Background of the company
Discuss about the Strategy Analysis of Kinder Morgan for Smart Energy Grid Design.
The purpose of the report is to analyze the strategic approach of the energy infrastructure company Kinder Morgan. In order to procceed with the discussion the report begins with a general overview of the company that includes the elaboration of resources, capabilities and competitive advantage of the company (Eva et al., 2014). In addition to that the study discusses the impact of the major factors in the company’s external environment such as political, economic, social, technological, competitive and other factors as well. One of the major parts of the discussion is the discussion of the strategic approach of the company in line with the previous discussion. Finally the report discusses the effectiveness of the company’s strategic approach. Thus it can be said that the whole discussion is to shed the light on strategic management. The strategic management is becoming an extremely important aspect in terms of business through which companies increase their competitive advantage.
Kinder Morgan Limited in Canada operates an integrated pipeline network system as well as facilities of terminal. The two separate division of the company operates in are pipeline and terminal. The aim of the company is to focus on a stable as well as a transportation system that is fee based. The company is one of the leading companies operating in the field of energy transportation. The company also stores the assets that are most important aspect towards the energy infrastructure of the country’s western regions. The company successfully practices sustainability in its business process and posses a responsible approach towards the company. The pipeline transport of the company supplies natural gas, crude oil, carbon dioxide, products from refined petroleum and so on. In addition to that the company also keeps storage of a wide range of products as well as materials at their own terminals. The products are coal, petroleum, steel, coke and so on. Over the years, the company has been able to achieve a considerable reputation within the industry. The company has been secured its place as the largest company in the field of energy construction.
The accompanying PESTLE examination gives a comprehension of the effect of political, economical, social, technological, Legal and environmental factors on the business.
Political factors: Canadian government has straightforward and productive legitimate framework for the business. Defilement level when contrasted with different nations is additionally lower in Canada. Subsequently, the political condition is reasonable for business development (Islam & Mamun, 2017). Dissimilar to the neighboring nations, where political condition is shaky, Canadian government has possessed the capacity to keep up its political condition stable.
Economical factors: As indicated by Ho, (2014), factors identified with economy have real effect on the overall organizations like Kinder Morgan. The financial emergency all through the world has influenced the general business industry. Kinder Morgan too goes under the influenced organizations. Because of the emergency, the net revenue of the organization brought and had down to take some cost lessening measures, for example, limiting providers. A standout amongst the most conspicuous cost cutting measures is the minimization of works. These elements likewise prompt the bringing down of generation of the organization. However, Kinder Morgan effectively dealt with the emergency, it can be said that the organization rather dealt with the emergency in the meantime held its situation in the market.
Social factors: One of the significant social factors that influence the whole business is the expanded attention on sustainability of environment. The government of the country imposes strict directives in order to ensure that the carbon footprint of the business is less. Thus there remains a challenge for the company to assure that the effect of the company is not adverse on the environment. Since the economy of Canada is growing at a rapid pace day by day, it has a large resource of workforce for the company (Team, 2013). Since the Canadian economy is growing a large amount of professionals migrate to the country in order to get employed. Thus a quality employment brings advantages for the company.
Technological factors: In regard to the innovative viewpoint, the Kinder Morgan Company is in the invaluable position. Being one the extensive supplier of energy in North America, the organization utilizes most recent innovation to serve their client the best administration. Innovation upheld current types of modern equipments are utilized for the business process of the company. The organization additionally utilizes most recent publicizing and showcasing strategies to advance its branding (Zalengera, 2014). The organization's assembling units are innovation based and furthermore utilize current advancements to stay associated with its all units.
Legal factors: Legal factor including charge laws are should be productively satisfied by the Kinder Morgan Company. In the interim, the company needs to satisfy the directions controlled by the government of the company identified with expansion of additives and different segments (Ho, 2014). As the company points is to offer bets service in the industry as well as since it deals in the international market, the company needs to adhere to all trade rules and regulation of the Canadian government and the other countries’ government.
Strategy assessment of Kinder Morgan Company
Environmental factors: According to Islam & Mamun, (2017), all companies in Canada have taken measures according to the government’s wing of trade as far as condition. The measures incorporate preserving water assets, vitality and power assets, and recyclable and reusable items. Thus Kinder Morgan Company needs to receive the measures keeping in mind the end goal to diminish the natural impression of their business activity.
- One of Kinder Morgan Company’s destinations is to open up improvement and advantage to make a motivating force for their financial specialists which will in like manner make backing for the brand under the going with procedures (Eva et al., 2014).
- Changing their plans of action to base on their customers' value potential as well as using a division approach that is based on value in order to manage the business' value-based potential (Hill, Jones & Schilling, 2014).
- Executing multi-division systems in the major markets in order to aim indisputable clusters of market distinguished by use occasion, forceful power and budgetary levels.
- Executing particularly masterminded range of product, packaging and assessing strategies through several scattering channels (Eden & Ackermann, 2013). Driving thing improvement along our unmistakable product segmentation.
- Achieving the complete working capacity of their plans of action and systems in order to drive operational efficiencies all through our association (Miller, Hotte & Sumaila, 2014).
- Concentrated on stable, chargeprimarily based assets which are center to the vitality basis of developing
- Virtually no ware valuehazard
- No showcasing and changing enterprise
- Increased use of advantages with cost control
- Classic settled fee corporations with minimal variable expenses.
- Improve profitability in order to drop the greater section of bestline improvement to major
- Useful cost cutting measures in order to increase acquisition.
- Decrease unnecessary overhead.
- Application of excellentpractices to middle tasks.
- Maximized advantagesof a one of a kind budgetary shape which matches with methodology.
- MLP maintainsaway from twofold tax series on disseminations from high earnings corporations.
- Strong accounting file permits adaptability when elevating capital for acquisitions/developments.
In order to conclude it will be apt to state that strategic approach the company adopts is exceptionally useful for the company. It can be said the adopted strategies are extremely beneficial for the since its past annual report suggests an increased rate in profits margin. The cost cutting measures in order to increase the acquisitions. One of the best strategies of the company is the sustainable approach. The company strictly focuses on sustainability of the natural resources so that its business operation does not affect the environment in an adverse manner. The different strategies adopted by the company in order to assure the further progress of the company. The cost control strategy is one of the most effective strategies that help the company to generate a large amount of revenue. The financial structure of the company is controlled with a sincere approach. In order to ensure that the cash flow of the business is high, the company avoids the system of double taxation. A very effective balance sheet is maintained so that the capital is enhanced in order to further expansion. The unnecessary expenses are reduced by the company in order to assure that the company can use the financial resource can be used for the improvement of more productivity.
Finally, it can be rightly said that the paper begins with a general outline of the organization that incorporates the elaboration of assets, abilities and upper hand of the organization. Notwithstanding that the investigation talks about the effect of the central point in the organizations outside condition, for example, political, financial, social, innovative, aggressive and different factors too. One of the significant pieces of the exchange is the talk of the vital approach of the compass in accordance with the past discourse. At last the report talks about the viability of the organization's key approach. Hence one might say that the entire talk is to reveal the insight into vital administration. The vital administration is turning into a critical viewpoint regarding business through which organizations increment their upper hand.
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