Analysis of Case Study of French Electricity Market

ANALYSIS OF CASE STUDY of Poweo: David and Goliath in the French Electricity Market

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Executive Summary The present investigation case is all about options available with in the view of the political and economic development of french electricity market. The case represents that Poweo, a leading company of electricity market is facing major issue of unfavorable economic and regulatory environment. French electronic market is to be regulated by the authorities and they have to provide the rights to effective use of production. Capacities. It was found that the lack of switching costs for end-users leaded by liberalization has increased opportunities for new companies to enter the electricity market, hence, competition increases. Government of France has taken initiatives for liberalizing its energy market, but was not yet reach up-to the EU market liberalization directives. From the report analysis, it can be said that the company can go for prompting new companies for investment in markets. Further, it is recommended to improve the financial position through improving the cash management.

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Table of Contents Chapter 1- Case study background.......................................................................................................4 Introduction..................................................................................................................................4 Statement of the problem.............................................................................................................4 Aims.............................................................................................................................................5 Objectives....................................................................................................................................5 Research questions.......................................................................................................................5 Structure of the rest of the report.................................................................................................5 Chapter 2: Case Brief...........................................................................................................................7 Chapter 3: Problem statement and plan of analysis............................................................................12 Chapter 4: Analysis and findings........................................................................................................17 Heckscher- ohlin model.............................................................................................................17 Greet hofsteid model..................................................................................................................17 Mintzberg management role......................................................................................................17 Mckinsey 7’s model...................................................................................................................18 Porter five forces........................................................................................................................18 PEST Analysis :.........................................................................................................................18 SWOT Analysis :.......................................................................................................................19 Bench marking:..........................................................................................................................19 Ratio analysis :...........................................................................................................................20 Chapter 5: Solutions to the problem and issues..................................................................................21 Solution to unfavorable economic and regulatory environment................................................21 Solution to problem of liberalization.........................................................................................21 Solution of problem competition...............................................................................................21 Recommendations......................................................................................................................22 Limitations.................................................................................................................................22 Future area of research...............................................................................................................23 REFERENCES...................................................................................................................................24

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Chapter 1- Case study background Introduction The present case study discuses about the operations of Poweo, a leaning manufacturing company of electricity and gas sector which was incorporated in 2007 and based in Paris, France.

Poweo Company is involved in production of electricity from renewable sources. The case is all about options available with in the view of the political and economic development of french electricity market. It has been witnessed that, in 2009, the mentioned organization has faced net loss of â‚Ź94 million, that was all time higher among last years. Unfavorable economic and regulatory environment is a major cause behind this loss. The organization is facing major Although, government of France has taken initiatives for liberalizing its energy market, but was not yet reach up-to the EU market liberalization directives.

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But , it was found that the lack of switching costs for end-users leaded by liberalization has increased opportunities for new companies to enter the electricity market, hence, competition increases. The the company was not having production capacity to serve large non-residential customers. However, due to electrical heating is widely spread in France, the sensitivity of French power consumption to changes in temperature is very high that affects the operations of company. The market structure and the adverse regulatory framework was also the issue faced by the mentioned company. The overview of french electricity market is provided in the present case study. The present case analysis is going to describe the problem faced by the companies as well as the application of various tools to overcome such issues.

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Statement of the problem After an in-depth investigation into the case of Poweo: David and Goliath in the French Electricity Market, it has been found that net loss generated by Poweo and unfavorable economic and regulatory environment is the major problem associated with the case. Furthermore, improper liberalizing of energy market of France is the major problem that has been witnessed.

The competition faced by Poweo in French Electricity Market with EDF or GDF, with vertical integrated production and supply operations, is also a problem associated with the company.

Aims The major aim of present investigation is to identify the problems associated with French Electricity Market and Poweo and related solutions through applying wide range of management tools and tactics.

Objectives 

To study the Electricity Market of France



To study the unfavorable economic and regulatory environment of French Electricity Market



To evaluate the problem faced by Poweo for operating business within French Electricity Market



The impact of liberalization of French Electricity Market to Poweo and entire Electricity Market



To identify and recommend suitable solutions for the current position of Poweo and mitigate the adverse effect of existing problems.

