Expansion Strategy for an Energy Company

Intelligent

Energy

Solutions Presented By:

David Kolapudi

Praveen Baghel

Pranav Patil

Diego Montano

Mengqi Sun

Shuping Lian

Bingzi Deng

❖ Company Introduction & Business Model

❖ Country Analysis (United Kingdom vs. India vs. France)

❖ Key Market Drivers

❖ Expansion Analysis

❖ Recommendation

Agenda

➢ Infrastructure

➢ Natural resources

➢ Economic situation

➢ Ease of Doing Business

➢ Government situation

➢ Trade/ Investment

➢ Attracting FDI

➢ Property rights

IES Introduction

Highly competitive, innovative and demanding energy industry

Key Consulting Services Intelligent Energy Monitoring Energy Management and Conservation Efficiency Management

Currently operating in the United States, IES has realized the need to expand abroad and has identified three opportunities:

United Kingdom France India

Main Power Grid IES

Customer 1

Customer 2

Customer 3

Notification

Sent

Notification

Received

Acknowledgement Signal

Initiates Load Reduction Protocol


Population 64 million 66 million 1,252 million

Area Size (sqkm) Land: 241,590Water: 3,230

Total: 244,820

Land: 545,630Water: 1,400

Total: 547,030

Land: 2,973,190Water: 314,400Total: 3,287,590

Bordering Countries Inclusive Countries:EnglandScotland

WalesNorthern Ireland

AndorraBelgiumGermany

ItalyLuxembourg

MonacoSpain

Switzerland

BangladeshBhutanChina

MyanmarNepal

Pakistan

Climate Temperate; moderated by prevailing southwest winds over the North Atlantic Current; more than one-half of the days

are overcast

Generally cool winters and mild summers, but mild winters and

hot summers along the Mediterranean; occasional

strong, cold, dry, N-to-NW wind known as mistral

Varies from tropical monsoon in south to temperate in north

Country Overview

Country Overview

Transportation Communication Utility

UKTotal Capex: £184,998.39MM

180 Transportation Project

Total Capex: £22,048.00MM

7 Communication Projects

Total Capex: £263,726.50MM139 Energy Projects; 32 Water Projects;

26 Waste Projects

France

Ranked second in Europe for high-speedrail lines.

Best road network in Europe

The broadband rate--35.5% in June 2012

23.1 million subscribers in June 2012.

Ranked as the second largest in Europe.

The number of wind turbines in France is expanding fast.

France aims to supply 23% of the total energy consumed domestically from

renewable sources by 2020.

India

Indian government has allocated $1 trillion

in infrastructure spending in the five years

through 2017.

Transport outlined plans for $120 billion

worth of road-widening projects

India is the world's second-largest

telecommunications market.

933 million

subscribers by the end of FY14.

India is the fourth-largest energy

consumer (2013) in the world.

Oil and gas account for 37 per cent of total

energy consumption.

Infrastructure Comparison

United Kingdom France India United States

Population 64 million 66 million 1,252 million 316 million

GDP(USD per capita)

39,336.91 41,420.76 1,498.87 53,142.89

Electric Power Consumption (EPC)

(kWh per capita)5,472 7,292 684 13,246

Percentage of EPC comparison to the US

40% 55% 5%

Infrastructure Comparison

Natural Resources


Import

1. Oil and Mineral Fuels 2. Other Items

3. Industrial Machinery4. Motor Vehicles & Parts

5. Electrical Machinery

1. Industrial Machinery2. Aircraft

3. Motor Vehicles & Parts4. Electrical Machinery

5. Pharmaceutical

1. Oil and Mineral Fuels 2. Precious Stones & Metals

3. Industrial Machinery4. Electrical Machinery5. Organic Chemicals

Export

1. Industrial Machinery2. Oil and Mineral Fuels

3. Motor Vehicles & Parts4. Other Items

5. Pharmaceutical

1. Oil and Mineral Fuels 2. Industrial Machinery

3. Motor Vehicles & Parts4. Electrical Machinery

5. Aircraft

1. Oil and Mineral Fuels 2. Precious Stones & Metals

3. Organic Chemicals 4. Motor Vehicle & Parts5. Industrial Machinery


GDP Country Rank (Out of 192, 2013)

10 8 3 1

Total GDP (USD, 2013) 2,321 billion 2,437 billion 6,774 billion 16,800 billion

GDP Growth Rate (USD, 2013) 1.662% 0.214% 5.017% 1.876%

GDP per capita (USD, 2013) 39,336.91 41,420.76 1,498.87 53,142.89

Inflation (2013) 2.555% 0.864% 10.908% 1.465%

Real Interest Rates (5-yr Avg, 2013) -1.311% 4.845% 3.158% 1.71%

Total Tax Rate(As a % of Commercial Profits, 2013)

34% 64.7% 62.8% 46.3%

Currency Value (2 Dec, 2014 Rates)0.63802

British Pound0.80256

Euro62.10102

Indian Rupee1.00

US Dollar

Total Labor Force (2012) 32,617,520 30,117,166 484,343,281 158,666,072

Unemployment Rate (2012) 7.9% 9.9% 3.4% 8.1%

Economic Comparison

Ease of Doing Business


Ease of Doing Business Ranking(2014)

9 33 140 7

Starting a Business 50 25 156 41

Getting Credit 14 67 30 1

Paying Taxes 15 93 154 44

Enforcing Contracts 37 10 186 41

Trading across borders 17 11 122 15

Dealing with Construction Permits

16 89 183 433

Government Situation

United KingdomConstitutional MonarchyParliamentary Government led by the Prime Minister.

