Executive Summary

This report looks into the detailed insight of the technological innovations of the energy sectors in the UK. The different strategic options that can help the energy sectors to gain a momentum in the market is also looked into with the possible strategic option that can be adopted in order to get a competitive edge over the other sectors. The different technological and digital advancements in the energy sector is also discussed in great details. The report has also been critically analysed on the basis of Value Proposition plan in this research work, that business enterprises takes into account while offering a proposal to any of their stakeholders.

 

 

 

 

 

 

 

 

Introduction

Organizational strategy is an overall sum of the various actions that any organization intends to implement in order to achieve long term benefits and accomplish goals. The combination of the different strategic actions sums up to the organization’s strategic plan. The energy in the UK in the recent years mainly 2019, details the contribution of the industry to the economy of the UK, illustrating its part of the contribution so far proceeding towards a future involving low carbon and hereby outlines the various challenges ahead in transport, transforming heating, and eventually moving towards a smart energy system. This report elaborates on the various strategic options that must be implemented towards the development of the organizational strategy along with explaining the essential tools and framework, that would lead to the sustainability of the industry in the near future benefitting the entire country with valuable consumption of resources.

Highlighting the growing competition in the market sector especially into the retailing sphere and also the extent of help provided to the vulnerable consumers. Proceeding to the report would help in analyzing the varied findings that have taken place in the UK industry along with the ones to be coming up. The energy sector has led to the creation of £86.6bn in the arena of economic activities in the year 2018, and also delivered an investment of £13.1bn in the same timeframe.

The source of the UK industry mostly comes from burning fossil fuels, essentially natural gas and coal. UK energy narrates in brief aims to describe a summary of a few of the key developments in the system of UK energy. From its production and its usage along with and the framework from which the energy use effectively influences the greenhouse gas emissions. Technologies usually use natural technologies to produce electricity. Hence this report will discuss in detail the various sources from where the energy is produced that will also strengthen the organizational viewpoint and other strategy improvements.

 

Discuss the Strategic Options

One of the most important strategies adopted by the energy sector in the UK is to promote secure, economical, and sustainable energy by reforming itself into a market-oriented low carbon emission energy sector. The energy sectors are exploring more on renewable sources of energy by reducing the dependency on non-renewable sources of energy. Smarter and innovative technologies are implemented in order to make the energy sector stay one step ahead of the other sectors (Littlechild, and Vaidya, 2019). The energy is presently distributed by the energy sectors using smart, diversified, extensible, unified, and resilient networks. The energy sectors in the UK are focussing on the rapid development of new technologies that will considerably enhance the efficiency of the energy and also considerably reduce the emission intensity of the energy which has a negative impact on the environment. A radical change in the strategies of the energy sectors in the UK is noticed which involves a shift to the cleaner sources of energy and electrification which is quite important in order to improve the air quality (Quarton and Samsatli, 2020). The integration of technology in the energy sector has resulted in the development of sensors that are quite efficient in the detection of methane emissions. The employment of drones and other remote monitoring technologies helps the energy sectors in the UK to detect any leakage within the energy supply network. The energy sector in the UK has adopted ultra-high-voltage transmission technology. UHV transmission technology enables to transmit electricity over long distances at a much reduced costs. UK energy sectors are banking on large scale adoption that would facilitate greater regional integration of power grids at a much reduced cost as compared to the one which is produced locally (Panos,  Kober and Wokaun, 2019). The energy sectors in the UK has enabled digitalisation of local energy trading including peer to peer as well as consumer to grid.

Moreover Energy UK should focus on the concept of four P’s as a strategic option in order to have a competitive advantage.

Firstly, in terms of market position Energy UK should concentrate on how to remain within the top 3 companies under the energy sector in the UK. It should frame its marketing polices that it can have an edge over the other companies. The technological advancements should be readily adopted by Energy UK in order to stay ahead of its competitors.

Secondly, in terms of performance Energy UK should strive to give the best performance in the energy sector of UK. The performance should be such that the consumers have very less to complain about the services offered by Energy UK.

Thirdly, Energy UK should plan to have an impressive portfolio elaborating its achievements which will generally draw the attention of the stakeholders as well as the consumers. This will help the Energy UK to stay one step ahead of its competitors.

