Metromedia Competition
Now Viewing Metromedia's competition in: Electric Energy Distribution
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Which part of the company's customer base consumes the most electricity? - Residential, commercial, and industrial customers each typically consume a third of the electricity used in a given market.
What types of renewable energy are used in the company's markets? - Renewable energy, such as wind and solar power, may compete with traditional electricity providers where these forms of energy are prevalent.
How is the company planning for maintenance and repair on its transmission network? - Maintenance and repair of transmission lines and equipment is a major expense for many companies.
How is the company able to pass wholesale price increases to customers? - In California, some distributors were unable to pass along higher costs and went bankrupt, leading to calls for re-regulation of the industry.
Competitive Landscape
Demand for electricity is driven by industrial and commercial activity and by population growth. The profitability of individual companies depends on the efficiency of their operations. Large companies have economies of scale in purchasing power; small companies can compete effectively by specializing in geographic regions. The industry is capital-intensive: average annual revenue per worker is about $2 million.
Business Challenges
CRITICAL ISSUES
Demand Varies with Economy - Although some portions of electricity demand, such as for residential and commercial use, tend to increase steadily, US industrial use varies with the level of economic activity. However, in the recession of the late 2000s, even though residential electricity use didn't decline, growth slowed. By contrast, residential electricity use grew 6 percent from 2000 to 2002.
Finances Partially Dependent on Regulators - In most markets, the rates electricity distributors can charge are regulated by state public utility commissions (PUCs). Rates are usually set to enable the distributor to earn an appropriate ROI, but winning rate increases to reflect higher costs can be arduous. Restructuring of electricity markets intended to reduce regulation and increase competition has been slower to take hold than proponents anticipated.
Industries Where Metromedia Competes
- Leisure
- Restaurants & Cafes
- Casual Dining Restaurants
- Restaurants & Cafes
- Energy & Utilities
- Electric Utilities
- Energy Trading & Marketing
