Renewable Energy Market Analysis Essay: Business Overview & Strategy

The Business Overview, Mission, And Vision

In every business, market analysis is one of the essential elements to be considered. As such, when starting, one has to identify and analyze the intended market to limit and understand the risks and how they might affect them. According to Liu et al. (2020), market analysis has several components that must be considered to determine the qualitative and quantitative elements of the market. These components include characteristics of the target customers, market competition, the barrier to entry, and the regulatory environments of the business. Renewable energy has been one of the main focuses across the world to try and save our environment. As such, I am considering a business in the renewable energy industry with the business mission is protecting the environment from degradation. The vision of the business is to reach out to as many people as possible and change their lives through renewable energy. Also, the organization will provide services that help vulnerable communities across the globe through renewable energy products and services. However, the renewable energy business will only be successful when marketing analysis is done well, and all components are identified and defined.

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Market Analysis

The first step in market analysis is identifying the market. Identifying the target market is vital for the business to understand the need of its customers. Takase (2021) argues that companies have to identify while identifying the market; it has to consider location, the size of the customers, their characteristics, and preferences. Renewable Energy Company is a global company that aims to replace fossil energy and advance the world to the green energy era. The primary renewable energy industry market is the automobile and fossil energy-using industries. These industries are spread across the globe, and the company has to reach them. The company has to identify the target markets and strategize a way to get them and provide the goods and services at a fee to make profits.

Moreover, the green energy industry is new but has several players who have shares in the market. As such, these companies compete with each other for a larger share of the market through their products and services. Amir and Khan (2022) posit that competition is one major factor in the market that has to be considered while analyzing the market before starting a business. Identifying the competitors is crucial as it helps the company to identify the weakness of others and work to outdo them by perfecting their shortcomings. Also, competitors make it easy for new firms to learn how to operate from their experience and success in the industry. Several green energy companies create healthy market competition and provide a learning path for new firms.

In every market, barriers and regulations are formed to limit competition and make it healthy. Every market is structured to have barriers and rules to create healthy competition among the players. Bhuiyan et al. (2022) outline the importance of market barriers and regulations and how they influence the characteristics and performance of the parties participating in the market. The green energy industry is an oligopoly market with distinct characters describing its barriers and regulations. An oligopoly market is characterized by high barriers to new entry, flexible and accessible pricing for the firms, interdependence, mutual relationships, varied profits, non-price competition, and product differentiation. These features and structured laws act as barriers and regulations to the market for new companies.

Recommendation

The success of the renewable energy company relies on the quality of the market analysis. There are a number of barriers and regulations that may hinder new green energy firms from entering the market, but if the company’s management takes the initiative to analyze the market effectively, success is inevitable. I recommend that the company consider the market components such as market location, size, and behaviors. These market components must be identified and defined to help them strategize and plan for action. Nonetheless, they should consider the market share, competitors, product alternatives, and pricing factors in relation to supply and demand. Lastly, the barriers and regulations in the market should also be considered critically to make entry much easier and more productive. In conclusion, the success of the renewable energy company is tied to its managerial skills in analyzing and understanding the market and its components.

References

Amir, M., & Khan, S. Z. (2021). Assessment of renewable energy: status, challenges, COVID-19 impacts, opportunities, and sustainable energy solutions in Africa. Energy and Built Environment. https://doi.org/10.1016/j.enbenv.2021.03.002

Bhuiyan, M. A., Zhang, Q., Khare, V., Mikhaylov, A., Pinter, G., & Huang, X. (2022). Renewable Energy Consumption and Economic Growth Nexus—A Systematic Literature Review. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.878394

Liu, W., Zhang, X., Wu, Y., & Feng, S. (2020). Economic Analysis of Renewable Energy in the Electricity Marketization Framework: A Case Study in Guangdong, China. Frontiers in Energy Research, 8. https://doi.org/10.3389/fenrg.2020.00098

Takase, M., Kipkoech, R., & Essandoh, P. K. (2021). A comprehensive review of energy scenario and sustainable energy in Kenya. Fuel Communications, 7, 100015. https://doi.org/10.1016/j.jfueco.2021.100015