ERG international,inc - Essay Example

? ERG International, Inc. ERG International, Inc Introductory Page The case study of Environmental Research Groups International, Inc. (ERG) proffered issues pertinent to evaluating the overall business plan and future prospects of the organization given previous experiences. ERG is currently owned by spouses Claude and Sherrie Robbins, who both have been instrumental in steering the company from its meager beginnings as a two-person operating entity, to an organization spanning the areas of energy, natural resources, and the environment. With a just recently lost bid for a 5-year, $12 million contract for the Department of Energy's National Renewable Energy Lab (NREL) technical services hotline, Claude Robbins remains optimistic of the future thrusts and prospects for the organization. 2. Executive Summary The study aims to present an understanding of facts and situations that need to be addressed given diverse areas that impact ERG’s operations. The paper would be outlined by initially presenting a summary of the business plan of ERG with identified objectives. Likewise, the discourse would delve into relevant details of the business including a brief historical background of the company, its products and its development and growth process. The company’s strengths and weaknesses would likewise be identified; including the main issues that currently face the organization. Finally, the factors that contributed to ERG’s success and the key factors affecting the industry, in general, would be determined, prior to discussing the proposed strategies that would be recommended to achieve identified goals. A. Brief Summary of Plan To achieve growth goals of increasing revenue and size, ERG plans to focus on using government and utilities as their target markets with large and mid-size contracts. The organization likewise plans to target the private sector through focusing on the top 1000 Fortune companies. ERG would offer services ranging from developing, managing, and evaluating demand-side management (DSM) programs, conservation programs, and alternative supply side options; as well as the development of innovative options for fuel consumption and improved technological efficiencies. The strategies that are planned to be used, as envisioned by ERG’s personnel are: “(1) creating a board of directors, composed partly of influential industry insiders who were likely to be aware of requests for proposals, (2) spreading out the marketing function by providing incentives to existing staff for obtaining future contracts, and (3) hiring a person whose sole task would be to solicit projects, with compensation tied to acceptance rate or profitability” (Winn 12). B. Major Objectives According to Claude L. Robbins, President of ERG, there are growth plans for the organization, to wit: “using government and utilities as a base, ERG would like to (a) expand our federal government contracts, particularly multi-year small business (and Woman-Owned Business) set-asides (which we have not actively pursued in the past), (b) develop long term consulting relationships with public and private utilities that are developing, managing, and evaluating demand-side management programs, conservation programs, and alternative supply side options (including cogeneration, and alternative fuels), (c) increase current work level for present client base. In the private sector ERG would like to focus on: (a) working with Fortune 1000 companies to develop energy efficiency and conservation policy as well as developing energy efficient buildings, (b) developing private sector industrial DSM and conservation programs, and (c) work with companies to develop/test new energy efficient technology” (Winn 11). As clearly indicated, the goal for the company is “to increase ERG's revenues and its size substantially over the next five years” (Winn 11). 3. History of the Business A. Background of the Company The company was originally formed by spouses Claude and Sherrie Robbins on Valentine’s Day of 1980. During that time, Claude was still working as “was a faculty member at Florida A&M University in the School of Architecture and Sherrie was a chef at the Hilton Hotel” (Winn 1); where according to case facts, the plan initially was for the spouses to operate it during summer break. The first few projects focused on solar research and daylight saving potentials of buildings’ energy consumption. Each incorporator continued respective endeavors until 1988 when they decided to operate ERG on a full-time basis. Their activities delved into energy services partnerships with other organizations, professional consultation, and services that included “feasibility analyses, concept development, impact planning, and environmental impact reviews to industrial, government, university, corporate, and business clients” (Winn 2). B. Background of the Product(s) As briefly stated, ERG’s services were mainly focused on engineering and research that were categorized into the following: (1) building thermophysics; (2) energy systems; (3) utility program consulting; (4) building lighting and daylighting; and (5) conference planning (Winn 2-3). Their product lines were reported to consist of technical reports and assistance that cater to the distinct and specific needs of the clients. C. Development and Growth of the Company Tracing the development and the growth of the company is illustrated through the table below: DATE/S MAJOR DEVELOPMENTS 1980 Incorporation as two-person summer operation. 