EUROPEAN ENERGY

European Energy

European Energy

Introduction

A number of marketing scholars have begun to explore the link between the practices of customer management and shareholder value (Doyle, 2000, pp 56-143). In particular, the connections between customer retention and shareholder values have been subject to scrutiny. Gupta et al. (2004 pp.7-19), for example, found that a 1 per cent increase in customer retention had almost five times more impact on firm value than a 1 per cent change in discount rate or cost of capital. As a result of this research, the business case for marketers to focus on the management of customer retention is becoming more clearly established. However, the mainstream marketing literature offers very little guidance on specific managerial practices that are associated with high levels of customer retention (DeSouza, 1992, pp.24-8). This gap is the focus of our research.

This paper will present a case study of European Energy evaluating its competitiveness in the UK energy industry. In this light, the paper provides a PESTEL analysis of European Energy external environment, the Porter's Five Forces model, and the critical success factors of the energy industry along with the internal analysis of the European Energy internal competencies and capabilities.

Company overview

In 1996 the U.K energy market was deregulated for the first time with the consumers offered the liberty to choose gas electric supplier of their own choice out of a number of suppliers. British Gas before this act of deregulation was the main and sole supplier of Gas across the U.K. With the introduction of deregulation and privatization of the energy market there were many organizations on the scene offering the gas and electricity services at different rates, a few of them being old electric suppliers in their former areas. The benefits envisaged by privatizing the energy market was lowering of gas and electric prices and providing the consumers with the option of selecting the supplier of their own choice.

European Energy Energy is the leading energy provider in the UK, recently expanding its home and commercial services to North America and Continental Europe while employing business management strategies that will improve its overall customer service and operations. The company sources gas and electricity to residential units as well as industrial clients all over Great Britain. Its operations include gas production, electricity generation and renewable asset operations, wholesale and industrial gas sales activities, energy procurement optimization and scheduling unit. Access appropriations to gas and power supplies make it possible for the organization to be successful in the energy retail business (www.European Energy.com).

Discussion

The company recognizes the fact that increase globalization trends calls for a more competitive as well as more stable business operations in order to meet the long-term and short-term obligations and object6ives of the organization. The impact of high international competition when it comes to energy production and energy services resulted to highly unpredictable and complex business environment in the international energy industry. Along with these market challenges includes the non-renewable characteristic of most energy sources limiting the life span of ...