Origin O is one of the known Australian listed public energy companies, having it’s headquartered in Sydney. This particular company comes under the Australian Stock Exchange publicly listed company. The company is one of the key players within the Australian energy supply chain. Being one of the leading energy retailers in Australia, the management of the company works daily to make the energy more sustainable, affordable, and easier as well as smarter. The company makes use of a range of energy sources to develop electricity from the traditional fuels like that of coal as well as natural gas, to certain renewables like wind and sun (Fern Fort University, 2020).
The primary vision of Origin O is leading the organizational transition towards cleaner, customer-centric energy, and a smarter future. The strategic priorities of the company are delivering the best customer experiences and solutions, the acceleration towards cleaner energy, becoming a low-cost operator along with maintaining disciplined capital management. These are certain primary strategies that need to be considered by Origin O Company at the time of relocating its headquarter to Hong Kong. Besides the benefits of cutting their overhead cost, the management of Origin O might face certain strategic issues, which might affect the company’s operations from the global perspective and might affect the company’s profitability. These things will be critically analyzed with certain theories and concepts explained below (Harvard Business Review, 2017).
It will be always difficult for energy companies like Origin O in implementing without an effective CEO’s engagement and a clearer governance structure. In this perspective, the company might face strategic issues from assembling a cross-functional team to develop the firm’s strategy and guide the executions. The concerned company might also face a problem in integrating the energy properly to fulfil the Company’s vision and operations. Sometimes, the management of the company might also face a lack of good systems to access the energy data quickly, which will help in providing actionable information ( QS Asia News Network, 2020).
Next is regarding the market for the clean energy technologies which is changing at a faster rate and here the companies like Origin O might face strategic issues like that of adopting the cost of storage technologies. The management of Origin O might also face issues in the context of financial and risk implications of different forms of the purchasing options. The other problem that can be evolved through this is that the company, Origin O might face problems in engaging stakeholders of different kinds, and hence through this, the decision-making process of the company might get affected. These are certain strategic issues that might be faced by the management of Origin O at the time of operating from the headquarter, Hong Kong. In addition to this, the other strategic issue, which might be faced by the management of Origin O at the time of shifting it’s headquartered, is the lack of effective communication with both of the partners and the investors. After operating from Hong Kong, the problems like involving the employees towards energy strategy, which might uplift the efficiency activities, might be ignored at the time of operating from headquarter, Hong Kong. Hence, in this context, it is to be recommended to the management of Origin O to undergo profitable businesses and manage the assets ( QS Asia News Network, 2020).
PESTEL analysis on the host country that is Hong Kong helps readers in providing certain insights on political, economic, social, technological, environmental, and legal factors, which will help the companies like Origin O in realizing that what will be the possible strategic opportunities. This particular strategic decision will assist the company in maintaining its homely affairs, governed under the Chinese principle of one country, two systems.
Political: Hong Kong was one of the British Territory and it became one of the special administrative region, located in China. Hong Kong can be defined as one of a semi-autonomous region. There exist certain positive points concerning Hong Kong in certain areas like foreign trade affairs, communications, the establishment of trade unions, etc. However, certain political challenges often being faced by Hong Kong's place in the context of anti-government protests through the escalation of violence and anger on very sides (Origin Energy, 2020). This might hamper the strategic decision of the company concerning global trade and politics. Hence, in this context, it can be recommended to the management of Origin O to closely analyze certain important factors like corruption level, regulation of the process, wage legislation, trade regulations with tariffs, etc.
Economic: Some macro-environmental factors like rate of savings, rate of inflation, interest rates determine the aggregate demand and investment within an economy. The macro-environmental factors involve the rate of growth of the country, inflation along with economic indicators through the help of which the future forecast can get easily predicted. Here Origin O might use Hong Kong’s economic factors like inflation, growth trajectories that turn out to be helpful by Origin O, which help towards the growth fulfilment objective. The GDP rate in Hong Kong as per 2019 was around USD 366.03 billion as per 2019. The shreds of evidence show that the rate of unemployment had increased at high subsequent levels during the first half of 2020 with a certain challenging labour market (SGS, 2020).
