MBA FPX 5006 Assessment 3 Strategy Implementation

MBA FPX 5006 Assessment 3 PG&E aims to enable long-term success and provide sustained competitive advantage through a clearly defined strategic vision and mission. The company’s vision is to provide clean, safe, reliable, and affordable energy, while the mission is to discover, develop, and install new infrastructure. The overall aim is to achieve clean and renewable energy sources by 2030. PG&E has devised a plan for the execution of a Continuous Energy Improvement Plan, following state and federal guidelines as part of its policy. The company’s policies revolve around the execution of the Green Energy Business Plan (Pacific Gas and Electric Energy Efficiency Business Plan, 2020).

AFI Framework

PG&E’s strategic analysis demonstrates strong leadership and ethics, as depicted in the AFI Framework. Strategy analysis entails an external analysis on the basis of the PESTLE and Five Forces models, which indicates the company’s competitive strength. Internally, PG&E has valuable, rare, and hard-to-imitate attributes, which put the company on the trajectory of long-term competitive advantage. The strategy development encompasses a business strategy that develops energy efficiency as an economic grid asset, a corporate strategy to provide clean, safe, affordable, and reliable energy, and a global strategy to make PG&E a climate change leader. Strategy implementation includes an appropriately structured organizational framework, 14-member Board of Directors governance, and business ethics in the sense of aligning corporate activities with ethical standards (PG&E, Our Approach, 2020).

SWOT Matrix

PG&E utilizes strategic thinking techniques to address business challenges through the SWOT matrix. Its strengths include over 100 years of history in the utility industry, 23,000 trained workers, and power diversity. Weaknesses include recent bankruptcy, wildfire risk, and government control. Opportunities include renewable sources such as wind, sun, and nuclear. The threats include rising production cost, rapidly changing energy markets, and green legislation.

Internal Environmental Analysis – VRIO

MBA FPX 5006 Assessment 3 The VRIO model measures PG&E’s internal capabilities and resources. On value, the company has 16 million customers, has excellent customer service, and has operations in rural and urban areas with a highly skilled workforce. Rarity is seen in high-tech equipment, more than a century of experience in utility, and vertical integration. Imitability is hard for the company because of strong customer relationships and market leadership, whereas its organization enjoys a diversified workforce, strong management, and effective government relations.

External Environmental Analysis – PESTLE

The political surroundings reveal that PG&E’s rates and earnings are regulated by the California Public Utility Commission and are subject to state legislation affecting business operations. The economic determinants consist of increased costs associated with variable gas and electricity prices, unionized labor employee wages, and inflation. Social forces are influenced by the skill level of the workforce and the attitude of the public towards utilities. Technological developments like the advancements in weather observation and utility infrastructure are key. Legal requirements encompass employment, antitrust, and consumer protection legislation. Environmental factors such as climate change and pollution legislation also affect PG&E’s operations.

External Environmental Analysis – Five Forces

In the Five Forces Analysis, the threat of new entrants into the energy market poses a risk by providing lower prices for energy, which PG&E counteracts with innovative energy programs. The suppliers’ bargaining power impacts profits, but PG&E counters this by utilizing its buying power and employing committed suppliers. The buyer bargaining power is an issue, with cities wanting less expensive energy through community aggregation. PG&E offsets this by charging alternative providers to use its power grid. The potential for substitute products such as solar and wind power continues to be strong, and PG&E offsets this by investing in these technologies and having better customer service. Finally, competition among rivals is intense but is supported by PG&E’s market leadership, enabling it to invest in massive renewable energy projects (PG&E Company Profile, 2020).

Strategic Concepts and Models

For effective strategic planning, PG&E management needs to develop a strategic vision, mission, and strategy. The strategic vision states the company’s principal purpose and cause for existence, and the mission explains how to achieve the vision. The strategy implements these plans through measurable objectives. PG&E leadership also needs to incorporate ethics values by establishing a code of ethics, funding ethics training, providing situational advice, and implementing a confidential reporting system. Integrating ethics into company business strategy is crucial to its future success (PG&E Continuous Improvement Plan, 2020).

Recommended Strategic Actions for PG&E

PG&E can also increase initiatives to make energy management and energy savings more affordable for customers and expand energy-savings programs. It can also assist the company in realizing zero-net-energy goals, increasing infrastructure resilience, and public safety. Frequent safety checks, improved vegetation management, and the use of high-definition cameras throughout the service territory are some of the other top recommendations (PG&E, Our Approach, 2020).

References

Pacific Gas and Electric Energy Efficiency Business Plan (2020).

PG&E Company Profile (2020).https://vimeo.com/191377315

PG&E, Our Approach (2020).

https://supplychaindigital.com

PG&E Company Profile (2020).

https://www.vitalsource.com/

MBA FPX 5006 Assessment 3 Strategy Implementation

PG&E Continuous Energy Improvement Program (2020).