Research questions 

What are the major forces affecting the environment of French Electricity Market?



What are the uses of various management tools and tactics to identify solution of problems faced by Poweo and French Electricity Market ?



How current market conditions and competition of French Electricity Market put financial impact to Poweo?

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

What are the opportunities available for Political and economic development of the French electricity market?

Structure of the rest of the report The present report is structured in a well manner and a chapter-wise presentation is followed: Chapter 1: Background of Case: This is the first chapter of the investigation in which the brief point of case are discussed along with defining the main aim of case analysis and the objectives of entire study. The major objective of study is to identify and recommend suitable solutions for the current position of Poweo and mitigate the adverse effect of problems.

Chapter 2: Case Brief : The next in line chapter is case brief that presents the overview of entries business case in the most surmised way. This is the crucial part to make regard understand about the major points of case and the reason for conducting study. In this chapter, the case situations are described clearly.

Chapter 3- Problem statement and plan of analysis: The third and the most important chapter of present case analysis is of identifying problems based by the company and specific analysis of each problem along with a strong application of management tools and theories. In this section, reader can find the statement of the problems in the case, the application of relevant literature review on various concepts, theories, models that are relevant to the case, However a proposed plan of analysis and sources of data collated are explained in this case.

Chapter 4: Analysis and findings : This chapter represents the assessment of the current position of Poweo and application of concepts, theories, models referred and discussed in chapter 3 are presented.

Chapter 5: Solutions to the problem and issues : The last chapter of the study represents the integrated assessment of the analysis along with a best solutions to the problem. However, this section represents a an action plan to resolve the problems. Limitations of the study and scope for further research are explained in this chapter.

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Chapter 2: Case Brief The present case discusses about Poweo, an alternative electricity and gas operater in France. The major concern area of this case is the development of political and economic developments of the French electricity market. Poweo was founded by Beigbeder in 2002 with an initial investment of €1.6 million and stated supplying electricity to French consumers. In 2004, the electricity consumption was steadily increasing across Europe, and the French grid so the operators were looking for power producers for new investments to sustain growth in the energy market. For this Poweo came up with a public offer in 2005, for construction of first French CCGT plant. In the similar year, French ministry of industry’s authorization has allowed company to diversify its activities in the gas supply business.

The revenue of Poweo company has reached to €565 million and it has attained high growth in the marketplace however, in 2009, aforesaid company has generated net loss of €94 million which was three times higher from than last year. In this years company has faced the unfavorable economic and regulatory environment. The impact of financial crisis held in US in 2007 were gradually spread over the world.

Poweo’s 2008-2009 Financial

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As per the case investigation it was found that France, electricity demand which was amounted to be 486 TWh, has reduced by 2% in 2008. The government of France has taken initiatives for liberalizing the energy market but it was still behind in the implementation of the EU market liberalization directives. The new players which are allowed to operate in the electronic market were facing strong competition, and are not enough capable in competing effectively with the incumbent Electricité de France (EDF) mainly in the non-residential (i.e. industrial) segment. Poweo has faced intense competition with two major firms in French electronic market such as EDF or GDF, with vertical integrated production, supply operations and an incumbent consumer base, however, there are very few suppliers who supply electricity to end consumers in French electricity market.

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The organization do not has enough capacity to serve large non-residential customers as the current Poweo’s production capacity is 412 MW which is generated by combined cycle gas turbine (CCGT) plant, 85 MW of wind energy, 3 MW of solar, and 6 MW of hydro power. The overall French market capacity is 100 GW which is 505 MW is available capacity of Poweo.

The mentioned company has adopted several measures so as to to face gloomy economic landscape. The major initiatives is of adoption of cost-cutting program which worth around €2 million. The headcount is reduced by 30% and salaries have frozen and a significant decrease in

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bonus payments. However, it was believed that all these actions would not be sufficient to foster the future growth of Poweo’s in the French electricity market. This was the time when company is planning for building a second power station with a CCGT in the east of France that worth around €400 million. The company had to major options , one is of investing into second CCGT power plant in order to better compete on the French electricity market, as the market is goimg to be fully liberalized and second one was of implementing optimization measures, cutting back investment plans, and waiting for the electricity market reform to be approved.

