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Extensive SWOT Analysis of O2 – A British Telecommunications Services Provider

Updated on: Feb 11, 2022
SWOT Analysis of O2 - Featured Image

The Last time we explained the SWOT analysis of arguably the world’s most famous sports car designer, Ferrari. This time, we will take a deep look at the SWOT Analysis of O2.

O2 is one of the leading mobile operators in the UK. They’ve been operating since 1985, they have been in the market for more than a century of technical achievements and they think that the future looks just as exciting as it. Why? Because we all know how important networks are these days and are they going to be in the future.

Another important aspect is O2’s marketing efforts. As noticed the world is going online and the marketing is changing completely. So if you think you are interested in knowing more about the online world – check out our Free Digital Marketing 101 Masterclass by the CEO and Founder of IIDE, Karan Shah. 

Do you want to learn how O2 became so successful in the network industry? In this blog, we will learn about the SWOT Analysis of O2 and decode the answer. Before we begin, let us learn more about O2 the company, its founding, products, financial status and competitors.

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About O2

SWOT Analysis of O2 - O2

O2 UK is legally incorporated as Telefonica UK Ltd, a British telecommunications service provider. It is headquartered in Slough, England. It is operated under the O2 brand. It’s owned by a joint venture between Telefonica and Liberty Global together named Virgin Media O2 with a share of 50:50. It has 31.8 million subscribers from its launch till September 2021. O2 was formed in the year 1985 on the 7th of January as Cellnet, after several named changes by BT Group it finally got a name O2 in the year 2002.

Quick Stats on O2
Founder John Carrington
Year Founded 1985
Origin The United Kingdom
No. of Employees 1,13,182
Company Type Public
Market Cap $3.82 Billion (2021)
Annual Revenue £ 6.510 Billion
Net Income/ Profit N/A

 

SWOT Analysis of O2 - O2 Germany


Products by O2
 

O2 has contributed to the telecommunication industry with various products for more than a century.

  • Broadband
  • Promotions & prize draws
  • Finance & insurance
  • Online shop
  • Other products & services
  • Archive
  • Website terms of use
  • Mobile


Competitors of O2
 

The following are some of the close competitors of O2:

  • Tango networks 
  • TeleTrust
  • Spoke Phone
  • Orange
  • China Mobile
  • Open Garden


Now as we are familiarized with the company brand and business let’s shovel into the SWOT analysis of O2.


SWOT Analysis of O2 

SWOT analysis is a strategic planning tool that can be used to do a situational analysis of the company by measuring strengths, weaknesses, opportunities and threats, the company is facing in its current business environment. 

It deals with two factors: internal and external. Strength and weakness are based on internal factors whereas opportunities and threats rely on external factors of the company.

To better understand the SWOT analysis of O2, refer to the infographics below:

SWOT Analysis of O2 - SWOT Infographics of O2

Below is a step-by-step detailed guide to help you with the SWOT analysis of O2.

Strengths of O2

The brand’s competence gives an edge over capturing the maximum market in the industry and earning more profits. Hence here we go with the strengths as follows:

  • Customer Base: The total registered customer base of O2 by the end of 2020 was 31.8 million inclusive of contract and non-contract customers and the active customer base was 30 million. O2’s strong customer base is one of its strengths.
  • Great Deals: O2 is known for the best big data plans. Whether it is an unlimited data plan or a 100 GB plan it continues to serve the customers with great deals. O2 has a complete edge over the market when it comes to big data plans.
  • Automation of Activities: One of the major strengths of O2 is the automation of all the activities and projects which has brought a good amount of consistency in the quality of the products. This automation has given an edge-over to O2 to scale up and scale down according to the demand and conditions of the market’s current situation which is working from home & office. 