1988 Focus on full time operation where Compaq Computer Corporation was the first client 1990 ERG had 6 employees; ventured with another company and expanded to 34 employees. May 1991 ERG’s operations halted and cut back on employees to only 3. Oct. 1991 Contract with the Western Area Power Administration (WAPA) 1992 Had 13 employees, consulting and demand-side management program were provided to 10 utilities in New York, California, and Colorado D. Indentify Company's Internal Strengths and Weaknesses The internal strengths of ERG are as follows: (1) the ability to bring a wide range of talents and knowledge to a wide range of projects; (2) conducting training to all employees; (3) get every personnel involved in the management process; (4) codified information management system for keeping track of client records and sharing progress reports and technical information; (5) a networked Macintosh workstations that connect employees through the central file server; (6) a codified operating policies in an "Employee Survival Manual," a manual of Standard Operating Procedures (SOP) which outlined such things as general office procedures, travel information, letter and report styles, employee responsibilities, proposal request guidelines, and personnel policies; (7) a “Green Book” that outlines and records activities, document meetings and conversations with clients, or to record ideas. The Green Book was reported to serve as an on-going business diary and was an invaluable tool to refer to when memory failed; (8) a corporate culture manifesting collaboration and team work. On the other hand, the weakness is exemplified in terms of over reliance on Claude for proposals and solicitation; no formal organizational structure with clear-cut responsibilities and job description, and tight financial credit ($25,000 bank line of credit) which is insufficient to cover unexpected business needs. 4. What are the main issues facing ERG? From the facts, it can be deduced that the main issues facing ERG are: (1) strategies to achieve the identified growth plans; (2) setting up branch offices either in other states or internationally; (3) hiring a marketing expert to work on solicitation of projects; (4) proposed management reorganization; and (5) maintaining high quality of services given budgetary constraints. 5. What has contributed to ERG's success so far? So far, ERG was successful in its operations due to the commitment and dedication of the spouses to operate the business with keen business and entrepreneurial skills. Solicitation and successful bidding of projects were successfully undertaken by Claude and was supported by project managers through follow-up projects from current clients. This attests to the high quality of services being delivered enabling them to get new contracts from current pool. Further, the enumerated internal strengths assisted in contributing to the success of ERG. 6. What are the key success factors in this industry? The energy consulting industry was depicted as highly competitor with diverse categories of major players depending on size and where, as case facts revealed, “competition was primarily based on performance and the ability to provide the skills required to complete complex projects in a timely and cost effective manner” (Winn 5). Since the potentials for revenues are substantial, for instance, government contracts of more than $2 billion annually are awarded to different agencies. Likewise, for firms like ERG that serve the utilities group, the case revealed that “according to the World Energy Council, demand side management was a $50 billion market worldwide in 1992. It was estimated that the global DSM market would grow to $200 billion by the end of the decade, and the consultant market would reach between $12.5 billion and $50 billion during that same period” (Winn 9). Therefore, the potentials for profits are great as demand for services are deemed to manifest an increasing growth rate over the near future. 7. (How) can ERG achieve its growth goals? ERG can achieve its goals by prioritizing objectives in specified time frames, designing appropriate strategies to direct and guide personnel towards goal achievement, and monitoring the progress of objectives that are attained within schedule (if beyond, proper measures to identify causes of deviation and corrective action must be applied). 8. What should ERG's strategy be? Through ERG’s identified strategies of hiring a marketing specialist to assist Claude in soliciting contracts; reorganizing the company to delineate jobs and responsibilities (thereby increasing accountabilities and specialization); minimizing costs by going after larger projects that entail fewer proposals; target larger and mid-size public and private customers; and slowly setting up branch offices in different states (according to demand) and in international markets (Central and South America), ERG is focused on achieving its growth goals. Conclusion The case study was able to identify crucial facts and situations that need to be addressed given diverse areas that impact ERG’s operations. Through initially summarizing ERG’s business plan, objectives and corporate background, including its products and its development and growth process, the company’s strengths would assist in the development and application of appropriate strategies that would assist ERG to attain its growth goals for the future. Bibliography Winn, Josephine. "ERG International Inc." Case Study. 1994. Read More