Question

Case is based on, NRG Energy, an energy related company.

Analyze the company based on analytical tools learned in chapters relating to this module.

• What are the external environmental factors affecting the company and industry?
• How do the 5 forces affect this company?
• Explain the possibility of a merger, acquisition, being acquired.
• Include a BCG analysis in your company analized

Answer 1

EXTERNAL ENVIRONMENT FACTORS:-

Supply:- Energy from nuclear, coal, gas, oil, and renewable sources react in response to demand. Prices change hourly as a result

1. Demand:- Demand for heating, light, cooling, and processes changes with activity in the US economy, technology, and efficiency measures.
2. Gas Storage:- Represents energy “inventory” i.e. the difference between supply and demand.
3. Weather Forecasts:- This is a major factor affecting critical to longer-term prices.
4. Transport:- There are severe constraints in gas pipeline and electrical transmission capacity, which take time and investment to reverse.
5. Global Factors:- Major changes in global oil supplies can affect U.S. domestic energy costs.
6. Imports and Exports:- Oil and gas prices determine relative profits suppliers can make selling fuels domestically or overseas.

5 FORCES AFFECTS THE COMPANY:-

• Bargaining power of suppliers.
• The threat of new entrants
• Bargaining power of buyers
• The threat of substitute products
• Rivalry among the existing players

POSSIBILITY OF MERGERS...........:-

NRG Energy, Inc. (NYSE: NRG) has agreed to acquire Stream Energy’s retail natural gas and electricity business for $300 million-plus working capital in an all-cash transaction.

BCG ANALISIS:-

They have multiple products and services, including generation facilities, operations, and management services, commercial industrial backup generators, retail electricity, and an internal data analytics engine called SpaceTag.