Geographical concentration



Opportunities:

(1) Price reduction
(2) Cutting down unnecessary
expenditure
(3) Demand for wireless broadband
applications (TV/Music etc.)

Threats:

(1) Technological change
(2) Regulatory framework
(3) Competitors adaptation of Verizon's
core competency in customers
service


Verizon- Current Strategic Overview
Business Strategy

Verizon follows an integrated cost leadership and differentiation
strategy.

The company has invested heavily in network expansion and
innovation
Ex: AT&T has been in an exclusive contract with Apple to sell the
iPhone on the AT&T network. To combat this advantage, Verizon
introduced the Motorola Droid, a device that operates on Googles
Android system, a potential killer for Apples operating system

Corporate Strategy

Core competency :
(1) Verizon offers a large variety of wireline and wireless services.
This diversification allows Verizon to increase customer value
through an expanded range of product and service offerings and
through a price-saving bundling strategy.

(2) Employee resource pool




Porter five forces Model-Verizon
The Buyer power is HIGH
due to high competition
Supplier power is LOW
Main suppliers are Nokia,
Samsung, LG, Blackberry &
Motorola
Each one of them offers a
distinct range of colours,
sizes and innovative
technologies.
Threat from substitutes is HIGH
Nextel technology
Internet based communication
software
Internet and portable laptops as
means of free communication
(Ex:Skype)
Threat of new entrants is
LOW as it is a quite hard
place to gain access as a new
service provider.
However, it is much more
common to see wireless
companies merging together
to benefit of both.
AT&T is Verizon's biggest
competitor and has been in
the market longer than
Verizon (customer base is
more)
Highly Competitive Industry

Steps taken to mitigate the impact of Porters 5 forces
model- Verizon

Verizon has created a competitive advantage that will attract more
customers thanks to the quality and innovation of their services as well as
products and features such as GPS systems offered in cell phones.
Verizon Wireless is also improving their customer service and providing a
high network quality through new technologies like EV-DO, which
improves data transmission rates and creates a competitive advantage in
this buyer powered industry.
Reduce the buying power
Reduce the threat of substitutes
Today, it is much more accessible and feasible to use Internet and portable
laptops as means of free communication that could easily substitute for
cell phones and paid wireless network services.

In the wireless network industry it is common for companies to require a
contract in order to create and control switching costs in case customers
decide to switch to another company. Verizon wireless charges fees to
avoid losing existing customers to their competition and to lower the
threat of substitute products or services


Long term and Short Term recommendations
for Verizon

Verizon must increase data limits in 4G service plans
Provide Broadband anytime
Verizon must continue to seek out operating partnerships with
companies like Apple and Google to avoid missing out on the
next big thing.
Focus on unique product offerings like FiOS


Focus on the three pillars: Shared Solutions, Shared services and
Shared Sustainability
Focus on emerging markets: Market entry mode: Acquisitions/joint
venture or fully owned subsidiary
Verizon must continue to invest more than its competitors in capital
expenditure to maintaining top positions in the market
Focus on divesting portions of wireless segments and enter attractive
businesses.

Thank You!!

Helpful for intro
What does Verizon stand for?
We coined the word Verizon from the Latin term 'veritas', which means truth and connotes certainty and reliability, and
'horizon' that signifies forward thinking, and limitless possibilities. It is a name we believe, reflects a new kind of
company that is a global voice in data and Internet communications.
How was Verizon established?
Verizon Communications Inc was formed last year by the merger of Bell Atlantic and GTE. It combines the strengths of
both companies and OFFERS a single source solution for residential, business and government customers for local,
long distance, wireless, Internet, paging and directory services.
Verizon Data Services India is a 100%-owned subsidiary of Verizon Data Services USA Inc, which is the information
technology division of Verizon Communications.
Tell us something about Verizon Data Services India.
Verizon Data Services India is a dedicated development center for Verizon Communications. It is the only development
center built by Verizon outside the US. India was chosen as the preferred development center because of the technical
strengths and quality of resources.


Need to do PEST analysis of telecom
industry
Company strategy for bt-
http://www.ukessays.com/essays/mark
eting/british-telecommunications-
shortcoming-and-capabilities-
marketing-essay.php

The power of buyers is rising because technology between
firms is converging and similarities are making it harder for
buyers to differentiate between services. One way that
telecommunication companies can alter the power of
buyers is through rises in cancelation and switching costs.
They are currently fairly low for residential customers but
are much higher for large business customers due to their
need for customized products and services. If cancelation
costs are low, customers can easily switch to cheaper
providers. This is particularly important to Verizon and
AT&T because they decide whether they want to provide
the same services differently or provide different services
altogether.
Find out more from UK Essays here:
http://www.ukessays.com/essays/marketing/telecommunic
ation-by-definition-is-the-transmission-of-signals-
marketing-essay.php#ixzz3D7RNB62f