Electrical Energy (EES) Company Limited has been founded in the year 2015. The company has been seeking to preserve future demand of Energy Storage System and current growing demand on Lithium ion battery and UPS in Asia market. The plan of the company is to become a Samsung distributor for Energy storage system and to be a reseller of UPS and Battery for leading company in the market. The company has looked and has also desired to provide quality solution and services to customers.
The major theme that reflects in the business of the organization is to offer energy storage system to large multinational firms such as Samsung. Since the market has quite a large potential and the customers can actually use the services offered by Electrical Energy (EES), therefore the growth prospect of the firm remain high and quite significant.
The company has been planning to start its operations from the local market. The company is based in Japan; therefore, it shall start its operations from the Asian market. The company has planned to offer its services primarily to the Samsung distributor for the Energy storage system and it is also planning to offer its services for the UPS.
The vision statement of the company is to offer sustainability and quality to the customers. The vision of EES also includes bringing to the world a systematic approach with quality products that shall satisfy the need and desire and needs of the customers. Along with this, the vision of the company is to rather maximize the long term sales and revenue while being a highly efficient and fast moving organization in the energy sector.
The mission of EES is to preserve future demand of Energy Storage System and current growing demand on Lithium ion battery and UPS in Asia market.
The political situation for the company is quite reasonable. The reason is simple; the government has been supportive of the business that has been taken up by EES. Since the company plans to provide and distribute energy storage system therefore, the government has offered subsidiary over this business model (Gomez-Mejia, 2008).
Moreover, the political situation is rather stable for the country and it has been offering support to the industry players. Since EES is a new company, therefore, the government would be more concerned because of the high energy demands. The political connection has a huge impact, though to shift the position of the business from growth to decline. The overall political is somewhere between stable and moderate for EES.
The economic situation for the country is quite stable. Moreover, the economic situation of the country is quite stable which offers energy sector companies to become a part of the market. Furthermore, the country has a strong gross domestic product therefore; it can be said that economic situation of the country has been favoring the energy sector and specifically EES.
Although the country has suffered immensely from the economic crisis that occurred in the last quarter of 2008 however, the economy has done tremendously well to bounce back and bring the economic outlook back on track.
By the end of last year, the economy started to show signs of development and is on the verge of becoming the strongest once again. The services and the manufacturing sector have a major role to play in developing the economic health of the country (Gomez-Mejia, 2008).
The consumers’ spending pattern has been one of the most important issues in the country, unlike other countries where the element of consumer spending pattern is not an issue specifically in the western world. On the other hand, the country has another major issue in the form of racism which is another concerning factor for those wanted to initiate businesses or become entrepreneurs.
The country has one of the premium business sectors and is providing the best facilities to the customers in this regard. Along with this, the labor issue significant for the new businesses and finding young and long serving employees are a concerning factor. The country offers low wage labor, but it is difficult to find the right mix of customers and population. Secondly, poverty is an issue that can seriously disrupt the overall operations and it has become an essential and an integral to witness the location and make sure that the territory is clear from such issues.
The technical expertise for the country is quite unique and encouraging. EEC can actually benefit from the successful usage of technical expertise which helps and supports build within the country. The country has command over adopting and assimilating innovation and new technologies and the relationship with technology is quite old. New technologies have created new opportunities for businesses in various sectors and in the energy sector quite significantly (Gomez-Mejia, 2008).
Along with this, the technology that has been installed at different energy companies have also enhanced which is why the fixed and operating cost has increased, however, the efficiency of the machines and their salvage value has enhanced (Kotter, 2002).
Porter Five Forces Model
Bargaining Power of Buyers: High
The bargaining power of buyers for the industry is high. The reason it is high is because of the large number of companies offering the services required by the customer. Moreover, the switching cost is also low for the industry which makes it easier for the buyers to switch brands. In addition, the introduction of similar products offered at lower prices makes it rather easier for the buyers to purchase such products (Leggie, 2006).
Bargaining Power of Suppliers: Low
The bargaining power of suppliers for the industry is low. The reason why it is low is because of the excessive number of suppliers in the energy sector. To actually outplay the rivals and to earn decent profits, the suppliers offer economies of scale. Moreover, large number of suppliers offering similar services makes it rather difficult for the suppliers to direct the industry. Therefore, it can be said that the market is highly insignificant for the suppliers.
Threat of New Entrants: Moderate
The threat of new entrants is moderate for the industry. The reason why it is moderate is that in spite of the fact that the entry in this market requires high capital investment still offers a lot of potential to the customers which makes it highly competitive for the firms. Moreover, the government support for energy sector has made it a potential market for the new entrants (Leggie, 2006).
Competitive Rivalry: High
The competitive rivalry for the industry is quite high. It is high because of the large number of competitors competing in the market. Along with this, all the rivals offer similar prices and services which make it further difficult for the industry players to overcome the threat of competition. Therefore, it can be said that the market is highly competitive. The level of competition has risen with the introduction of Asian and Western world countries.
