The Strategy Of The Powergen Business Commerce Essay

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PowerGen plc is a private sector company, it is a UK based company and its head quarter in Coventry. PowerGen plc started in 1989by the restructuring of the electricity industries in England and Wales. PowerGen plc is division of the Central Electricity Generating Board (CEGB). PowerGen plc is a part of E.ON group. The PowerGen plc functions conferred in March 1990.The Company allocated 21 power stations, it generated it outputs from coal and dual fired. The company generates electricity, distribution services and gas distribution services for the businesses and household customers. The company's vision is to create the world leading independent electricity and gas business it aims to grow by generating, distributing and supplying power in the UK and the other countries. PowerGen plc was gained by E.ON in 2002 and its now run as E.ON UK.

The major players of electricity industries are N power, British Gas, EDF energy and many more the N power is a leading player in electricity industry it was started in 1999. It provides more than 6.5 million customer accounts in England. The British Gas is a domestic supplier of gas and electricity. It also provides millions customers in Wales, Scotland and England. EDF energy is also a major player in electricity industries in London, south west England and south east England. EDF energy has more than 5million residential and business customers.

Strategy is nothing but is a plan for achieving objectives. "Strategy is the result of a careful analysis and it is purposeful it is a plan for achieving something".

Corporate planning:

Corporate planning is organized approach to helpful business objectives. Corporate planning is helpful to make strategic decision and checking progress towards objectives. Corporate planning describe that what role every department likely to do to achieve organizational objectives.

Compare and contrast:

Characteristics of strategy:

Analyzing the environment: Analyze the environment means first understanding the market structure and understanding their competitors and the position of market.

Planning the direction: Plan the direction what is the organization mission, objectives, values and expectation and in which way they go ahead to achieving their objectives

Planning the strategy: Plan the strategy what are the strategy alternatives, structural influences and then select the strategy to get their objectives what methods they use to achieving their goals

Resources: Plan the resources what are the resources they needed for making a good plan.

Implement and control: Implement the strategy for action to human resources management to operational stages and then they check how to control and how effectiveness is.

Characteristics of corporate planning:

Analyzing the environment: In corporate planning first the planner check what are the threats and what are the opportunities to achieve their business objectives.

Ends planning: In corporate planning planners specified the desirable future for the business.

Direction: In corporate planning planner define the way to reach the business objectives.

Resources: In the corporate planning planner define that what are the resources they needed and how to get them.

Implementation and control: In the last step of corporate planning who is to do what, when, where and how is define and control by monitored it.

There is no big difference between strategy and corporate planning but there are some comparison and contrast between strategy and corporate planning. Strategy makes for corporate planning but the corporate planning is not makes for strategy. Strategy made before corporate planning and corporate planning made after strategy. In the strategy they analyze the market structure competitors' position, and in corporate planning the planner check what are the threats and what the opportunities to achieve their objectives are. Strategy define what is the organization mission, objectives, values and expectation and how to go ahead to achieve them. Corporate planning defines the way to reach the corporate mission or objectives. Strategy plan the resources what are the resources needed to gain the objectives and in corporate planning planner define that what the resources are they needed and how to get them and how to use them. Strategy implementation how to put in action in human resources management to operational level and then they check how to control and how effectiveness is, and in corporate planning, who is to do what, when, where and how is define and control by monitor there activities.

As example from the Case study, objective of PowerGen plc concentrate on early energies on totally restructuring the core electricity business to become a low cost producer on a world class basis. For that it makes a strategy to developing its generating capacity to better fit commercial and environmental requirements through improving the flexibility of coal units and developing gas fired station.

In 1989 PowerGen was converted from UK based electricity supplier to global corporation. The PowerGen plc first structure was introduced between 1990 to 1992 it was functional organizational structure. It was well define with functional responsibility and few layers of management. It was a simple structure and divided into five divisions of planning process commercial division, technological & engineering division, generation division , finance division and corporate division then they sub divided into sales, marketing, business planning or the power station themselves. The strategy of PowerGen plc was to become a 'low cost producer on a world class basis'. For action plan PowerGen plc went to develop gas-fired station and they proved cheaper to build and maintain than coal and dual power station. The developments took place on a slow growth because of external environment factors. The national grid forecasted that the slow growth in electricity demands, therefore PowerGen plc decide to close some power station and invest in growing international market. The structure of PowerGen plc was not enable to adapt this change in circumstances of time to prevent too many negative effects from the declining domestic market. So Powergn plc decides to reform the origination structure and introduced new structure for corporate planning. That's why PowerGen plc introduced new structure in 1992.

In 1992 PowerGen plc reformed its structure from functional to divisional structure. The strategic role of management was developed in this structure. it was divided in three divisions new ventures, UK electricity and engineering and business services. In the structure they provided managing director for each division. In planning staff existing planning team was replaced and smaller strategic planning function was introduced and it helpful for corporate strategy and corporate planning. The company gives more room for decision making and the separate task for financial planning was placed in financial division. But the divisional structure of corporation is no able to deal with new situation and problem with lack of integration of corporate and divisional strategic planning.

In 1996 PowerGen plc re formed its structure into new cluster of business units. Within the new structure the functions for all divisions were well defined MD was responsible for all corporate units. The role of chief executive was to develop a corporate strategy for business units and the role of financial director was mainly related with financial plans. It was a good structure but company wants to improve it so company introduced corporate planning cyclein1998

In 1998 PowerGen plc developed new corporate planning cycle. In this corporate planning cycle first step is financial and strategic overview in this step company check the financial and strategical options and what are the issues affecting them. The second step is planning guidelines in this step company check the past financial position what are the resources they needed to achieve their goals and how to get their company use all guidelines for planning. In the third step of corporate planning cycle company doing business planning company produce a plan five year and the plan clearly stating the company's objectives and how to gain them. The fourth step of corporate planning cycle company doing planning review. In this step corporate planning staff, business planner and business directors are involved and they examined the process and they give feedback in to the business review and the last stage of corporate planning cycle draft corporate plan in this stage company check the development at the end of the year and check the plan how successful is and then they plan for next year.

In 1998 company retained its leading position with a market share of 16% and also company combined heat and power business successfully with the help of company's new structure and corporate planning cycle.