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Nextera Energy Case Study: Exploring Marketing Strategies

Discover Nextera Energy Business Strategies and Success in this Case Study

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Introduction

This company is among the Top 20 in the world of innovation according to Fortune. America has 98% reduction in our dependency on foreign oil since 2001. It generates 45500 megawatts of net generating capacity. It boasts of a shareholding of 945% return over the last 15 years. The company has created thousands of high-paying American jobs thought the investments.

Introduction

Vision and Mission Statement

Vision: “Our goal is to achieve Real Zero, meaning we will be carbon emissions free by no later than 2045.” (Quiroz and González 2020).
Mission: “We're committed to respecting our environment, sustaining our communities, investing in our team and growing shareholder value.”

Vision and Mission Statement

United Parcel Service Inc.Situation Analysis

Electric power and energy infrastructure are two business lines of NextEra Energy Inc (NEE). It also owns investments in gas infrastructure assets and produces, transmits, and distributes energy. Utilizing nuclear, coal, oil, natural gas, wind, and solar energy sources, the corporation generates electricity. Additionally, NEE purchases electricity for resale and offers risk management services for gas and electricity usage. It provides services to a variety of consumers in Florida, including residential, commercial, industrial, wholesale, and other clients. It also owns, develops, builds, runs, and manages electricity producing facilities in the US and Canada wholesale energy markets. The US city of Juno Beach is home to NEE's headquarters (Feng, Li and Wang 2021).

Industry Structure and economic feature

Energy Resources owns and manages producing facilities that use natural gas, nuclear electricity, and oil in addition to wind and solar power. About 41% of NextEra Energy's generating capacity came from non-renewable sources including fossil fuels as of 2020 (Stanley and Securities 2019). In 2020, NextEra Energy continued to strengthen its position as the greatest producer of solar and wind energy in the world, and it is still working to modernise its power plants. This will result in significantly reduced air pollution rates and a significant decrease in its reliance on foreign oil. Numerous states now have construction jobs thanks to this multibillion-dollar investment programme, which has also produced enough fresh, clean, inexpensive energy to power millions of homes and businesses ( Shakirov and KSpEU 2020).  

NextEra Energy Strategic

Business Level Strategies:
The business level strategy that is used by the company are as follows:
  1. The company is able to provide thorough, data-driven energy strategies and solutions to our customers thanks to our unique analytics tools and the knowledge and expertise of our analysts.
  2. The company’s regulatory experts cover all relevant jurisdictions in the nation, are knowledgeable about all aspects of the sector, and are able to recognise and evaluate new regulatory changes as they happen.
  3. The company combine to be the world’s largest generator of renewable energy from the wind and sun and a world leader in battery storage (Weeren 2020). 
Corporate Level Strategies: 
The cooperate level strategies include the four steps and they are understanding, assessing, designing and executing. Multiple stakeholders will frequently be involved at various organisational levels in order to achieve enterprise energy optimization, and various risks and opportunities will need to be taken into account. Understanding each of these components is our first step because they are essential to developing a strategy. The next step is to review the energy cost and consumption data to see how and when your company is currently utilising energy. Additionally, we might audit your energy use, speak with important stakeholders, and examine your rate codes, capacity tags, and utility bills. The third step is to create the consumer’s unique energy plan after thoroughly knowing your aims and objectives and conducting an evaluation of your existing situation. Fourth, to ensure goal attainment, the company continuously assesses results against predetermined targets. It also modifies plans and deadlines as necessary because business demands, markets, and technology frequently change quickly (Dong 2022).

Competitive Analysis and Advantage in the industry

Nextera Energy Inc. reported a 53.75% year-over-year rise in total revenue in the third quarter of 2022 when compared to the performance of its rivals. The sales growth outpaced the 24.09% average revenue growth of Nextera Energy Inc's rivals during the same quarter   (Bradford et al. 2020).

SWOT Analysis

Strengths:
  1. High customer satisfaction - the business, with its devoted customer relationship management department, has been able to attain a high degree of customer happiness among current customers and good brand equity among potential customers (Bradford et al. 2020).
  2. Strong Returns on Capital Expenditure - By creating new revenue sources, NextEra Energy was able to execute new projects with a fair amount of success and create good returns on capital.
  3. Strong distribution network — NextEra Energy has developed a solid distribution network over the years that can cover the majority of its potential market (Bradford et al. 2020).
  4. Excellent Free Cash Flow: NextEra Energy has strong free cash flows, which give the company the means to invest in new projects and expand.
Weaknesses :
  1. Compared to other businesses in the sector, there is a high rate of employee attrition. In comparison to its rivals, NextEra Energy must spend significantly more on employee training and development because of its higher turnover rate.
  2. Not very effective in integrating businesses with perse work cultures. As was already established, NextEra Energy occasionally fails to merge businesses with distinct work cultures, despite its success in doing so for small businesses (Bradford et al. 2020).
  3. NextEra Energy's profitability ratio and Net Contribution% are below the sector average.
  4. The organization's structure only works with the current business model, which prevents it from expanding into related product sectors.
  5. The products' marketing could have been far better. Even if the product is a sales success, its positioning and unique selling proposition are not well defined, which could invite competition to attack it in this market niche (Zhongming et al. 2020).

