BUS020C407A Business Organisations in a Global Economy Assignment Sample
Introduction
A brief discussion about British Telecom
British Telecom (BT) is one of the most renowned telecommunications companies of the UK as the main approach of the company is to connect people with the fast and effective technology of the company. It has been evident that the company has been recognized as the fastest mobile network of the UK and the country successfully provides the network services in more than 160 cities of the world (Bt.com. 2021). Moreover, the company recently focused on establishing a digital transformation in the company as it is extremely useful in providing more improved service to the customers of the company.
FDI opportunities for BT in Greece
BT may get several Foreign Direct Invest (FDI) opportunities in Greece as the suitable FDI in Greece for BT may be useful in ensuring the profitability and sustainability of the business in the county. In addition to that, the FDI inflow of Greece has been significantly increased in 2019 as in this year the net FDI inflow of the country was £4,484 million, however due to the Covid-19 it has been decreed to 37.3% in 2020 (Enterprisegreece.gov.gr 2021).
Moreover, the financial system of Greer has been growing day by day and due to this reason the government of Greece has shown an interest to invest in the telecommunication sector of the country through FDI. The FDI initiative by the Greece government in the telecommunication industry may be extremely suitable for BT to grab the opportunity and flourish the business in the country.
Analysing motivation for the choice of BT
BT is a famous telecommunication operator in the UK as the country is extremely customer oriented which is one of the main reasons to take this company for the report. Additionally, the good connection initiative by BT has created a positive impact in the company as it also enhances the brand value in the UK.
Background information about BT Group
Size
British Telecom is a British multinational company which has its headquarters in London, England and the company operates in 180 countries all over the world and it needs to be added that the company is the largest provider of fixed line, broad and mobile connections in the UK. Along with this, it may be added that the company also provides television subscriptions and Information Technology (IT) services and the origin of the company goes back to 1846 when the Electric Telegraph Company brought the first telegraph company which was able to develop a strong communication network in the UK.
BT group was founded on 18th June 1846 and on 1 January 1912 BT Group had started its business operations when the General Post Office had taken the charge of the National telephone Company. On the other hand, it may be implied that the company has been able to generate annual revenue of £22.905 billion in 2020 and the company has an operating income of £3.283 billion in 2020 (Bt.com. 2021). Additionally, the net income of BT Group stood at £1.734 billion in 2020 and the company employed 105,300 employees throughout the world (Bt.com. 2021).
Ownership structure
It may be asserted that Adam Crozier is the chairman of the company and Philip Jansen is the chief executive of the BT Group while Simon Lowth is the group finance director of the company. Apart from this, the company focuses on a single business where the presence of several organisational units assists in handling business operations to a great extent and along with this, the company has 331 institutional owners and shareholders (Refer to Appendix-1).
Furthermore, it may be stated that the BT Group is a holding company where the maximum part of its business as well as assets are owned by the entirely owned subsidiary British Telecommunications. On a broader note, it has to be mentioned that the company has four customer facing lines of business which includes Consumer, Enterprise, Global and Openreach and all the four are highly assisted by the internal service units named as Digital and Networks.
In addition to this, Openreach is a fully owned subsidiary of the BT Group yet it is a part of the BT Group (Refer to Appendix-2). Moreover, it needs to be opined that there is a profound relationship between the ownership structure followed by an organisation and the performance of the organisation (Dakhlallh et al., 2019).
Current international operations
BT Group is a multinational company which operates on a global basis and delivers services locally where 17,000employees expert in their fields are serving several companies throughout the world. In other words, it may be implied that the company owns as well as leases a wide number of buildings on leases in the UK and also in other countries of the world. However, it may be added that the BT Group has been operating in numerous regions of the world including the USA, Europe, Middle East and Africa (Refer to Appendix-3).
Background information on the business environment of Greece
| Pestle dimensions | Aspects |
| Political | Political instability, political diagrammatic and disturbances, high level of corruption |
| Economic | Huge governmental debt, low GDP rate, unemployment issues, negative inflation rate, |
| Social | Huge dependency ratio, high literacy rate, Growing aging population |
| Technological | Strong technological infrastructure, huge investment of government in research and development departments, tech friendly population |
| Legal | Attracting tax structure for FDI, freedom of speech, enforcement of civil law |
| Environment | Governmental initiatives against environmental pollution, negative impact of biodiversity due to climate pollution, promoting alternative energies |
Political environment
It needs to be noted that Greece mainly suffers from political instability for many years and for that reason it may be treated for foreign investment. According to the political stability index in 2017 the value of the index was -0.7 which increased to 0.18 in 2019, however, it decreased again in 2020 (GlobalEconomy.com. 2021). Corruption is one of the biggest problems of the country and that may adversely impact the FDI investment and for that reason BT needs to be extremely careful about the transparency of the country. According to the data of Transparency International the corruption index of Greece was 59 among 180 countries which indicates that corruption is highlighted political issue of the country (Transparency.org. 2021).
