Strategic Plan, Part 1: Environmental Scan

Strategic Plan, Part 1: Environmental Scan Krista Brown STR/581 March 3, 2017 Melany Felton Introduction Environmental scanning is done to accomplish two broad sets of goals: first, to understand external forces on the organization; and second, to see threats and opportunities and avoid surprises [Pen17]. There are typically three frequencies in which environmental scans are done; ad hoc, scheduled, and continuous. There are important difference between the three frequencies; ad hoc is typically in response to failure while scheduled and continuous are a proactive effort [Pen17]. The goal of Pacific Gas and Electric Company’s (PG&E) scanning is to identify early signals of potential changes and detect any changes that are already under way. PG&E is aware that there is a significant relationship between strategic environmental scanning and organization performance, therefore, they complete environmental scans on a continuous basis. How to create value and sustain competitive advantage using the environmental scanning strategy Paying strong attention to potential threats is the key to maintaining a sustainable competitive advantage, which cannot be achieved through operational effectiveness alone. Sustainable competitive advantage is possible only through performing similar activities in different ways [Bab12]. Scanning and being aware of potentially new CCA’s and third party gas providers will be crucial for PG&E to maintain their current customers for both procurement/delivery of gas and generation/transmission of electricity. Finding to innovative ways to deliver the current products is key to creating value and sustaining our competitive advantage. Working with other innovative companies such as Tesla will allow PG&E to remain on the cutting edge while also building value. In addition, continuing to build a safety-first culture will allow the company to maintain their competitive advantage and create value while providing reliable service to their customers. Evaluate the company's external environment The service territory of PG&E is quickly changing with large parts of California opting for Community Choice Aggregations (CCA) like Marin Clean Energy and Clean Power SF. These CCA’s generate their own clean electricity and PG&E simply delivers the electric service to each customer. This means PG&E is only making money on the transmission of the energy. As of right now, there are five CCA programs which cover a large portion of the company’s service territory. In addition to CCA’s, everyday more and more customers are opting to install solar on their homes and businesses. While PG&E is still the service provider for customers with solar, they aren’t making anything on the generation of power. In fact, they are providing each solar customer a credit of 0.2 cents for every kilowatt hour of electricity that they sent back to our grid. While PG&E still maintains a monopoly over most of Central and Southern California, their profits are decreasing, due in part to CCA’s and the increase in solar installation. California is quickly evolving into an energy efficient state that requires sustainable energy. In a recent decision, the California Public Utilities Commission (CPUC) decided to phase out nuclear power over the next ten years. This decision will have a large impact on the company as their Diablo Canyon nuclear power plant produces about 20% of the overall