In the first half of 20th century the entire electricity industry was fragmented and it take into consideration more than 200 small generators along with 1100 transmission system operators. Further, law associated with merging and nationalizing all the private owned electricity and gas firms led to the development of EDF, which is vertically integrated state owned entity. After the occurrence of oil crisis in the year 1970 government of French introduced a nuclear power program with the aim to secure self sufficiency in the electricity production.

Country like France has been directly benefitted from large scale investments in nuclear power generation since 1973 and it is regarded as world’s second largest self sufficiency in electricity production. Apart from this the low marginal cost of French nuclear park was regarded to be highly competitive when prices of oil increased in the past decade. Further, due to wide spread of electrical heating in France overall sensitivity of French power consumption to change in temperature is very high. During the entire year Nuclear plant produced a large amount of energy and at the time of peak season France imports power from neighboring countries and is exported during off season. Moreover, the government of France does not hesitates in adoption of first electricity directive.

Poweo’s Competitors in the French Retail Electricity Ma arket declare ed at CRE

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Development of national law in the year 2000 when came into force exceeded the EU deadline and it opened up to competition with the minimum share of the market laid down by the directive. Further, the French reform has been one of the most minimal and conservative in Europe where people living in the country have strong sense of public service and it has influenced around 50 year old preference for centralization. At present government of French owns 85% of EDF. In the year 2000 France established an independent regulatory authority named Commission Regulation de l’Electricite as required under the second EU directive.

Further, enterprise holds the responsibility for regulating non discriminatory access to transportation along with distribution network. Further, after few years government of French set up first transmission system operator named Reseau de Transport de l’Electricite. In country like TOLL-FREE NO: +44 2038681671 EMAIL: help@instantassignmenthelp.com WHATSAPP NO: +44 7999903324 WEBSITE: www.instantassignmenthelp.com ASSIGNMENT WRITING HELP FOR UK STUDENTS

France no entry along with exist tariff system exists and consumers have to pay fixed fee for accessing the grid no matter where they are located. Further, operators are allowed to book their entry along with exit on the basis of production capacity and estimated demand of end customers. Moreover, it is required for operators to be balanced in the energy supply in real time basis.

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Chapter 3: Problem statement and plan of analysis Strategic management Problem 1: Unfavorable economic and regulatory environment According to case investigation, it has been found that the major problem faced by Poweo company is of unfavorable economic and regulatory environment of business. The company has faced various financial downturns due to unfavorable condition of market.

However, the major reason was found the financial crisis which were held start in the U.S in 2007. In order to resolve the issue French government has decided to liberalized the electronic market. Due to such unfavorable economic and regulatory environment, the company has gained losses around â‚Ź94 million which was three times higher from than last year. Within 320 th century, it was seen that monopoly had been the predominant choice of European countries to organize electricity markets.

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Problem 2: Role of Management towards the production and supply of electricity In the given case it was also assess that role of management towards the production and supply of electricity was also not appropriate. From the case scenario it was assessed that management has not monitored the supply of electricity and management of its resources in order to operate their business profitable manner.

Problem 3: Involvement of regulatory authorities After 2003 the market of electricity has greater involvement of regulatory authorities as previously there was not such role of higher regulatory. Due to this company has to follow TOLL-FREE NO: +44 2038681671 WHATSAPP NO: +44 7999903324

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different regulations in the area of transmission and supply, generation of electricity and also while trading through cross border frontiers.

International business Problem 1: Improper liberalizing of energy market of France From the in -depth investigation in to the case, it has been witnessed that to improve the condition of electricity market, French government has taken initiatives for liberalizing the markets. However, the government has taken initiatives for liberalizing the energy market but it was still behind in the implementation of the EU market liberalization directives. This was the major problem faced by the energy market of France and the players. There were two option available to the company, these are of investing a second plan in CCTC plant or implementing optimization measures and cutting back investment plans. The new players which are allowed to operate in the electronic market were facing strong competition, and are not enough capable in competing effectively with EDF, primarily in the non-residential due to production capacity.

Problem 2: Problem of considering the different factors of market Poweo has not considered all the factors while operating its business in different areas as expansion of business in other places, it is essential for the company to consider the favorable factors. Company has not considered the favorable factors of supplying electricity in different regions.

