AGL Energy Limited Strategic Analysis Report

This report provides a comprehensive analysis of AGL Energy Limited, an Australian public listed company in the energy sector. It examines the company's current and past strategies, controversies, and its organizational structure. The report includes a PESTLE analysis of the macro environment, a micro environment analysis, and a SWOT analysis. It also delves into AGL's organizational culture and the leadership theories applied within the company, such as functional, transactional, and transformational leadership. The research paper concludes with an overview of AGL's working environment and leadership practices, providing insights into the company's operations and market position.

AGL ENERY LIMITED
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AGL energy industry

AGL ENERY LIMITED
Contents
Introduction..........................................................................................................................................................2
Task 2....................................................................................................................................................................2
Task 3....................................................................................................................................................................3
Macro environment analysis.............................................................................................................................3
Micro environment analysis..............................................................................................................................4
SWOT analysis...................................................................................................................................................4
Task 4....................................................................................................................................................................5
Organizational culture.......................................................................................................................................5
Leadership theories...........................................................................................................................................6
Conclusion.............................................................................................................................................................7
References............................................................................................................................................................8
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AGL ENERY LIMITED
Introduction
AGL energies are an Australian public listed company operating in energy products. The
company manufactures and distributes energy products prepared from coal seam gas, solar
energy, thermal power, wind power, hydro electric energy etc. The initialization of this company
has been established in 1837 as the only company providing energy services to the nation. In
2000 the company has been listed in ASX with its wide prospect of retailing natural gas and
associated products. This research paper discusses about the various controversies, present and
previous strategic implementations, and organizational structure and leadership strategies of the
company. Furthermore the paper also focuses on the analysis of the economic environment of the
company in the Australian market (AGL appoints CFO to head IT, p. 1).
Task 1
Current strategies:
One of the major gas and energy manufacturers as well distributor, Australian Gas Light orAGL
Company came into the international stock market from 2007. In the business market the
competition is high and to sustain and emerge profitable in this competitive market every
company has to follow some strategies and AGL is no exception in this regard. The previous
strategies are different from the current to cope up with the competitive market as well as
avoiding the ecological or environmental hazards.
The current strategies include some modern ways to follow the present scenario of energy
consumption. The modern technology based usage or consumption of energy either directly or
indirectly must be taken into consideration. According to the demand and requirements of the
customers, the manufacturing companies should amend their operational policies. Keeping these
views in mind AGL has adopted certain operation related policies those met both the production
efficiencies as well as the environmental concerns.
The production output and the input to run the organization in terms of operation must be in a
positive ratio. The operational efficiency of AGL is set to improve with the cost control and
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AGL ENERY LIMITED
optimization of the productivity cost based on input and output. The target of the cost advantage
is set to approximately $ 200 billion.
Also the generation of turnover by cost effective measures through the various share holders is
another important aspect in this strategy reformation. The retail market is growing for almost
every product in the current scenario. Aiming in this point the company takes keen interest in the
digital meter and battery storage ideas along with production efficiency and cost reduction. In the
energy sector, the investment for the new and innovative business replica is needed to balance
the customer’s view with the energy consumption and relevant energy usage sectors. The smart
card users are the target of the company in the coming years those will be benefitted with battery
and electric operated automobiles and solar operated roof top. Each of the strategies those are
being adopted in the present years by AGL will make the base of the company strong in the long
run in the cutthroat energy sector.
Past strategies:
The earlier concepts, views and ideas adopted by AGL are not totally effective. Some of them
are not able to provide any successful and fruitful measures in the company’s profitability. The
reasons may be the scenario of the past was completely different from the present one. The
environmental concerns and the effect of global warming in the present age are more alarming
than the previous years. The environmental and social impact of an industry or organization is a
matter of concern in the current scenario and thus the measures in the e-business, growth and
progress of the company and other policies those are adopted in the past are not the same as now.
The energy sector in the past was based on mainly the output and production efficiencies without
the thought of the environmental hazards. AGL has seen the demerits of the past policies and
tending to improve them.
