Entrepreneurship - Greenenergy International Limited - Essay Example

? Business Report: Greenenergy International Limited College: Introduction Greenenergy International Limited was founded in 1992 as a supplier of low sulphur fuels in 1992. Two years later, the company started similar operations in Germany, UK, and Switzerland. Greenenergy concentrated on expanding its products portfolio and reaching out to new markets with its products. In 1999, Greenenergy introduced ultra low sulphur petrol in Japan, Hong Kong, and France. The product had been introduced in the UK market in the previous year. As a fast growing company that cares for the environment, Greenenergy has received many awards and recognition in the UK and other markets. Greenenergy started supplying low sulphur fuels to reduce on air pollution in all markets. However, the company shifted from low sulphur fuels to bio fuels to address the growing concern of global climatic change. Greenenergy has grown rapidly to be a leading supplier of fuel in the UK. The company supplies about 10 billion litres fuels including petrol, bio fuels and diesel. This is more than 25% of all road fuel that is supplied in Britain (Greenenergy 2012). Greenenergy’s main customers include supermarkets and oil companies. These are the major retailers of road fuels. Fleet users are major customers for diesel. Although Greenenergy supplies large amounts of road fuels, it does not own any petrol stations but supplies fuels to its customers in bulk. Greenenergy’s objective is to expand its operation by offering high quality products at low prices to its customers. This strategy has worked to attract new customers and retain existing customers. Consequently, Greenenergy’s market share has been expanding since its establishment. The company evaluates its supply chains to increase their efficiency and cut costs. Consequently, Greenenergy can sell its products at low prices without compromising on quality. This attracts more customers in its markets in the UK and other parts of the world. Greenenergy has employed effective business strategies to become the primary supplier of sustainable bio fuel in the UK. The company produces biodiesel in large quantities from wastes among other products (Greenenergy 2012). Entrepreneurial Characteristics and the Entrepreneurial process The approach taken by an entrepreneur at the start-up level has an influence on the success of the business. Some of the factors that influence a new venture’s success include the time spent in the business, amount of start-up capital, risk management strategies, and government policies. The characteristics of the entrepreneur have significant influence on business success. The level of ambition and experience of the entrepreneur will determine their persistence in new markets. Experienced entrepreneurs are likely to last longer in the market and achieve significant levels of success (Gelderen, Thurik & Bosma 2003, p.319). This implies that an entrepreneur plays a significant role in the growth and sustainability of a new business in the market especially in risk management. The approach that an entrepreneur uses to launch their business will depend on the amount of information, experience and skill that the entrepreneur possesses. Gilbert and Erying (2010, p. 92) indicate that successful entrepreneurs have the capacity to analyse risks involved in a new venture. Successful entrepreneurs identify and eliminate risks systematically. Ignoring risks could lead to losses in a business and sometimes an entrepreneur is forced to exit the industry. Thus, systematic elimination of risks enables entrepreneurs to tackle risks in the right order with the right methods and resources. Every entrepreneur must recognise that risks are different and have different effects on a business’s growth process. A wrong approach to eliminating risks may lead to the failure of a new business venture. This implies that the level of success for any new venture depends on the capacity of the entrepreneur to deal with all the risks involved correctly. Effective risk management begins with identifying and classifying all risks involved at every stage of the business. The founders of Greenenergy were aware of the risks involved in starting up an oil company in the Swedish market. The company was launched at a time when Sweden was very conscious of the state of its environment. Oil companies are associated with pollution and the kind of products that Greenenergy would introduce would determine if it would be allowed to launch its operations in the Swedish market. Having analysed the market rules and regulations in Sweden, Greenenergy introduced low sulphur fuels in the market. These products gave the company a competitive edge in the market and enabled Greenenergy to comply with government regulations. The introduction of low sulphur diesel and a research on its benefits built Greenenergy’s image and competitiveness in the Swedish market (Greenenergy 2012). Greenenergy produces products that meet the needs of market. These needs keep changing with changes in environmental concerns. Greenenergy has taken advantage of the opportunity that environmental concerns presents to produce fuel products that best address environmental conservation. Greenenergy has differentiated its products in the market as environmental products and this has helped the company to build its brand. The demand for environmental friendly fuel products represented unmet needs in the market and Greenenergy has concentrated its product innovation strategies to meeting these needs (Greenenergy 2012). Entrepreneurs are not homogeneous. They differ in their characteristics, motivation, ambition, skill and experience. Governments and financiers realise the need to support entrepreneurship for economic growth. However, governments and financiers channel their support to entrepreneurs who are likely to succeed in business (Westhead et al 2005, p. 109). Government support is important to a new venture. Governments have the authority to develop policies that would lead to business closure. With government support, an entrepreneur is guaranteed of longevity in the market if other business strategies are competitive. Financiers such as banks issue loans to entrepreneurs that prove their capacity to succeed in the market. They will examine business plans and strategies before issuing financial support to entrepreneur. Therefore, an entrepreneur’s characteristics will influence the decisions of the government and financiers to offer support. This in turn affects the speed and extent to which an entrepreneur expands their business (Westhead et al 2005, p. 109). Greenenergy has managed to build its image in the market as an organisation that cares for its customers and local communities. From its establishment, Greenenergy