Center point energy
Discuss the Competitive environment and Robust Summary statement Findings
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CenterPointEnergy
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CenterPoint Energy
Long-term objective
The company’s long term objective is to be a pure play regulated utility, electric and gas distributor. Some progress is being realized toward the achievement of this objective for instance, the Enable Midstream stake is still being considered with some strategic steps being developed to refit Indiana generating capacity by 2024, less coal, and more solar and wind (Sorrells & Benitez, 2005). In simple terms, the company’s goal is to transition from use of coal and other conventional productions methods into a fully fledged renewable energy hub.
Current Strategy
The current strategy of the company is to offload two gas distribution company, work on increasing its five-year earnings grwoth rates and built on new energy and grid modernization opportunities at its electric business. The company had pronounced that its targeting an increased 6 to about 8 percent utility EPS growth rate from last year through to 2025 (Sorrells & Benitez, 2005). And this was an increase up from 5 and 7 percent and by 2021 it had uncovered its guidance basis utility EPS range of about 1.23 to 1.25 dollaes, up from the 2020s EPS range of about 1.12 to 1.20 dollars.
This current strategy is extremely inclining toward electric on the front end as the company is upgrading its productions in Indiana. This is done in resonance with gas distribution investments which is entirely ramped up in the latter years of the plan. The company is planning an investment of about 55 percent of its revenue plan in the business of electricity and also anout 45 percent at its gas utilities (Sorrells & Benitez, 2005). Also, it is currently focusing on getting cleaner with a 9.1 billion dolla capital investment plan at the electric utility business to gear the investment in the direction of transmission, distribution, renewbales and natural gas, fundamentally in Indiana and Texas.
External assesment
Geographic Environment
The new policies regarding environment comes with new opportunities is is to create a level playing ground for all the players in the industry CenterPoint Energy being one of these players, is represented with a great opportunity to drive home its advantage in the new and disruptive innovation and gain wider market share in the new product category (Sorrells & Benitez, 2005).
Trends
The new technologies is offering even greater opportunities to the company to enable it practice differentiated pricing strategy in the new market (Sorrells & Benitez, 2005). Also, it is going to facilitate the firm to maintain its loyal customer base by offering them great services and also attract new customers through the diverse value oriented propositions.
Threats
The new market is clearly concerned with the preservation of environment and for this reason they are very mindful of their energy consumption. Since, the company is still relying on the conventional methods, it is difficult to attract new opportunities and customers.
Opportunties
The growing application of renewable energy and the emergence of the renewable technologies is actually acting to minimize dependancy on natural resources. CenterPoint Energy has got a vast chance of assessing the extent to which the country’s technological infrastructure is supporting the use of renewable technologies to capture the very environmental trend.
Economic Environment
Trends
Economic growth rate of the countries making global expansion is one area which is somewhat a trend in this case. The company should review such countries’ economy and the growth rates that are supposedly offering more opportunities for strategic grwoth.
Threats
Inflation particularly in the wake of COVID-19 pandemic is a huge threat. The high inflation rate can potentially trigger adverse impacts on the growth of revenue of CenterPoint Energy because it highly decreasese the purchasing power of money and also discouraging consumers spending on goods and services.
Opportunities
The increased effeciency of financial markets is perhaps offering a profound correlation with the general economic growth, making the accumulation of money and good and services to be quite smooth.
Political Environment
Trends
Trade policies for expansion decisions. The company has to consider the prevailing trade regulations, while prefering the regions having free and flexible trade agreements. The region under consideration is currently minimizing the trade restrictions to ease the environment for foreign investments and this is increasing the attractiveness of this region for the company.
Threats
Taxation policies are not quite favorable and this discourages investments in most areas. However the company should be looking at the countries with reduced corporate taxes to make it easier for them to make profits and invest in innovation, new products and research and development (Sevcik & Lunsford, 2007).
Opportunities
The governance system is majorly anchored on democracy is making the business environment friendly for companies like CenterPoint Energy (Sevcik & Lunsford, 2007). The company is bound to benefir from the economic freedom offereed and the enabling environment created by the government to promote entrepreneurship.
Socio-cultural environment
Trends
Consumption behavior which is actually strongly correlated with the economic factors. The new consumers are willing to spend moee on goods and services to improve lifestyles, and this is offering exiting opportunities for the company to grow (Sevcik & Lunsford, 2007).
Threats
Societal and cultural norms. It is a challenge that each and every country is diverse in its norms, values and traditions and this is eventually reflected on the consumer behavior. Being a global firm from a culturally distant market, it is indeed difficult for the company to understand and manage the delicate cultural nuances.
Opportunities
Demographics. The incraeased growth of population particularly the younger population segment is becoming favorable for the company, particularly in the event that its products and services are directed to the young population (Sevcik & Lunsford, 2007).
Global environment
Trends
Increased technological innovations which is indeed affecting the entire market stability and the industry is generally (Sevcik & Lunsford, 2007). By studying and adopting the emerging technological innovations CenterPoint Energy will be able to contend with the disruptive nature of such innovations and understand the new product development rate, the product lifecycle, and the features which are mostly preferred by the customers.
Threats
COVID-19 pandemic is ravinging the world and this has destroyed the global commercial activities and logistical aspects. This is a great threat to the development and revenue growth of the company.
Opportunities
Countless opportunities are arising from the technological innovations, research and development and the developing technological infrastructure in the gobal scale. CenterPoint Energy can take advantage of this and stage a smooth transition into the production of renewable energy.
References
Sorrells, P., & Benitez, A. (2005, April). Power transformer neutral grounding reactor application and distribution feeder protection issues at CenterPoint Energy. In 58th Annual Conference for Protective Relay Engineers, 2005. (pp. 27-39). IEEE.
Sevcik, D., & Lunsford, R. (2007, June). Automated Analysis of Faults and Disturbances: Utility Expectations and Benefits-CenterPoint Energy. In 2007 IEEE Power Engineering Society General Meeting (pp. 1-4). IEEE.