Fourthly, Energy UK should focus on entering partnerships with technology providing companies which have a large consumer base in the market and have a valuable resources in their disposal (Sachs et al., 2019). This will help Energy UK two reduce competition and penetrate within the market more efficiently.

Renewable systems utilize renewable resources to produce power. Types of fuel include breeze, ocean, sea, hydro, biomass and solar. This is often produced utilizing renewable sources of energy that are easily substituted, including such biomass. Renewables generate upwards of 20% of the UK’s energy, and the EU’s plans are set to rise to 30 % by 2020. Renewable energies should prove to be an essential aspect of the plan to minimize carbon pollution from 2020 (Chernev, 2020). A variety of innovations would be needed to do the same, including such coastal and inland wind turbines, renewable power plants or hydroelectric power networks.

 

Justify a particular strategic option

 

Sustainable strategic option is found to be the most suitable in this scenario adopted by the energy sector in the UK that will help in promoting a secure, economical, and sustainable energy platform by reforming itself into a market-oriented low carbon emission energy sector. Besides, Energy UK should focus on the concept of four P’s as a strategic option in order to have a competitive advantage in the longer run.

 

Tools or Framework for the development of the strategy

 

In order to discuss the current situation of the company in terms of the future betterment of the same. It has been observed that the organization must understand the future opportunity or situation of the organization if it integrates advanced technological tools within the organizational framework. Hence for this particular topic of discussion various tools can be used which are essential and easier to understand the repercussions of the scenario and the strategies of doing it in reality (Onyusheva, Phyu and Noe, 2019). Some of the frameworks that could be used by the organization itself to analyse the situation are BCG matrix, Porter’s Five Forces, Ansoff matrix, etc. For this particular paper, Porter’s Five Forces would be more applicable than any other strategic model.

 

Figure 1: Porter’s Five Forces

(Source : Onyusheva, Phyu and Noe, 2019)

 

Porter’s Five Forces focuses on the business orientation of an organization and for an organization like Energy UK, the requirement for understanding the scope in the market if the technological integration takes place how it will affect the market of the company and how that would help out the same to narrow down or broaden the market performance of the same. Hence, all the five areas of concern are mentioned below:

 

Threats from New Entrants:  It is generally seen that the new entrants in the energy sector bring in new innovations and new ways of carrying out operations which are quite different from others (Eberspaecher, 2020). The new entrants generally have competitive pricing strategies, reduced costs, and provide advanced value propositions to the customers which generally gives them a competitive advantage over the other companies in the energy sector.  The existing companies have to take care of all these challenges and build effective policies to safeguard themselves from the stiff competition provided by the new entrants. The existing companies under the energy sector sometimes bring about a complete makeover of their economic policies in order to reduce the possible threats from the new entrants.

 

Bargaining Power of Suppliers: The energy sector has numerous suppliers that supply the raw materials and most of them supply them at affordable rates. The dominant suppliers generally have the capability to reduce the profit margins of the companies under the energy sector in the UK by increasing the prices of the raw materials (Irfan et al., 2019). The powerful and popular suppliers generally possess a high negotiating power in order to extract high prices from the companies under the energy sector in the UK. This generally has a considerable impact on the energy sector and has a profound impact on the profit margins of the companies under the energy sector. The companies under the energy sectors can effectively build a supply chain with multiple suppliers to end the monopoly of the dominant and popular suppliers.

 

Bargaining Power of Buyers: The buyers have a lot of demands and needs which gradually rises with time. The buyers generally have a lot of options to choose from in terms of energy supply companies and this gives the buyers an advantage to negotiate with the companies under the energy sector regarding rates and other relevant factors. Generally, it is seen that a smaller customer base is more powerful and when it comes to bargaining they remain one step of the other customer bases and generally possess a higher ability to seek for increased rate of discounts and attractive offers. The companies under the energy sector can expand the customer base in order to reduce the bargaining power of the buyers. Additionally, it will help the companies under the energy sector to streamline their sales and production services.