engaged in product development and innovation strategies that attracted government’s support and endorsement in the market. This support has been crucial Greenenergy’s rapid growth and expansion. Greenenergy has grown from a single idea to be one the leading private companies in Britain. The UK government sets bio fuels targets for oil companies. Greenenergy has managed to meet and exceed these targets. This has attracted more support and praises from the government. Erying, Johnson, and Nair (2011, p 88) argue that new businesses should focus on unmet needs in the market as their starting point. Sometimes the unmet needs are basic and these represent an entry point into the market. Such a strategy requires a comprehensive market research to identify the unmet needs. Greenenergy has employed this strategy from the start. The unmet needs in the UK market guide its production and product innovation. The company concentrates on expanding its products portfolio based on the needs of its customers. The exit of traditional companies from the market increases the number of customers with unmet needs. Reaching such customers with a constant supply of fuel products has enabled Greenenergy to expand its market share. Today, its market share is more than 25%. If the company continues with its innovating strategy, its market share will increase rapidly in the coming years. Innovation Activities Rapid changes in market requirements and technology reduce the lifecycle of an organisation’s products in the market. Developments in infrastructure and globalisation challenge organisations to engage in continuous innovation to remain competitive. Innovation of products is particularly important in every organisation given the current changes in the global business environment. Customers have access to information on various products and suppliers. The range of products for consumers has increased with information technology and hence businesses must develop their products to attract customers. Businesses are expanding their operations to foreign markets as a way of increasing their market share. Consumer needs evolve from time to time and product innovation is necessary to cope with these changes (Jansen 2009, p.6). Greenenergy recognises the need for continuous innovation on products and business strategies. The company’s range of products has been changing as consumer needs in the UK market change. Consequently, Greenenergy has recorded high sales even in seasons of low demand for fuels products in the UK market. Dyer, Gregersen, and Christensen (2009, p. 61) outline some of the characteristics of innovative business owners. The discovery skills of entrepreneur set them apart from other entrepreneurs in the market. Questioning skills enable entrepreneurs to consider new possibilities in the market and take advantage of such possibilities to launch their operations or expand their market share. Observation is also important to identifying opportunities in the market. An innovative entrepreneur observes small details in the behaviour of consumers, suppliers and competitors. The observed behaviour guides an entrepreneur in adopting a new or different way of conducting business. For instance, observing the behaviour of competitors will help an entrepreneur to design strategies of differentiating their products in the market. Experimenting with new ideas can also help an entrepreneur to discover new ways of doing things. Networking exposes an entrepreneur to different perspectives from other entrepreneurs. The extent to which an entrepreneur exploits his or her discovery skills will determine their approach to innovation in their business. Anthony, Eyring, and Gibson (2006, p.1) indicate that many managers use the wrong approach to innovations and as a result, they do not achieve their objective of investing in innovation activities. They rely on their past innovation strategies and try to expand their operations without a well-defined systematic plan. This leads frustrating results in the market and some business managers conclude that innovation in unpredictable. The first step to innovations should be identifying the target market or play field for innovation activities. This can be indicated by the markets worst customers or unmet needs in the market. Barriers to consumption can also help a company to locate its playing field. Once the play field is identified, the next step is to establish specific ways in which the company will serve the market. The process of innovation begins after establishing strategies of serving identified target markets. Ofek and Whathieu (2010, p. 124) suggest that business managers should observe current trends as a guide to their innovation strategies. Market trends have an impact on consumer behaviour as well as value propositions in the market. Greenenergy has invested in innovation since its establishment and this largely contributed to its success in the market. At the start of its operations, green energy was manufacturing and supplying low sulphur oil to address oil pollution concerns in its areas of operations. However, environmentalists shifted their focus from oil pollution to climatic change. Greenenergy identified this shift in focus and started to produce bio fuels. The contribution of oil companies to environmental conservation helps them to build their image in the market. This is because oil companies are associated with pollution and environmental degradation. The innovation on Greenenergy’s products indicates that the company keeps track of current trend and uses such trends as a guide to its innovation activities. Greenenergy has taken advantage of the current trending UK market where oil traditional oil companies are exiting the markets. These strategic markets form Greenenergy’ play field for its innovation strategies. To reach these markets, Greenenergy has renovated its storage units and the efficiency of its supply chains. Greenenergy had adopted latest technology in production including sophisticated information technology systems that enable it to serve its customers at high levels of efficiency. Opportunities An evaluation of an organisation’s internal and external environment can help the organisation to identify different opportunities in the market. Exploiting such opportunities can lead to higher levels of growth and profitability. Exploiting opportunities in the market can also help an organisation to expand its market share. However, identifying opportunities does not necessarily lead to their exploitation. Many entrepreneurs ignore exploitation activities. Therefore, they have not focused their market research to exploitation activities. Some entrepreneurs have missed on chances to expand their businesses by ignoring opportunities or using the wrong approach in exploiting opportunities. Entrepreneurs