Competitive Strategies and Government Policies
Alternative fuel is a big issue becoming more of a common discussion topic among many firms around the world, along with politicians all over the world. There are many regulations and government policies that will come into play in the years to come for the fuel market and those involved. There will be negative and positive externalities involved, issues that will need to be adjusted to, for example new companies entering the market, globalization that will affect price and price sustainability of profit and different types of mergers that will be described in this report. Management has assembled a team to address these potential issues relating to our market in the future. New companies entering the market, mergers, and globalization The demand for alternative fuel is rising; with that rise there are several corporations breaking into the industry. The big five companies are BP, Chevron, Conoco, ExxonMobil, and Shell have already invested over $8 billion dollars in alternative fuels. These five companies set the trend for many companies venturing out into this industry. The new company paving the way in alternative fuels is Pearson Fuels, they have been in business since 2003 and were the first alternative fuel station in the country. They specialize in bringing alternative fuel to the public. They brought the first Bio diesel fueling station to California.
White Lightning LLC is another company that has broken through in the alternative fuel scene. They developed the first digital E85 conversion kit. A conversion kit allows any vehicle to operate on gas or ethanol. There are other companies trying to copy this model however none have been as successful as this company.
The largest merger was a $44 million acquisition of Agility Fuel Systems, a provider of on vehicle fuel systems for commercial trucks. The merger provided a platform to combine the best of the best and expand the services in the industry. (Nashville Post, 2011) In total, the new company has more than 10,000 systems deployed in fleets around the world; engineering, production, installation, and service locations in California, Alabama, British Columbia, and Canada; and capabilities in a range of fueling systems, including compressed natural gas, liquefied natural gas, hydrogen, and electric hybrids (Nashville Post, 2011). Pricing and the sustainability of profits
Lewis (2006-2009), "The Environmental Protection Agency defines sustainability as meeting the needs of the present without compromising the ability of future generations to meet their own needs.” A lean strategy includes relentlessly pursuing the elimination of waste in all business processes. Manufacturers have done this on the plant floor for many years and are implementing lean throughout their entire organizations, including office processes, and even sales. Corporate management often sees green initiatives as expensive propositions that ultimately reduce profitability. However, many manufacturers, and distributors implementing lean, are finding that sustainability is a natural extension of the lean philosophy and can improve profitability. Environmentally friendly products are only going so far but they will provide an advantage over competitors as consumers today show a preference for doing business with companies who are “green”. Lewis (2006-2009), " Obtaining tax credits are another way to offset some of the cost of green initiatives. They can be issued in many forms, such as income tax credits, sales tax rebates, and/or property tax abatements. Both federal and state governments offer these benefits. They commonly are given for use of alternative fuels, renewable energy, and energy-efficient equipment. ” (Making Your sustainability Initiative Profitable Combining lean efforts and securing tax credits can...