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.


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 7s 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


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 94 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.

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?


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.


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 industrys 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.
Poweos 2008-2009 Financial


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 Electricit 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 Poweos 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


bonus payments. However, it was believed that all these actions would not be sufficient to foster
the future growth of Poweos 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 worlds 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.
Poweos Competitors in the French Retail Electricity Ma arket declare ed at CRE


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 lElectricite 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 lElectricite. In country like

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.


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 94 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

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


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


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


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.
9. Ratio analysis


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.


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.


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


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 7s 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.


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.
SWOT Analysis :
Strengths Weaknesses


Strong Brand image Inefficient management
High production capacity Lack of market knowledge
Impact of European crisis
Opportunities Threats
Rising expansion opportunities in other Rising competition level
market Introduction of new government laws
Rising demand for electricity 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
Current Assets 535885 454249
Current Liability 512151 439026
Current Ratio 1.0463421.0346745
Revenue 577.3 543.5

Operating Profit/Loss -85.3 -21.7
Net Profit/Loss -93.5 -20.5
Operating profit ratio -14.78% -3.99%

Net Profit Ratio -16.20% -3.77%

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.


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,


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

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.


REFERENCES
Books and journals
Brian, K., 2014. PESTEL analysis of Malawi's non-life insurance industry. African Journal of
Economic and Management Studies. 5(1).
Hill, C. and Jones, G., 2009. Strategic Management Theory: An Integrated Approach. Cengage
Learning.
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 Hofstedes 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.
Sekaran, U., 2006. Research Methods for Business: A Skill Building Approach. John Wiley &
Sons
Sreedharan., 2007. A Manual of Historical Research Methodology. Centre for South Indian
Studies.
Tsitsipati, V. and Athanasios, C., 2014. SWOT analysis of the truffles market in Greece. British
Food Journal. 116(12). pp.19761997.
Walden, G., 2006. Survey Research Methodology 1990-1999: A. IAP.


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ANALYSIS OF CASE STUDY

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Structure of the rest of the report

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Poweos Competitors in the French Retail Electricity Ma arket declare ed at CRE

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Problem 2: Role of Management towards the production and supply of electricity

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Revenue 577.3 543.5

Operating profit ratio -14.78% -3.99%

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