Figure 1: Political stability of Greece
(Source: GlobalEconomy.com. 2021)
Economic environment
The government of Greece has taken a huge debt from the World Bank as the government of the country was not able to repay the debt which negatively impacted the economic growth of the country. Due to the huge debt the GDP of the country has observed continuous economic downfall as in 2008 the amount of the Gross Domestic product (GDP) of Greece was $354.461 billion which has decreased to $189.41 billion in 2020 (Data.worldbank.org. 2021). In addition to that, the country has also faced an unemployment issues as the government of the country has taken multiple initiatives to mitigate the unemployment problems of the country.
Figure 2: Current GDP of Greece
(Source: Data.worldbank.org. 2021)
Social
It may be argued that Greece has one of the highest democracy ratios in Europe as according to World Bank data 56.104% of the population of the country depend on earning persons (Data.worldbank.org. 2021). However, the country has a higher and growing literacy rate which may create a beneficial impact on the business growth of BT as the company may be able to hire skilful people for the company. Additionally, the country has also suffered with an aging population as in 2020 the age of population of the country was 65 which defines the low fertility rate of Greece (Data.worldbank.org. 2021).
Figure 3: Age dependency ratio in Greece
(Source: Data.worldbank.org. 2021)
Technological
The government of Greece has invested in the research and development sector of the country which indicates that the country has a strong technological infrastructure which may provide a massive support to BT. Moreover, the country also has a tech friendly population which is extremely suitable for BT to invest in the telecommunication sector of the country.
Legal
The corporate and business tax policy of Greece is suitable for foreign investors as it is not rigid and does not contain any hidden terms which may help the business of BT in flourishing the organisation in Greece.
Environment
The government of Greece has designed a solar energy transition model, however, there are many barriers in this transition as Greece needs to identify the risk factors to mitigate the barriers or else it will not support the socio economic growth of the country (Nikas et al., 2020). In other responses the government of the country also planned to mitigate the use of fossil fuel as the traditional source of energy is a threat for the existing biodiversity of the country.
Analysis of the business scenario
It needs to be stated without any doubt that the BT Group is a well-known British multinational company which is always focusing on expanding its business operations through analysing the business environment of different countries. On the other hand, it has to be asserted that Porter’s five force analysis plays an immensely crucial role in understanding the essential factors which contribute to the success and profitability of an organisation to a significant extent (Goyal, 2020).
Furthermore, it may be implied that the BT Group is required to pay attention towards all the 5 factors which will play a crucial role in analysing the business environment of Greece and will definitely prove beneficial in expanding the business by identifying new business opportunities in the country.
Threat of new entrant
In a more specific way, it may be argued that the BT Group is to pay attention towards the existing market competitors which will provide an added advantage in understanding the current business models used in the country which will provide the company a preliminary view of the present condition of the industry.
In addition to this, understanding market segmentation also becomes an essential factor which directly impacts the growth and development of business in a new country and following Porter’s 5 force model will definitely help the BT Group in understanding whether the launch of new products and services will fetch profit in the long run. Along with this, the BT Group needs to follow the 5 force model closely in order to identify the areas of risks which may become a serious threat to the company and hinder the numerous business operations.
Threat of substitutes
In other words, it may be opined that following Porter’s 5 forces will definitely prove beneficial for the BT Group in analysing the business environment of Greece and also in implementing business strategies and approaches in a proper way in order to generate desirable results in the long run. The BT group needs to focus on creating a unique range of products and services which will reduce the threat of substitution in a significant way and will also satisfy the customers to a great extent.
Bargaining power of buyers
On the other hand, it may be mentioned that several issues relating to patents may become a cause of serious concern for the BT Group and advancement of new technologies also contribute in making the entry of companies such as the BT Group further difficult. Moreover, the existing customer loyalty towards the brands which are currently operating in Greece is another important factor which needs to be treated with special attention in order to generate profit in the long run.
Additionally, it may be implied that the power of the buyers is another essential aspect which the BT Group needs to consider with utmost care and attention as an increase in the number of competitors in the market of Greece will certainly make the prices sensitive to a great extent. On a contradictory note, it may be argued that innovation has become an extremely vital aspect for gaining competitive advantage in any field of business which enhances growth (Syapsan, 2019).
