Report on the BT Group Marketing
I have been working for Ericsson Vietnam since 1996. My first position was implementation engineer, and with the business growth in Vietnam together with my experience and contribution, I had been recognized and promoted gradually to team leader, Site Implementation Manager and Service Delivery Manager as today. However, my 15 years experience was almost focusing to technical support only. It is so pity to say that I have never done a complete research on any company even Ericsson until I joint this MBA class.
I had learned from this module the way how to learn more. I had able known how to get all data to do a complete research on British Telecom PLC (BT). Later I can use this method to research on my company, customers, suppliers and also competitors to understand the business environment as well as the opportunities and threats that my company may face in future in order to build a suitable strategy to win our business. In the following pages, I will present a brief report of my research on BT Group.
REPORT ON BT GROUP
What are its major products or brands?
BT’s major activities are the provision of fixed phone lines, broadband, mobile, television products and services as well as networked information technology (IT) services. In the United Kingdom, BT is the biggest communications services provider to provide the products and services for the consumer, business and public sector markets. BT has a portfolio of around 1,800 products and services selling them to consumers, small and medium enterprises, multinational corporations, domestic businesses, government departments and more than 1,000 communications providers in the UK and in more than other 170 countries. (BT Group PLC, 2010)
Some of BT’s customers (BT Group PLC, 2010, p. 9)
BT operates in UK and other 170 countries (BT Group PLC, 2010, p. 9)
Which business generates the most revenue?
BT is a very big communications services company, proving the products and services to customers through four business lines which are BT Global Services, Retail, Wholesale and Openreach divisions. Basing on business line, the statistic shows that the BT Global Service had generated the most BT’s revenue with 41% contribution in year 2010. (BT Group PLC, 2010, p. 8)
On the perspective of products and services of BT Global Services, the statistic shows that the Managed solutions are always the top business had generated the most revenue for many years as below figures. (BT Group PLC, 2010, p. 24)
Finally, the statistic base on customer-facing division shows that the BT Consumer had continually generated the most revenue in 2010.
(BT Group PLC, 2010, p. 25)
Which business generates the most profit?
The Openreach business is to offer the broadband internet access, telephone, television and intranet connections for home and businesses using copper wires and fibre cables. In 2010, it had generated the most BT’s profit with 36% contribution. The next one is very close with Openreach’s profit contribution is BT Retail. It has around 13 millions consumer lines in the UK and around a million SME customers and it had contributed 33% profit in 2010. (BT Group PLC, 2010, p. 8)
Which business will drive growth in the next decade?
For the customer perspective, BT believes that below three customer segments will drive BT business’s growth in future.
Multinational Corporations customers
UK corporate and public sectors customers
Public sector and multinational corporate customers outside the UK.
For the globalization perspective, BT believes that the Asia Pacific region will be their major area for business growth and making plans to further increase its capabilities to setup their business opportunities. The new investments will not only continue build on the strong established markets but also focus to look forward new business opportunities in multinational customer’s growth plans.
Finally, for the products and services side, BT also believes the new products and service enhancements which had launched during 2010 will drive their business growth globally. These included the releases of virtual data centre, hybrid virtual private network, hosted unified communications service, unified communications and collaboration, next generation contact centres and BT OneVoice.
Source: (BT Group PLC, 2010)
How successful would you say this company has been since 2007?
(BT Group PLC, 2010, p. 7)
BT’s business was very successful with Adjusted earning per share is rising steadily from 2006 to 2008. However, it was dropped badly in 2009 whilst BT’s Customer Service Improvement was still increasing. During 2009-2010, BT management board had done a lot of efforts to recover their business. At the end of quarter II/2010, BT Group has successfully increased profits by improving the performance of BT Global Services division which is thought as the lost-making group. Other business from BT Retail and BT Wholesale also improved. All of them had contributed to increase BT’s adjusted earnings per share and its free cash flow get peak £1.993m in 2010.
Together with business growth since 1990, BT has always been balancing their profit and benefits of their customers and society such as protecting the environment on climate change and reduces the impact of on environment by developing the sustainable products and services. Below are the evidences that BT engages with external stakeholders.
The CO2 intensity of BT’s global business had reduced by 54% by 2010 and committed to reduce 80% by 2020 (compared with 1997). In the UK, BT is contributing its good effort to protect the Climate Change by using only around 60% electricity consumption from normal channel and the rest 40% from renewable sources. For example, BT had successful managed the data centre energy more efficiency. New design of data centres has improved the way to cool the areas housing the equipment better. This helps to reduce 30-40% power than previous one. This has added up for all BT’s 107 data centres to save 500MW of electricity yearly.
