Transformation of Energy

Introduction:

Energy industry is one of the fastest growing industries due to ever-increasing number of consumers and high energy demand across the globe. Internationalisation of energy sector allows its market leaders to conduct cross-border trade that not only promotes high profits as well as market growth of this industry but also facilitates highly competitive advantage in global business platform. Due to growing population and increasing consumption of energy across the world, marketers of energy companies are compelled to develop useful strategies that can not only provide them with high market growth but also assists the manufacturer to meet the increasing demand of energy across the world. on the other hand, climate change as well as the environmental degradation poses pressure on energy firms to use innovative strategies to find out alternate sources of energy to meet the ever-increasing energy demand of consumers. due to illegal use of natural resources, energy companies are going to face scarcity of potential energy sources such as petroleum, coal and natural gas, that will create the high level of competitive rivalries in international market.

In this context the report is going to determine and discuss the strategies that energy firms can take to gain strong competitive advantages in the global business platform. Additionally, the report will also analyse the fact why institutions would support the transformation of energy sector. finally, the report will make a suitable conclusion in which it will represent the summary of the entire discussion.

What strategies might global energy firms pursue to gain competitive advantage?

Following strategies would be taken by energy firms to gain competitive advantages:

Cost-leadership strategy:

This strategy enables businesses to gain competitive advantage by cutting down production cost as compared to its rivals (Kharub et al. 2019). Market leaders of energy firms can use this strategy to become the Lowest Cost Producer in global market that will assist them to gain a strong competitive edge. in recent era, energy sector faces difficulties due to unpredicted climatic condition as well as environmental degradation that compelled the energy producers to use the alternate sources of energy to meet the high energy-demand in global market that can enhance their production cost (Marangu et al. 2017). In this context, the marketers of energy firms need to consider some aspects such as firm’s financial condition, cost strategy of other market leaders, nature of energy demand in global market and possible outcomes of the cost reduction. Despite the criticism, it can be stated that, cost reduction strategy will be useful for energy sector to reduce its operation, production and management cost that enables marketers to enhance the overall profit and high competitive advantage.

Pricing leadership strategy:

This strategy will assist energy firms to lower the price of its products and services as compared to international rivals with an intention to grab strong competitive position in global market. as mentioned by Helmold (2020), price-leadership is highly useful strategy that assists firms to offer products and services at lower prices to customers as compared to the other firms selling similar products and services. By using this strategy marketers of energy firm can attract global consumers by offering them energy and petroleum products at attractive price that will not only improve the brand reputation of firms in the international market but also enable marketers to pose high competition on their rivals. On the contrary Hinterhuber and Liozu (2019) argued that, due to high demand for energy, marketers are obliged to spend huge money to use innovative and highly-modern production process, which make it obligatory for the marketers to fix such prices of their products that would enable them to gain the desired profit. therefore, marketers of energy firms need to use price leadership strategy along with the cost-leadership strategy in which they are able to reduce both production cost and product price that will enable them to gain estimated profit.

Differentiation strategy:

This strategy will enable an energy firm to represent the difference of its products and services with the similar products and services offered by the other firms (Semuel et al. 2017). Brading is important differentiation strategy that can be used by marketers of energy firms to gain strong competitive position in international business market. through using this strategy, energy firms can represent the uniqueness, durability, and usefulness of their products to convince consumers to choose the firm over the others. For example, British Petroleum is known for the crude oil, petrochemical products, and industrial fuels. By using this strategy marketers of energy company can enhance the visibility and attractiveness of its products in front of the customers to develop strong customer-base and gain good competitive position in global business platform.

Promote culture of innovation:

As the number of payers in the energy sectors have been gradually increased in recent era, if energy firms want to gain competitive advantages, they need to develop a culture of innovation in their workplace (Aksoy, 2017). Through using innovative energy production process, smart market strategies, creative product development strategy and technology-based operation management process, energy firms can enhance their productivity and reduce the production as well as operation cost. therefore, by conducting innovative strategies in production, operation and decision-making process, energy firms would be able to improve its competitive position in international market and pose strong competitive threats on their rivals.

Operation effectiveness strategy:

This strategy is widely used by today’s market leaders to grab strong competitive edge. By using innovative and creative methods in operation management process, energy firms would be able not only to fasten the production and delivery of energy products to customers but also can enhance the overall output by using limited inputs (Tegethoff et al. 2019). By introducing highly modern technologies and smart tactics in overall operation, energy firms can improve the quality and quantity of energy products that will satisfy the customers’ need thereby enables marketers to gain good competitive position in global market.

Technology-led competitive method:

by using technology into operation management, marketing, project management, production and selling process, energy firms can improve the customer experiences (Raghupathi and Raghupathi, 2019). Additionally, technology will assist marketers of energy firms to conduct thorough market research on global business trend that is important to understand current consumers perspectives, energy demand in global market and changing buying behaviour of customers. On the other hand, online transaction facilities, highly smart business dealings and convenient as well as smart pricing strategy will attract customers in energy sector that is highly useful for marketers to grab competitive edge.

