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TOPCIMA EGC Strategic Analysis Nick Best

TOPCIMA EGC Strategic Analysis Nick Best. Welcome. Welcome to Nick Best’s TOPCIMA strategic analysis In this presentation you’ll find my views on the latest TOPCIMA case study

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TOPCIMA EGC Strategic Analysis Nick Best

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  1. TOPCIMA EGC Strategic Analysis Nick Best

  2. Welcome Welcome to Nick Best’s TOPCIMA strategic analysis In this presentation you’ll find my views on the latest TOPCIMA case study For details of courses which I am taking at Reed Business School and to learn more about the exam and how to approach it, please see www.topcima.biz

  3. ABOUT ECG Well, what an unusual case!!! I bet you weren’t happy when you heard about this one. Personally, I find this a nice change from all those medium sized quite successful businesses which seem to crop up case after case. Nasty from a student’s perspective though!

  4. ABOUT ECG The difficulty in doing a strategic analysis on this type of company is that many of our standard models don’t work well and are largely meaningless. This is the first time I ever remember doing a Porter’s Five Forces analysis where all the forces are low. Despite this, there’s still plenty to get our teeth into!

  5. ABOUT ECG • Electricity Generation • 12 coal fired power stations • Democratic Asian country • Sell Electricity to 10 electricity distribution companies, who sell on to consumers/businesses • Main goal = providing electricity to home country ‘at any cost’ • Nationalised • Government influenced – direct strategy • Monopoly • Appears to be inefficient • Election (1) Current government - Greater efficiency drive (2) Opposition - Nationalise

  6. SWOT • On the following page you’ll find my SWOT analysis. • Remember that you MUST do a SWOT analysis as Appendix 1 in your answer. • You will score 1 mark in the technical section for this, and up to 3 further marks in the application section if done well • You must update this SWOT for unseen issues (underline or bold these in your exam script) • A recent student script review I read made it clear that 2-3 word points in the SWOT are NOT sufficient. Aim to write at least 7-8 words for each point in SWOT. • I’ve shown my points in priority order as I see it. You don’t need to do this in the exam!

  7. SWOT

  8. Mission and objectives • On the following page you’ll find my PEST analysis. • The PEST analysis is always an optional appendix in this exam. • In this scenario, the PEST factors are more significant than most and I believe that including a PEST will be very useful • You MUST cross reference your PEST in your script however, and many students do not do this well. Aim for 2-3 cross references

  9. Mission & ObjectivesGovernance & Ethics

  10. PEST • On the following page you’ll find my PEST analysis. • The PEST analysis is always an optional appendix in this exam. • In this scenario, the PEST factors are more significant than most and I believe that including a PEST will be very useful • You MUST cross reference your PEST in your script however, and many students do not do this well. Aim for 2-3 cross references

  11. PEST

  12. Resource Audit – 5 M’s • On the following page you’ll find my resource audit. • This adds to the detail you’ll find in my SWOT analysis.

  13. Strengths and WeaknessesResource Audit - 5 M’s analysis

  14. Strengths and Weaknesses5 M’s analysis

  15. Porter’s 5 forces analysis • What a boring 5 forces analysis!!!!(see the next page) • This is not one I’d recommend for this exam since its rather strange, mostly due to the fact the company is a monopoly. • An analysis like this with all forces being low would normally suggest high profitability, but, of course, in this case it is largely meaningless since prices are agreed by the government.

  16. Opportunities and Threats5 forces analysis

  17. Product life cycle/BCG matrix • The product life cycle/BCG matrix is largely meaningless here as they have one single product – electricity – which is mature in nature. • Production methods could have a life-cycle – but note that this is a ‘production method’ not product so take care in its use! • Coal and gas = Mature (Int) • Nuclear = Mature (internationally) • Wind = Growth • Oxyfuel/carbon capture – Growth

  18. Generic strategies It’s so strange to say this, but Porter’s generic strategie are largely pointless in this case study! Why bother being a cost leader when you are a monopoly! No need to differentiate when you are a monopoly! Perhaps you could argue they are focused on Electricity generation and distribution, not sales, but that’s weak at best!MY SUGGESTION IGNORE THIS MODEL IN THIS EXAM!

  19. Ansoff’s Matrix

  20. Mendelow’s Stakeholder Matrix I like this for use in the exam! Remember to cross reference your Mendelow’s matrix throughout your script (people are so bad at doing this – why is that when its so important???????) This case throws up a lot of stakeholders with high interest in the company which is unusual. I really struggled to find a stakeholder in the keep satisfied box, but one of my students suggested the media were a good example. I agree.

  21. Stakeholder AnalysisMendelow’s Matrix Individual employees End Users Environmental groups 10 Dist Companies Finance Director Corporation Sec Opposition Coal producers Technical D. Regional D. Media Unions MD Government

  22. Methods of Growth

  23. Possible strategy So given all that analysis – what should EGC do going forward? The following slides show you my view. WARNING!!! Just remember that this MUST be seen alongside any new information given in the UNSEEN, and that new unseen information is far more important to deal with than any of the pre-seen issues.

  24. Possible strategy • Plan for future capacity to meet future demands • Environmentally friendly e.g. oxyfuel/nuclear • Discuss and agree with political parties after election • Create a financial plan, including funding issues ( government/private sector funding) • Considering when current power stations need replacement • Review possibility to import electricity, and infrastructure • required to do so • Restructuring • Delayer - Lay off many staff • Remove regional structure and rationalise OR centralise the functions • Remove some bureaucracy

  25. Possible strategy • Significant governance changes • Non-exec style personnel on board to bring independence • and scrutiny • Possible replacement of key personnel e.g. MD to help to • create cultural change • Clear, formal processes of decision making • More discussion with and accountability to government • Efficiency improvements • Management information and performance targets including • costing information • Benchmarking vs other countries • Continual cost improvement targets • Culture change programme (organisational development)

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