How the European market affects the way a firm

Throughout this assignment I will try to give a clearer description on how the European market affects the way a firm is willing to operate as a business. The business I have decided to focus on is mmO2. This is the new operating name of BT Cellnet, a very well firm known all over Europe, especially in the United Kingdom. It also has major opposition from many forms in the market including Vodafone, Nokia, Orange and Virgin. I will be able to identify the factors that are going to affect the way my business will operate.

This includes legislation that they have to uphold, opportunities and threats presented to them by the European Union, positive and negative effects of monetary, social and competition policies, impact of cultural differences and the way their target market will react to continuous changes in the sports wear industry. My business has a monopolistic stronghold on the market and is able to dictate prices to their customers knowing full well that teenagers and young adults are willing and able to pay for these products because of a greater disposable income.

In this assignment I will give my own views on how they should maximise their opportunities and minimise their threats, how they could gain a greater market share in Europe after taking advantage of their own home market. BT Cellnet was created in January 1985 with the aim of providing a quality mobile phone service to all its customers. In the first year 25,000 people joined the cellnet network and that number continued to increase throughout the years.

In September 1998 BT Cellnet's dominance in Britain became more apparent as they were the first UK mobile phone Company to cover 99% of the UK population. As we enter a new age of mobile phone technology, BT Cellnet are always looking at ways of improving their service. This is why in February 1999, BT joined up with Genie Internet to become an Internet Service provider- a first of its kind. BT Cellnet then suffered a dip in sales so to combat this; they felt they needed a new image.

Then in the summer of 2001, BT changed the image and the name of their mobile phones- mmO2. mmO2 completed a de-merger from British Telecommunications plc on 19 November 2001. As a result of this de-merger, mmO2 plc operates its operations as an independent entity with key subsidiaries in the UK, Germany, the Netherlands, Ireland and the Isle of Man. mmO2 plc is listed in the London and New York stock exchanges. As at 31 March 2001, the mmO2 businesses served 16. 5 million mobile customers in the UK, Germany, Ireland, the Netherlands and the Isle of Man.

The group's mobile businesses in these countries are all wholly owned and together they cover the territories with a total population of over 160 million people. The combined turnover for the year ending 31 March 2001 reached 3,200 million, up 22% from 2,618 million for the preceding year. The European Union was created with the aim of helping to make the lives of its citizens better in all areas of life. However it also had a major effect on the way a business operates within Europe.

Even before the Second World War, many felt that there was a need for a unified Europe. After the war many people around the world felt major affects, as many lost loved ones, their homes and their jobs. The first steps to create a united Europe was marked by the signing of the North Atlantic Treaty in 1949. This meant that a united Western Europe was being created and it separated military decisions from political and economic developments within countries.

The 'father' of the E.U, Jean Monet, started the solution by introducing the European coal and steel community (ECSC) between Italy, West Germany, France, Luxembourg, Belgium and the Netherlands in 1952. This created a single market between the coal and steel industries and helped to improve its efficiency. From a political point of view, it was able to monitor the essentials of war-making capacity. As the Cold War continued, the member states signed a European Defence Community (EDC) to make sure Western Europe were in tandem concerning their defence of Europe.