Aurora Energy: International Strategic Management Report (India)

This report presents a market analysis for Aurora Energy, a New Zealand-based electricity distribution company, planning to expand its business operations in India. The analysis examines the Indian market using a PESTLE analysis, identifying opportunities and threats. The report highlights the increasing demand and limited supply in India's electricity market, suggesting that Aurora Energy can capitalize on this gap. The recommended market entry strategy is franchising. The report covers the company's overview, organizational structure, and value chain analysis. It also includes a detailed PESTLE analysis of the Indian market, discussing political, economic, social, technological, legal, and environmental factors. Furthermore, the report outlines potential opportunities and threats, strategic options, and an appropriate entry mode for Aurora Energy's successful expansion into the Indian market. The report concludes with recommendations for the company's international strategic management.

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.