Business Strategy of Bord Gais - Essay Example

If one of the arrangements with the suppliers does not work effectively, the company has a choice to change over the suppliers.

Considering the threats of the new entrants, it is clear that the company has built a strong brand image for itself and has also been able to effectively retain its customers by staying on track with the latest market changes and requirements. Hence here the company faces Low to medium levels of threats. Although new entrants can enter into the markets, the company’s current customer base as well as the goodwill will permit Bord Gais to effectively fight against the newer entrants.

The company however faces a High and Very High level of threats in terms of substitute products and rivalry respectively in the current markets. The current trend in the markets where customers are opting for the ‘debt hopping’ option, the rivalry, and substitute products prove to be a major level of threat for the company. However although the company does lose out on customers, they do gain customers who have hopped from other companies as well. The above figure provides a clear overview of the threats faced by the company and the intensity of the threats has also been displayed.

Strategic Group Analysis

The strategic group analysis helps the management to gain a better idea of the direct competition for the company. Here the main competitors for Bord Gais are a) Mott MacDonald Group Limited, b) Papierfabrik Palm GmbH & Co. KG, c) Tembec Inc., d) Mainstream Renewable Power Ltd., and e) Phoenix Natural Gas.

The figure below provides a clear view of the position of each of these companies in terms of each other and their strategies. It is essential to note that not all of the above-mentioned companies act as direct competition to Bord Gais as this is determined more so by the size and the market position of the companies (Kotler, Keller, Koshy, & Jha, 2009).

It is evident from the above figure that Bord Gais has a relatively higher position and overall standing in the current markets as compared to its competitors. The company has shown an intense position in terms of energy providers. Companies like Papierfabrik Palm, and Tembec Inc., although are not direct competition do pose a threat to Bord Gais.  

Industry Life Cycle Analysis

In the current times, the need and demand for natural gas have been increasing highly. As explained in an article by Wall Street Journal, it is expected that gas usage will grow to as much as three times faster than oil or coal in developing countries. The energy forecasts as have been discussed in the report, clearly show that the global demand for natural gas will see an increase of 2% p.a. through 2030, and this change is relatively high (Gonzalez, 2011). Hence considering this factor and the forecasts of the natural gas sector, it is evident that Bord Gais will continue to rise and the company will continue to remain in the growth stage. As long as the company can keep up with the suppliers, all the companies in the industry will face a period of growth. With the rising demand for natural gas, all companies that provide natural gas will see an increase in customers and also the overall revenues of the company as well (Gonzalez, 2011). Hence it can be concluded that the industry is presently in a growth phase that will continue until there is a clear balance in terms of demand and supply.

Market Segmentation

In terms of market segmentation, Bord Gais has proved to take a major part of the overall markets not only in terms of business electricity markets as well as the domestic electricity sector. The company has shown immense attention and focus on every sector, irrespective of how big or small it is. This is evident from the company’s current position and the increase that the company has been seeing regularly on the whole, Bord Gais has been able to not only achieve a wider market but has also been able to successfully acquire companies and increase the number of towns for natural gas as well. The company has also been able to increase the number of gas users by almost 4% total to 63,000 (Bord Gais, 2011). In comparison to the competitors, the company has been able to achieve high market segmentation and has spread its brand image across several different sectors. Bord Gais has proved to be one of the major energy suppliers in Ireland and has also been able to effectively increase its total electricity supply market to 12% (Bord Gais, 2011). On the whole, Bord Gais has shown intensive performance and this has gained the company a major position in the market segmentation.