Market Analysis Report for Aurora Energy in Indian Market

This paper presents a market analysis report for Aurora Energy's expansion in the Indian market. It analyzes the market condition of India with the help of PESTLE Analysis, identifying opportunities and threats for Aurora Energy. The report suggests adopting franchising as the market entry strategy.

Running head: INTERNATIONAL STRATEGIC MANAGEMENT
Aurora Energy
International Strategic Management
5/1/2019

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Executive Summary
The intent of this paper is to present a market analysis report for Aurora Energy which is
planning to expand the business operations in India. Presently, the company is operating its
business in the New Zealand market with key operations in the energy industry. The report
has analyzed the market condition of India with the help of PESTLE Analysis, which has also
supported in identifying the possible opportunities as well as threats for Aurora Energy
present in the Indian market. From the analysis, it has been identified that the demand in the
Electricity market of Indian is increasing but in contrast to this, the supply is limited which is
resulting in increasing supply-demand gap. The company can gain the opportunity by
supporting the government in meeting the demand of the population in India. The company
can adopt franchising as the market entry strategy to take entry in the Indian market.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of the Company.....................................................................................................3
Organizational Structure........................................................................................................4
................................................................................................................................................6
Value Chain Analysis of Aurora Energy...............................................................................7
Strategies................................................................................................................................8
Overview of Indian Market....................................................................................................8
PESTLE Analysis of Indian Market......................................................................................9
Political Factors..................................................................................................................9
Economic Factors.............................................................................................................10
Social Factors...................................................................................................................11
Technological Factors......................................................................................................11
Legal Factors....................................................................................................................12
Environmental Factors.....................................................................................................12
Opportunities and Threats....................................................................................................13
Opportunities....................................................................................................................13
Threats..............................................................................................................................13
Strategic Options..................................................................................................................14
Entry Mode...........................................................................................................................15
Conclusion................................................................................................................................16
References................................................................................................................................18

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Introduction
International Strategic Management is the planning procedure of framing international level
strategies fit between the competencies of the business and the resources under the global
environment in which operate its functions. It is said to be the ongoing procedure that is
followed by a business to compete in an international scenario. In other words, it is the
procedure that is adopted by the businesses for developing the strategies to expand the
operations abroad and compete internationally (Wheelen & Hunger, 2011). Strategic planning
is utilized in the procedure of framing a specific international strategy. It is very essential for
the international companies to create policies that consider the manufacturing, marketing,
employing, and servicing in the country with diverse belief, laws, and diverse levels of socio-
economic development in comparison to the origin country of the firm (David, 2011). The
intent of this paper is to represent the strategic analysis of Aurora Energy in the international
business environment. The paper is engaging in identifying issues that are present for the
company in the Indian market to operate the business and providing possible strategic options
that could support the company in surviving in the market. A proper procedure is being
suggested to the company to effectively pursue the opportunities and mitigate available risk.
Overview of the Company
Aurora Energy is one of the electricity distribution business established in New Zealand. It is
owned by the Dunedin City Holdings Limited on the account of Dunedin City Council.
Aurora Energy is the sixth largest distributor of electricity. With over 85,000 grounds in
Dunedin and Central Otago obtain power from Aurora Energy (Aurora Energy, 2016). The
distribution network of Aurora Energy is supplied from the national grid of the Trans power
at five main exit points. Aurora Energy is making its major contribution to society by

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distributing the electricity day-to-day life. The company is known for supporting the society
by the sponsorship majorly in the area of culture, education, and youth development. For
eleven consecutive year, Aurora Energy has been the major sponsor of the Aurora Energy
Otago Science and Technology Fair. This event inspires students to discover the field of
science and technology and share their inspired thinking with their friends and community
(Aurora Energy, 2018).
Organizational Structure
The organizational structure of Aurora Energy is comprised of expertise and skilled
management executives, who are responsible for the management of the organization
operations in order to attain all the desires does. The management team of the company
includes:
Rebecca Kardos – The Chief executive Officer
Grant Russell – The Chief Operation Officer
Kane Ingham – General Manager
Michelle Brooks – Manager People and Performance
Oliver Cousland – Company Secretary (Aurora Energy, 2019)
Mel Percibal – General Manager Marketing
Shaun Webber – Chief Information Officer

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Source [(Aurora Energy, 2017)]
The senior level organizational structure for asset management is presented in the above
image of Aurora Energy who has been involved with the asset management to Delta under
the agreement related to performance that was rehabilitated for a further 10 years in 2007.
This agreement is presently being reread in order to confirm whether it is good for the
business and offers cost-effective results for the customers as well as stakeholders. In Aurora
Energy, the primary accountability for the asset management of the distribution network of
the electricity reclined with the General Manager Network Performance (Aurora Energy,
2017).
Dunedin City Council
(Owner)