Problem 3: Change in TaRTAM system Another problem which occurs in context to international business was change in the TaRTAM system which was introduced by the government. This regulation was introduced by the European Commission and they have set the new tariffs rate for the companies. This decision has created the infringement againg the French company and penalty fees was also imposed by the European Commission.

Marketing management Problem 1: Competition faced by Poweo in French Electricity Market

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The main issue faced by Poweo in the of French is rise in competition level in the market where major competitors of company are EDF or GDF with vertical integrated production, incumbent customer base and supply operations. Further, these companies are also producing electricity but they vary in terms of production capacity and overall units produced. But on the other hand only few suppliers are present who are supplying electricity to the end consumers in the French electricity market. All the small company such as French Direct Energie are strongly focusing on the downstream business. With 108000 business and 303000 household sites poweo is respectively having share of 15% and 22% of the alternative supplies market share in the year 2009. Due to rise in overall level of competition companies are not able to enhance their market share and survival becomes little bit difficult in the modern era. Therefore, it is one of the major issue being faced by Poweo in the market of French.

Problem 2: Change in regulation of Electricity market of France In context to marketing the policy of French Government in electricity segment also changed and it has created problem for the existing companies. Change in policies of retail electricity market in France has affected the market share of companies as number of new entrants in market has increased. It has make impact on revenue of the organization.

Problem 3: Customer segment of French electricity Market In 2009, customer segment of electricity market has also created problem for the organization.

There was big difference in number of electricity sites and electricity consumption. Inappropriate segment of electricity market has made greater impact on managing demand and supply of electricity.

Research methods For conducting the present study different tools and techniques have been employed.

Information has been gathered from the secondary source where case study has been undertaken.

Inductive approach has been applied where findings are based on Poweo. For analyzing information different themes have been formed (Sreedharan., 2007). Further, descriptive design has been undertaken through which in-depth analysis of the topic being chosen for research has TOLL-FREE NO: +44 2038681671 WHATSAPP NO: +44 7999903324

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been done. Interpretivsim as a philosophy has been used through which results derived from conducting study has been interpreted and it has supported in accomplishing aim of the research.

Therefore, in this way the range of research methods employed has been used in the present study.

Proposed plan of analysis 1. Pestle The PESTEL model is used to assess the global market forces that affects the business of mentioned company in the French market (Brian, 2014). There are political, economical, social and technical that affects business. The analysis of French electricity market is going to done in the market place.

2. Swot The SWOT analysis is used to assess the internal strength and weaknesses as well as the external opportunities or threats of the French electronic market (Tsitsipati and Athanasios, 2014). This model is going to used for the analysis of French electricity market.

3. Porter's Porter's five forces analysis is going to be used for the present case analysis in which the five market forces are going to be assessed in the French electricity market.

4. Heckscher- ohlin model This model has been applied in order to know about the condition of import and export.

Further, this model is based on the assumption that countries will produce and export commodities which require resources. Therefore, applicability of this model has shown that what are the range of important factors required in producing any good and it has to be considered by enterprise.

5. Greet Hofsteid model This model has been implemented in the present study which highlights the range of dimensions which can distinguish one country from another (Piepenburg, 2011). Further, it also undertakes different issues prevailing in the society which every business has to consider

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for its growth along with survival. Therefore, applicability of this model is effective and can be applied by company like poweo for knowing the range of factors which affects society.

6. Mintzberg's management roles This model has been applied in the present study where different roles of management are present such as leader, monitor, Laision, spokesperson, entrepreneur etc (Mintzberg, 2009).

Through this model it has been known what are the effective roles which management can play so that overall operations of the business can be carried out in appropriate manner.

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7. McKinsey 7s model This model has been applied in the present study in order to know about the range of factors which affects business operations (Michalski, 2011). It undertakes soft and hard elements which is associated with growth and development of business in the market. Applicability of this model has shown how company can enhance its performance in the market by considering large number of factors.

8. Benchmarking Bench-marking is the most important model that is going to be used for the present case study so as to set the benchmarks of company for providing the best results as compared to the competitors (Hill and Jones, 2009). The Poweo company is facing the issue of competition and it can improve the performance by setting the benchmarks for the business.

The Bench marking model is applicable to the present case.