Task 2
In the long run of the company it has faced with many challenges and controversies. Some of
these controversies have put a very bad response on the company’s public response. The
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AGL ENERY LIMITED
company has thus changed a great deal of its leadership structures and implemented their
organizational needs upfront. Some of the controversies that rattle the company’s economy are as
follows:
1. Coal seam gas project in Gloucester: the gas fracking operation of AGL near the region
of Gloucester NSW a toxic waste material has been observed and reported to EPA asking
for further investigation in January, 2015. The EPA report stated that the chemical toxic
substance that was reported to be found in the region is BTEX and is a common waste
product in groundswell projects. Since the authorities have been reluctant about the
maintenance of the toxic substance before its observation the EPA authorities has asked
the company to stop its processes in and around the respective power plant.
Environmental officials and government officials have summed up a set of fines that
include $1 million and an additional $120,000 for every day the project is continued. This
has put great discomfort in the company’s working order and has challenged the
company’s security and antitoxic measures.
As a result of this controversy after a prolonged discussion and jurisdictional trials the
company has been forced to withdraw its possessions from the Gloucester coal seam gas
project in NSW.
2. Brown coal vs. green environment: AGL has been one of the largest energy
manufacturing and retailing companies in Australia. Since the generation of energies
from natural fuels has been predominant with respect to renewable resources there seems
to be a greater emission of greenhouse gases from the power plants. The Loy Yang power
plant and mine in Victoria has been recorded as one of the major greenhouse emitting
plants with 1.3billion tones of brown coal gas emission.
The company has been taking measures of reducing the emission of brown coal gases
with its replacement in renewable energy sources. AGL has developed solar stations in
Victoria and Queensland which provide some relief from the emission of green house
gases.
Task 3
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AGL ENERY LIMITED
Macro environment analysis
Pestl
Political: AGL has been operating in the energy industry of Australia for over 177 years and its
influence in the company’s economic and political domains has been far more influencing (AGL
Resources Inc Marketline Company Profile, pp. 1-35). Thus the political foothold of the
company helps it to accomplish its various projects with ease.
Economical: the company is operating in the industry of energy manufacturing and retailing
which is involved with huge turnovers annually. AGL has been providing renewable resources of
energy as well which adds up to the company’s economy.
Social/cultural: AGL has a very decent working environment within the organization with high
end operational structures and motivational leaders like Michael Fraser and Andrew Vesey.
Technological: the manufacturing and retailing of energy products needs vast range of
technological advanced equipments. AGL has procured the most latest and superior machineries
that helped the company in its energy manufacturing and distribution.
Legal: AGL has been following the legal guidelines of the nation from the very beginning of its
initiation in the energy business in 1841.
Micro environment analysis
Customer: as the company operates in Australia and is one of the major energy manufacturing
companies in the nation the customer base of AGL is extended to the whole of Australia. The
company’s initiative in renewable energy manufacturing resources has enabled the company in
procuring a higher customer base in the recent years.
Partners: AGL has been maintaining a constant strategic partnership with “The Smith Family’,
‘St. Vincent de Paul Society’ ‘Cancer Council’ and ‘Julian Burton Burns Trust’ in Australia to
enable providing their services.
Industry: the industry in which AGL operates its functionality is based in energy manufacturing
and retailing which is an enormous market all over the world.
Competitors: some of the competitors of AGL in Australia and regions are Atmos energy
corporation, Scana Corporation and The Southern company.
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AGL ENERY LIMITED
Suppliers: since AGL has been in the energy production and retailing business for a long stretch
of time the company has a well organized structure of suppliers that provide the company with
constant services.
SWOT analysis
Strength: the company has larger storage and distribution channels all over the country with
80,500miles of underground transmission channels. The customer base of the company has also
been influential since the company has been established for a long stretch of time period and its
well organized structures in Georgia, Victoria, Queensland and New Jersey (AGL Resources Inc.
SWOT Analysis, pp. 1-9).
Weakness: AGL’s operations are limited in the retailing market of Australia. This proves to be
one of the major weaknesses of the company in its global scenario. Diversification is lacking in
the operational framework of the company which is not satisfactory for AGL. The company is
dependent on AGL Capitals, which is a subsidiary company that deals with its operations and
distribution.
Opportunities
The increasing utilization of LNG gases in the trucking industry has helped the company is
developing its future opportunities with the energy industry.
Threats: AGL has been under the government’s leadership guidelines for a long stretch of time
period and thus the participation in the operating structure of the government in the company’s
operations has been influencing. This participation has proved to be disrupting the regular flow
of the company’s operations.