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Source [(Aurora Energy, 2017)]
Value Chain Analysis of Aurora Energy
Primary Activities
Inbound Logistics
DCHL (Shareholder)
Aurora Energy
(Statement of Intent)
Aurora Strategy
Aurora Asset Policy
Asset Management Plan
Capital Project Plan
Budget
Performance Reporting
Annual Report
Asset Service
Contract Service Delivery

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Procurement Plan
Old Material Scrapped
Material Replenishment
Product control
Material and Equipment storage
Operations
Management of Production Planning
Grid Infrastructure
Safety and Quality
Technology Management
Outbound Logistics
Power Quality Control
Power grid Dispatch management
Marketing and Sales
Energy metering management
Electricity Audit
Line Loss Control Management
Management of small hydropower and small thermal power
Service
Customer equipment maintenance
Handling client complaints
Electricity meter recording
Training
Supporting Activities
Infrastructure of Firm
Organizational structure
Media release
Discipline inspection
Corporate rule and regulations
Asset management
Discipline inspection
Management of Legal affairs
Trade Unions
Human Resource Management
Job placement
Planning a compensation system
Planning of human resource
Recruitment and Selection
Performance Management
Technology Development
Development of Information system
Planning of science and technology
Innovation Management
Implementation of innovation and procedures
Management of Technological Innovation
Procurement
Outsourcing project management
Material bidding procurement
Financial accounts

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Reimbursement
Source [(Visual Paradigm, 2019)]
Strategies
The maintenance strategy of Aurora Energy is built on monitoring of the condition of the
assets in order to attain the ideal balance of risk, performance, and cost. The network of
maintenance of Aurora Energy is directed in line with the policies of the risk management
and is reflective of the customer, community, expectations of the shareholders, safety, and
compliance (Aurora Energy, 2017).
Monotonous measures for maintenance precise to every category of the asset have been
developed. These determine the regularity of servicing or inspection and the work scope that
should be covered. They are dependent on the mixture of the recommendations of the
manufacturers, practices of the industry and the own experience of the company are based on
the defects and faults incidence for every asset design, model, make, or type, and factors like
as its operating environment. Aurora Energy endures improving its system of maintenance
management by rereading the policies and practices regularly (Aurora Energy, 2017).
Overview of Indian Market
India is a nation that covers a huge portion of South Asia. It is a legitimate republic
comprised of 29 states, each with a considerable level of control on their own affairs. Indian
is known across the world for its archaeological that a very urbanized culture that is Indus
civilization, which dominated the north-western portion of the subcontinent from about 2600
to 2000 BCE (Iyer, Khanna & Varshney, 2013).
The energy sector of India is one of the most critical elements of the infrastructure which is
also crucial for the growth of the economy and welfare of the nation. The development and
existence of the passable infrastructure are vital for the continued development of the
economy of India. The energy sector of India is the most expanded in the world. Energy

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generating sources available in India are from conventional sources like natural gas, coal,
hydro and nuclear power, and lignite to feasible non-conventional sources like solar,
domestic waste, wind, and agricultural waste (India Brand Equity Foundation, 2019). The
demand for electricity in the country is regularly increasing and is anticipated to increase
further in the coming years. To fulfill the increasing demand of the electricity in the nation, a
huge addition to the connected generating capacity is needed.
The energy sector of India is experiencing huge alterations that have redefined the outlook of
the industry. The continued growth of the economy endures driving the demand for electricity
in India. The Indian government concentrated on attaining the goal of “Power for all” which
has enhanced capacity addition in the nation. Similarly, the competitive intensity is
cumulative at the supply and market sides (Energy Research, 2019).
PESTLE Analysis of Indian Market
Political Factors
India is the largest democracy in the world as it is operated on the federal form of
government. The political environment is majorly affected by the forces like the interest of
the politicians, ideologies of the political parties, and policies of the government. As an
outcome, the environment of the business of India is influenced by the multivariate political
forces (Rahman, 2019). The system of tax in India is well-organized and a number of taxes
like service tax, sales tax, and income tax are forced by the Union Government. Besides this,
other taxes like octroi and utilities are managed by the domestic bodies. Privatization is also
encouraged within the country and government to encourage people to get involved in the
free business by the range of programs. The government of India is searching for different
sources of energy generation due to the increasing demand in the country. The demand in the
nation is increasing due to increasing population (SME Venture, 2017). Aurora Energy can

