Case Study Description of BT Plc: The Broadband Revolution (A)
To maximize their effectiveness, color cases should be printed in color.In early 2003, CEO Ben Verwaayen and Chief Broadband Officer Alison Ritchie of BT Plc. are trying to transform the former British Telecom from a stodgy telephone company into a 21st century broadband company. Their efforts to focus the firm on broadband issues within the UK are being thwarted by a reluctant management team. Discusses the problems Verwaayen and Ritchie face in forging a social revolution within BT and illustrates the challenges of cross line of business innovation. Includes color exhibits.
Authors :: Michael L. Tushman, David Kiron, Adam M. Kleinbaum
Swot Analysis of "BT Plc: The Broadband Revolution (A)" written by Michael L. Tushman, David Kiron, Adam M. Kleinbaum includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bt Broadband facing as an external strategic factors. Some of the topics covered in BT Plc: The Broadband Revolution (A) case study are - Strategic Management Strategies, Collaboration, Innovation, Organizational culture, Organizational structure and Communication.
Some of the macro environment factors that can be used to understand the BT Plc: The Broadband Revolution (A) casestudy better are - – there is increasing trade war between United States & China, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of BT Plc: The Broadband Revolution (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BT Plc: The Broadband Revolution (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bt Broadband, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bt Broadband operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of BT Plc: The Broadband Revolution (A) can be done for the following purposes –
1. Strategic planning using facts provided in BT Plc: The Broadband Revolution (A) case study
2. Improving business portfolio management of Bt Broadband
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bt Broadband
Strengths BT Plc: The Broadband Revolution (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bt Broadband in BT Plc: The Broadband Revolution (A) Harvard Business Review case study are -
Training and development
– Bt Broadband has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BT Plc: The Broadband Revolution (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Communication field
– Bt Broadband is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bt Broadband in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Bt Broadband has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in BT Plc: The Broadband Revolution (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Bt Broadband has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Bt Broadband is one of the leading recruiters in the industry. Managers in the BT Plc: The Broadband Revolution (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Bt Broadband is present in almost all the verticals within the industry. This has provided firm in BT Plc: The Broadband Revolution (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Bt Broadband
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bt Broadband does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Bt Broadband is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bt Broadband is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BT Plc: The Broadband Revolution (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Bt Broadband digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bt Broadband has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Bt Broadband in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the BT Plc: The Broadband Revolution (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Bt Broadband in the sector have low bargaining power. BT Plc: The Broadband Revolution (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bt Broadband to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses BT Plc: The Broadband Revolution (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BT Plc: The Broadband Revolution (A) are -
Slow decision making process
– As mentioned earlier in the report, Bt Broadband has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Bt Broadband even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Bt Broadband is dominated by functional specialists. It is not different from other players in the Communication segment. Bt Broadband needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bt Broadband to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study BT Plc: The Broadband Revolution (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bt Broadband 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bt Broadband supply chain. Even after few cautionary changes mentioned in the HBR case study - BT Plc: The Broadband Revolution (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bt Broadband vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Bt Broadband has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BT Plc: The Broadband Revolution (A), is just above the industry average. Bt Broadband needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Bt Broadband needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study BT Plc: The Broadband Revolution (A), it seems that company is thinking about the frontier risks that can impact Communication strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Bt Broadband has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Bt Broadband, firm in the HBR case study BT Plc: The Broadband Revolution (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Bt Broadband has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities BT Plc: The Broadband Revolution (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study BT Plc: The Broadband Revolution (A) are -
Manufacturing automation
– Bt Broadband can use the latest technology developments to improve its manufacturing and designing process in Communication segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Bt Broadband has opened avenues for new revenue streams for the organization in the industry. This can help Bt Broadband to build a more holistic ecosystem as suggested in the BT Plc: The Broadband Revolution (A) case study. Bt Broadband can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bt Broadband is facing challenges because of the dominance of functional experts in the organization. BT Plc: The Broadband Revolution (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Bt Broadband can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Communication segment.
Loyalty marketing
– Bt Broadband has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Bt Broadband to increase its market reach. Bt Broadband will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Bt Broadband to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Bt Broadband can develop new processes and procedures in Communication industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bt Broadband to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bt Broadband to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Bt Broadband has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study BT Plc: The Broadband Revolution (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bt Broadband to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bt Broadband can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bt Broadband can use these opportunities to build new business models that can help the communities that Bt Broadband operates in. Secondly it can use opportunities from government spending in Communication sector.
Leveraging digital technologies
– Bt Broadband can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats BT Plc: The Broadband Revolution (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BT Plc: The Broadband Revolution (A) are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bt Broadband.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bt Broadband needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bt Broadband in the Communication industry. The Communication industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Bt Broadband high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bt Broadband with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bt Broadband can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study BT Plc: The Broadband Revolution (A) .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Bt Broadband can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Bt Broadband needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Communication industry regulations.
Increasing wage structure of Bt Broadband
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bt Broadband.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bt Broadband in the Communication sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BT Plc: The Broadband Revolution (A), Bt Broadband may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Weighted SWOT Analysis of BT Plc: The Broadband Revolution (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study BT Plc: The Broadband Revolution (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study BT Plc: The Broadband Revolution (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study BT Plc: The Broadband Revolution (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of BT Plc: The Broadband Revolution (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bt Broadband needs to make to build a sustainable competitive advantage.