PESTEL Analysis :

political factors: 
  1. Risk of military invasion
  2. protection of intellectual property
  3. Tax rates and incentives
  4. providing mandatory employee benefits
  5. Level of corruption  (Bradford et al. 2020).
Economic factors:
  1. The quality of infrastructure in the electric utilities industry
  2. The level of education in economy
  3. The rate of economic growth
  4. Cost of labour and productivity in the economy
  5. Rate of employment (Walz et al. 2022).
Social factors:
  1. Leisure interest
  2. Cultural factors
  3. Structure of class, hierarchy and structure of power in the society
  4. Skill level of the population
  5. Level of education as well as the

Target Market Analysis

Demographic Characteristics of Market ;
  1. young market
  2. age group is 25-50+
  1. perse cultural people
  2. consumers from source countries (Walz et al. 2022).
iii) sychological Characteristics of the Market
1, accepting towards new technology
  1. supportive of new products (Bradford et al. 2020).
  2. iv) Behaviors of the Target Market
  3. predictable behaviours
  4. v) Strategies Appealing to Market
  5. introduction of new technologies in the market
  6. client-centered planning (Bradford et al. 2020).
  7. Marketing Mix of NextEra Energy
  8. i) product Strategy (product Mix): The company maintains high quality of products. It procures raw materials from reliable and trusted suppliers only. It promises high quality products and delivers them with a distinct competitive advantage (Walz et al. 2022).
  9. ii) pricing Strategy: NextEra Energy Inc. promotes positive brand and product perceptions among target consumer groups by adopting premium pricing for some of its product categories. By using premium pricing for several of its product categories, NextEra Energy Inc. fosters favourable brand and product views among its target consumer segments (Smith 2022). 

Competitive Analysis

  1. i) product: The products brought to the market by the company is technologically advanced as compared to their other competitors.
 iii) price: The pricing is set various options for the customized needs of the customers which puts the company at an advantageous position to other competitors.
  1. iv) place: The geographical areas chosen have effective connectivity to ensure marketing and product supply.
  2. v) promotion: The company uses magazines, hoardings, tv advertisements to appeal to consumers in high density locations (Su and Kuveke 2022).

Competitive Analysis

NextEra Energy outperformed the S&p 500 Utilities Index by a wide margin in 2021, and it has continued to beat both the S&p 500 and the S&p 500 Utilities Index in terms of total shareholder return over the course of the past three, five, ten, and fifteen years. Nearly all of the other S&p 500 Utilities Index businesses have underperformed over the past 15 years, yet NextEra Energy has doubled the index's average total shareholder return (Su and Kuveke 2022).

Key Success Factors

The key success factors are as follows:
  1. Strong flow of free cash
  2. Successful track record of integrating complimentary firms through mergers
  3. Excellent performance in the new markets
  4. Strong network of distribution
  5. Great returns on capital expenditure

Problems and Issues in Organization

  1. The company is not good at producing product demand as compared to its competitors.
  2. The high days inventory as compared to the competitors impact the long-term growth of the company (Christophers 2022).

Financial Analysis

Current ratio
0.5327
Long term debt/cadivital
0.5287
debt/equity ratio
1.207
Gross margin
73.4782
Odiverating margin
17.066
EBTI margin
17.066
EBTIDA margin
41.7541
divre-tax divrofit margin
18.601
Net divrofit margin
20.9327
Asset turnover
0.1211
Inventory turnover ratio
2.9001
Receivable turnover
4.1551
Days sales in receivables
87.8446
ROE return on equity
6.2236
Return on tangible equity
6.9665
ROA return on assets
2.0062
Return on investment
2.9331
Book value diver share
23.1401
Odiverating cash flow diver share
-0.2251
Free cash flow diver share
-0.0701

Conclusion

According to Fortune, this business is one of the Top 20 innovators worldwide. Since 2001, the United States has reduced its reliance on foreign oil by 98%. Its net generating capacity is 45500 megawatts. The company needs to consider the areas of threats and weaknesses to improve on. 

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