BT Group plc SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by BT Group plc managers to do a situational analysis of the firm . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) BT Group plc is facing in its current business environment.

The BT Group plc is one of the leading companies in its industry. BT Group plc maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the BT Group plc to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect BT Group plc strengths, and eradicate its weaknesses.

Step by Step Guide to BT Group plc SWOT Analysis

Strengths of BT Group plc – Internal Strategic Factors

As one of the leading companies in its industry, BT Group plc has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of BT Group plc are –

Read - BT Group plc Porter 5 Forces Analysis & Industry Analysis
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Strong Free Cash Flow – BT Group plc has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Strong distribution network – Over the years BT Group plc has built a reliable distribution network that can reach majority of its potential market.
Automation of activities brought consistency of quality to BT Group plc products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Superb Performance in New Markets – BT Group plc has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
Good Returns on Capital Expenditure – BT Group plc is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Weakness of BT Group plc – Internal Strategic Factors

Weakness are the areas where BT Group plc can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
Limited success outside core business – Even though BT Group plc is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, BT Group plc needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
High attrition rate in work force – compare to other organizations in the industry BT Group plc has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
Investment in Research and Development is below the fastest growing players in the industry. Even though BT Group plc is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
The profitability ratio and Net Contribution % of BT Group plc are below the industry average.

Opportunities for BT Group plc – External Strategic Factors

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The market development will lead to dilution of competitor’s advantage and enable BT Group plc to increase its competitiveness compare to the other competitors.
New trends in the consumer behavior can open up new market for the BT Group plc . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
The new technology provides an opportunity to BT Group plc to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for BT Group plc to capture new customers and increase its market share.
Government green drive also opens an opportunity for procurement of BT Group plc products by the state as well as federal government contractors.
New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for BT Group plc. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of BT Group plc.

Threats BT Group plc Facing - External Strategic Factors

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
Liability laws in different countries are different and BT Group plc may be exposed to various liability claims given change in policies in those markets.
Imitation of the counterfeit and low quality product is also a threat to BT Group plc’s product especially in the emerging markets and low income markets.
The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for BT Group plc in those markets.

Limitations of SWOT Analysis for BT Group plc

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of BT Group plc
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of BT Group plc

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis BT Group plc managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of BT Group plc

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)