Task: Porter's Five Forces Analysis of British Telecom (BT)
Must include graphs when useful and, more importantly, references to source material
Topics to answer for assignment:
1: Provide a description of British Telecom and a short history of them.
2: Describe the market.
3: What is the product line and geographic region served?
4: Consider the competition. How many firms are direct competitors to British Telecom?
5: What do you believe the 4-firm concentration ratio is in this market? Is British Telecom one of the 4 largest firms? Are all firms the same size? Is there a large amount of price competition or non-price competition in this market? Or both? Explain.
6: How easily can new competitors enter this market? What are the barriers that prevent entry? When was the last time a new competitor entered this market?
7: Beyond direct competitors, are there other firms that you view as providing a substitute to British Telecom's product? Who are they? How close to a substitute is their product? What is the potential for these other firms to become direct competitors of British Telecom?
8: Does the success of British Telecom's product, that is their sales, depend on the success of sales by another firm? Has British Telecom formed a sales alliance with another firm? (Could be a joint marketing campaign perhaps)
9: Does British Telecom have a degree of monopoly power in buying raw materials, negotiating labor contracts, hiring, or borrowing funds? Do they have a significantly different relationship with suppliers than other companies in the industry? Or, does everyone face the same basic prices for inputs in production (basically discuss vertical integration)?
10: Does British Telecom have a degree of monopoly power in selling their product? Why or why not?
11: Do buyers of British Telecom products have a degree of monopoly power? Why or why not?
12: What external factors do you believe play a large role in the success or failure of British Telecom? Explain why?
13: Considering all of the answers, what is the greatest source of risk and uncertainty for British Telecom? Why?