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Ratio analysis is the financial model that is going to be used for the present investigation.

The applicability of ratio analysis is the most appropriates so as to access the feasibility of the investigation. For this, liquidity and profitability performance of Poweo company is going to be assessed on the basis of financial information provided in the case. On the basis of financial information, financial feasibility of company can be accessed.

Sources of data Data has been collected from secondary sources where information has been obtained from the case study provided. Further, different books and journals have been undertaken for collecting information (Saunders, 2003). Apart from this, the source employed for research is appropriate and through this it is possible to focus on the objectives framed for the study.

Primary source of data collection has not been considered in the study as it is not possible to collect data from this source by considering the nature of the research. Therefore, the source adopted for conducting research is appropriate and this can enhance reliability of the entire study.

Data Analysis It is one of the most important parts of the study where information collected is analysed so as to gain expected findings with the help of this. Two techniques of data analysis are present named qualitative and quantitative. Considering the nature of the present study qualitative technique has been used where themes have been formed for analysing information (Sreedharan., 2007).

Further, it supports in gaining expected findings and it can be ensured whether all the aims and objectives set for the research have been accomplished or not. Therefore, in this way data has been analysed for knowing overall condition of Poweo in the French electricity market.

Ethical issues : The present study is going to address the ethical issues that are going to be faced by the research while completing the entire study. During the research study, the secondary is going to be collected from the ethical sources (Sekaran, 2006). For collecting the data, proper access to the sources is going to be used. The issue of plagiarism is to be avoided and the information is accurately cited with the right authors. The information is acquired from the Limitations of study : In respect with the present research study, various issues are going to be faced by the researcher. recent publications and no more old data is used to support the data.

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The major limitation of the study is of limited time to completed the project due to this issue the research may be affected (Walden, 2006). It has been witnessed that the issue is going to be resolved by providing proper time to each activity of research. The monetary issue can also be faced by the investigator that is going to be resolved by planning a budget for each activity. The issuer can be faced for collecting the information from ethical sources, hence, authenticity and reliability into the entire project is going to be followed in the entire investigation.

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Chapter 4: Analysis and findings Heckscher- ohlin model The model relies on the assumption that countries will only export and manufacture commodities which require large number of resources. Further, commodities are manufactured that require resources which are relative in short supply. This model is based on large number of assumptions which takes into consideration labor, capital flow between different sectors etc. By considering this model it is possible for Poweo to consider different factors such as labor, capital in production of electricity. Further, this model is based in the assumption that countries are having different identical production technologies which are present in production technologies.

Analysis of this model has supported in knowing that by utilizing all the resources in appropriate manner it is possible for Poweo to operate efficiently and firm can easily deal with large number of challenges present in the market.

Greet hofsteid model This model relies on four dimension and supports in distinguishing one country from another. Further, various issues are present in the society which involve uncertainty, inequality etc. Through this model it has been identified that different dimensions are present in the market of French which Poweo has to consider so as to operate efficiently. Power along with inequality are regarded as the two fundamental facts of society. Further, in case if company plans to expand in the international market then it is necessary to consider culture of different customers to whom electricity is being supplied. By considering all the key dimensions of this model it is possible for firm to operate efficiently in the market and can easily deal with challenges in the environment.

Mintzberg management role Mintzberg has introduced ten roles of management which are figurehead, leader, liaison, monitor, disseminator, spokesperson, entrepreneur, disturbance handler, resource allocator and negotiator. By considering all the roles it is possible for management of poweo to handle each and every operation of the business in appropriate manner. Further, the most important role is of leader where by company can manage its workforce in appropriate manner and it becomes easy TOLL-FREE NO: +44 2038681671 WHATSAPP NO: +44 7999903324

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to enhance overall performance of enterprise in the market. Apart from this, role of resource allocator is also crucial through which company can easily utilize all the resources in appropriate manner and can support in accomplishing overall aims along with objectives.

Further,

monitoring is also key role which management plays and through each and every activity related to production of electricity can be carried out easily.

Mckinsey 7’s model This model relies on 7 elements which are segregated into hard and soft element. Hard element involves strategy, structure and system where soft one considers shared value, skills, style and staff. It is required for Poweo to consider all the range of elements so that overall operations can be carried out by business in appropriate manner.

