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Gas_Revolution__ismita (1)

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Gas_Revolution__ismita (1)

  1. 1. Integrated Case Study of Gas Revolution London school of commerce 2/25/2016 JANNATUN TARANNUMISMITA StudentID:c0128kknkkn0414
  2. 2. 1 INTEGRATED CASE STUDY GAS REVOLUTION
  3. 3. 2 EXECUTIVE SUMMARY The case study about “Gas Revolution” has revolved around different business problems faced by the gas companies while being operated in the EU energy market. International business problems, strategic and marketing challenges have remained as the major business problems for the gas companies while being operated in EU energy market. The use of the different business models has helped to resolve the business problems of the company and deal with the external business environment of the company. The findings of the case study are relevant to be applied to resolve the different business problems. The major business problem has been identified as the influence of the internal and external business environment, problems created due to the ever changing EU market and weak supply chain of the company. Thus, the use of the business models seems to be effective for working with the strong organizational strategic planning that helps for the business growth and development of the company in an international business market area.
  4. 4. 3 TABLE OF CONTENTS EXECUTIVE SUMMARY 2 CHAPTER 1: INTRODUCTION 6 1.1 BACKGROUND OF THE STUDY 6 1.2 STATEMENT OF THE PROBLEM 6 INTERNATIONAL BUSINESS 7 MARKETING CHALLENGES 7 STRATEGIC CHALLENGES 7 1.3 RESEARCH QUESTION 7 1.4 RESEARCH AIM AND OBJECTIVES 7 1.5 STRUCTURE OF REPORT 8 CHAPTER TWO - ANALYSIS OF THE CASE IN BRIEF 9 CHAPTER THREE - PROBLEM STATEMENT AND ANALYSIS 11 3.1 PROPOSED PLAN OFANALYSIS 11 3.2 PROBLEM STATEMENT 12 3.2.1 INTERNATIONAL BUSINESS 12 3.2.2 MARKETING CHALLENGES 14 3.2.3 STRATEGIC CHALLENGES 17 3.3 ETHICAL ISSUE 20 CHAPTER FOUR - ANALYSIS AND FINDING 22 4.1 THE USE OF MODELS FOR INTERNATIONAL BUSINESS 22 4.1.1 ANALYSIS AND FINDINGS USING PESTLE ANALYSIS 22 4.1.2 ANALYSIS AND FINDINGS WITH THE USE OF SWOT ANALYSIS 24 4.1.3 ANALYSIS AND FINDINGS WITH THE USE OF BCG MATRIX 25 4.2 THE USE OF MODELS FOR MARKETING CHALLENGES 25
  5. 5. 4 4.2.1 ANALYSIS AND FINDINGS WITH THE USE OF KOTTER’S CHANGE MODEL 25 4.2.2 ANALYSIS AND FINDINGS WITH THE USE OF BUSINESS COMPETITIVE ANALYSIS 26 4.2.3 ANALYSIS AND FINDINGS WITH THE USE OF 4 PS OF MARKETING MIX 26 4.3 THE USE OF MODELS FOR STRATEGICCHALLENGES 27 4.3.1 ANALYSIS AND FINDINGS WITH THE USE OF THOMAS KILMANN CONFLICT MODE 27 4.3.2 ANALYSIS AND FINDINGS WITH THE USE OF VALUE CHAIN MANAGEMENT 27 4.3.3 ANALYSIS AND FINDINGS WITH THE USE OF STRATEGIC SCENARIO PLANNING 28 CHAPTER FIVE - PROPOSED SOLUTION TO IDENTIFIED PROBLEM 30 5.1 INTERNATIONAL BUSINESS 30 5.2 CHALLENGES OF MARKET 31 5.3 STRATEGIC MANAGEMENT 33 REFERENCES 35
  6. 6. 5 LIST OF FIGURES FIGURE 1:DIFFERENTCHALLENGES FACED BY GAZPROM .........................................................................................................................9 FIGURE 2:PLAN OF ANALYSIS ..............................................................................................................................................................11 FIGURE 3:PESTLEANALYSIS FOR AN EXTERNAL ENVIRONMENTANALYSIS OF BUSINESS ..........................................................................13 FIGURE 4:SWOTANALYSIS FOR AN INTERNAL ENVIRONMENT ANALYSIS OF BUSINESS ............................................................................13 FIGURE 5:BCG MATRIX.......................................................................................................................................................................14 FIGURE 6:KOTTER'S CHANGE MODEL..................................................................................................................................................15 FIGURE 7:MARKETCOMPETITOR ANALYSIS FOR THEBUSINESS ..............................................................................................................16 FIGURE 8:4P'S OF MARKETING MIX .....................................................................................................................................................17 FIGURE 9:THOMAS KILMANN CONFLICT MODE ...................................................................................................................................18 FIGURE 10:SUPPLY CHAIN..................................................................................................................................................................19 FIGURE 11:STEPS IN STRATEGIC SCENARIO PLANNING..........................................................................................................................20
