UK

UK

UK

1. What are the potential opportunities and costs for companies based in the UK in outsourcing their operations to countries in the enlarged European Union? Please give examples to illustrate your answer.

The United Kingdom's Utilities commerce is ever growing and changing. It comprises of three major industries which form the basic needs of almost every house in the country; these being Water, electrical energy and Gas. Since the 90's all of these commerce have been Privatised and so with that there is now ever growing competition between rival businesses to offer a better service and value to buyers; their main aim being earnings as a result of this. This report groups out to perform an investigation of these utilities and explain the diverse components which affect the behaviour in which these utilities function and perform. The two major components that will be looked at will be a Pestel analysis of the entire utilities commerce followed by an analysis of the expected influences of technology.

PESTEL Analysis of UK Utilities Industry

The PESTEL investigation will gaze at the different components affecting the Utilities industry. These components encompass Political, Economic, Sociological, Technological, Environmental and Legal.

Political Issues

Political matters influencing the Utilities Industry may encompass the fact that many of these commerce were privatised but the government kept 'Golden portions' in certain commerce, encompassing the national grid. However in May 2003 the European Court of fairness ruled that the shares held by the government were illicit and therefore, this opens up new possibilities as certain limits enforced by the government may no longer apply. "The cause for the golden share placement originally was to defend these companies from takeover and sustain a degree of government command over the companies. However, the European Court has directed that these limits on ownership are illegal because they are a restriction on the free action of capital which is one of the fundamental tenets of the single market inside Europe "(Bized.ac.uk, 2003 Internet). The utilities have habitually had to be watchful of the government because issues that may sway public interest will be scrutinised by government watchdogs such as OFGEM who have been granted forces by the government to penalize companies. An example of this is OFGEM's proposal of penalties for power companies Npower and Scottish Power for stopping customers from altering suppliers. "Britain's power controller Ofgem on Thursday suggested fining utilities npower, the retail arm of RWE Innogy, and Scottish Power 200,000 pounds) each for wrongly stopping 9,000 households from switching energy supplier. Ofgem has previously penalised suppliers two times, using new forces granted in April 2002. In June this year it fined British Gas selling 200,000 pounds, while London electrical energy was penalised two million pounds in November 2002" (Reuters, 2003 Internet)

One last example of political matters effecting industries is the conflict In Iraq. Although now 'over' the cost to businesses has been shown with digressive costs producing from increased crude oil charges, which lead to an boost in petrol charges and any business which is nationwide will ...