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move towards the Indian market to expand its business operations in the country and increase
its market base. It can gain support from the government in establishing its activities and
operations in the country. However, the company has to deal with the changes in the political
state and condition in the country as it has a major influence on businesses operating in the
country.
Economic Factors
The Indian economy has been considered stable, from the establishment of the industrial
reform policies in the year 1991. According to the policy, a decrease in the industrial
licensing, the establishment of FIBP, liberalization of foreign capital, etc. has led to the
continuous enhancement in the economic environment of India. In the year 2013, India
registered the GDP of around $5.07 trillion succeeding a further developed growth rate of the
GDP of 5% in the year 2014 in comparison to the rate of 4.35% in the year 2013 (PESTLE
Analysis, 2015).
The key exports of India are jewelry, transport equipment, readymade garments,
pharmaceutical products, machinery, and petroleum products, etc. Besides this, India is
involved in the importing of gold and silver, precious stones, crude petroleum, and pearl and
precious stones, etc. (Mishra, 2011). Considering the friendly relationship between India and
New Zealand can provide an added advantage to Aurora Energy in successfully establishing a
business in the country.
India and New Zealand share an enduring, friendly and rising relationship. The roots of this
relationship are from the 1890s when the first immigrants from Punjab and Gujarat visited
New Zealand (New Zealand Foreign Affairs and Trade, 2019). Both the nations are majorly
interested in the stability and prosperity of the Asia-pacific zone, and vigorously contribute in
the East Asia Summit and the ASEAN Regional Forum.

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Social Factors
The social force is any alteration in the trends which have a major influence on the
environment of the business. For example, the increasing aging population of India is
resulting in a substantial increase in the employment of the older employees and pension
costs. The population of India is more than 1.2 billion people with around 70% between the
age group of 15 and 65 (Chandramouli & General, 2011). The increasing population of the
country is resulting in increasing demand for the electricity which is not being managed by
the government of India. The supply and demand gap is increasing resulting in huge loss to
the nation. Aurora Energy can operate in the country by adopting different strategies such as
a strategic alliance with different existing players to reduce the supply and demand gap and
meet the demand of the Indian population.
Technological Factors
Technology majorly affects the development of the product and also presents fresh cost-
cutting procedures. India is presently being served with the 3G and 4G network technology
that has enabled a number of technological projects. In addition to this, the nation also has
one of the most robust information technology sectors in the world, which is motivated
towards promoting the information technology development, updating of software, and
advancement in the technology (Reddy, 2011). Presently, India has also launched their
satellites into space. This is the reason some of the huge international players are
continuously investing in the Indian market like Microsoft, Apple, and Facebook. India is
offering enormous opportunities for international firms and entrepreneurs to develop and
introduce new technologies for the development and growth of the nation.
Aurora Energy can operate its business in the Indian market as the nation is comprised of
advanced technologies and infrastructure which will offer a smooth path to the company
towards development.

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Legal Factors
In the present time, several numbers of legal alterations have been executed in India, like an
increase in the minimum wages policy, disability discrimination, and recycling, which has
directly influenced the operations of different businesses. However, in terms of environment,
the air quality has been also affected due to urbanization and industrialization, also leading to
problems related to health (Truelove, 2011). As an outcome, there has been the introduction
of the environmental pressure groups, noise controls, and regulations related to controlling
waste and disposal. India is also involved in framing different types of trade tax and policies
that must be considered by every business while operating their activities in India. In order to
successfully operate the business in the Indian market, Aurora Energy has to adhere to the
rules and regulations framed by the government for safeguarding the rights and profits of
local businesses.
Environmental Factors
While India has done huge progress over years, but it still deals with some of the challenges
related to the environment e.g. floods, air pollution, resource depletion like forest and water,
consumer waste into the rivers, loss of biodiversity, etc. Due to this, expatriates may find it
tough to live in the country (Makori & Jagongo, 2013).
In order to overcome these environmental challenges, the government of India is getting
involved in framing different types of rules and regulations in terms of safeguarding
environment and wildlife. Aurora Energy has to make use of sustainable practices related to
the justifiable use of natural resources and reducing the exploitation of the resources as well
as employees. In addition to this, the company has to be socially responsible for the
environment.

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Opportunities and Threats
Opportunities
In India, there is a huge opportunity for Aurora Energy to successfully operate its energy
business. From the above analysis, it has been analyzed that the demand in the country for
energy and electricity is increasing due to increasing population which is resulting in meeting
the supply and demand gap (Rahman, 2019). For managing this government is trying to
search for different sources to meet the demand. If the company will introduce its operations
in the country, it will be beneficial for the company as well as the country as through the
services of the company government will be able to manage the demand and supply with the
help of advanced technology imported by the company. Besides this, the company will be
beneficial in receiving a different type of government support in the form of subsidy to
operate the business.
The friendly relationship between India and New Zealand is offering another opportunity and
chance for the company to expand its business in the country (New Zealand Foreign Affairs
and Trade, 2019).
Another key advantage for Aurora Energy to operate its business in the Indian market is the
access to the advanced and developed infrastructure which could result in proper operations
and success of the business.
Threats
The major threat for Aurora Energy in the Indian market is its social culture and values.
There is a huge difference between New Zealand culture and Indian culture, which can raise a
number of hurdles and issues for the company in operating the business. Indians give major
priority to their culture and values and hence they look at different businesses from the same