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  • High Level of Customer Satisfaction: The company has efficiently managed loyal and dedicated customer relationships. Thus a high level of satisfaction can be seen in the customers and good brand equity among the potential customers can be seen. 
  • Skilled Workforce:  O2 has invested huge resources for the training and learning programs for its employees. This results in the formation of a highly skilled and quality workforce, which is not only skilled technically but also highly motivated to achieve their aim and make innovations. 
  • Network Coverage: O2 has excellent network coverage. It reaches 99% of the population of the UK and Ireland. 


Weaknesses of O2

Every coin has two sides, now after a bunch of the strengths there come the weaknesses of O2.

  • High Prices for Small Plans: O2 struggles when it comes to the pricing of its budgeted devices. Its pricing seems to fall slightly on a higher side in small data plans ranging between 1 – 5 GB.  O2’s competitors seemed to have an upper hand when it comes to small budgeted plans.
  • Competition with Brands Affecting the Market: Although O2 has a unique marketing strategy the new brands and other existing brands are also coming up with new strategies. But to maintain the position of best telecom services they need constant advertising, improvement in their products and this causes the majority of the expenses of the brand.
  • Reliance in UK Market for Major Revenue: As O2 has its main headquarters in the UK and it is providing the services more efficiently and gets major revenue from the UK. It is mostly dependent on the UK market and hence lacks revenue from worldwide.
  • Customer Service: Customer services offered by O2 is around average. Research conducted by Ofcom in 2021 stated that 23 of every 100,000 O2 subscribers complained about the customer services not being up to the mark. 
  • Limited International Presence: O2 currently operates in only eight markets around the world. It should consider operating in other countries, to expand its business and create strong brand recognition and awareness in the market.


Opportunities for O2

There is always a way to add an extra mile to your work and improve sales, marketing, and profit.

  • Internet Users: According to Statista.com, there are over 4.66 billion active internet users in the world. O2 has a huge opportunity to increase its customer base by providing affordable data plans. 
  • New Environmental Policies: The new opportunities will open doors to a level playing field for all the players in the industry. It provides a good opportunity for O2 to drive the advantage home buying new technology and gain market share for new product categories. Also to sustain the potential customers as well as loyal ones.
  • Stable Free Cash Flow: The stable cash flow provides opportunities to invest in adjacent products. Hence when more cash is with the company can think of some new technologies and product segments to increase the market share. 
  • Customer Base: O2 has the widest network coverage in UK and Ireland. The network coverage in Sweden and Indonesia is quite less in comparison to the other countries where O2 operates. O2 can take the opportunity to build a large and strong network coverage.


Threats to O2

The environmental factors can prove to be a threat to the company and are harmful. Here are some threats:

  • New Entries: The new entrants like Reliance are gaining market due to some policies and absorbing the market share of the existing telecom services. Hence, O2 faces threats from such new brands as it may steal loyal customers.
  • Technical Advancement: The new competitors in the race are with some advanced technology reducing the overall market share of O2.
  • Challenging & Competitive Market Conditions: Intense competition has led to a declining active customer base, in particular for non-contract customers. Aggressive competition from other telecom brands results in the problem of retaining customers.

This ends our detailed SWOT analysis of O2. Let us conclude our learning below.

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To Conclude

O2 has been a huge success in the markets in which it is operating, but it still lacks in global presence as well as partner presence. It should expand its business in other parts of the world through joint ventures, merging or by starting its operations and partnering with other companies to increase its brand presence.

China, India and the US have the highest number of internet users. O2 should now focus on expanding their business in these O2 markets as well in the developing countries where internet users are increasing rapidly. 

With its extensive marketing skills, it has a wide reach but has to undergo tough competition due to an increase in demand and various other competitors coming up with new brands and strategies. 

In today’s dynamic world digital marketing is of utmost importance. Hence, improving marketing skills is very paramount for digital marketing enthusiasts. If you are intrigued with the above piece of information in learning more and upskilling, check out the 3 Months Advanced Digital Marketing Course by IIDE to know more.

We hope this blog on the SWOT Analysis of O2 has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of O2, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of O2 in the comments section below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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