Social: Hong Kong can be defined as one of the richest cities across the world. Around 73,0000 inhabitants of the city are having a net individual worth of USD 5 million or more. It is also considered as one of the attractive places for rich people as it can be stated as one of the gateways of China. It is also regarded as one of Asia’s prime financial centre and one of the least corrupt places, which will actually help the management of the company to extend its strategic decisions in this country. However there also do exists certain challenges in the context of poverty and the unequal distribution of income which might be challenging for the company to operate its headquarter from this place since the problem of employment might get generated (Origin Energy, 2020).
Technological: Hong Kong is endowed with a highly advanced technological environment and it is popular for world-famous ICT infrastructure and internet connectivity. Hong Kong Science Park Houses is more than around 800 technology companies and most of the companies demonstrate a higher level of the product innovative capabilities at the global perspective. Hong Kong for many years has also been trying constantly in the utilization of its financial powers so that the higher technical ideas can be easily generated. The technological base in Hong Kong should ensure that the country is following the National Energy Retail Law Act 2011, through which both the supply as well as the sale of gas and electricity easily gets supplied to the retail customers (Harvard Business Review, 2017).
The generation of electricity, distribution of electric powers, and sales can be found complex by nature. This need to be analyzed and reviewed by the management of Origin O at the time of transferring its headquarter towards Hong Kong so that the other electric power companies can get assisted from owner generation to the risk analysis. It can be stated through certain evaluations that the best workforce resources are available inside Hong Kong. The technical staffing services under this had undertaken a global approach and operated through a network of certain offices and laboratories. The energy company Origin O needs to check these things first at the time of operating its headquarters from Hong Kong.
Environmental: Different markets are having different norms and standards, which affect organizational profitability. Before entering into a new market, that is the place of starting up a new business, the important environmental standards which are required to be considered in those markets. Some environmental factors, which needed to be taken into consideration by the firm at the time of operating their headquarter in Hong Kong, are the changes in the climate, Hong Kong laws regulating the environment pollution along with the presence of endangered species as well as attitude towards and support for the renewable energy. Certain evidence shows that the new Hong Kong technology developed at the City University of Hong Kong saves around 4.5 per cent of the energy (Origin Energy, 2020).
One of the research projects has been conducted by the Department of Electrical Engineering which aims in optimizing mobile network designs and at the same time also reduces energy consumptions of the base stations by around 4.5 per cent. Base stations generally account for around 80 per cent of the consumption of the total energy. It is comprised of radio transceivers, which maintains the communication between the network and mobile users through radio links. These are certain strategic issues, which might create issues for the company, Origin O at the time of operating their headquarter from Hong Kong (Fern Fort University, 2020).
Legal: The legal framework and institutions within Hong Kong are not that robust enough in protecting intellectual property rights within an organization. The presence of a 10-year agreement between the government of Hong Kong and the companies of the territory’s, the electricity rates will provide around 9.99 per cent assets return. Before entering into the market, the management of Origin O should check the existence of this particular ordinance to check that they are receiving an adequate amount of energy-efficient products for not only the consumption of the less energy but also assist the consumers in saving their money for the long term environmental protection. The management of the company might also face strategic issues n the context of the maintenance of the data privacies and hence it should be looked after the data protection law in Hong Kong and also the Personal Data Ordinance without which it will be not profitable for the management of the company to operate their headquarter from Hong Kong. These are some of the strategic issues, which need to be looked after at the time of entering the Hong Kong Market.
The other competitors in the market like Jiawei Solarchinaa Company Limited, Global Tech China, Oasis Renewable strategy, etc. After analysing their strategy is one and the purpose of their work, the management of Origin O has tried to develop certain business model link strategies through which the company execution can be designed. The value chain segments were developed for natural business activity integration. The upstream segment is comprised of supply of fuel, trading as well as marketing, etc. Besides the strategic execution, the management of the other existing competitors in Hog Kong follows a differentiated strategy here GT40 utility models involve heritage integrated models along with the restructured infrastructure models by focusing on either solution and the services or the supply and the commodity or both. Through the single business models, the multiple business models are tailored and integrated so that the needs can be well achieved (Origin Energy, 2020).
Porter’s five forces model is used actually in undergoing through Energy industry analysis under which the management of Origin Energy Limited operates in the context of attractiveness through the inherent profit potentialities. The information that can be analyzed using this particular Porters Five Forces Model can be effectively used by the strategic planner s for Origin Energy Limited so that the strategic decision can be easily undertaken. There exist certain of Porter’s forces that will be discussed below like the threat of new entrants, Buyer’s bargaining power, supplier’s bargaining power, the threat of substitute products, and rivalry among existing firms.