Wind for change project
BT is also working on wind farms plan to generate up to one-quarter of its existing UK electricity requirements by 2016. This scheme is the biggest corporate wind power project outside of the UK's energy sector. With the planning cost up to £250m, BT will corporate with their renewable energy partners to safeguard future supplies of clean, green energy. This will equal to cut of 500,000 tonnes of CO2 yearly compared with coal generation.
Offer more efficient products to customers
BT always encourages and offers their customers the products that can save energy. For example, BT offers new cordless phone models which are energy efficient products to replace all tradition cordless telecommunications and fixed-line phones. This help to reduce overall more than 195,000 tonnes carbon dioxide emissions which is similar with the impact of 57,000 cars driving for a year and the customers can save more than £39m by this waste electricity bills.
Source: (Bristish Trade & Coutral Office Web Page)
(BT Group - Climate change Wep Page )
In the past few years, BT had faced a major issue which is the finance crisis in 2008. According to (Writer, Nov 14, 2008), the BT Global Services division had lost £53m ($78.3 million) in the quarter 3/2008, even though their revenue still increased 15% to $3.1 billion. EBITDA also fell 5.5% to $175.9 million. All losses had added up the BT's profit before tax dropped 11% to $872 million. However, BT’s revenue increased 4% to reach $8.1 billion, so the CAPEX is decreased 4%. The BT’s management had immediately looked this critical finance issues and planned to cut 10,000 employees by the end of the financial year 2008 to balance flagging profits caused by the BT's global services division.
However, at the end of quarter 4/2008, BT's profit had gone to very bad situation when it fell 81% to £113m ($160.3 million). The main reason is because of £501m operating loss of the BT Global services division. Finally, BT had cut off around 15,000 employees worldwide since 2009 with around 30% from BT global services division. The majority of these headcounts cuts are in the area of indirect labour, including contractors, subcontractors, agency and offshore workers. This headcount cut had reduced BT’s operation costs and establish the organization in excellent. These actions helped BT Group’s profit was up from £214m ($334m) in 2009 to £28m, even the sale fell 4% because BT’s operating costs reduced 6% to £4.4 billion during 2Q. Thus the EBITDA increased 6% to £1.3 billion. (Carroll, July 30, 2010)
In conclusion, with very long history since 1605 as a private enterprise until to today as a Public corporation, BT had faced a lot of major issues but its management board still can manage, apply suitable strategies and solutions to keep BT’s survival and growth. I have very strong belief that BT will continue to grow in long-run.
Source: (BT History Web Page)
How would you define the company’s strategy over the past few years?
BT’s strategy is to focus on building a better business to ensure its customers will get the best the services and support they deserve. BT believes that their better business will deliver a better future for BT, its customers and shareholders. BT also focuses on three areas such as customer service delivery satisfaction, operation cost transformation and investing for the future. These areas are essential building blocks to make better business. They are linked and support each other. BT believes that the better they serve their customers, the less time and money they will spend on reworking and fixing faults. BT strategy is to continue to transform their cost base to open new business opportunities to invest in BT’s future. (BT Vision, Strategy & Values Web Page)
What markets has it focused on?
BT has focused and successful renewed or extended lot of contracts with existing customers, including leading multinationals business in the UK and in more than 170 countries worldwide. BT also focuses on the Asia Pacific region as a major area for their business growth and making plans to further increase its capabilities to setup their business opportunities in these fast-growing regions. The new investments will not only continue build on the strong established markets but also focus to look forward new business opportunities in multinational customer’s growth plans. Key elements will be extending BT’s professional services, industry sector, innovation resources, enhance many products and services and establish the technology showcase centres where customers can directly see and experience BT’s leading edge products. (BT Group PLC, 2010, p. 25)
What are its core strengths?
BT has big market networks in more than 170 countries with a lot of existing customers.
BT has a lot of talent staffs within more than 97,000 BT’s employees to run successful businesses worldwide.
New customers feel trust and confident to sign contract with BT as they can get references from other markets how good BT’s products and services are.
BT continues to develop new products and services with can save power consumption and reduce CO2 emission which interesting the customers.
BT offers their employees competitive funds and additional interested benefits such as annual bonuses, good performance rewards, pensions, share-ownership plan and incentive programs to motivate, attract and retain the best employees.
Would you describe the company as innovative?