  7. 7. 6 CHAPTER 1: INTRODUCTION 1.1 BACKGROUND OF THE STUDY Russia, being a core destination for European Union imports resources of energy like natural gases, oil, coal and uranium, while European Union covers the magnificent ration of market of Russia regarding energy (Abdelal, et al., 2014). The European Union is facing challenges in energy market, resulting to impact on security issues where EU nation took decision regarding alternatives to the energy market of Russia to authorize it. The scenario can be related with impact of the United Nations over European Union for suppliers of energy to achieve leverage on politics over Russia. Furthermore, United States with small energy firms developed methods to form natural gas from shale rocks. With this formation, United States claimed itself as core player in energy market in the world. The European Union is notifying regarding the import of other countries for energy resources (Charpentier, 2013). As, Gazprom is one of the largest Russian Company which deals with extraction business, transportation, productions and sales of natural gas in the European Union Market, so the organization behavior, overall management and the marketing strategies are influenced by the relationship between European Union and Russia energy and also the influences in international business regarding the reputation and sales of Russia (Stern, 2014). The long term maintenance of the relationship with suppliers of the energy and the new suppliers is risked because of the changes in regulations of European Union regarding energy resources. Thus, the policies of European Union energy has immensely challenged the aspects of generations of energy resources like; geographic location of financial issues in energy resources, sales, sustainability and environmental aspects of industry establishments for production of energy resources within the nation (Wanga,, et al., 2014). 1.2 STATEMENT OF THE PROBLEM With the change in political environment, there is reformation in energy resources with the recessions in Russia, and influence in international business that have affected the business operation of Gazprom regarding the market share and sales of the business (Lacalle & Parrilla , 2015). These has directly affected in various aspects of the business like internal management in the organization that has risked the overall operation of Gazprom energy based company in European Union. The problems faced by Gazprom are:
  8. 8. 7 INTERNATIONAL BUSINESS Influence of the external business environment has created problem for the business growth and development of the gas companies that has been analyzed as the problem of the business in the study. Similarly, high dependency over the European energy market has been identified as another problem in the case study. MARKETING CHALLENGES Poor business marketing strategies, conflict with European stakeholders has been identified as the marketing problems for the energy suppliers companies to compete with the highly competitive European energy market. STRATEGIC CHALLENGES The loss of control over the energy resource market of European Union, which has affected the overall operation of the business, indicates the problem in strategic management of the business in international business. 1.3 RESEARCH QUESTION The major research question that derives the research findings are mentioned below:  What is the major business challenge faced by the Gas Companies for being smoothly operated in European energy market?  What are the strategic challenges faced by the energy suppliers company for effective business management and operation in the competitive business environment?  How can the business companies overcome its business marketing challenges and enhance their business activities? 1.4 RESEARCH AIM AND OBJECTIVES The main aim of conduct this research analysis is to identify several force that exists in the market of Europe and its influence on theoverall business performance of energy resource supply companies in reference to the business of Gazprom. The overall objectives of the research are listed below:
  9. 9. 8  To analyze the impact of conflict between Russia and EU on energy resource supply business in reference to Gazprom.  To determine the effect of EU legislation and reforms on the business of overall energy supply.  To access various competitive force present in the market of Europe for development of business in new perspective  To recommend strategic market development for sustaining the energy resource market. 1.5 STRUCTURE OF REPORT The overall structure of the report has been presented below: Chapter one will cover the introductory part of the case study, background of the study, statement of the problem, research question along with the research aims and objectives. Chapter two includes background of the study, problems and the issues identifies in the case study along with an explanation of the case brief. Chapter three will highlight about analysis of plan and the problem statement of the case study. Different problem carried out from the given case will be analyzed throughout this chapter. Chapter four will cover analysis from the findings of the problems in the case study. Chapter five will purpose the effective solution on the basis of the findings of the problems.
