Part 1- Introduction The report contains the...
This is first part consists dissertation British Gas Introduction Research methodology. Assignment Help showcase the complete dissertation in Three parts so stay update for next and enhance knowledge with this part of dissertation.
Introduction and background
With economies developing at various paces around the world the demand for energy supplies has been increasing exponentially in last few decades. The conventional choices for fuels for industrial development as well as domestic usage are coal’ petrol’ diesel’ petroleum gases in different natural or liquefied forms etc while non conventional fuel choices are solar energy’ bio gas’ nuclear energy’ wind energy and tidal energy. In current circumstances the raising awareness towards a cleaner environment and need to conserve fossil fuels has encourage people to take alternative and non conventional fuels for their usage but it cannot undermine the usage of fossil fuel for the needs of transportation’ boilers and furnaces in industries and domestic heating and cooking appliances (Smith, 2011). The advantage fossil fuels like gas have over its counterparts are its is relatively cheaper’ available in abundant amount’ easy to transport through pipelines to long distances and relatively low emission of noxious fumes and damaging gases in environment. The efficiency of burning is much higher for gases as well in comparison to coals. This has turned many industries that are using coals for decades like steel industry’ thermal power plants etc to take turn towards natural gas as their chief energy source. The sudden rise in demand of gas all over the world has raised doubts in mind of consumers’ governments and economists that organization’s who are producing natural gases for supply might take advantage of this demand and supply gap and earn unusual profits from consumers (McCullough, 2006). They governments are closely watching the pricing strategy British Gas adopted by these organizations and analyzing them to ensure that the pricing is reasonable and transparent in nature. The supplies of fossil fuel is restricted to certain parts of the world which are blessed with natural reservoirs of crude oil and gas while major part of world is dependent on imports from these countries to full fill their supply needs. British gas is one the largest gas manufacturing and supply consortium in United Kingdom. The organization is more than 50 years old and its was under the government control and management but in the decade of 80’s the organization was privatized and opened for disinvestment. After a series of changes in the management structure and capital structure of organization presently it is owned by Centrica plc. A large conglomerate ventured in manufacturing and production industry. The British gas in largest supplier of natural gas in UK and presently it is supplying gas and other products in 55 different countries located in 5 continents. The BG group or British gas group is located in UK and their head office is in Reading city of UK. Although the organization is headquartered in UK its major business is generated in foreign countries. British gas in the largest supplier of natural gas to United states and currently have operations in 25 different countries (Data Book 2010). The BG group is not only involved in production and extraction of gas and oil but is also providing the last mile transportation and supplier services with the help of multiple gas retailing organizations and own subsidiaries. The business operations also involve manufacturing of oil but it is relatively very less in comparison to gas production. The proven extraction capability of group is 680000 barrels every day and a reserve of over 2.6 billion barrels oil equivalent. The gross revenue of organization in annual report of 2010 is 16.77 billion US dollars and net income in tune of 3.5 billion US dollars. The company has direct employee base of 9000 people with majority of workforce employed outside UK and indirectly providing employment to thousands more around the world. Sir Robert Wilson is current chairman of the group (British Gas 2011).
See the first part, Research Proposal British Gas Pricing Strategy>>>>>
Rationale behind choosing this topic
The rationale behind choosing this topic is the sudden movement and interest taken by various competitive organizations around the world in gas exploration and oil field licensing and acquisition. The current and forecasted demand of gas is very huge and all organizations are aiming to get the biggest share of profits from this boom. The rapid industrialization of developing world especially countries like India’ China’ Brazil etc has spurred the demand in gas market. With latest breakthrough in exploration technology like rock fracturing by water jets to collect the entrapped gases ( in shale gas exploration) and liquefaction of coal bed gases like methane for industrial usage has made it a more feasible and attractive investment for venture firms and existing players. The prices of international crude oil and gas supply agreement are also fluctuating on a daily basis which has created a interesting topic for economist’ industrial analyst’ and academician at all levels to study the reasons behind it and do an in depth study of the factors and theories applicable in determining pricing strategy for the organizations like BG group. The BG group is also preferred over other similar type of organizations because of its geographically closer location’ unique history of previous control of local government bodies and later council based control and then demerger and privatization of the organization. This feature also provides an opportunity to do a contrasting study in the organization itself regarding its previous and current pricing policy and structure (Kitasei, 2010).The organization also enjoys a strong and professional work force and a very good working culture where strategies are in resonance with the short term objectives and activities of each department and employee. The organization is very large revenue wise making it easier for a researcher to observe the changes caused by even a minute factor or slight disturbance in international market and researcher can also analyze the huge impacts it causes on the pricing of gas (Forsyth, 2006). Another unique feature of organization is its forward and backward integration of business where they not only extract the natural resource but also process it and supplies it to both bulk industrial users and domestic consumers. This attribute provides a great opportunity to understand pricing structure for both types of consumers decided by the organization. The organization’s officers were also encouraging and cooperative with researcher and discussed the intricacies of the business and pricing policies. All the features and attributes are the reason and rationale behind researcher’s choice to choose British Gas statistics for this dissertation.
