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Pounds Case Study Business Models

X. Pounds current size and corporate ethos.

F.X. must rebrand itself as a company that cares about the community, and knows the community well. As Miller Fuels has a superior range of products, F.X. Pounds must offer superior service. It must also solidify a more compelling risk-mitigation strategy. At present, the company spends little on marketing and promotion and offers no innovative services, such as lock-in energy pricing. It focuses only on current customers who are older and likely to remain with the company. More of the same is its current approach, and other than owning a small gas station, which is still tied to the fortunes of the fuel industry, it has no way of dealing with future market volatility.

F.X. Pounds has been able forestall change because the market of natural gas has traditionally been that of an oligopoly, with only a few service providers. This has allowed the company to favor more conservative strategies, and to keep product and price differentiation relatively minimal. Now, F.X. Powers main competition is challenging its complacency in the wake of deregulation. To become truly profitable as an energy company, F.X. should divest itself of its land holdings and focus on remaining solvent as an energy company. Since it cannot compete on size or by offering more expansive services, it should instead focus on providing members of the community with attractive services, such as lock-in energy prices; senior and first-time customer discounts; and discounted services on maintenance calls and maintenance insurance plans.

Fears of energy price hikes, particularly amongst individuals with depleted retirement savings are likely to mean increased demand for such cost-mitigating strategies. F.X. Powers must offer a greater and more attractive range of such pricing options to outmaneuver its competition (Kilian 2008).

References

Kilian, Lutz. (2008). The economic effects of energy price shocks. Journal of Economic

Literature, 46(4): 871 — 909.

Michaels, Robert J. (2008). Electricity and its regulation. The Concise Encyclopedia of Economics. Library of Economics and Liberty. Retrieved May 7, 2010 from the World

Wide Web: http://www.econlib.org/library/Enc/ElectricityandItsRegulation.html

Porter, Michael E. (2008, January). The five competitive forces that shape strategy. Harvard Business Review. Retrieved May 7, 2010 from the World Wide Web:

http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1

Porter, Michael. (1980). Competitive strategy. Free Press, New York.

Zachman, Julie a. (2007). Kohls department store: Fastest growing retailer in 2007. Journal of the International Academy for Case Studies. Retrieved May 7, 2010 from FindArticles.com at http://findarticles.com/p/articles/mi_qa5452/is_200903/ai_n39234946/.

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