  10. 10. 9 CHAPTER TWO - ANALYSIS OF THE CASE IN BRIEF The energy resource supply business to the EU market is significantly occupied by Russian natural gas producing company that is fully owned by the government of Russia (Leffler , 2014). With different political revolution between Russia and EU the company has lost its strong hold in the market of Europe. Such situation has generated condition of struggling to regain its position in the European market that was lost. Moreover European market highly relies on Russian company for importing Russian energy. Therefore, Gazprom is independent in the market of Europe. In recent times condition for Gazprom has changed as EU has started in seeking an alternative supplier for an energy source (Bahadori, 2014). With the identification of different suppliers, EU nations have started to ignore its association with Gazprom with a supply of energy. EU has also imposed a political sanction against Russia resulting negative impact on the business of Gazprom. With Shale revolution in US Gazprom further has to face challenges as the interest of EU nation to produce natural gas using Shale gas haveincreased. Figure 1: Different challenges faced by Gazprom Along with the influence of political instability between EU and Russia on the business of international companies Gazprom, the companies also face a charge of anti-trust in the European market. Gazprom is blamed for misusing its market position in different parts of Europe. The EU energy resource market Challange in international business Challange in market Strategic challange
  11. 11. 10 company was blamed for blocking the free flow of gas in some part of Europe. With the use of no resale,clause blockage was done to some of the nation of EU. Gazprom was fined for this act. Another misuse done by the company was refusing the use of its pipeline by its supplier and using oil product indexed price mechanism for earning unfair benefits (Abdelal, et al., 2014). Along with heavy charge, Gazprom had to lose most of its client. After the occurrence of this event power of Gazprom decreased causing loss of market share in the European market. Regaining lost market share with the occurrence of different controversy regaining lost market share have become difficult for Gazprom. Different political and legislation influence present in Europe have influenced the business of the company to a great extent. In addition European nation seeking to find alternative energy source also have affected the business of the company to a great extent. As EU nation have started to think using the energy available from different source Gazprom have no option than to reduce the price of gas. With this entire problem identified, Gazprom is struggling to retain its previous market position (Gaille , 2014). Gazprom intends to regain its position in the market of Europe by making necessary changes complying policies of EU and by performing market negotiation. As the market of Europe provides bigger opportunities for the company willingness to make changes in business strategies will enable to regain its position in the European market (Boersma , 2015). As the availability of alternative energy source have stumbled monopolies of the company in the market of Europe. Although Gazprom supplies to other different countries other than EU nation its business is still affected with cut off of dependency on energy with Russia. European market however still import a large amount of energy from Russia increasing the prospect for Gazprom to regain its lost market position and continue to supply gas in the future. The main focus of this research analysis is finding out how the market of Europe and Gazprom are dependent to one another. The need for effective strategy forms the perspective of Gazprom is also focused in this case analysis. Three different problems that has been identified is the main concern of this analysis. Based on analysis of the various issues that has been identified different strategies will be derived from the used of several literature to come up with an effective solution for identified problem, in this case, analysis.
  12. 12. 11 CHAPTER THREE - PROBLEM STATEMENT AND ANALYSIS 3.1 PROPOSED PLAN OF ANALYSIS The research conducted on cases analysis of Gazprom intends on identifying several measures taken by the company for the identification of the problem and taking necessary measures for addressing that identified problem. As it is well known that market condition in Europe is not favorable as before, Gazprom needs to come up with appropriate strategies for addressing several problems that have been identified (Bahadori, 2014). The research mainly focuses on addressing several problem faced by Gazprom for performing business in the European market. It also intends on identifying measures that have to be taken by Gazprom. Several solutions to problems of Gazprom is also explored in the research. Techniques that can be used by Gazprom for regaining its position in the European market is also discussed in the research. Figure 2: Plan of Analysis International Buisness •Influenceof external environment (PESTLEAnalysis) •Influenceof Internal Environemnt (SWOTAnalysis) •Dependency on EU market (BCG Matrix) Market Challenges •Ever changing EU market (Kotter change model) •Business competition (Competitive analysis) •Long-term buisness sustainability (Marketing mix) Strategic Challenges •Conflict with European stakeholders (Thomas Kilmann Conflict mode) •Flawed supply chain (valuechain management) •Compliance issues (strategic scenario planning)
  13. 13. 12 3.2 PROBLEM STATEMENT 3.2.1 INTERNATIONAL BUSINESS 3.2.1.1 Influence of external environment in an internationalization of business External business environment has greater influence on the business activities of the organization in an international business practices. As, the use of the PESTLE analysis helps for analyzing about the external business environment and helps for the evaluating about the business problems of the company in an international business market area (Alanena, et al., 2015). Different external factors like; political factors, economic factors, social factors, technological factors, legal factors and environmental factors has high influence upon the business activities of the companies in an internati0onaliztaion of the business (Andrews & Playfoot, 2014). Thus, high influence of external environment in an internationalization of business has been identified as the business problems for the energy suppliers company including Gazprom in EU energy market.
