On January 15 2016, BT Group's £12.5bn acquisition of EE was cleared by Competition and Markets Authority (12), successfully creating a new player in UK's telecom market. With EE's best and fastest 4G coverage of UK, BT's ownership of Openreach, and largest market share in their respective markets, the merged company certainly is the largest in the very competitive market.
This report aims to present an improved quadplay service, and strategies concerning synergies and talent and time management during the acquisition to board of directors. It also addresses the changes in name and colour scheme of merged companies.
Quadplay is a telecommunication package bundling TV, landline, broadband and mobile together into one service, emphasising simplicity, convenience, and practicality. Both BT and EE already offer quadplay in a limited sense – it is not fully customisable. However, what is being proposed here is a completely personal quadplay package Tetra by BT. Tetra offers flexibility in a way no other package
does as it allows the customer to choose their broadband speed, TV channels, landline minutes, with option to opt-out, and a fully customisable mobile package.
For easier access, certain Tetra bundles would be pre-prepared, some with all four components, others with landline or mobile missing. The process of selection a package would be rather simple, online or in-store, by clicking though selection of pre-made TV channel bundles, broadband speeds, choice of landline and pre-paid minutes and then a separate process to pick a mobile package, with certain amounts of minutes, texts and data. The process of picking out a mobile plan is presented below this in figure XX.
BT Group has a combined revenue of £6,029 in third quarter of 2015/2016 (2) and a wide range of products, both considerably larger than its competitors Sky and Virgin media have. A thorough external and internal analysis is required to understand and argue why there is no better time than present to introduce Tetra by BT.
With careful examination of external factors through qualitative PESTLE analysis in Appendix XX (Boddy, 89), it can be seen that BT's major external concerns are social and economic factors as they impact customer power and trends and needs in society. Political factors also play a considerable role as possibility of Brexit and decreased stability in Middle East have the potential to change economy by a substantial amount. While economic growth in 2015 was positive, and the minimum wage has increased, the cost of living also rose, resulting in ‘more confident consumers' (15).
Porter's five forces analysis shows competitive and profitability forces as building blocks of strategy (16). Competitive rivalry is the highest pressure force and therefore a potential weakness as customers may leave for other providers because of better suited offers and lack of loyalty schemes with BT. Telecommunications market is a highly competitive market with many players competing for a limited number of customers with different deals and promotions. BT has 4 main direct competitors in broadband and TV area of market, of which 2 offer quadplay, and 5 competitors in mobile service market. BT and EE combined had 36% share of market at end of 2014 (10). In March 2015 Three agreed to purchase O2 (3) and Sky announced launch of their UK mobile phone service (11) so market is in process of restructuration and making its future growth hard to forecast. Evidently, large conglomerate corporations are a certainty in near future of UK's telecommunications market.
Through SWOT analysis (see Appendix XX) the internal strengths and weaknesses and the external opportunities and threats are brought together (Boddy). Especially important section here is ‘Weaknesses' as it shows where improvements within the merged company are necessary (see Synergies).
Lewin's Force field analysis shows the restraining and driving forces that change the temporary dynamic equilibrium in environment of company. (Boddy 296; 20)
• First in the market that has done quadplay to that extent (5)
• Potential new customers that need personalized packages without services they don't need (4)
• Relatively easy to make implement the product as market research is being constantly done (3)
• Infrastructure is already in place (3)
• Brings all telecommunication services together in one package – no need of different providers (2)
Tetra by BT
• Is of no use to corporate buyers who already have different deals, so it applies only to individual buyers (5)
• Individual buyers already have chosen providers so this limits the target market (4)
• People might find it confusing and not like it or find it useful (3)
• Public opinion of terrible customer service may drive potential customers away (2)
• Affects current packages and deals (1)
Thus, the introduction of Tetra by BT can be justified through Lewin's Force field, PESTLE, SWOT, and Porter's Five force.
From marketing's perspective, attention should be paid to spending behaviour of target markets and neki beki.
Boston matrix helps identify the projects that need prioritising in a way that ‘star products' and ‘question marks' get money from ‘cash cows' (21). Tetra by BT would fall into ‘star products' category because of favourable dynamics on market.
According to Vizjak (25) strategy for synergies ‘should be based on identification of affinities inside the firm, up-front quantification of synergy potential, formulation of a clear horizontal strategy, … and implementation of organizational mechanisms to eliminate the barriers to synergy realisation'.