 

Threats of Substitute Products or Services: The threat from substitute products or services to the energy sector in the UK is quite high. The substitute products or services possess an immense threat to the companies under the energy sector if it comes at affordable rates and offers a value proposition which is even better than the one offered in the market by the existing products or services (Wang and Zhan, 2019). The companies under the energy sectors in the UK should be more service-oriented rather than product-oriented in order to considerably reduce the threats from substitute products or services. This will bring about a considerable change in the energy sector and hence reduce the pressure on the companies under the energy sector from the imminent threats from the substitute products and services.

 

Rivalry among Existing Competitors: The rivalry among the existing competitors influences the operations of the companies under the energy sector in the UK. It is seen that if the rivalry among the existing competitors is quite intense then general the market prices of the products or services offered to go down and the profit margins are also considerably reduced. Generally, a stiff rivalry has a huge impact on the companies’ operations and on its long term profitability in the market (Lapko et al., 2019). The existing companies can considerably reduce this rivalry among themselves by collaborating among themselves in order to increase the available resources and in turn expand the size of the market which will help in more positive growth.

Implications of Porter’s Five Forces on the Energy Sectors in the UK

The proper and sound analysis of the five competitive forces in the market for the energy sector in the UK helps the strategists to gain a clear and in-depth picture of the effects that these forces have on the profitability of the companies under this sector. The strategists can get a forecast beforehand of the possible threats and opportunities that are there within the energy sector and plan strategies accordingly (Leisen, Steffen, and Weber, 2019). They can also positively identify the changing marketing trends and act swiftly in order to give directions to the companies under the energy sector in the UK to gain some positive momentum. By understanding Porter’s Five Forces in great detail the managers under the energy sector in the UK can shape those forces in their favor.

 

 

 

Development of Value Proposition Plan Link with marketing and customer

The development of the Value Proposition is very integral for every business. Value Proposition comprises the promises that are made by a particular concern to its stakeholders involving the government, the customers, the vendors, distributors, suppliers, investors, and the entire community at large (Chernev, 2020). By developing a Value Proposition plan, a particular company keeps a track on whether it being able to deliver its stakeholders, the various promises that were being made or not, if yes then how can the values be maximized, if no then what is the possible reasons for such shortfalls. A Value Proposition stands as a statement that comprises the benefits that a particular company is ready to provide. It also signifies who will be the probable beneficiaries and for what good reason the particular concern or enterprise who is offering the value, is the best in trade. The more clear a Value Proposition plan is, the more clear will be the communication between the business entity and the stakeholders, due to which long term relationships will be inevitable. Being concise and brief, a sound Value Proposition plan delivers the purpose and resolution of the business making enterprise.

 

In order to develop an effective Value Proposition plan, a company should take into account certain questions. For instance who are the stakeholders? What are the expectations and requirements of the stakeholders in the process? What is the issue that is being faced by the stakeholders, and how the company can resolve the same? What is the USP of the business? What are the advantages that the business possesses over those that are being offered by the company’s competitors? If the aforementioned questions are taken well care of after holistic research and study, then it will be very easy and simple for any company under the sun across various sectors to develop such a Value Proposition plan, which will certainly appeal and attract the stakeholders (Tripicchio et al., 2020). Since the expectations of the various stakeholders involved in a business project differ from each other, the value being offered to them by the business should also differ.

A Value Proposition plan discusses the strengths of the company, where the positive points of the company ranging from customer relationship management strategies to awards and recognitions achieved can be mentioned. If a company adopts innovative out of the box creative marketing and promotional techniques, that too can be put under mention in a lucrative Value Proposition plan.

While framing a Value Proposition plan, the company should consider certain aspects likewise the relevance and reliability of the plan, whether the plan can be defended no matter what or not, whether it is flexible or not, etc. Many a time while formulating an effective Value Proposition plan, marketers and business analysts take into account the concept of emotional selling, hence the values that are being offered to the ultimate end users might have an emotional touch too (Magalhães et al., 2020). The motto of the Value Proposition plan has to be an alignment of the stakeholder’s goal with the company’s beliefs.