  14. 14. 13 Figure 3: PESTLE analysis for an external environment analysis of business (Mokhatab, et al., 2013) 3.2.1.2 Influence of internal environment on the organizational business activity With the use of the SWOT analysis it becomes easier to analyzes the condition of Gazprom in the European market along with its market value. The use of SWOT helps for the identifying the strength, weakness, opportunities and threats of the Gazprom and other energy supplies company in the EU market (Abdelal, et al., 2014). Further, it makes easier to evaluate and understand about the need of the best organizational practices that helps to enhance the internal organizational environment of the business company to be more competitive and challenging in nature. Figure 4: SWOT analysis for an internal environment analysis of business (Bahadori, 2014) 3.2.1.3 Dependency on EU market High dependency of the energy suppliers company in the EU energy market and having no alternative market has been analyzed as the business problems for the companies in an international business market (Wanga,, et al., 2014). The use of the BCG matrix helps for the
  15. 15. 14 understanding about the market growth rate of the company and its relative market share as well. Four different business indicators used in the BCG matrix; stars, cash cows, dogs and question market helps in understanding about the business market condition of the company (Charpentier, 2013). Increasing the business market share of the company in international business market helps for the reducing the over dependency of the company in the EU energy market. Thus, it is essential to find out the alternative market area for the company that helps in minimizing the business problem of the company about the being over dependent on the EU market (Xiong, et al., 2015). Figure 5: BCG Matrix (Paltsev, 2014) 3.2.2 MARKETING CHALLENGES 3.2.2.1 Ever changing EU market Problems for the business companies in an international business practice are changing business environment. As, Gazprom and other energy suppliers companies in the EU energy market are getting business marketing challenges due to the ever changing EU markets business
  16. 16. 15 environment (Tomory, 2012). The study, analysis and the use of the Kotter’s change model helps for handling the marketing challenges of the company caused due to changing business environment in a strategic manner. Creating the circumstances for the change helps to make people understand about the continuous changing business market environment (Bahadori, 2014). Figure 6: Kotter's Change Model (Lacalle & Parrilla , 2015) 3.2.2.2 Business competition For the energy suppliers company including the Gazprom high business competition of the EU energy market has created business problems (Alanena, et al., 2015). With the use of competitor analysis it becomes easier for the business companies to identify the market competitors that are most essential for an effective business marketing of the company. Similarly, positioning the level of the competitors helps for the better analysis of the business challenges occurred due to the business competition in the EU energy market area (Azimi & Namazi, 2015). Thus, the strategic use of the Competitor analysis helps for evaluating the business competition and work with the effective business marketing strategy of the company.
  17. 17. 16 Figure 7: Market competitor analysis for the business (Gold , 2014) 3.2.2.3 Long-term business sustainability Energy suppliers companies like Gazprom and British Gas in the EU energy market has more often faced the long-term business sustainability problem in the company (Kolb, 2013). Lack of an effective use of business marketing model has created business marketing challenges for the companies and it has its direct impact upon the product sales and the business sustainability of the company. The analysis and the use of marketing mix helps for the product placement, use of an effective pricing strategy and work on the product promotion (Ruminski, 2015). All these factors helps for the reducing the business marketing challenges of the company and work on the long-term business sustainability of the company.
  18. 18. 17 Figure 8: 4P's of marketing mix (Lacalle & Parrilla , 2015) 3.2.3 STRATEGIC CHALLENGES 3.2.3.1 Conflict with European stakeholders Strategic management of the company is the major challenging job for the business companies (Lyons, 2015). Energy suppliers companies in the EU energy market face strategic challenges for managing the conflict situation with its European stakeholders. As, per Ghezelbasha, et al. (2015) the conflict mode organization should make compromise regarding the different aspects of the business. Stakeholders demands for the positive business benefit and strategic management of the company that helps to ensure about the benefits for the stakeholders helps to reduce the conflict situation with them as well (Bell, 2014). Dealing with the business conflict especially with important stakeholders of the company helps has been analyzed as the business strategic challenges for the energy suppliers companies.
