Micro Environment and Macro Environment Analysis of CIM Centrica - Case Study Example

 CIM Centrica Case 1. Situation analysis Macro-environment (PEST) PEST analysis Political and Legal 1. The New businesses and ventures. 2. The Policies differ from business to business ( this implies on all the different categories the organization has ) 3. The company’s more about consumer satisfaction providers at various levels. 4. The competitor market in each business segment is disreputably unpredictable. 5. The Political as well as the economic solidity have played a very important role in the success of the organization as a whole. Economic 1. The company needs to be vigilant of the altering constancy of the market rates and the foreign exchange rates. 2. The profit of the company in each of its business segments is increasing. 3. The basic disposable income of the consumers is rising which can be a major element affecting the demand of the products and services in the market. 4.The development in all the market segments the organization has diversified into 5. The economic Growth of UK, North America and Europe. Social and environmental 1. The varying consumer needs and wants tend to influence the market. 2. The Increase in overall employment within the diversified market. 3. The ever increasing spending power of the consumers. 4. The Consumers have started recognizing the price changes along with that of the competition involving the other companies. 5. The organizations which are real old in the individual market segments tend to have a certain negative influence on the consumer markets. 6. The consumer database of the organization varies largely in between new and old market associates. 7. There is possibility that there might be similar customer demands in the parts of north America and Europe. Technology 1. The extraordinary intensification within new skills tends to smooth the progress of simulations. 2. The technological enhancements are the element that is producing innovative products development in addition to foundation. 3. The New gas and other segment technologies stimulate an innovative technique of doing support such as the organizations World Wide website. 4. The innovative technologies make exploration as well as development effortless. 2. Products and markets A) The United .Kingdom . Market B) The Market internationally The BCG 3. The Porter’s Five Forces (Micro-environment) The Power of Dealers The Power of the Clientele The Aggressive Competition The Intimidation of Alternates The menace of the new competitors LOW 1. As the organization is involved in the energy sector , the automobile sector , in addition to the financial services sector all of their products are used within the industries 2. Financial products , energy products along with the automobile The expense of choosing an alternative can be high. High 1. There are a lot of other dealers with similar backgrounds in the market. 2. A very swift alteration within the needs in addition to the wants of the clientele is making them more demanding. 3.The element of Brand segregation 4. There exist a big variety of brands Most of the time when they are alternating in between the products it isn’t too costly for them. High 1. The competition is Rivalry increasing day by day, there are also organizations who tend to work really hard to help create a niche within their products in order to be able to challenge the competitors effectively. 2. There is a lot of competition within the market amidst all the competitors 3. Innovative products in addition to their service expansions . MID 1. The Technological expansion within the energy sector. 3. An augmented demand for products in the automobile sector. 4. The Centrica Plc products in addition to the services are exclusive which is why at the moment they are enjoying good share within the market segment of Energy. High 1. The specific markets are highly competitive. 3. The augmented operating expenditures. 4. The product life cycle is not too short. Also because the company has diversified this is not really a very serious matter of concern. But the organization does keep a check on the PLC curve. 4. Marketing mix consists of the 7P’s To be capable of accomplishing higher sales profits and well as expansions. The organization needs to work towards boosting their total sales .And in order to be able to successfully do that it is essential for them to pre plan and strategize in a way that they would include the 7 elements of the marketing Mix. The element of Product Making use of their diversification as well as producing products and services that are targeted at satisfying clientele both within industries and households. The element of Price Because the fact remains that being one of the older players in the energy market the goodwill of the organization is real good. The organization herein also makes all it efforts to benefit from premium pricing. The element of Place The agents and dealers from where the products and services are avialble. The element of Promotion Promoting and campaigning through magazines, bulletin boards, pamphlets, leaflets, print and electronic media, market displays. The element of People The Engineers , manufacturing staffs, Sales service in addition to the marketing group The element of Process Predicting the trends within the energy, and the financial market along with the automobile sector. Making sure that the products and the services reach the maximum number of customers. Physical evidence The Products, and services and goodwill of the organization within the market. 