EDF energy business process

EDF Energy Business Process Followed to formulate Strategies:

To be benefited it is important for an organisation to provide a framework for decision making to clarify future opportunity and threats by setting specific objectives of achievements. It also helps to measure performance, it work like channel of communication to develop team by managerial training to achieve organisation's focused area.

In EDF Energy strategies are formulated into three different levels:-

  • Corporate level (MDs / Directors)
  • Business level (Senior Managers)
  • Operational level (Operational Managers)

According to Johnson et al (2008) corporate strategy consists of two main elements which sometimes cannot be possible to distinguish:-

i) Corporate-level strategy which is concerned with the overall purpose and scopes; that provides vision, mission, of the company.

ii) Business level strategy comprises how to compete successfully in a particular market; that is also known as who directs in involving taking decisions of a particular SBU's (Customer Branch) of the organisation.

iii) And the last one is operational level which situated at the end of the organisation where the operational managers are likely to take decisions of operational measures in different kinds of business operation decisions. These decisions are directly implemented, in some cases it may consider to amend the strategies in Business Level where changes are extremely necessary.

According to Kay (1993) corporate strategy can be seen as the linking process between management of the organisation's internal resources and its external relationships with its customers, suppliers, competitors and economics and social environment in which it exits. If we look at the diagram where it reflects the bonding and that's how it's hook-up between supplier; customers; and its end users.

It is necessary to ask questions on environments, resources, competences, competitive advantages and reactions of environment changes and so on strategic choices and implementations to find out the strategic position of EDF Energy's. In a broader sense strategic management is about "strategic decision". And these are the decisions are taken by the CEO, MDs and followed by Directors, Senior Managers of the divisions.

Strategic Analysis:

On the other hand to explore the strengths and weaknesses of the company; it is necessary to analyse its SBUs by considering the external factors which may be influences its position in the existing market which are usually assessed by various tools, are as follows:-

  • PEST analysis
  • Scenario planning
  • Porter's Five Forces analysis
  • Market segmentation
  • Directional policy matrix
  • Critical success factor analysis
  • SWOT analysis

The external environment of EDF Energy can be split into three elements, although these are often interrelated in practice.

  • The physical environment
  • the social environment
  • the competitive environment.

For an example SME Fields Sales Team of EDF Energy was asked not to go out during the bad weather in the beginning of the year 2010. A farm decision were taken by the Corporate Level to achieve a set target without losing any working days but the Business and Operation level has amended the strategies depending on the situation and asked all the concern employees not to leave home in these extreme weather. However, it is also expected to cover the business losses by putting extra efforts which is taken positively by the employees are may be considered as a competitive environmental activities.

The corporate Level has decided to adhere with government policy by announcing a new holiday entitlements. It has also taken major steps by fixing or installing CERT and Cavity wall work done to reduce carbon footprint are also a corporate level decision influenced by political-legal agendas (Political-legal).

It is also encourages its customer to buy more green and carbon trust product then grey products to buy offering better opportunity to save. To help balance climates changes it encourages using wind power and nuclear power system etc. It has also created flexible forms of work, such as working form home where applicable and suitable to reduce possible co2 footprints (Technological).

All the above decision are usually made by corporate level managers and it is delegated to its business manages to facilitate the operational manager to implements in the organisation.

Critical discussion of its process:

The one of the strengths of EDF Energy is; it is the largest existence in the energy companies in Europe, with key business operations in France, the UK, Germany and Italy. It is Country's largest electricity network operator, distributing electricity to over a quarter of the country's population. A major generator of power in the UK. It has coal and gas generation, wind farms as well as combined heat and power plants (EDF Energy 2009).

As we know from the above discussion that EDF Corporate Levels are always following a readymade process which is a positive in some extent. It also gives a very straight forward answer to a problem and come back to an answer with a previous result history. In a practical scenario some time it may be considered as strength of a decision maker who already knows what to do in relation to such problems.

On the other hand, the weaknesses are also part of its success which is identified in several areas. For an example to start four people died at work and 220 work related injury recorded in 2009 despite taking so many initiative to reduce it accident levels. It has also increase in electricity and gas piece in UK, where competitors' prices are much lower. And their business customer registration processes are frustratingly slow but management has taken initiative to register customers within 10 days of signing contracts to comply with OFGEM registration policy 2010 Act, without considering the situation of registration capability. It is also revealed that a 16% less profit calculated (before tax) then previous year.

The downside is that the corporate management is always try to solve the problem which they have already considered without considering any present changes, which creates problem for the business level managers and operation managers. To implements in some extent middle managers are not even believe changes may help or have completely lost confidence to implement.

Professor Porter (1985) argued that there were three basic strategies (generic) open any business:-

  1. Cost Leadership;
  2. Differentiation; and
  3. Focus /Niche

As discussed earlier EDF Energy is a multinational company that has been emphasising innovation, creativity and coordination among the company. It has strong marketing ability, product engineering skills and resources and researches capability and strong cooperation from distribution channels as they produce and distribute not only for them but also for their local competitors. Hence, it can be considered as differentiation in broad scope.

In a simple context organisation is like a machine. Machines generally require some form of fuel or energy; possible raw materials, and they perform some kind of process of conversion on the fuel/energy/raw materials and then they output of the conversation.

The objective of the marking will lead to sales. To measure the objective we will be using SMART concept:

Specific      Numbers of sales need to be calculated to measure

Measurable      Only the actual successful registered sales figure will be considered to measure

Achievable      Whether the target is given practical or not to measure

Realistic      As per current market situation and position

Time bounds      Within the time frame

Once the SMART concept used then EDF Energy need to set its target objective enter into the targeted market. The target they have already chosen and also arranged logistics (agent, distributor) to low control, low risk, high flexibility.

We also know that EDF energy is in product development stage when they are also promoting traditional products as well as to compete in the market. On completing of new product development it may require to find a suitable market to explore its vision. It also requires developing its various resources (people) etc.

However, recent development of new business model argued by Johnson et al (2008) - A business model, .consist of four interlocking elements that elements that, taken together, create and deliver value, are as follows:-

a. Customer value proposition (CVP);

b. Profit formula

c. Key resources; and

d. Key processes.

The Elements of a Successful Business Model:

Source: Johnson, M. W. et al (2008) Reinventing Your Business Model, Harvard Business Review, December.

According to Johnson et al (2008) a business should have a targeted customer in relation to its production / service capability. EDF's vision of "Bringing sustainable energy solutions home to everyone" that requires alternative products to offer to its customer which requires being affordable as per current credit situation. As we know that EDF has already taken a measure to produce its energy using nuclear generation systems, that will be less expensive and environments friendly. Still looking at the broader stakeholders list; some of the customers might not agree with nuclear product where they can also emphasise more with the wind power and solar power products by having different strategy to offer to its customers.

Therefore, it suggested to plan a business decision not from the top management but can be considered bottom down management policy, where all the employees who are involve in directly with the customers such as; data retrieval, sales force, engineering division who involves in various way to its market and can put together their real life scenario into business world of the EDF energy.

Finally, any decision which is not considered fully is sometime creates problem. Those who perform in the field they actually need confidence when they are securing the business acquisitions and provide customer services. Therefore, it may be recommended to consider a new approach on decision making to see the changes in business in a positive direction.


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