  19. 19. 18 Figure 9: Thomas Kilmann Conflict Mode (Allard-Poesi, 2015) 3.2.3.2 Weak supply chain The value chain analysis helps for evaluating about the product supply condition of the Gazprom and other energy supplier company in the European energy market area. Different factors like improper human resource management of the company, lack of the appropriate technological usages and the organizational infrastructures are the major reason behind the weak supply chain of the company (Lacalle & Parrilla , 2015). Thus, the use of the value chain analysis helps for the effective strategic management of the company in the competitive business environment.
  20. 20. 19 Figure 10: Supply Chain (Kidnay, et al., 2011) 3.2.3.3 Compliance issues The use of the strategic scenario planning helps to encourage the business companies to deal with the strategic challenges of the company. Competing with the EU energy market is a difficult job and there are numbers of the compliance issues that need to be faced by the company (Alexeeva & Chernyavskiyb, 2015). The use of the strategic scenario planning model helps for creating the strategic planning for the company that helps for an effective strategic management of the company.
  21. 21. 20 Figure 11: Steps in strategic Scenario Planning (Allard-Poesi, 2015) 3.3 ETHICAL ISSUE When searchstudy is conducting, it is essential for any researcher to consider several ethical issues. It is essential for considering several ethical issue as several conflict may occur research fails in fulfilling responsibilities towards parties involved in research. For minimized different risk involved when conducting research extra precautions must be taken by the researcher. In this research secondary source is consulted for the collection of data. The ethicalissues that may occur with access and authorization have been minimized by taking proper authorization to use data obtained from various source for the purpose of conducting this research study. Keeping issue related to authorization in mind secondary data collected for research is not used with the authority of the concerned party. Likewise, all the data collected was recorded safely to avoid any kind of misuse of data. Data was used for conducting are search study and was not used for any type of personal gain. Research ethics have been a top priority when conducting this research.
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  23. 23. 22 CHAPTER FOUR - ANALYSIS AND FINDING 4.1 THE USE OF MODELS FOR INTERNATIONAL BUSINESS 4.1.1 ANALYSIS AND FINDINGS USING PESTLE ANALYSIS External business environment has strong influence upon the business activity of the organization in the competitive business environment (Alanena, et al., 2015). EU energy market is competitive and different external factors like political factors, economic factors, social factors, technological factors, legal factors and the environmental factors. High influence of the external factors in the business has been identified as the business problems for an international business practice for the energy suppliers company including Gazprom (Wanga,, et al., 2014). Different factors of the external business environment have been analyzed below: Political Factor High business competition and business authorization of EU upon the energy suppliers company like Gazprom has been seen as the business problems in the international business. EU’s business legislation and regulation has been evaluated as the political factors that have strong influence upon the business activities of the company in an international business (Kolb, 2013). Divergence in the opinion between Russia and Ukraine about the prices of gas resulted in the interruption in the gas supply to whole Europe. The divergence occurred in 2009 between Russia and Ukraine led to the cessation for the south-east Europe through Ukraine. This phenomenon resulted in severe economic consequences. In Europe the total loss counted as 1.65 billion (European Commission 2010, 36), Where Russia along experienced 1.5 billion USD losses. The main transit of gas supply through the whole Europe is Ukraine. In a way Ukraine has lots of power being a dominated transit route. Analyzing this political factor it can be concluded apart from the transit routes, there is a strong interdependence between the Russia and EU in terms of gas supply as Europe is the main market for Russia. Economic Factor Economic factor is one of the external business factors that often creates business problem for the company (Katz & Bradley, 2013). EU energy policy depends on economic grounds. Russia
  24. 24. 23 determines one-sided pricing for the gas as a monopoly. The example of this is LNG is the most expensive and then the Russian pipelines. Social Factor Social factors create business problems and have huge impact on the business activities of the energy suppliers company in an international business market area (Kotter & Rathgeber , 2006). Falling business condition of the Gazprom in the EU energy market is all about an impact of the social factors in the business activities of the company. Thus, social factors have strong influence on the organizational business activities in an internationalization of the business. Technological Factors During the international business practices, the use of an innovative technology helps for the smooth business operation. Gas companies like Gazprom, British Gas and other energy suppliers companies need to be updated with the technological innovation that helps to reduce the business problems of the company that occurs in an international business activities (WEI, et al., 2015). Legal Factor European Union’s has made many business policies, laws and legislation that has great influence upon the international business activities of the gas companies that supplies its products in the EU energy market. Environment Factor Successful operation of the business equally needs the use of the natural resources, but during the use of the environmental resources it need to be considered about the impact of the environmental factors upon the business activities of the company (Yoshiokaa, et al., 2015). Gas extraction should be on safety grounds. The EU members should be told to supply energy concerning pollution. Germany has got on low carbon emission.