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Further, the element such as strategy represents the plan developed by poweo so as to deliver appropriate service to target market, structure is associated with the line of command within firm and shows who reports to whom. System highlights activities carried out by employees so that responsibilities assigned to them can be done. Apart from this style indicates leadership style along with staff members and skills.

Porter five forces Bargaining power of buyer: In case of poweo bargaining power of companies who purchase electricity of company is high as other companies are also operating in the market and presence of substitute allows firms to dominate the market.

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Bargaining power of supplier: Poweo produces electricity on its own and does not purchase any kind of raw material from outside parties. Therefore, this option is not applicable in case of Poweo.

Threat of substitutes: It is high in case of Poweo as other companies such as EDF or GDF are also producing electricity in the market due to which firm has to face challenges in the market.

Competitive rivalry: Threat of competition is quite high in the market where other companies are allowed to enter into this market and they can produce electricity.

Threat of new entrants: It is low in case of French electricity markets as some restriction along with laws are present. Further, high investment is required so as to operate efficiently in the market which is major drawback.

PEST Analysis : The PEST analysis of French electronic market is as followed : Political factors

The political factors include the government policies and laws that are to be followed by the companies. In respect with the present case, it was seen that the French government has liberalized the electricity market and companies have to follow the rule of market regulators. On the other hand, the political environment of company also affects the business of Poweo company.

Economic factors

Economic factor such as financial crisis and changes in tax rate, interest rates are the major factors the affects the business of Poweo. In addition to that the financial crisis held in U.S in 2007 were the major economic impact on the business. However, to solve the problem French government has decided to fully liberalized the electronic market.

Social factors

Social factors such as the demographic profits of customers especial their income level and habit of customer to consume electricity affects the business of company in the electricity market of french

Technical

The use of advanced technology as well as the initiatives of french electricity market towards the use of improved technology affects the business of company.

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 

 

Strong Brand image High production capacity

Opportunities Rising expansion opportunities in other market Rising demand for electricity

  

Inefficient management Lack of market knowledge Impact of European crisis

  

Threats Rising competition level Introduction of new government laws Market fluctuations

Bench marking: Bench-marking is the model that is used to assess current performance of company as well as to identify the factors that are to be improved for improving the future performance. In respect with the present case, it can be said that the company is facing competition from other electricity generation companies in terms of production capacity. Hence , it can be said that the Poweo company can improve performance and can make continuous improvement in the business by making use of bench marking. This model also allow company to improve the satisfaction level of customers of customers as well as improve competitiveness of business entity in the french electricity market. The major issue of company is with current production capacity that can be improved with the help of using this model.

Ratio analysis : 2009 2008 535885 454249 512151 439026 1.0463421.0346745

Current Assets Current Liability Current Ratio Revenue Operating Profit/Loss Net Profit/Loss

577.3 -85.3 -93.5

543.5 -21.7 -20.5

Operating profit ratio Net Profit Ratio

-14.78% -16.20%

-3.99% -3.77%

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Ratio analysis is used to identity the financial performance of the Poweo in the french market just after US financial crisis and its impact on the European market.

Form the above

calculation , it can be seen that the current ratio of the company is improved from a significant rate as in 2008 it was 1.03 which is significantly improved to 1.04 in 2009. However, it can be said that the liquidity performance of company is improved to a normal rate as the company is able to meet the short term financial obligations. On the other hand, profitability position of company is seen to be negative in both the years. From the analysis of this model, it can be said that the company's profitability is decreased to be a higher rate after the crisis. Hence, it can be said that the liquidity performance of company was good as compared to the profitability position in the years 2008 and 2009.

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Chapter 5: Solutions to the problem and issues Solution to unfavorable economic and regulatory environment The major problem of French electronic market is seen to be the major problem of electricity market of French, however, it Poweo company had faced net loss due to such unfavorable economic and regulatory environment. The company has faced various financial downturns due to unfavorable condition of market. To improve the condition of market the government of French has to allow new entrance for improving the production capacity. The company can go for prompting new companies. However, the major reason was found the financial crisis which government has decided to liberalized the electronic market but it was not fully liberalized. The company is recommended to improve the financial position through improving the cash management. The French electronic market is to be regulated by the authorities and they have to provide the rights to effective use of production capacities.

