TalkTalk Telecom Group SWOT & PESTLE Analysis

Strength

1. UK’s leading value for money connectivity provider: Ever since entering the markets in 2000s, TalkTalk has positioned itself as a market leader for providing value for money connectivity to its customers. Currently, the company is involved in delivering fixed and mobile services, TV to its large customer base of nearly four million customers. The broadband customers of TalkTalk include end consumers (TalkTalk brand), small businesses (TalkTalk business) and resellers (wholesale), which account for 96% of the entire Britain’s population. Owing to the company’s quest for establishing itself as an innovative challenger brand and to be in alignment with the latest trends, TalkTalk has plans to invest further in the fibre connectivity. For instance, FibreNation was launched by TalkTalk with the intention to fulfill the outreach of Fibre to the Premises (FTTP) to three million customers.

2. Continuous efforts to leverage the driving cost efficiencies: With the company’s continuous efforts to provide its customer base of 4.3 million customers with best affordable prices, TalkTalk strives to achieve cost leadership over its competitors by operating in an efficient value chain. Over the previous two years as of FY19, the company has been successful in minimizing costs by cutting down transition costs and making notable savings thereby. Along with this, the shift of focus to a more non-core service provider has enhanced prioritization in making capital investments in different avenues. The self-serving customer service feature of the digital tools and digital incorporated business model of TalkTalk has enabled the network transformation initiatives to leverage the efficiencies of newer technologies by increasing the capacity and decreasing the costs. Moreover, TalkTalk has plans to shift the headquarters to a single campus at Salford from London to reduce the administrative costs.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

1. Demographic changes in the telecom marketplace: Demographic characteristic include the mortality rates, migration trends and the socio-economic factors, which can further affect the marketing strategy adopted by the company. TalkTalk has positioned itself for the target segment of customers in the age group of 25-55. So, in order to realize the full potential of the segment and venture into newer ones, TalkTalk needs to study the demographic trends which affect the customers’ decisions. For instance, in the 2018 UK Communications Report by UK, it was mentioned that seven out of each ten commuters use smartphones on their journey to access the internet services. The fixed broadband has remained stagnant whereas the mobile phone usage has increased significantly. It was also found out that the greatest increase in the number of users were in the age group of 15-35. TalkTalk needs to be aware of these trends to satisfy the needs of its customers.

2. Changes in the customer buying decisions with respect to pricing: TalkTalk, having established itself as a value for money provider of telecom services, needs to understand the extent of ethnocentrism of the customers to understand their preferences. Trying to understand the consumer interests and analyzing and forecasting the purchasing power of the customers provides a glance into their consumption as well as spending patterns. Studying all these aspects might help the company to come up with proper pricing strategies for its offerings. As per UK’s telecom sector regulator Ofcom, pay monthly type of mobile subscriptions fetch the maximum number of customers and the average data used by fixed broadband line has been increasing. To attract or retain the existing customers who bring a large chunk of revenues to this sector, TalkTalk can introduce lucrative discounts and simultaneously.

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Technological

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Legal

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Environmental

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