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perspective. If the business is socially responsible towards the society as well environment
then the image of the company enhances.
Another threat for Aurora Energy in the Indian Market is the presence of strict legal reforms
and guidelines for the international firms operating a business in the country (Truelove,
2011). In order to properly operate a business in the national company has to be careful
regarding each and every legal rule.
India is a democratic nation, whose political structure has a major influence on the
businesses. The forces that influence the business in the market are the perception of the
political bodies, alterations in the political parties, and political pressure. The factor that can
highly influence the operations of Aurora Energy is the fluctuations and changes in the
political bodies after a period of time, due to which a number of changes take place in the
political reforms. Therefore, in order to smoothly operate the business in India, the company
has to be aware and updated regarding the changes in the political structure of the nation.
Presently, India is dealing with a number of environmental challenges due to the activities of
the business (Makori & Jagongo, 2013). Hence, to manage that government has adopted
different reforms to restrict the exploitation of the resources. Aurora Energy has to meet the
environmental expectations of the government by adopting sustainable practices that have
minimal influence on the environment.
Strategic Options
Aurora Energy is presently operating its business in the New Zealand market in the energy
industry. The plan to expand the business operations in the Indian market is one of the key
steps that it has taken; however, it is very difficult to put the foot in this market due to the
presence of a number of barriers in the direction. The major barrier for the company it could
be the presence of a number of legal frameworks and rules framed by the government for the

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businesses operating in this industry. Besides this, there is a number of reforms for the
international firms too. Without the information and knowledge of these reforms and barriers,
the company cannot successfully operate its business in this country. In addition to this, there
are a number of strong players in the market who are working in the same industry who can
give high competition to the company. Hence, in order to adhere to government regulations
and intense competition in the Indian market, Aurora Energy has to adopt a strategic alliance
as the strategy to successfully operate in the market.
Strategic alliance takes place between two companies who decide to share resources to attain
a particular, mutually beneficial project. This type of contract is less binding and less
involved in comparison to the joint venture, where the pool resources of the two businesses in
the formation of a separate business entity (Rothaermel, 2015).
Entry Mode
When it is about taking the products and services in the foreign market the business has to
adopt some strategies that can support them in taking entry into the foreign market. These
strategies are also considered as the delivery and distribution of the goods and services to the
new market (Mutio, 2013). In the context of export and import of services, it is called the
establishment, management, and creation of agreements in the international market.
The market entry strategy that could be adopted by the Aurora Energy to take entry in the
Indian market is franchising. Franchising is one of the most typical procedure for quick
market expansion and the positive aspects it that it is regularly gaining the attraction of
different markets across the world. Franchising is one of the best options for the businesses
that possess a repeatable model of business that could be simply transferred into other
markets (Chandrasekhar, 2012). By adopting Franchising as the market entry mode, Aurora

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Energy will be able to effectively grab the Indian market for offering its energy services in
the industry and meeting the increasing demand of the electricity.
Recommendation
From the above analysis, it has been analysed that Aurora Energy is presently only offering
its services in the New Zealand market and trying to meet the electricity demand of the same
area. However, across the world, there are number of countries like India, where the demand
of electricity is increasing but the players of the respective market are not being able to
provide the sufficient supply. Hence, in order to contribute in meeting the demand, company
can establish its business in different markets.
In addition to this, to meet the demand of the Indian market, Aurora Energy can get involve
in joint ventures or can initiate the contract with the government of the country to support it
in meeting the demand of electricity.
Conclusion
The above report is discussing the challenges and opportunities that Aurora Energy can
experience while expanding its business operations in the Indian market. The challenges and
opportunities for the business have been analyzed with the help of PESTLE Analysis of the
Indian market. Besides this, the paper is backed with key and important information of the
company that can support in providing recommendations for the company regarding taking
entry in the Indian market. From the above analysis, it has been analysed that the government
of India is presently searching for the different alternatives or sources of electricity through
which it can meet the increasing demand, which reflects an opportunity for Aurora Energy to
establish in the Indian market and offer its services which could result in filling the supply

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and demand gap. On the negative side, the political market is very fluctuating, which can
offer high barriers as well as challenges for the company, hence, to deal with that company
has to make strong strategies. Considering the legal and environmental factors, Aurora
Energy has to adhere with the rules and regulations framed by the government related to the
trade of services and environmental safety, this will allow the company to create a positive
image among customers and society of the country. In order to take entry in the Indian
market, the company has to take the support of the market entry strategy that is franchising,
through which; it can operate its business functions in the market successfully. Furthermore,
the company has to get involved in the strategic alliance with any of the local company
dealing in the same product and services because this will support company in making use of
the market expertise and information of the local operator while framing policies for the
business.

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