IndiaA federal state with a parliamentary form of Government.Pro-Business Prime Minister Narendra Modi.High economic growth emphasized by business-friendly regulations and large infrastructure investment.

FranceA semi-presidential Government divided into an executive, a parliament and a judicial branch.High earning companies subjected to higher tax collection.French companies are investing more in foreign markets than in France.

Trade/ Investment

Tariffs and Taxes

Ownership Restrictions● None of the countries have restrictions in ownership for FDI in the private sector although in the UK foreign controlled

companies are considered UK owned.

Attracting FDI

United Kingdom Over the last five years, the UK has experienced a negative cycle. The main issues are concentrated around credit availability

through the recent recessions but the government has shown a positive attitude towards business and attracting investment.

France Foreign companies from 132 countries have established themselves in France throughout the sectors. The top two source

countries creating jobs in France are the United States and Germany.

India FDI inflows to India increased 17 per cent in 2013 reaching US$ 28 billion.The Indian government’s policy and a robust business

environment have ensured that foreign capital keep flowing into the country.

Intellectual Property

TYPES & DEFINITIONS OF Intellectual Property:

Copyrights Authorship: literature, music, artistic works, and computer software

Trademarks Distinguishable: word, phrase, symbol, design

Patents Utility, Design, Plant

Trade Secrets Formula, process, device, or business information → NDIs

Industrial Designs An industrial design constitutes the ornamental or aesthetic aspect of an article. Global Percentile for IP Rights

Intellectual Property

. United Kingdom France India

Legislation:Patents Act 1977; Registered Designs Act1949; Copyright, Designs and Patents Act1988;

Authoritative Body/ies:Enforcement & Registration: IntellectualProperty Office, 2007 (former: The PatentOffice, 1852)

Duration:Patent (5 years, and then renewal requiredevery year up to 20 years)Industrial Designs (exclusive right up to 25years)Copyright (70 years after the death of theauthor)Trademark (renewal required every 10 years)

Legislation:French Intellectual Property Code (1992)

Authoritative Body/ies:Enforcement: INPI → Institut National de laPropriété IndustrielleRegistration: European Patent Office

Protection:● Recognition of intellectual property

rights outside of France● Recognition within the European Union

by European Patents● Recognition and protection under

French Law.

Duration:Rights are protected according to the date ofregistration.

Legislation:The Patent Act 1970; Designs Act 2000; TheCopyright Act 1957; Copyright Rules 1958

Authoritative Body/ies:Registration: Intellectual Property India(Controller General of Patents, Designs andTrademarks, Indian Gov); Indian CopyrightOffice

Protection & Duration:Trademark (10 year periods)Patent (20 years, then public domain)Copyright (author’s life plus 60 years; protectsexpression of the idea, not the idea itself)Industrial Designs (10 years, renewable for afurther 5 years)

http://www.inpi.fr/

India Fourth-largest energy consumer (2013) in the world

Oil and gas account for 37 per cent of total energy consumption.

India is the world's second-largest telecommunications market.

Indian government has allocated $1 trillion in infrastructure spending in the five years through 2017

Government situation : High economic growth emphasized by business-friendly regulations and large infrastructure investment.

Government’s Initiatives: opening to foreign investment by relaxing norms and regulations.

FDI inflows to India increased 17 per cent in 2013 reaching US$ 28 billion.

Investor friendly platform - Increased transparency in policies and procedures.

Competitive advantage of low wage high skilled labor workforce.

India: Key Market Drivers

Energy security and water scarcity are national priorities

Water and waste management challenges due to rapid industrial growth and urbanization

Escalating costs of conventional energy sources with depleting fossil fuel reserves

Supportive government policies (subsidies)

Increased investments by global corporations to reduce climate change risks and pursue new products/service opportunities A$1 trillion investment in infrastructure - 2012 to 2017

Expansion Analysis

Differences in corporate culture between two organizations.

Differences in Technology used between two organizations.

Technical and Interpersonal skills.

Primary Demand Drivers:

Income of consumers

Increasing customer sophistication

Profitability of business customers

Profitability Drivers:

Gaining expertise in a particular field of knowledge

Developing and marketing new products

Achieving access to capital

Creating a faster time-to-market process

Opportunities in India

The policy environment of the country is aligning itself towards a host of Energy Efficiency Initiatives

Competition remains low because of the high growth trajectory coupled with the small number of firms

Knowledge and experience in efficiency technologies and their implementation pose the biggest barriers because of the technical risks

Recommendation

Why EnTech?

India Based Access to an established market

Close to 300 skilled workers

Instantly acquire the EnTech’s technology, clients and vendors.

Instant branding

Increase in knowledge base

One less competitor to deal with!

How?

Aquire 51% stake in Entech company

Questions?

Expansion Strategy for an Energy Company

Business

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