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Exelon Corporation: Strategic Planning

Strategic Planning Process

Strategic planning process focuses on purpose of existence of the firm and its objective according to company’s vision and evaluates both the internal and external environment of the organization and make strategies and amendments as necessary. It provides competitive edge and predicts profitable openings about future. Strategic planning process consists of five components; Mission and Objectives, Environmental scanning, Strategy formulation, Strategy implementation, Evaluation and Control.

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Internal and External environment of Exelon

Exelon Corporation is one of the largest electric utilities based in U.S, Chicago. The company primarily engaged in generation of energy, transmission of energy and distribution of energy. Exelon is also engaged in distribution of natural gas. Internal analysis provides understanding about the strengths and weaknesses of the organization; it includes management relations with employees, employee’s interaction with other employees, management interaction with shareholders, organizational structure and competencies. Exelon’s internal analysis examines strengths like massive power generation assets, strong retail customer base and extensive transmission. It also points out weaknesses like indolent revenue growth, weak performance of its subsidiary (Commonwealth Edison) and Exelon’s dependence on subsidiaries to meet financial requirement. External analysis examines industry which includes history, nature, dynamics and rivals of particular industry. Secondly it examines national environment in which you are operating it gives you competitive edge. Thirdly it explores macro environment which include social, legal, government and technological factors impacting your organization. External environment analysis reveals opportunities and threats for an organization. Exelon’s external analysis disclose opportunities like growing popularity of renewable energy, increased demand of electricity in U.S and investment in Solar energy projects. Threats such as environmental liabilities are also revealed and criticisms from various social organizations are also present regarding emission of various dangerous gases (Wee, 2002).

Role of energy in Organization’s value chain

All the value generating activities of business or firm that provide competitive advantage and increases shareholders value are called organization’s value chain. Energy value chain compromises of five steps production, transport, distribution, conversion and end use. At first two steps right of way of generating energy is important, it also includes environmental impacts and allocation of economic rents and establishment of revenue management is important. A customer relation and customer benefit plays an important role in energy value chain. At end of the stages of value chain customer interface is important in terms of their evaluation about the provided service, reliability and quality of service. This phase also emphasize on energy prices whereas cost differentiation can also occur for core customers (QuickMBA, 2011).

Two Potential Grand Strategies

First potential grand strategy is to invest in renewable energy. We can confidently say that renewable energy is the future of energy sector utilities. Renewable energy are very important low carbon generation alternatives. Renewable alternative includes Hydroelectric, Solar energy, landfill gas and Wind power energy. The reason for considering this strategy is increase in energy efficiency and it will offset the criticism involving emission of CO2 gas and coal burning processes of producing energy. It will provide Exelon to present clean image to the world and also result in decrease in environmental impact of Exelon existing energy production activities.

Second potential strategy is to make use of gas which is far most realistic approach in cutting pollution and reduced gas emission by burning natural gas to produce electricity rather than investing in expensive projects of nuclear power plants. The reason of adopting gas as electricity producer is very economical as we know that the prices of gas are low throughout history, providing Exelon a huge cost saving advantage (NetMBA, 2005).

Competitive Advantage

Competitive advantage obtains from renewable energy alternative strategy will result in zero emission of tons of perilous gas. Exelon will be able to offer low carbon electricity in the market giving a cleaner image to the world, it will help the company to retain its strong retail customer base as today people look for socially responsible companies to invest in, allowing Exelon in overcoming or meeting all its financial obligations.

Making use of gas will allow Exelon to save tons of money by replacing oldest method of burning coal and investing in renewable energy projects will eventually increases Exelon’s presence and domination in the market place which will surely grant tough competition to all the rivals.

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Exelon’s Cleaner image will provide very long term advantage to the company as positioning yourself as a socially responsible company is a wise strategy, you can also get political support once you are green which will help you build projects in the country through support of government. This will again give you big competitive advantage over others.

Key success factors

The key success factor depends upon effective strategy implementation that creates a fit between the Exelon’s strengths and weaknesses and its opportunities and threats. A good fit will successfully implement the strategy which will maximize firm opportunities and minimizes weaknesses (Hoovers, 2010).

The Customer education is the most important success factor of both the strategies. Creating awareness about global warming and emission of hazardous gases will grab customer attention towards our zero emission electricity generation projects. We should provide our customer base with interactive displays of renewable projects of create electricity and most importantly demonstrations about how to conserve energy.

Investing in renewable projects is not an easy task establishing a solar power plant will employed tons of capital and expertise. Exelon have to build alliance with other giants in energy industry it will minimize the risk and amalgamation of two companies will enhance the probability of achieving success. There will be higher chances of zero emission gases by combining technologies and expertise of two companies and they can predict positive cash flows in upcoming future.

Exelon Corporation can also make alliance with state government making it easier to get funded for huge renewable projects. Through government alliance company can easily get high amount of long term loan at low margin. Government will also take part as eventually it will boost up the economy and providing several job opportunities as setting a new plant will also need human capital. Local companies and labor will be employed during construction and job training programs will be provided to educate employees about new and efficient methods of generating energy.

Exelon Corporation will surely be needing technology adoption when investing in renewable energy in terms of solar plant, hydroelectricity and landfill gas. Solar plant requires solar panel which converts sunrays into clean and reliable electricity. Exelon should purchase or make alliance with such foreign energy giants that have resources to generate energy from renewable methods. Companies that can willingly transfer technologies can be very accommodating for Exelon to made alliance with, it will very beneficial in terms of future prospective. The other options includes that Exelon should heavily invest in its research and development (R&D) to construct these renewable energy generating resources.

References

Hoovers. 2010) Description about Exelon Energy Company. Hoovers Online. Web.

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NetMBA. (2005) Strategic Management: Organization value chain. NetMBA Online. Web.

QuickMBA. (2011) The strategic planning process and its components. QuickMBA.

Wee, H. (2002) A Bright light in Energy. BusinessWeek. Web.

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StudyCorgi. (2022, January 7). Exelon Corporation: Strategic Planning. Retrieved from https://studycorgi.com/exelon-corporation-strategic-planning/

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StudyCorgi. "Exelon Corporation: Strategic Planning." January 7, 2022. https://studycorgi.com/exelon-corporation-strategic-planning/.

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StudyCorgi. 2022. "Exelon Corporation: Strategic Planning." January 7, 2022. https://studycorgi.com/exelon-corporation-strategic-planning/.

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StudyCorgi. (2022) 'Exelon Corporation: Strategic Planning'. 7 January.

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