BT is always committed to developing the innovative solutions which will both benefit society and support their long-term development. BT encourages staffs continually to have innovative such as
Innovation of the cooling technique the areas housing the equipment in data centres to reduces the heat to save electricity consumption.
Innovation to find out the renewable energy sources like the solar photovoltaic renewable energy project in America and wind farms plan project to drive down CO2 emissions and reduce their operation costs.
Innovation to produce new cordless phone models which are energy efficient products to replace the tradition cordless telecommunications and fixed-line phones to reduce CO2 emissions and save electricity consumption.
BT also aims continually to win market share and to improve increase revenue by developing innovative products such as BT Business One Plan Plus which provide the first unlimited calls, lines, broadband and mobile option available to small businesses in the UK.
BT always embraces open innovation. One of them is the extension of their abilities to recruit new ideas from outside their own boundaries by the acquisition of Ribbit in the US in 2008. It provides BT a new open platform combining telephony and internet technologies in new ways that enables developers to create innovative voice applications and services.
Source: (BT Innovation Web Page)
(Bristish Trade & Coutral Office Web Page)
Vision, Mission, Goals
What is the company’s vision?
“Our vision is to be dedicated to helping customers thrive in a changing world. The world we live in and the way we communicate are changing, and we believe in progress, growth and possibility. We want to help all our customers make their lives and businesses better with products and services that are tailored to their needs and easy to use.” (BT Vision, Strategy & Values Web Page)
This means that BT vision is getting ever closer to their customers, understanding their lifestyles and businesses to establish the long-term relationships with them. BT is passionate about their customers and working not only to meet customer’s needs today but also continually innovating to meet their needs in the future. (BT Vision, Strategy & Values Web Page)
What are its goals?
BT’s goal is to provide excellent customer service in all market by putting customers at the heart of everything they do and maintain a competitive remuneration package that will attract, retain and motivate a high quality top team and align their interests with those of shareholders. (BT Group PLC, 2010)
How does it motivate its employees?
BT always treats their employees as important resources. BT aims to maintain a team of high-performing, engaged and motivated people who can make a difference for customers, shareholders, the company and themselves. The quality of their leadership is vital to BT’s continued transformation. BT aims to ensure leaders at all levels understand what is expected of them and have access to appropriate development opportunities. BT’s goal remains to maintain a competitive remuneration package that will attract, retain and motivate a high quality top team and align their interests with those of shareholders. BT believes in pay for performance will motivate their employees. BT aims to set base salaries below the median for its comparator group, while setting stretching goals for the annual bonus (including deferred shares) and the long-term incentive share plan. It is only in return for sustained and excellent performance that the remuneration package as a whole will deliver upper quartile rewards. (BT Group PLC, 2010)
Another BT’s motivating perspective is the way BT looks after their people, and encourages them to grow and develop to a best one by themselves. Every employee will have their own Development Action Plan, specially tailored to help them succeed in their job and progress in their career. BT also motivates its employees by actively encourage their flexible working hours and option to work remotely if possible. BT always tries to do their best to make sure their employees have a healthy work and life balance. (BT Helping our people to make a difference Web Page)
Would you like to work for this company and why?
BT is a well known communication industry leader. As all above researches, I am impressed by BT’s success and portfolio. BT has more than 97,000 employees worldwide. BT’s policy is to keep and invest more on good performance people. BT runs a retention service to make sure that talented employee will stay with BT even if their capabilities change. BT business may slow down in short-term like last 2008 but with a talent management board, its business is always recovered as their long-term commitment. I am feel trust and very confident with BT long-term successful.
With 5-year experience as a Service Manager in a Global Telecom Company, the BT Global Service is the division that I am proud to work with. I believe the BT Global Service is the place can fit with me where my background, skills and experiences can be utilized and developed. If BT is going to setup its business in Vietnam, I think that I could make a meaningful contribution to BT development and growth there.
People join to work for a company for many different reasons which depend on what they are looking for. For some, it’s because they want to have a good salary and bonus. For others, it’s because of the good way that the company look after the employees, and encourage them to grow and develop to a best one; or just because they want to be trained and get experience in new industry; or simply because they like to help people get very best benefits of interesting communications. As my research result, I believe that BT can provide us all of above. BT is the very good company for telecommunication engineers to joint, especially for talented people.
However, I prefer to stay with my current Ericsson Company since Ericsson is also providing the similar and as my loyalty. So I will try my best to complete this MBA program in order to apply to higher position in Ericsson.
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