There's more to meeting marketing challenges than first meets the eye.
Imagine you've just taken over as chief executive officer (CEO) of a $1-billion gas utility in a major metropolitan market. Your predecessor retired early, leaving this mythical local distribution company (LDC) (em let's call it Total Gas (em unprepared to engage the competition on the home front and ill-equipped to grow unregulated earnings.
Time is short. Some LDCs are pushing ahead of you and choosing joint-venture partners. Others are merging to create the critical mass that will likely be needed to compete in the new millennium. To complicate matters, the state Public Utility Commission (PUC) has just approved a pilot program offering 5,000 of your residential customers the opportunity to choose their supplier.
Your job, as you read this column, is to make some quick judgment calls that will frame your approach to reengineering and repositioning your company for the battles ahead.
Drawing on a survey of what several LDCs consider their major threats and advantages, we pose 15 challenges. Based on the admittedly cursory background information provided, what strategy would you choose to meet them? In each case, we tip our hats to the companies and managers who have already made such decisions.
#1 (em Payroll Reductions
Total Gas must reduce overhead by at least 20 percent. A big bulge exists in your unionized workforce. How do you take a big bite out of total wages, gain the flexibility to reassign workers, and get them to buy into a "win-win" culture?
a) Lower the body count with an aggressive early retirement program; let your human resources people make the numbers work.