Relevance with MBA
The relevance of choosing this topic is very clear and easy to understand. MBA is a master degree program in business administration. We are taught various concepts and basic principles of business administration and methodology in the course. We also learn the basic theory of financial analysis and pricing structures in our course which allow us to use the similar concepts in our professional careers. A dissertation on the topic which is related to studying and analyzing the pricing structure and policies is a excellent opportunity to get a practical experience of applying those theories to real business situations. This dissertation will also assist the student of MBA to understand the difference between the ideal theories present in books and changes they can see while practical usage of these theories. It will also unfold various new aspects of business conduct and organizational level decisions which were not taught in classrooms or books (Kotler and Armstrong, 2010). The study will also assist the student in developing his/her research skills and practical methods of conducting a study. There will be certain errors and limitations associated with the study which will make an excellent learning experience for student to induct themselves into the corporate world. This dissertation in essence provide a good opportunity for student to apply what they have learn in classrooms and in turn learn new things which they can never learn in classrooms (Zineldin, 2004).
Aim and objective of the study
The study is aimed to indentify pricing structure and policies adopted by BG group while determining the prices of their products and how these policies will assist the organization in achieving a long term sustainability and competitive advantage over other players in industry.
Objectives of study are
The aims and objectives of the present research are as follows.
- To analyze different aspects of pricing strategy followed by British gas in determining their product’s prices and rationale behind their current pricing strategy.
- To investigate various challenges faced by the organization from free market and other players present in the industry.
- To explore and assess various risk factors present in market which can impact the pricing mechanism in a negative way and disrupting all forecasting about future prices.
- To evaluate the current pricing and marketing strategy of British Gas using various strategic analysis framework like SWOT and PEST analysis.
Brief research methodology
The research is designed in such a way that it involves various aspects and view points from not only officials and management of the organization but also incorporates viewpoints of consumers of the products and services. The research is adopting the mixed research methodology with both primary and secondary research as a part of it. In secondary research the researcher will go through an in depth analysis of various literature available about the organization in particular and pricing theories and models in general (Brannen, 1992). The literature review will be done by using a large number of articles’ journals’ previous studies’ e journals’ annual reports and books related to the subject. The researcher will go through the resources available by using various databases and libraries and extract relevant information. Based on that information arguments will be developed in favor and against the pricing policies of the organization (Drew et al., 1996). The data collected will be sorted on the basis on aims and objectives of the study and any redundant data will be discarded before analyzing. In second phase of study a primary research will be conducted. The samples will be broadly classified into two groups
- The officials and management of the organization
- The consumers of the products and services
These two groups will be the focus of primary study. The sample will be selected by simple random selection technique and the tool for data collection will be questionnaire and interview. The interview will be primarily used for data collection from the company officials. The interview could be either personal interview or a telephonic interview based on the situation and resources available (Malhotra, 2007). The questionnaire will be used to collect data from the consumers of the BG group. The research is both qualitative and quantitative in nature. The data collected from primary research will be sorted and analyzed using various analysis tools like SPSS and NIVIVO. The results of the analysis will be presented with the recommendations and conclusion of the study. The research study will have its limitations as well which will be discussed in dissertations and proper steps will be taken to minimize the impact of limitations on the result of the study (Gray, 2004).
Explore the third part, Dissertation on British Gas Literature Review>>>>>
- Smith, T. (2011) Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures. USA: South-Western Cengage Learning.
- McCullough, Michael (2006). "The Guru of Gasoline" Alberta Venture [Date accessed: 18th Oct, 2011].
- Kitasei, Saya. (2010) Powering the Low-Carbon Economy: The Once and Future Roles of Renewable Energy and Natural Gas World watch Institute pages 234-297
- Kotler, P. and Armstrong, G. (2010) Principles of Marketing (13th edition) Pearson Education pp231-432
- Data Book (2010) Bg-group.com. [web page] http://www.bggroup.com/InvestorRelations/Reports/db2010/Pages/default.aspx Retrieved 18th Oct 2011.