Bargaining power of suppliers
Apart from this, the factor relating to the power of suppliers becomes important as it determines the number of suppliers and their contribution in terms of the uniqueness of the products and quality of services. In a more specific way, it may be mentioned that the threat of substitution will definitely reduce the power of suppliers as well as the attractiveness of the BT Group in the market of Greece.
On a contradictory note, paying attention towards the human resource management also becomes a crucial factor in achieving organisational goals which is directly linked to the performance of an organisation (Pham, 2020). However, it needs to be stated that the BT Group is required to pay attention towards the threat which may be caused due to the entry into the new market of Greece which may significantly impact the profit margin of the company.
Degree of rivalry
The BT Group will certainly become successful in understanding and interpreting the existing rivalry which the company may face in the long run through analysing the competition which is already present in the field of telecommunication in Greece. Additionally, there is no denying the fact that innovation and improvements in the field of technology always become a vital aspect in achieving organisational excellence which further boosts the reputation of an organisation in a significant manner (Cannon, 2017).
Moreover, it may be added that the presence of rival companies such as Vodafone, Ericsson Worldwide, Intracom Telecom and Wind Hellas needs to be analysed in great detail in order to measure the threat of substitution without any error which may harm the business operations of the BT Group in a negative way.
Figure 1: Porter’s 5 forces
(Source: Goyal, 2020)
Conclusion
From the above discussion, it may be clearly concluded that the BT Group is a well-known British multinational telecommunication company which is focusing to expand its business in different parts of the world and due to this reason it has become important to pay attention towards several factors which directly impact the growth and development of business.
On a broader note, the company needs to analyse the environmental, legal, social, economic and technological factors in an accurate and precise way along with analysing the current rivalry and competition present in the market of Greece.
It needs to be asserted that the BT Group is required to analyse all the important factors in a proper strategic way where the presence of an effective leadership becomes truly essential in attaining organisational goals and objectives. Apart from this, the BT Group is also required to improve its communication among the employees working in different departments in order to maintain a constant flow of necessa
In addition to this, the company needs to focus on training its employees and staff in the most efficient way in order to maximise the performance of the employees and staff which will benefit the company in increasing its productivity and performance. Furthermore, the BT Group should follow all the legal terms and conditions in order to avoid any sort of legal complexity which may hinder the progress of the company in Greece.
References
Bt.com. 2021.Home | BT Plc. [online] Available at: <https://www.bt.com/about> [Accessed 13 December 2021].
Cannon, F., 2017.The Agility Mindset: How reframing flexible working delivers competitive advantage. Springer.
Dakhlallh, M.M., Rashid, N.M., Abdullah, W.A.W. and Dakhlallh, A.M., 2019. The Effect of Ownership Structure on Firm Performance among Jordanian Public Shareholders Companies: Board Independence as a Moderating Variable. International Journal of Academic Research in Progressive Education and Development, 8(3), pp.13-31.
Data.worldbank.org. 2021. GDP (current US$) – Greece | Data. [online] Available at: <https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=GR> [Accessed 13 December 2021].
Enterprisegreece.gov.gr 2021. Foreign Direct Investment – Investment & Trade Promotion Agency of Greece. [online] Enterprisegreece.gov.gr. Available at: <https://www.enterprisegreece.gov.gr/en/greece-today/why-greece/foreign-direct-investment> [Accessed 13 December 2021].
Goyal, A., 2020. A Critical Analysis of Porter’s 5 Forces Model of Competitive Advantage. Goyal, A.(2021). A Critical Analysis of Porter’s, 5.
Nikas, A., Stavrakas, V., Arsenopoulos, A., Doukas, H., Antosiewicz, M., Witajewski-Baltvilks, J. and Flamos, A., 2020. Barriers to and consequences of a solar-based energy transition in Greece. Environmental Innovation and Societal Transitions, 35, pp.383-399.
Pham, H., 2020. Impact of human resource management practices on enterprises’ competitive advantages and business performance: Evidence from telecommunication industry. Management Science Letters, 10(4), pp.721-732.
Syapsan, S., 2019. The effect of service quality, innovation towards competitive advantages and sustainable economic growth: Marketing mix strategy as mediating variable. Benchmarking: An International Journal, 26(4), pp.1336-1356.
TheGlobalEconomy.com. 2021. Greece Political stability – data, chart | TheGlobalEconomy.com. [online] Available at: <https://www.theglobaleconomy.com/Greece/wb_political_stability/> [Accessed 13 December 2021].
Transparency.org. 2021. Greece. [online] Available at: <https://www.transparency.org/en/countries/greece> [Accessed 13 December 2021].