How might institutions support the transformation of the energy sector?

Due to growing demand for energy worldwide and scarcity of energy resources it becomes necessary for the energy sector to go through effective transformation. This transformation needs political, economic. technical, socio-cultural, and legal support from governmental and non-governmental institutions across the world. following are the ways in which institutions can support the transformation of energy sector.

Support for Transition towards renewable energy:

Governmental institutions can encourage the transition of energy industry towards renewable energy production, that can enhance not only the market growth of this sector but also can produce higher amount of energy that assist energy producers to meet ever-increasing demand for energy globally (Jonek-Kowalska, 2019). The scarcity and higher price of petroleum and coal pose financial burden on energy producers by enhancing manufacturing, operation and management cost. in this context, governmental organisations need to provide economic support to energy manufacturers to switch to the renewable energy resources such as fossil fuel, wind, solar power and water that will reduce the overall production as well as operation cost and enhance the profit margin. for making this transition, energy firms need legal approval, continuous cash flow and modern infrastructure, which can only be possible by the support of governmental institutions (Osmundsen, 2020). Governmental institutions can develop and reform regulations in support of transition of energy sector to renewable energy production. additionally, governmental as well as non-governmental organisations need to ensure that energy sector will get high amount of FDI that will improve the overall cash flow in this sector. on the other hand, through developing positive and highly supportive infrastructure for energy industry, governmental institutions can assist energy firms to use highly modern technology and innovative procedures to produce high amount of energy by using limited inputs.

Economic support:

Transition of the entire energy industry needs huge financial support that will assist marketers of energy firms to use innovate procedures, modern technologies and equipment and reliable operation methodologies (Massel and Massel, 2019). In this context, governmental and non-governmental organisation can provide financial support to the energy industry by ensuring that the energy firms will get consistent cash flow. In this purpose, global energy institutions need to focus on grabbing foreign investment into the energy sector that will assist the industry to make perfect transformation of its production process, operation process and management system (Cheung and Davies, 2017). in addition to this, private organisation needs to assists governmental institutions to provide economic support to the energy firm by enhancing number of clients and investors in this sectors that can improve the overall cash flow in this industry.

Political support:

Political support is crucial for transformation of any industry. Energy firms seek legal permission from government to make the necessary changes as well as transformation in this sector (Allen et al. 2019). Therefore, political support from governmental institutions is crucial for energy firms for allowing marketers to implement the changes and transition in their overall operation, decision-making and management process. legal approval from governmental institution assists the energy firms to work on the transformation freely and use innovative technologies to make modernisation of the entire sector.

Social support:

Transformation of energy sectors needs social support in which society people, consumers, suppliers, dealers and clients need to accept the transition with positive mind (Cox et al. 2017). if social trend is against the transitional then energy firms are unable to achieve their desired goals through making the transformation. In this context, government and non-governmental institution can conduct campaigns, awareness program and public relation program to improve social perception towards the transition (Ammer, 2017). Through conducting online promotion of the transformation of energy industry, governmental and non-governmental institutions can develop a positive mind-set of society people towards the usefulness of this transition, that will provide the energy firms with high level of social support.

Technical and infrastructural support:

For making useful transformation of any sector only political, financial and social support are not sufficient, rather marketers also need technical and infrastructure support (Cox et al. 2017). For implementing desired changes and modification in operation, production, management and decision-making process, energy firms need good technical infrastructure. In this context, governmental and non-governmental institution need to ensure that energy firms are provided with the infrastructure that they need to implement effective changes in this industry such as modern technologies, ultra-modern equipment, skilled staffs, improves cash flow, strong technical backup and sufficient technical staffs. on the other hand, governmental and non-governmental institutions ensure that energy industry is provided with the financial support that they need to buy modern technologies, innovative operation process and modern machineries (Gawlik, 2018). Through ensuring proper technical and infrastructural support, institution can assist the marketers to make such a tradition of the energy industry that will improve the overall production and will assist the industry to gain competitive advantage in international market.

Conclusion:

From the overall discussion, it can be concluded that, competitive advantages is important for any business to grab strong market reputation while operating in global business platform. Energy industry is the fastest growing industry that has high market opportunities in global market due to ever-increasing demand for energy and increasing number of consumers worldwide. On the other hand, due to scarcity of energy resources and increasing price of petroleum and coal, energy industry faces challenges to produce sufficient energy to meet ever-increasing demand worldwide. In this context, energy industry needs to focus on grabbing strong competitive position in international market by developing innovative strategies such as cost leadership strategy, price leadership strategy, innovative culture strategy, efficiency enhancement strategy and implementation of technology-led business. on the other hand, to deal with the challenges, energy sector needs a useful transformation of the entire industry that will allow the marketers to make useful modifications in the market-decision, operation, production, processes and management system. additionally, useful transition towards technology-based and modern system will enable energy industry to improve the overall production and enhances the quality of their service that will not only assist them to improve customer-relationship but also assist marketers to grab strong competitive position in international market.

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