  25. 25. 24 Findings An external factor that has the strong influence on the business activities has been analyzed with the use of the PESTLE analysis during the study. Business authorization of the EU energy market over the gas companies has created business problems for the international business practices (Lacalle & Parrilla , 2015). Likewise, limitation of the financial resources, effects of the taxation policy has been analyzed as the major factors that have strong impact upon the business activities of the company. 4.1.2 ANALYSIS AND FINDINGS WITH THE USE OF SWOT ANALYSIS EU energy market is highly dependent upon the energy suppliers companies that can be analyzed as the strength of the energy suppliers companies. Energy suppliers companies have filled the high need of the energy needs in the European business market area. Many energy suppliers company are not flexible enough for the successful business operation in an international business market area that seems to be the weakness of the company (WEI, et al., 2015). Besides, the EU energy market has created several business opportunities for the energy suppliers companies (Etkind , 2011). Along with the business opportunities there are several business threats in an international business practice for the companies. Lack of the understanding with the European stakeholders has been evaluated as the business threats for the companies. Findings The business analysis with the use of SWOT analysis helps for evaluating about the internal business environment of the company. Dependency of the European countries with the energy suppliers company has been evaluated as the business strength for the companies (Lyons, 2015). Similarly, not being flexible enough to deal with the international business environment has been analyzed as the business weakness of the companies in an international business market area. This business weakness of the company creates problem for the business expansion of the company in an international business market area. Growing business competition in the EU energy market and the conflict among with the stakeholders has been evaluated as the business threats for the companies (Allard-Poesi, 2015).
  26. 26. 25 4.1.3 ANALYSIS AND FINDINGS WITH THE USE OF BCG MATRIX BCG matrix helps to analyze about the relative market share and the business market growth of the business companies in the international business market area (Kotter & Rathgeber , 2006). Understanding about the impact of the EU energy market upon the business companies has been evaluated with the use of the BCG matrix in the study. With the use of this matrix in the business it has become easier for the evaluating about the impact of the different factors on the business growth and development of the energy suppliers company in a European business market area (Kidnay, et al., 2011). Enhancing the market share of the business companies and minimizing the dependent nature of the company upon the EU energy market can be done with the analysis of the BCG matrix. Findings Energy suppliers companies can make the study and analysis of their businesses with the use of the BCG matrix that helps for the successful business operation in an international business market area. High dependency of the energy suppliers companies including Gazprom has been evaluated as the international business problems for the companies (Wanga,, et al., 2014). 4.2 THE USE OF MODELS FOR MARKETING CHALLENGES 4.2.1 ANALYSIS AND FINDINGS WITH THE USE OF KOTTER’S CHANGE MODEL Kotter’s eight step change model helps in understanding about the ever changing EU market and its impact upon the business activities of the energy suppliers companies (Kolb, 2013). Along with the growing business competition and changing business environment of the European Union many business marketing challenges has been faced by the energy suppliers companies. The use of the Kotter’s change models helps for understanding about different eight steps change that can be done for reducing the business market challenge for the companies (Alanena, et al., 2015). Employing the Kotter’s change model helps to successfully implement and embrace the organizational change in the business activities of the energy suppliers company in the competitive business market environment. Findings
  27. 27. 26 Kotter’s Change model helps to plan about change, action for the change and implementation about the organizational change. Coordination according to the changing business market needs can be possible with the use of the Kotter’s change model. 4.2.2 ANALYSIS AND FINDINGS WITH THE USE OF BUSINESS COMPETITIVE ANALYSIS Energy suppliers companies are facing marketing challenges due to the highly competitive business market (Legrasa, et al., 2015). With the use of the business competitive analysis it becomes easier for the study of the market competitors and work on the organizational strategic planning accordingly. Identifying about the strength and weakness of the market competitors helps for making strategic planning and implementing it in the organizational environment that helps to reduce the business marketing challenges of the company’s European business environment (Högselius , 2012). Findings High business market competition among the energy suppliers companies in the European energy market has created effective business marketing problems for the companies (Kolb, 2013). Business companies like Gazprom and British Gas can apply the model of competitive analysis that helps for the identifying the competitors for the organization and work on the business marketing strategies of the company. 4.2.3 ANALYSIS AND FINDINGS WITH THE USE OF 4 PS OF MARKETING MIX As, business marketing is essential for ensuring the business growth and development of the business company. Energy suppliers companies seem to be facing business sustainability problem all due to the lack of the implementation of an effective business marketing strategies in the organizational environment (Katz & Bradley, 2013). The use of the 4Ps of marketing mix techniques helps for enhancing the business marketing approaches to the energy suppliers company that helps to cope up in the competitive European energy market (Hassanzadeh , 2015). Findings It seems to be effective for using the business marketing mix model that helps for the energy suppliers company working with the European energy market to have effective business
