Comprehensive Business Case Analysis: Adani Australia's Strategies

This document presents a comprehensive business case analysis of Adani Australia, a subsidiary of the Adani Group. It examines the company's hierarchical structure, diverse business segments, and expansion into renewable energy, including the Rugby Run Solar Farm. The analysis highlights Adani Australia's adoption of a pull strategy, its business-to-business, business-to-consumer, and business-to-government structure, and its efforts to address environmental concerns, such as improved groundwater management plans for the Carmichael Coal project. The case study identifies key risks, including environmental risks and the availability of substitute products, and discusses the imperative for energy companies to adapt to changing conditions. References to academic sources are included to support the analysis.

Running head: BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
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1BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
The Adani group is a colossal multinational conglomerate of India, with its founder as
Gautam Adani. The organization is recognized for its diversity in businesses ranging from
logistics, energy sources, real estate, defense, financial services and aerospace and such
others. The Adani Australia is an expansion of the Adani Group of India and is a
multidimensional infrastructural and energy company (Australia, 2017). The company has
owned and operated from the Abbot Point Terminal that has been exporting coal of
Queensland for over 30 years. The company though has faced certain criticisms for its
Carmichael Coal project, the initiative has now been approved. The organization is working
towards building the solar farm in Rugby Run area of Moranbah, Australia, for the further
availability of renewable sources of energy to the common masses and other business
organization. Following, is a detailed business case analysis of Adani Australia.
The Adani group in general follows the hierarchical structure wherein the structure of
the company is divided into various departments headed by particular managers, and all of
these sectors report to one head of the company. The Adani family in general comprises of
four major sectors namely the Adani Power ltd, Adani Enterprise ltd, Adani Ports & SEZ ltd,
Adani Transmission ltd. Positioned under the Adani Enterprise, is the Adani Mining P/L of
Australia that is referred to as Adani Australia. The company is headed by the chairman,
Gautam Adani, under whose control and leadership the various divisions of the company
operates.
With the rapidly increasing problems of global warming, several industries and
countries are taking steps to reduce the causes for industrial pollution. Adani Australia too
has its own contributions to this cause. The company’s plans for production of renewable
energy in Australia is of remarkable significance. Adani Renewables Australia aims at
providing the people with secure, affordable and reliable sources of energy. The Rugby Run
Solar Farm in Moranbah, Queensland is the first solar project of the company. Incorporated

2BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
with over 247000 solar panels it will supply 65MW of renewable power per year, and has the
capacity to produce 170MW.
Another step taken by the company to promote sustainable ways of conducting
business is the new and improved groundwater management plans of the company. The
Carmichael Mines had been facing criticism for its water management plans. However, with
prompt upgradation of the groundwater management procedure, the company has cleared off
the criticisms (Bell-James, 2016). The improved groundwater management plan for the
company ensures that the Great Artesian Basin is not eroded as the mine is separated from it,
rain water will be contained to prevent run offs, water will be recycled as much as possible
and water from the Suttor river can be taken only after the farmers have met with their
requirements from the river. By implementing these measures in particular and such others in
general, the company ensures to act responsibly in the face of the growing concerns regarding
the environment (Edgeman & Eskildsen, 2014).
Adani Australia is a leading producer of energy sources wherein it producesb the
same with the help of thermal power and solar power. As the company provides its
consumers with a necessary product, it implements the pull strategy. According to the pull
strategy, a company creates the interest of the consumers towards a product and thereby
caters to the demands of the consumers by producing the similar products in large quantities.
In this manner, the consumer base of the company is solidified. Adani Australia follows the
same method in its production and marketing process.
Another facet that can be considered as a business practice of Adani Australia is the
fact that it caters to the needs of other companies, normal consumers as well as the
government authorities. Since the world runs on energy sources of varied types, Adani
Australia follows the business to business, business to consumer and business to government

3BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
structure and thus has a wide consumer base. Certain business practices of the company such
as the issue with the Carmichael coal also harms the company’s reputation. Similarly, the
measures taken by the company to safeguard the environment promote the company’s brand
identity in a proper light.
The prime risk faced by the Adani Australia is the environmental risks the company
had taken to ensure smooth functioning of the organizational process. In accordance to this
environmental risk, the instance of the Carmichael Coal Mine can be appropriate. Such other
risks include the availability of substitute products in the market that are similar to the
products of the company. The 3 main types of risks are
Depletion of Non Renewable Source of Energy: With the increase in requirement of
fuel to cater the needs of the increasing population the rate of fossil fuel extraction has
increased exponentially. As a result, the total resource of fossil fuel has reduced t such an
extent that the total remains will only last for the next fifty years.
Global Warming: With increased use fossil fuel the global temperature has risen to
such an extent that both the polar caps i.e. the north pole and the south pole is losing out its
ice resulting in increase in water level and rising temperatures. With the increase in the sea
level the salt water to fresh water ratio has increased resulting in reduction in oceanic
currents.
Loss of Habitat: An extension of the above point, due to rising temperatures the
animal species are being hit hard on a daily basis. Animals which thrive on snow and ice are
losing out their numbers exponentially. For instance, everyone is aware of the condition of
the polar bears in the north pole and south pole. Due to the unavailability of adequate food
the mother polar bear is feeding on her own children. On the other hand, migratory birds and
animals are losing their track resulting in death of their species in huge numbers.

4BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
For energy companies to realistically be able to transfer risk in these areas, three
imperatives will need to be addressed:
Business models must adapt to changing conditions largely due to the collapse in oil prices.
Companies are reducing costs where possible by reviewing strategies, slashing capital
expenditure, and mothballing stranded assets to protect future earnings. Mergers and
acquisitions are taking place to develop synergies and cost savings. Transferring risk in this
environment must be as efficient as possible, particularly with risk management budgets also
under pressure.
The industry increasingly operates in a globalised environment. The past decade has
seen companies expand from their regional comfort zones into unfamiliar areas of the world
with unfamiliar regulatory regimes. This requires companies to understand an ever-growing
list of responsibilities under contract and carries heightened supply chain risk. The Japanese
earthquake of 2011, for example, showed the damage that disruption to the supply chain can
inflict. Added to physical loss or damage at the supplier’s site, other causes of disruption
include supplier insolvency, power outages, political unrest, IT failures, labour disputes,
transportation problems and pandemics. All pose risk in a world where companies are
searching the globe for lower-cost supplies and operate “just-in-time” procurement strategies
to keep inventory costs low and stocks at minimum levels.
The need to manage human capital. The oil price collapse has caused thousands of
redundancies, but if a company loses its most experienced workers – often among the first to
go because they are closer to retirement or the most expensive – it can also lose the skills and
knowledge needed to sustain business and then build it when the economic cycle turns.
Retention of talent as profits fall, or at least measures to ensure that accumulated knowledge

5BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
passes to younger employees, is thus a priority. With the legal and regulatory duty of care bar
rising in recent years, companies must also ensure that employees operate in as safe an
environment as possible. Political unrest, the remoteness of locations, infectious diseases, and
workplace accidents are among the risks they need to counter. The fatalities when terrorists
occupied the Armenas gas facility in Algeria in 2013 evidenced how hard this can be.
Climate change and care of the environment particularly when energy companies are
venturing into environmentally sensitive areas such as the Arctic in search of resources.
Failure to comply with legal and regulatory environmental requirements for clean energy and
lower hydrocarbon emissions can hit a company’s balance sheet, share price, and reputation
hard, as witnessed by car manufacturer Volkswagen’s emissions scandal. Its UK car sales in
the UK alone have fallen by 20% since the exposure. The consequences of an environmental
catastrophe are seemingly limitless. To date, the cost to BP of the Deepwater Horizon
blowout and explosion stands at over US$50bn, enough to ruin oil companies not in the
super-major league.

6BUSINESS CASE ANALYSIS: ADANI AUSTRALIA
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