Threat of substitutes: Low
The threat of substitutes for the industry is low. The reason it is low is because of the limited number of substitutes. In fact, there are no any substitutes for the energy sector firms. The limited number of substitutes ensures that the rivals in the main projects can dictate the market prices and can convince and influence customers in purchasing the products offered by the industry players.
The products that are offered by Electrical Energy (EES) Company Limited are basically the different services and also provide and distribute Energy Storage System. Moreover, the company also offers its customers with Battery provider to deliver Power system to customer.
The company has also looked to offer its services primarily to the Samsung distributor for the Energy storage system and it is also planning to offer its services for the UPS. Therefore, it can be said that in spite being a new entrant in the market, the company has been offering large and varied services and products to the customers (Leggie, 2006).
The price strategy followed by Energy Solution (EES) Company Limited should be the price penetration strategy. The reason is simple, the company has been a new entrant in the market, and therefore it should introduce its services and products with the price penetration strategy. The reason for this strategy is based on the current competition in the market. Since there are quite a few rivals in the industry therefore; EES shall enter the Asian market with the price penetration strategy.
The place strategy or the distribution strategy for its services would be to offer its services initially in the Asian market. The company should present itself as a horizontal integration, where ESS can provide its services at the backend. Moreover, the company even has to present and locate itself in areas that offer more customer attraction and attention (Kotler, 2009).
The promotional strategy that shall be used by the company will be more aligned and focused over direct marketing. The reason is simple, since it is a highly technical product, therefore, it needs to present to the customer rather directly.
Moreover, the company needs to sell and promote its services to the potential clients over the internet and the different exhibitions. The reason is simple, the company needs to invest heavily in promotional activities since it is start up organization which has planned to penetrate in the market (Kotter, 2002).
The customers that the company will target are the already established clients of the industry. The company should become a distributor for Samsung. Moreover, it shall provide its services to the UPS. Since the energy storage system is generally acquired through licensing this is why the brand name, the outlook, the location and the customer base will remain the same (Kotler, 2009).
Along with this, the services that shall be offered by the company, it is assumed that the customers will be mostly the companies that are looking to outsource their services to other companies. The company has planned to offer its services primarily to the Samsung distributor for the Energy storage system and it is also planning to offer its services for the UPS.
These customers generally require the energy services in bulk therefore; the company has to actually deliver its services accordingly while fulfilling the needs of the customers along the way. The direct customers for the company shall not be walk in customers, in fact it shall rely on the intermediary to become a customer for the products and services offered by the company EES (Kotter, 2002).
The segmentation in the energy sector shall be the customers with varied preferences. Based on the market research, EES shall segment the market by offering high quality products. The company can target large enterprises that can serve as customers for the company EES.
Moreover, the company should segment and present it with customers or the businesses that can offer bulk quantity. Along with this, the firm has also served the mass marketing techniques which shall help in attracting the customers. The purpose of the company is to attract more customers which will eventually lead to increased profit margins for the company.
The target or the major customers for the company shall be the large firms which can actually look to avail the services of EEC. Moreover, the list of customers is not the business to customer business model, in fact the business model used by the company business to business (B2B).
Since the market has quite a few and large number of customers therefore, the target market can eventually increase and further be expanded based on the necessity and requirements. Organizations that earn ample profits and revenues can become potential target market for EEC.
The major focus of the company is to offer its services in diverse markets and to diverse customers. The major unique selling proposition or the major attribute of the firm has been the services and the quality it has been offering to the customers. The company has planned to position itself as a low cost service provider to attain more customers and to successfully integrate and also penetrate in the new market.
Based on the above business plan, it suggests Electrical Energy (EES) Company Limited can successfully penetrate in the market. The reason is simple although it is a new company that ha suffered services specially designed for the large enterprise Samsung. The company can even penetrate in other markets also. By doing so it would be able to successfully look after the result and regulations offered by the company. The recommended pricing strategy for the company in the currents situation is to use the price penetration strategy. The reason is simple; the firm needs to offer low cost services which shall help the firm growing in the market (Kardes, 2015).
Being a new entrant, it is rather obligatory that the services offered dot the customers is all about the quality and series it shall offer to the customers which are more often than not the business clients. Moreover, the promotional strategy that shall be used by the firm will be direct marketing because of the limited knowledge about the services offered by the management. Once it is offered to diverse range of customers, the company can penetrate other parties of the world in the future.
Gomez-Mejia, Luis R.; David B. Balkin; Robert L. Cardy (2008). Management: People, Performance, Change, 3rd edition. New York, New York USA: McGraw-Hill. p. 20.
Legge, David; Stanton, Pauline; Smyth, Anne (2006). “Learning management (and managing your own learning)”. In Harris, Mary G. Managing Health Services: Concepts and Practice. Marrickville, NSW: Elsevier Australia. p. 13.
Kotter, John P. & Dan S. Cohen. (2002). The Heart of Change. Boston: Harvard Business School Publishing..
Kotler, Philip; Kevin Lane Keller (2009). “1”. A Framework for Marketing Management (4th ed.). Pearson Prentice Hall.
Kardes et al.; 2015; Consumer Behavior; 2nd edition; Cengage Learning, Stamford