Starting with identification of affinities, Porter's value chain for BT (see Appendix XX) shows that while outbound logistics (4G and fibre) will be BT's selling point, they are also the ones that need the most improvement alongside with service. Similarly, ‘Weaknesses' in SWOT analysis (see Appendix XX) show areas of necessary improvement in a more straightforward way.
Acquisition of EE has put BT in a unique position on the market, as BT has the perfect opportunity to successfully implement quadplay in their product range and at same time solve some of the weaknesses. EE has approximately 553 retail stores all over UK (18) which could be put to use by BT as walk-in stores for their products. Help on new offers, faulty products and service queries should be provided from there by well-trained employees in a very Apple Genius bar way. The stores should keep the EE logo, with a smaller BT logo underneath it.
As both companies are known for poor customer service, joint call centres built in UK are a perfect solution to this. Simultaneously it would provide more jobs for people and increase their customer satisfaction with faster response rate.
During a merge of companies, speed in making changes is important. If the changes are not implemented during the first fiscal year, they will most likely not be implemented at all (26). Remaining realistic with cost-savings is of great importance as one-time costs and future projections are likely to stray from the predicted course (26).
Some synergies are already taking place, with BT announcing BT Mobile which runs on EE's network. Similarly, other synergies concerning managers for both companies should not pose a problem as companies' values are similar.
Talent management deals with retaining and obtaining best people available while simultaneously keeping them motivated and providing sources for growth on the long-run.
According to Kanter (27) employees work better and are more likely to stay with merged company if managers keep them informed, give them certain control over their actions, make the workload manageable and leave habits and routines of employees as they are or change them slowly. With that taken into consideration, some people are going to leave no matter what, but it is important to keep the most diligent.
BT and EE endorse similar values and show comparable mission statements along the lines of improving their service and their customer experience, so adapting new company values should not be a problem for managers. Keeping employees and managers motivated during the times of change, however, may be more problematic. This is why pursuing the open system model is proposed. It draws attention to links between the internal parts of the system, between the whole system and the outer environment (28) to create a supportive environment.
Basing on open system, respect of psychological contract is very important for employees' motivation, productivity, and co-operation. Breaking of the contract from employer's side is seen as not respecting employee's opinions and knowledge (23). According to Maslow's hierarchy of needs which puts self-actualisation atop the pyramid of needs (23), ‘people seeking self-actualisation look for personal relevance in their work, doing things that matter to them' (22), making them motivated in a more intrinsic manner. This behaviour is favoured with McGregor's Theory Y which supports conditions in which creativity, imagination and ambition can be expressed in a way they co-create an inspired working environment, resulting in positive results for everyone (22).
Herzberg's two factor theory provides a different outlook, taking into account motivation factors as well as hygiene or maintenance factors (22). Motivation highly depends on the person – if manager is working on an intrinsically challenging and rewarding task, they are more likely to be motivated.
Both intrinsic and extrinsic rewards are valued by people. From Maslow's, McGregor's and Herzberg's theories under assumption people want both intrinsic and extrinsic rewards, ‘job characteristics theory' was developed by Hackman and Oldham (29). By taking care of providing job characteristics that satisfy psychological states by using implementing concepts, the motivating potential of job and therefore motivation of employees increases. For example, workers in call centres could be motivated by de-routinizing their jobs by giving them a chance to work in a store and help people face to face, which would give the workers the feeling of autonomy. Publicly endorsed importance of good customer service could be also motivating as it would make them feel more significant to the company.
Kle dodej screenshot iz knjige
When Orange and T-Mobile merged to create EE, their respective names remained the same, however all new services and products were named and branded as EE. A similar approach is being proposed here, EE and all its current products shall keep the name, but all future services shall be branded BT. It is suggested to keep website ee.co.uk live but make is to that it is redirected to a BT domain. Tabs for EE&Me shall stay as they are, including EE for Orange and T-Mobile, which shall be renamed into BT for Orange and T-Mobile. EE's retail stores shall keep their logos for a year, while adding a smaller (by BT) underneath it. All formal documents from BT or EE should have the header of BT.
BT's logo shall change so it incorporates one of EE's recognizable circles. For colour schemes it is proposed to keep the BT's signature colours on all platforms.
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