Entergy

664 Words3 Pages
A business model is the plan implemented by a company to generate revenue and make a profit from operations (Investopedia, 2014). Business models focuses on addressing the needs of the consumers who dislike some aspect of an existing business mode of an existing category. The U.S. electric power industry is ever changing. For over a century, vertically integrated monopolies have built power plants, threaded transmission and distribution lines, billed customers, and were rewarded with a return on their investment. Consumers are demanding more control over the energy they use. Innovative power companies and technologies are rising to meet the demand, introducing new technologies, from smart control systems to rooftop solar panels. Entergy is taking this model a step further and introducing this new system to international markets (Entergy). Underneath the current regulatory system, these market trends constitute a considerable threat to traditional utility business models. According to the Edison Electric Institute, which represents investor-owned utilities, disruptive technologies like renewables, efficiency, distributed generation and new storage innovations, will lead to declining power sales and therefore declining revenues. “As the cost curve for these technologies improves, they could directly threaten the centralized utility model (EEI, 2013).” Utilities are facing declining sales, a shrinking customer base and potentially stranded assets. Michael Porter’s competitive forces model is probably one of the most often used business strategy tools and has proven its usefulness on numerous occasions. The five forces consists of traditional competitors, new entrance, customers, suppliers and substitute products and services. W... ... middle of paper ... ...s not exist. Therefore, Entergy does not have a threat of a substitute at a tactical level but strategically speaking due to climate change issues; global warming and other related environmental related issues, the demand for alternative generation (Wind, Solar, Tidal, etc.) is growing substantially as compared to fossil fuel based generation (Denault, 2013). Entergy is well placed to meet this threat however, due to their entrance into MISO for transmission systems. Works Cited 2012 Entergy Annual Report. (n.d.). Entergy Nuclear – How Entergy Operates. (2014, March 19). Retrieved from Entergy: http://www.entergy-nuclear.com/about_us/.aspx Edison Electric Institute. (2014, March 21). Retrieved from Edison Electric Institute: www.eei.com Investopedia. www.investopedia.com Denault, L. (2013, June 10). Transition. New Orleans, Louisana, United States of America.
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