  28. 28. 27 marketing strategies (Lyons, 2015). The use of the 4Ps of marketing mix helps for the product placement, product pricing and product promotion of the company that makes easier for an effective marketing of the product and the company in the competitive business environment (Alanena, et al., 2015). 4.3 THE USE OF MODELS FOR STRATEGIC CHALLENGES 4.3.1 ANALYSIS AND FINDINGS WITH THE USE OF THOMAS KILMANN CONFLICT MODE With the use of the Thomas Kilman Conflict Mode it has been easier for analyzing the reason behind the conflict situation among the gas companies in Europe (Abdelal, et al., 2014). Variation in the interest and opinions of the companies and its stakeholders causes the conflict. Besides, it has stood up as the strategic challenges for the gas companies as well. Applying Thomas Kilmann conflict mode helps for study and investigation about the conflicted situation and makes the strategic planning for the organizational strategic management on the basis of the results and findings of the study. Findings It seems to be effective for applying the Thomas Kilmann conflict mode that helps to identify the reason of conflict among the energy suppliers company in a European energy market. With the use of this model it becomes easier to address the reason behind the conflict among the energy suppliers company and its stakeholders. 4.3.2 ANALYSIS AND FINDINGS WITH THE USE OF VALUE CHAIN MANAGEMENT Having the greater business value helps to owe the greater business position along with the higher business reputation in the competitive business environment. An appropriate use of the value based management techniques helps for enhancing the organizational value and holds the business sustainability in the competitive European energy market (Kesler & Kates, 2010). Identifying the business problems during the supply chain of the products will be supported with the use of the value chain management of the company.
  29. 29. 28 Findings For the successful business growth and development of the energy suppliers company along with it business sustainability in the European energy market it is essential to ensure about the products and the business value of the company (Hayes, 2010). With an effective use of the value chain management it becomes easier for the gas companies to work on the effective supply chain of the company and also reduce the business strategic challenges of the company. 4.3.3 ANALYSIS AND FINDINGS WITH THE USE OF STRATEGIC SCENARIO PLANNING Strategic planning helps for the effective strategic management of the company and working on the strategic planning by being based on the different business scenarios of the company helps to overcome the competitive business environment of the European energy market (Griffin, 2012). In order to reduce the business problems of the companies it is essential to hear for the compliance, create the best scenario and make the business strategic planning that helps to reduce the strategic challenges of the company (Allard-Poesi, 2015). Findings Gas companies of the European energy market need to apply the strategic scenario planning model that helps to reduce the business problems including the different compliance issues of the company.
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  31. 31. 30 CHAPTER FIVE - PROPOSED SOLUTION TO IDENTIFIED PROBLEM 5.1 INTERNATIONAL BUSINESS Possible Solutions: list of possible solution from each  Analyzing the external business environment of the European energy market mainly depend on Russia and Ukraine. So it is necessary look for alternative sources instead of natural gas.  Shale gas could be one of the solutions to the problems. Best fit solution In order to reduce the international business problems for the gas companies and considering the Ukrainian crisis, shale gas could be a solution for stabling the supply. Recommendation Energy suppliers companies like Gazprom and British Gas are recommended to make changes in its recruitment strategy for hiring a qualified management team to enhance organizational process and activities. It is also recommended to use the constructive style of conflict resolution to improve its relationship with stakeholders present in the European market (Stern, 2014). Besides focusing on owns goal, it is recommended to consider goals of stakeholders to establish a better relationship with them. Action plan Adaptation of appropriate recruitment and selection strategy for hiring qualified staff that is able to make an appropriate business decision. For solving conflict with stakeholders, it has to conduct a bilateral discussion with them. By conducting such discussion, adjustment can be made between needs of both parties (Kidnay, et al., 2011). Involvement in corporate social responsibility for gaining trust of its stakeholders is essential helping process management organization design and performance gain.
