British Telecom Essay -- GCSE Business Management Studies Essays

British TelecomMy aim in this investigation is to discuss whether or not BritishTelecom has successfully grown and developed since its Privatisationto compete on a world scale. In addition to this has it any long-termstrategies for future growth and development of products.According to the 1996 work out Red Book, more than 50 major businesses claim been privatised since 1979 and the state owned sector of industryhas been reduced be two-thirds. British Telecom was privatised in1984, with no major restructuring. This meant that a public monopolywas transferred directly into private hands, this natural monopolybenefited from having economies of scale. Of scat this move had itsadvantages but there were also disadvantages. These were mainly amongthe staff who now had often less of an easy time in work. Not onlythis but as a result of privatisation the company obviously becamecost effective and jobs were lost in cast to reduce costs.Privatisation is seen as a way of reasserting consume r sovereignty,raising standards of provision, of increasing efficiency and ofreducing costs.There are many reasons to why the Government chose a course ofdenationalisation. State monopolies create inefficiency, are poor ininnovation and restrict consumer choice instead of the consumer beingsovereign, power has been transferred to the state and itsbureaucracies. Before privatisation all nationalised companies had tohave their expenditure passed by the Treasury, because of this theyfound it difficult to raise money. During these years almost 250,000people who wanted a new phone line couldnt get them and BT didnt cope what to charge the people who did have them. Privatisation gavecompanies t... ...nge from Mercury and have seen their share pricerise from an initial 130p back in 1984 to an incredible 1351p now.BT, while being a natural monopoly in Britain realise that theirposition is being challenged. Although their share of the land-linemarket has still nearly been all encompassing t hey have seen that themarket as a whole decrease as almost half of the UK population havegone out and bought mobile phones. In answer to this threat BT haveinterpreted up a strong position in the mobile phone market themselves,competing alongside the big guns such as Orange and Vodafone. Throughseveral(prenominal) acquisitions they have established themselves as a leadingcompany with 7 million UK customers and very sound plans for thefuture, which they see as being a merger of the latest mobilephone technology along with the immense power the Internet has tooffer.