5. The Value chain Inbound Logistics Operations Out bound Logistics Sale & Marketing Service Acquiring the Automobile Association (AA) in addition to a range of energy companies the Automobile , Customizing along with producing products in addition to services to satisfy consumers wants within households along with business sectors. They are distributed through their respective agents and dealers. Selling and advertising on the print as well as electronic media. Along with trying to gain the customers trust. Searching through the market and investigating through the clientele on the altering needs of the clientele with respect to the automobile, the energy plus the financial services sector. 15% 65% 100% GE/Mckinsey, Model 1 BCG Matrix, Model 2 High Market share Low High Market Growth Low 6. Portfolio analysis 7. 5 The C analysis The Customers B2C: customer both male as well as female B2B: All organizations / competitors within the energy sector, the financial service centers. The Cost: The Manufacturing as well as service providing expenditures, the elevated cost at times due to higher demand of certain products or services. The Channels: The agents and dealers help distribute these products and services to the consumers The Communication The Products being displayed within dealers in addition to the retailers shops so much so that the image and the goodwill set by the organization are matched accordingly .Doing promotion in addition to advertising of both the products moreover the services through print as well as the electronic media. The Competitors Competitors are all within the energy sector, the financial services sector, and the automobile sector within the diversified business segments. 8. SWOT analysis S1 The Centrica PLC is one of the few wholesome consumer cores. Through which financiers can get experience. S2 The Centrica and its organization are exclusive S3 Within the Centric PLC it is fundamentally a .consumer center. Presenting an inflated variety of efficacy services into the residence S4Within the Centrica PLC the household gas consumer base outlines the center, S5 Within the Centrica PLC the long - term concern to Centric’s interior gas consumer stand is the echelon of sustainable boundary. S6 With refrence to The number of UK customer relationships is continually growing S7 the element of Lesser negativity , established as well as resourceful products in addition to services S8 Both less old fashioned but less modern W1 Gas and electricity are typically seen as boring and low involvement services by customers, as there is very little that is tangible to attach emotions to. W2 frequently branding is further than cost correlated. W3 The Product life cycle is small W4 One Tel is also a fresh brand; however it is becoming comparatively well reputable within its own right. W5 Centrica is not as life-size as a few of its challengers , as well as an international competitor it may require to maneuver under a particular brand individuality which is as without doubt familiar as Coca- Cola or Sony O1 With hurried alterations in expertise, ever growing wireless communications, in addition to the dawn of broadband, the worldwide telecommunications market is anticipated to be in surplus of $1,000 billion (1 trillion US dollars). O2 The inhabited market for broadband admission will be value of around $88 billion by the year 2007, an anticipated seven time boost in profits over the subsequent five years O3 It can frequently generate motoring products plus the services developing the AA Service Centers. Similarly , it has the capability to appreciably spread out its company within the financial services O4 The Goldfish, originally a credit card developed through Centrica has been in general intended as a service to the universal customer. On the other hand, the British Gas reflection also assisted to attain a bigger audience. O5 comparable market recognized within north America as well as Europe O6 The continuing deregulation of the US as well as the European markets has offered opportunities to a range of companies, such a Vivendi from France in addition to Enron within the USA. T1 Many companies are using relationship data as their main tool for prediction, utilizing the analysis of historical data about the past behaviour of their customers, identifying specific segments, as well as extrapolating the behaviour of these segments into the future T2 market conditions will not change significantly. T3 With a range of competitors in the market, it is possible that customers. perceptions will change fast, and also as better offers appear in the marketplace they may become less wedded to one supplier and become more promiscuous T4 how the company consolidates its UK market effectively, and at the same time devotes enough energy into expanding its presence in international markets T5 the public do not discern big changes, but are aware of the changing environment. 