Solution to problem of liberalization French government has to take some good actions towards the organizations which are dealing power sector as it will help to enhance the output of the business organization and also the performance of the companies. Currently the french government has regulated very strict rules for the companies which are dealing in the electricity. Strict regulations of liberalization is making huge impact on the performance of the companies. More positive efforts are required to flexible the rules of liberalization for energy sector of France. Rules and regulations for energy and electric sector are to be made in such a way that company should operate its business in better way to fulfill the demand of its customer in efficient way. For example the regulations related to generation of power capacity should be increased which will help to meet the current needs and demands in better way.

Solution of problem competition The proposed solution to the issue of competition to Poweo is that enterprise can enhance its production capacity. Further, it is required for business to set low prices for the electricity supplied as other firms are also operating in the market. By setting high prices overall performance of firm will decline and this can have adverse impact on entire business. Further, TOLL-FREE NO: +44 2038681671 WHATSAPP NO: +44 7999903324

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the challenge of competition can only be resolved if poweo enhances its production capacity and is capable enough in dealing with the condition of rise in demand for electricity in the market.

The solution is effective enough in dealing with the challenge of competition and if corrective actions are not taken by business then company has to exit from the electricity market of French.

Apart from this by applying model such as porter give forces it has been found that large number of challenges are present in the market due to presence of competitors such as EDF or GDF who are also supplying electricity in the market of French. By dealing with the challenge of competition it is possible for Poweo to operate efficiently in the market and can easily deal with the sustainability issues present in the business environment.

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Recommendations 

It is recommended to poweo to enhance its production capacity so that it is possible for business to deal with the condition of rising demand in the market for electricity



Effective strategies can be developed so as to deal with large number of barriers in the market such as political, economical, social etc



Prices have to be kept low by firm as other competitors of the enterprise are offering electricity at lower prices as compared with poweo



Decision linked with investment in new plant is feasible for company as financial strength of the business is high and this can allow firm to allocate funds in new plant



Poweo can also sell electricity to consumers as through this profitability level along with

market share can be enhanced easily TOLL-FREE NO: +44 2038681671 WHATSAPP NO: +44 7999903324

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

It is recommended to business to comply with all the regulations introduced by government along with different laws as it will have positive impact on the entire business and can assist to survive in the competitive market for longer period of time



Providing training to staff members can also be beneficial for business as through this it is possible for company to meet with the rising demand for electricity in the market.



From the above case , Poweo company is recommended to invest in the new plant east of France that worth around €400 million. It will provide opportunities to better compete in on the French electricity market

Limitations The researcher has encountered many limitations at the time of carrying out this research.

One of the major limitation was regarding time as the scholar was having limited time to carry out this research. Somewhere or the other this has affected the entire outcomes of the research. In addition to this, the financial resources were also limited and this has also affected the findings of this study. The data has been collected from secondary sources and the information regarding the topic of research was limited. At the time of carrying out this research, the three main limitations of faced by research was time, money and information. To carry out more effective research more time and money was required which was not available with the researcher.

Future area of research The present study was based on one particular market and in future the same study can be carried out using different market. This will help in identify some other factors which are associated with the topic of this study. On the other hand, this report demonstrate the impact of of US crises in on the French electricity market and in future study can be conducted on the other reason which has resulted in downfall of the market. Therefore, on the above stated two areas future research can be carried out.

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Michalski, A., 2011. The McKinsey 7-S Framework: Invented in the 1980s and Still a Possibility for Success Today. GRIN Verlag.

Mintzberg, H., 2009. Managing. Berrett-Koehler Publishers.

Piepenburg, C., 2011. Critical analysis of Hofstede’s model of cultural dimensions: To what extent are his findings reliable, valid and applicable to organisations in the 21st century?. GRIN Verlag.

Saunders, M., 2003. Research Methods for Business Students. Pearson Education.

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Tsitsipati, V. and Athanasios, C., 2014. SWOT analysis of the truffles market in Greece. British Food Journal. 116(12). pp.1976–1997.

Walden, G., 2006. Survey Research Methodology 1990-1999: A. IAP.

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