The threat of new entrants: The economies of scale are difficult to be achieved in the industry where Origin Energy Limited operates. It makes the company easier in producing higher volumes so that it can achieve a cost advantageous position. Hence to maintain this standard also across the borders, the management of Origin Energy Limited should look after the existing competitive strategies available in Hong Kong, and likewise, they should operate their headquarter from Hong Kong. In general, the capital requirements within the Energy industry are high and to set up the same thing across Hong Kong, they should check the concerned country’s capital structure to lessen their capital expenditure. The entrepreneurs of Origin Energy should attempt adequately to learn regarding existing businesses in Hong Kong and likewise should strategize them to prevent new businesses from entering its business sphere (Origin Energy, 2020).
The threat of substitute products: In a new country, Hong Kong, certain threats might come from entrepreneurs of new companies concerning the production of substitute products. Hence, the entrepreneur of Origin Energy Limited needs to prepare one monitor plan to check not only the growth perspectives of itself only but also to monitor other potential competitors.
The intensity of competitive rivalry: The intensity of competitive rivalry among the competitors within an industry is defined to an extent where one firm within an industry puts pressure on another firm to limit each of the firm’s profit potentialities (Origin Energy, 2020)s.
Buyer’s bargaining power: In the context of the buyer’s bargaining power, Origin Energy Limited focuses on both the innovation and the differentiation so that more buyers can get attracted in the future. In this context, both the product differentiation and product quality turns out to be important for buyers within the industry. On the other hand, Origin Energy Limited also attracts a large number of customer’s through a focus on this. It can be crucially advised to the company to develop a larger customer base since the bargaining powers among the buyers are weak. It can do it through different efforts of marketing. Side by side, it can also take the advantage of the economies of the scale build a cost advantage and selling them at lower prices to the lower-income buyers within an industry.
Supplier’s bargaining power:
Origin Energy Limited in the context of the supplier’s bargaining power, Origin Energy Limited can purchase raw materials from the suppliers at the owner cost. Under this, if the product cost is not found to be suitable, it is having an option in switching the suppliers because of the lower switching costs. The management of Origin Energy Limited can be benefited from the development of closer relationships with suppliers where both of them could be benefited.
VRIO framework is one of the tools, which is used in order to undergo certain analysis on the internal resources of the firm long with certain capabilities so that the sustained competitive advantages can be regained.
Valuable: Under this context, the management of Origin O needed to be asked a question where it should be noted that whether a resource aids value through the employment of the opportunities? The concerned company in Hongkong through the maintenance of the diversified prices could do this to assist the company in continually valuing the resources (SGS, 2020).
Rare: The resources that being acquired by an individual or more companies grant the temporary competitive advantages. In the other context, where more of the commandeer there or having the same resources always leads towards the competitive parity.
Costly to imitate: A firm that has valuable, rare, and costly to imitate resources can (but not necessarily will) achieve sustained competitive advantage. Barney has identified three reasons why resources can be hard to imitate:
To conclude a strategic issue can only be solved through proper planning and monitoring methods. In doing this, the target markets along with the capital structure of the respective company should be properly evaluated and clarified. This will ultimately help in providing proper direction courses for long-term business management along with serving the needs of the customers. From the entre study, internal strategic issues are the ones, which the organizational faces due to certain internal factors, which can be solved through owner, influence, and impacts.
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Fern Fort University, 2020. Origin Energy Limited PESTEL & Environment Analysis. [Online]
Available at: http://fernfortuniversity.com/term-papers/pestel/nyse4/4738-origin-energy-limited.php
Harvard Business Review, 2017. Energy Strategy for the C-Suite. [Online]
Available at: https://hbr.org/2017/01/energy-strategy-for-the-c-suite
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Available at: https://www.originenergy.com.au/about/who-we-are/our-leadership-team.html
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QS Asia News Network, 2020. New technology developed at the City University of Hong Kong saves at least 4.5% of energy in mobile networks. [Online]
Available at: https://qswownews.com/new-technology-developed-at-city-university-of-hong-kong-saves-at-least-4-5-of-energy-in-mobile-networks/
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