  32. 32. 31 Limitation Relying upon only the European energy has created several business limitations for the energy suppliers companies. Business policies, legislations and regulation imposed by the EU have limited the area of performing the business activities for the companies. It has limited the gas companies for being only in the European business environment. Besides, changing business environment of the EU energy market has created business problems for the companies in the international business practice. 5.2 CHALLENGES OF MARKET Possible Solutions: Business marketing challenges has been seen as the common business problems for the energy suppliers company in the European energy market. Possible solution to overcome the business marketing challenges for the companies is mentioned below:  The use of the Kotter’s Change model helps for the understanding about the need for the adoption of the change for the organization and work as per the business needs of the company.  The use of the business competitive analysis helps for identifying the factors of the high business competition and prepare for the business marketing strategies of the gas companies.  The use of the marketing mix approach helps for introducing the products and promoting it with the effective business marketing strategy.
  33. 33. 32 Best fit solution: The use of the marketing mix approach will be the best fit solution that helps for introducing the products and promoting it with the effective business marketing strategy to overcome the business marketing challenges of the companies. Recommendation Recommendation for adopting an appropriate strategy for identifying limitation of its supply chain and then take corrective action to strengthen its value. It is also recommended in focusing on its activities for maximizing organizational value. Gazprom is recommended to establish a positive relation with EU nation for making a strong hold in the market. By building strong strategic framework, several external environmental problems need to be addressed. Flexibility with several reforms and legislation established by EU to avoid any kind of conflict (Stern, 2014) is essential. Understanding EU legislation and adopting change are recommended for energy resources import companies. It is also recommended that companies have to develop an efficient marketing strategy. Action plan Building alternative pipeline will be useful as it will help avoid taking the route of Europe. Investing in technology will enable to come up with improved products with better value. Entering into long-term contract with the nation of EU will be helpful to strengthen its position in the European market (Boersma , 2015). Bringing flexibility according to reforms of EU and entering into a long-term contract will be useful to regain its market share in the European market. Developing a marketing strategy that complies with current market practice will help in retention of customer and provide a competitive advantage to the company. Limitation It is essential to be regularly updated with the technological innovation that helps for the effective business marketing of the company. Being lately updated with the innovative technology itself is one of the limitations for the gas companies for the free business marketing
  34. 34. 33 of the company. Besides, lack of the effective marketing tools, techniques and strategies is another problem for minimizing the business marketing problem for the company. 5.3 STRATEGIC MANAGEMENT Possible Solutions: The use of the different business models helps for the effective strategic management of the company also helps to overcome the strategic challenges as well. Possible solutions to overcome the business strategic challenges are enlisted below:  The use of the Thomas Kilmann Conflict Model helps for identifying about the indicators of the business conflict.  Applying the value based management helps to strengthen the weak supply chain of the company that helps to overcome the competitive business environment.  Compliance issues in the organization created the business problems so; it is good to apply the strategic scenario planning in the organizational environment. Best fit solution The best fit solution to solve the strategic challenges of the gas companies and ensure the strategic management is to apply strategic scenario planning. Recommendation An alternative market analysis and alternative sources analysis is recommended in the EU market that will allow further expansion. As Gazprom is fully dependent on European marketoperating business in other parts can be beneficial for the company. It is recommended that analysis of market and forces that existin the market to face challenges related to the xistence of competitors (Alexeeva & Chernyavskiyb, 2015) can be a step forward for strategic management. It is also recommended to adopt appropriate pricing strategy and make improvement in the quality of products and customer service to establish as a distinct business in the European market.
  35. 35. 34 Action plan With analysis of environment, companies like Gazprom can identify potential market other than Europe for reducing its dependency on European market. Analysis of market can be done with the help of several analytical tools. As Gazprom have been facing a challenge from competitors coming up with better business strategy will be helpful to gain competitive advantage. Pricing product according to market trend will enable make appropriate pricing of the product (Charpentier, 2013). Limitation Limitation of the business market area has created business problems among the energy suppliers companies of European energy market. Conflict among the business companies and organizational stakeholders has been analyzed as the business problem all due to the limitation of the business market area for business companies. Besides, lack of the business understanding about the market needs and demands has limited the work activities of the companies.
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