 

 

Link with marketing and customers

 

A commercial or marketing message that explains whether a customer will buy a commodity or use a service. This argument would reassure the future buyer that one unique product or service will provide greater benefit or address an issue better than all comparable products. It is challenging to construct a successful value proposition as it allows the marketer to distill several separate aspects of meaning and difference into a concise argument that can be readily interpreted and understood (Hollensen, 2019). Given the difficulty, the development of a successful value proposition is quite critical. The value proposition centres campaign strategies on the particular advantage of consumers.

 

It tends to base the deal on the client and, most importantly, on the consumer’s particular interest.

A value proposition ought to address the problem quite simply: why would anyone purchase what you’re offering? When you take a close look at this problem, it consists of three parts:

Who? The value proposition does not identify the target buyer, but will display a specific interest to the payment methods by the target buyer.

Which is it? The deal requires to be specified in the sense of the purchaser.

Why? This will prove that perhaps the bid is of special interest to the consumer.

The AIDAR analysis is adopted by the company which suggests how well the promotional plan is appropriate:

 

Awareness: the conduct of provided to enable for a product or service via a variety of media.

Interest: The investment Step to promote purchasers to just want to understand exactly extra.

Desire: to create an intimate attachment to the purchaser so that they just want an item and like a product line.

Action: The move where the customer takes up a brochure, asks for more details or transactions.

Retention: As long as somebody is a client, the corporation focuses its attention to pleasing the consumer so that they can continue and maybe recommend the organization to relatives and friends.

1) Social networking provides a variety of enticing forms to communicate with consumers. Businesses can post images or videos of their products or interact via comments or messages. Social networking offers an atmosphere in which consumers can know about a company or the market (Wood and Jobber, 2016). Trying to engage with consumers creates client value and improves customer satisfaction.

2) Maximization (SEO)

Keywords or phrases are entered in a search engine to find a certain topic or address a question. Web applications are done by searching the internet sites or articles for words or phrases and to portray the information to the user. Successful SEO may not only put the business only at the top of search engine results.

 

Recommendation: –

After the study of this is found that the organization Energy UK has some crucial negative effects which is a really bad condition for the business, and which also cannot change by the organization, like political and economic impact on the energy business of the UK (Griffin et al., 2016). It has been discussed earlier that the increase of tax by 19% can affect the business profit directly and also the inflation rate is not favorable for the organization. It is assumed that the inflation rate of the United Kingdom will increase to 2.1%. Instead of this negativity, organizations have some positive factors in the business, which can help them to grow in the future. This recommendation is based on that.

Technological advancement: –

The United Kingdom is undoubtedly one of the countries in the world that have achieved some great achievements in the field of technology. In the energy UK if the UK can bring high growth with the help of technology. As the Government of the UK is not allowing the use of carbon, if the organization tries to implement the eco-friendly green energy system, that time it can save the environment as well as increases the business growth of the organization. As it links to the PPP, which is increasing, it is a good opportunity for the organization. As per the discussion above the lithium-ion batteries is a good option, which supports the green environment initiative taken by the Government as well it is good technological advancement by the organization Energy UK (Malinauskaite et al., 2019). The Government also tried to help the energy sector by investing £ 47 billion and also proposed to the energy sector of the United Kingdom that installation of 30GW offshore windmills by 2030. It is a great opportunity for this sector where the government itself helps the sector to build the system in the country (Munro 2018). Not only the Government but also some private companies also want to invest £ 10 billion in the energy sector of the UK.

The demand of the Green Energy:

It is noticeable the demand for green energy among the people of the UK increases day by day (Andersson et al., 2017). As per the last survey report till now 1.9% energy of the UK is driven by the solar system and it is increased day by day. It is assumed that within the 2030 energy sector of the UK can give 60GW of power, which is generated by the green energy system.

 

 

 

 

 

Conclusion

On the basis of this study we can clearly see the organization Energy UK has a great opportunity to grow. Instead of some negative aspects, organizations have some crucial positive aspects also. Organization gets a lot of support from the United Kingdom Government, which is the best scope right now as well as for the future of the organization. Green technology is the best option for the company and also for the carbon free world. Except for the Government the private players also want to invest in the Energy sector which indicate the future growth of the company. Energy UK has to adapt the technological advancement and implement in the organization.

 

 

 

 

 

References

 

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