9. Sowot Strength S8 xx x S7 xx x S6 xx xx S5 xx xx xx S4 xx xx xx S3 xx xx xx x S2 xx S1 xx xx xx xx x x weaknesses W5   W4 W3  W2     W1 O1 O2 O3 O4 O5 O6 T1 T2 T3 T4 T5 opportunities Threats All the points above tagged as “xx”, imply the fact that the organization might have SO strategies which utilize the strengths to grasp the opportunities within the market. For instance, with Centrica’s exclusive branding extension s, diversification as well as pricing strategies within the target market (S1), they may well make use of it to generate better quality merchandise and service to provide for those with sky-scraping personal disposable incomes (O1). All the headers that have been tagged “x”, imply the fact that Centrica Plc could have ST strategies which may perhaps make use of the strengths to let go off otherwise alleviate the threats. For instance, with the Centrica’s sound practice within the energy sector it facilitates to devise dissimilar modes to congregate unlike consumer group’s requirements (S8), they may perhaps utilize it to manufacture the accurate mode of products in addition to its services to those consumers (T5) to magnetize them expend money on the service otherwise product. The points labeled “”, imply the fact that WO strategies which can make use of the opportunities to progress within the weaknesses. For instance, with the goldfish credit card , being launched as a new product within the financial services sector (W2), the Centrica needs to carry out market /consumer researches in order to observe the desire trends (O3) of the customers to acquire products and services . The points that have been tagged as “”, imply the fact that the there subsists certain WT strategies which can prevail over the weaknesses to keep away from the threats. Centrica needs to make the manufactured goods as well as their services that are being provided more exclusively within their respective target markets (W2) to help boost the market shares (T2), along with providing a customer friendly product and service (W5) to distinguish amongst the competitors (T2) furthermore the new competitors (T1), might do promotion to magnetize price-sensitive consumers (T5) along with competing with the dealers and agents in the UK (T3). The telecommunications segment is worth mentioning here, telecommunications through mobiles, set lines as well as the World Wide Web. There were two products that were being offered such as: British Gas Telecommunications. Presenting, fixed, mobile plus narrowband Internet service, through telecommunications as a major fraction of the .indispensable services. The principal dispute for the brand is to offer consumers with a inclusive package dealing with mobiles, land line communication along with Internet statement. The investigation approved out by the corporation delegated that One.Tel is a solemn challenger inside the telecommunications market, however is not essentially very popular. The organization had tried their level best to maintain the operations of this segment. But what acted as a disadvantage was the fact, that there were already organizations within the telecom sector which were providing the services at nominal charges, and so One Tel was not able to capture the market the way it was expected to. 10. Brand positioning Product Position Stakeholder value Product Position Strategic advantage Strategies Part Porter’s generic strategies The Cost Leadership The organization has market capitalization of around £10 billion and have a large number of employees. The company has outperformed the stock market index by an approximate 187% between the year 1997 as well as the year 2002. The Company earnings augmented by £155 million to £478 million in 2002. The operating profit for the company was £932 million. The return on capital employed was an approximate 32%, otherwise an approximate 7.9% on the average market Capitalization. The Differentiation The capability of venturing into multiple segments of the market covering energy , financial , as well as automobile sectors ,for the reason that they have been old operators within the energy sector, when they diversified they carried their goodwill to each one of their respective segments. The element of Focus Operating with a combination of its segregation strategies with centralization strategies Focusing on: Centrica is a company with a variety of dissimilar products as well as services. inside Each market diverse brand names are common. In order to assist the company and Expand a market center for the upcoming decade. Ansoff’s Matrix Strategy that Centrica should focus on : Product Development & Market Penetration Boost the Market shares 1. propose as well as fragment the products and services to cater to the varying needs of consumers both within households and industries 2. Establish and offer incentives on sales of the product or the service to the consumer. Motivate the stores’ sales staffs to sell products. 3. Amplify the brand likeness and categorize for new consumers. 4. Focus more on the response when investigations are assembled from fresh consumer groups; helping the organization develop products and services as best as they can. Works cited The Certified Marketing Institute , Strategic Marketing Management: Analysis & Decision ,Centrica Plc UK case study , 2004 Graham Cooper’s Class Lecturer notes Drummond & Ensor Strategic Marketing 2nd edition Kotler Philip Marketing Management 11th edition 2003, ISBN0-13-049715-0 by Prentice Hall Kotler Brown & Adam Armstrong Marketing 5th edition Johnson Gerry, Schools Kevan and Whittington Richard Exploring Corporate Strategy (Text and Cases) edition 7th 2006 CIM (1994) - Study Text, Strategic Marketing Management – Planning and Control. London: BPP Professional Education. CIM (2002) - Study Text, Strategic Marketing Management - Analysis and decision London: BPP Professional Education Drummond et al (2004) Strategic Marketing. Planning and Control. Oxford: Butterworth-Heinemann. Gilligan C & Wilson R. (2003) Strategic Marketing Planning. Oxford: Butterworth-Heinemann. Jim Blythe (2003) Marketing strategy. McGraw-Hill Education . Read More