Moreover the increase in the competition of the energy industry has induced the company’s
economic conditions in the present market (Wall Street Transcript, pp. 34-36).
Task 4
Organizational culture
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AGL ENERY LIMITED
AGL is the largest manufacturing and retailing company in Australia with over 3.7 million
customers including household and business organizations. The company maintains its
sustainability with the proper working relation with its stakeholders in the market. The
employees have been the best treated in the company for their performances. AGL believes in
the implementation of right people with right skills in the right places in the company.
AGL has a prospect of offering their employees with the best services of the company allowing
them to flourish in their own interest of developing the company. The greater asset utilization of
the company has enhanced AGL’s working structure for the last 177 years (International Tax
Review, 21, 10, p. 57).
AGL provides career development plans for the employees so that they can build their expert
skills in development and manufacturing techniques and thus help the company in flourishing in
the economic market. In the last few years AGL has invested around $3 million in strategic
planning partnerships for the growth of the company in Australia.
AGL values the decision making power of its workers and gives proper value to their views
regarding the various areas of concern. The company believes that the employees are the
backbone of the company and their responsibilities towards the company are necessary for the
development process. Thus AGL optimizes a healthy working environment in its internal
organizational structures.
Leadership theories
Functional leadership: it is a key milestone for the better public services change program in a
corporation. The main motive of it is to reduce cost effectively in an organization.
Functional leadership explicitly signifies in the major expenditure and management attention in
an organization. In AGL this leadership theory has been adopted by Michael Fraser to attend to
cost cutting from energy utilization sectors of coal seam gas and other resources.
Functional leadership theory has a concern when it comes to cross government investments.
They pose a threat of risk to the government.
Task, Team, Individual…these are the main focus of a functional leadership mode.
Transactional and Transformational leadership: transactional leadership focuses on the
prospect of constant flow of operation maintenance so that the functionality of the organization is
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AGL ENERY LIMITED
a regular task for all the specific departments (Australian Business Law Review, 42, 4, pp. 313-
316). AGL like any other energy manufacturing company has accepted this policy of
management strategies in their leadership structure design.
In the other end transformation leadership skills focus on team building, motivation,
collaboration and engagement with the employees. Transformation leadership includes the
setting of goals and providing incentives to the employees depending on their efficiency in their
line of work.
Andrew Vesey has been seen in developing a competitive working environment in his leadership
with increased pays and incentives to his skilled employees so that they deliver more superiorly
in their operations.
Conclusion
A detailed research regarding the working environment and leadership theories that the company
applies for its employees provides an inner view of the organization. The different strategies that
are applied by the leaders in the past and their transformation to the present are being depicted as
efficiently as the market analysis of the company. From this research paper the overview of the
working facilities of AGL energy industry can be procured.
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AGL ENERY LIMITED
References
 'AGL Resources Inc SWOT Analysis' 2014, AGL Resources Inc. SWOT Analysis, pp. 1-
9, Business Source Complete, EBSCOhost, viewed 9 September 2015.
 'AGL Resources Inc' 2014, AGL Resources Inc Marketline Company Profile, pp. 1-35,
Business Source Complete, EBSCOhost, viewed 9 September 2015.
 Connolly, B 2015, 'AGL appoints CFO to head IT', Cio (13284045), p. 1, Business
Source Complete, EBSCOhost, viewed 9 September 2015.
 'AGL Resources Inc. (GAS)' 2015, Wall Street Transcript, pp. 34-36, Business Source
Complete, EBSCOhost, viewed 9 September 2015.
 'FOR AGL RESOURCES, BPO IS 'A LOT HARDER THAN IT SOUNDS' (cover story)'
2007, Financial Executive, 23, 5, pp. 42-43, Business Source Complete, EBSCOhost,
viewed 9 September 2015.
 'AGL Resources names new head of tax' 2010, International Tax Review, 21, 10, p. 57,
Business Source Complete, EBSCOhost, viewed 9 September 2015.
 Minton, E 2000, 'Catherine Land-Waters', Industrial Management, 42, 2, p. 12, Business
Source Complete, EBSCOhost, viewed 9 September 2015.
 Corones, S 2014, 'Competition law and market regulation', Australian Business Law
Review, 42, 4, pp. 313-316, Business Source Complete, EBSCOhost, viewed 9
September 2015.
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