must make a conscious decision to pursue an opportunity if they are to benefit from their opportunities. Such decisions are based on a number of factors including the cost of exploiting an opportunity (Ucbasaran, Westhead & Wright 2006, p. 38) When the cost of exploiting an opportunity is lower than the expected benefits, an entrepreneur is likely to exploit such an opportunity. An entrepreneur’s decision to exploit an opportunity also depends on the resources available and the entrepreneur’s level of knowledge. Lack of resources constrains entrepreneurs from exploiting all opportunities in the market. The knowledge of opportunities and strategies of exploiting these opportunities influences an entrepreneur’s decision on opportunity exploitation. If an entrepreneur has limited knowledge on how to exploit opportunities, he or she is likely to ignore identified opportunities (Ucbasaran, Westhead & Wright 2006, p. 38). Greenenergy’s continuous market research has enabled it to identify opportunities in the UK oil market. The launch of Greenenergy’s operations started from identifying an opportunity in the market and taking advantage of the opportunity. Identification and exploitation of opportunities is a continuous process in Greenenergy. The level of success and rapid expansion in Greenenergy is an indication that the company employs the right strategies to exploit opportunities. Greenenergy is able to identify opportunity in the UK market where major oil companies are seeing limitations. Greenenergy is expanding while its major competitors are closing down their operations in the UK. Many traditional companies have been leaving the UK markets to other markets. Greenenergy takes advantage of this move to increase its efficiency and reliability in the UK market. Greenenergy has invested in new infrastructure so that it can supply road fuels in all strategic markets in the UK. The company has also been building its economies of scale. New manufacturing plants have been established at Teesside and on Thames estuary. The increase in the number of manufacturing units has enabled Greenenergy to increase its level of fuel supply and assure its customers of reliable oil supply. Greenenergy has also renovated Cardiff and Plymouth storage terminals to increase their efficiency. Greenenergy took advantage of the opportunity provided by companies that are leaving the UK market and aligned its operations to reach to their market share. As a result, Greenenergy is the third largest private company in Britain (Greenenergy 2012). The company has recorded a growth rate of 60% in the past five years as traditional oil companies struggle to maintain their competitiveness in the UK market. Environmental concerns in Sweden created an opportunity for Greenenergy to produce fuel products that are environmental friendly. These products have built Greenenergy’s reputation even with the Swedish government. By utilising its opportunities well, Greenenergy has managed to attain its position as the leading supplier of road fuels in the UK. Greenenergy experienced a rapid growth in sales of 66% between 2007 and 201. This growth rate was achieved when there was a 16% decline in demand for fuel in the UK market. This implies that Greenenergy studies trends in demand for fuel products and aligns its product strategies to those trends. Greenenergy sells its products in bulk and has no retail outlets (Greenenergy 2012). The UK oil sector is undergoing fragmentations and major oil companies are selling their production, refining, and storage facilities in the UK. The traditional business model for oil companies in the UK was vertically integrated. The traditional oil companies have been refining their fuel products and supplying to their consumers through their own petrol stations. These companies are now selling their plants to new entrants who have to established brands in the UK market. Refining and storage facilities are sold to different entrants and this has made vertical integration rare in the market. This move to sell refining and storage facilities to new entrants is an opportunity for Greenenergy to expand its market share before the new entrants build and market their brand (Greenenergy 2012). Greenenergy adopted a different business strategy from its competitors. The company does not sell its products through petrol stations like the traditional UK oil companies. A vertically integrated business models has not worked for the companies that are now leaving the market. The current trend in the UK oil sector demands that oil companies increase their efficiency to remain in business. Greenenergy recognises this requirement and thus, the company has positioned itself for higher levels of efficiencies. Some of its strategies to increase efficiency include proper management of infrastructure and logistics between refiner and retailers. This will ensure that deliveries to retailers are timely (Greenenergy 2012). Conclusion Greenenergy is one of the leading private limited companies in the UK that supplies fuels products. The company has experienced rapid growth in its market share and sales since its establishment in 1992. The characteristics and approach of entrepreneurs in new and existing markets influence the sustainability of their businesses in the market. One major characteristic of successful entrepreneurs is the ability to identify and systematically eliminate risks in the market. Greenenergy has employed effective strategies in risk management and has managed to overcome challenges in Britain’s oil sector. Innovation is necessary in any form of business given the rapid changes in market requirements and consumer needs Innovation activities should be guided by current trends in the market. An entrepreneur should identify their play field by identifying unmet needs in the market and then develop strategies of meeting those needs. Greenenergy recognises the current trends in the UK market. The company has invested its resources in innovation to remain competitive. The current market trends requires that oil companies increase their efficiency and supply products that meet the government’s rules and regulations on environmental conservation. Greenenergy’s innovation activities focus on efficiency and product development to meet current needs in the market. Identifying and exploiting opportunities in the market can help a business to expand its market share. Since its establishment, Greenenergy has been identifying and exploiting opportunities in the UK and foreign markets. Consequently, the company has expanded its market share to more than 25%. The right approach to entrepreneurship has enabled Greenenergy to experience rapid growth in sales and market share while oil companies are leaving the UK market. 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