Free «Organizational Analysis: Gemma» Essay

Organizational Analysis: Gemma

The world’s systems and mechanisms cannot operate effectively without energy. In every sector of the economy, power, synonymous to energy, serves as one of the vital components to steer growth. And power comes in a number of facets. Just think of the many ways in which you as an individual use and demand power. The car runs on power derived from oil, the mobile phone uses power derived from electricity or solar and many other appliances in our homes that are wholly dependent on power. The power being in discourse here is the power from oil and renewable sources. In this industry, Gemma companies show much dedication in availing this much needed power through its systems of power generation and renewable power fuel facilities. Gemma companies have much experience in the fields of gas, oil fired combined with simple power plants, winds, solar facilities, coal, biodiesel and ethanol plants.

This paper will be broken down into a number of divisions and subtopics for easier analysis.

First, it shall look closely on the current situation of the company and here we focus on the company overview, then the strategic history of the firm. The point of interest here is trying to understand when the company was initiated and track its development till to date. Schenetzler et al (2004)   and Khan (2007) argue that for a business to succeed and survive in the competitive market world it must have well laid plans and so in that context, the paper will have an overview of the mission statement and the business strategies that govern the company’s operations.

Secondly, the paper shall analyze the strategic plans and overview of the company’s policies. The strategy that the company uses to stay afloat comes into picture here. The general power industry will also be illuminated, with an aim of getting to know the driving factors and forces in the industry. The five forces analysis will also be discussed here aiming at providing the market analysis and the company’s competitiveness.

Company overview

Gemma companies provide a very wide range of products and services. These services and products range from development, consulting, procuring, constructing, operations as well as maintenance services to clients of power generation and renewable power markets.

Currently, Gemma companies are involved in the management and operation of more than 270 biodiesel projects, over 100 ethanol projects and 40 engineering, procurement and construction projects. The company is also involved in the generation of more than 10000 Megawatts of power, installation of over 600 Megawatts of wind turbines and in the maintenance of fossil and solid fuel facilities.

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 The company is also involved in the construction of boiler plant construction and renovation, heating and cooling systems, utility maintenance and renovations, project developments, commercial evaluation and technical consulting.

Strategic history of the company

Gemma is a subsidiary of Argan group of companies. Argan companies encompass everything from telecommunications to the power sector. Gemma was acquired by Argan group of companies in 2006 before the company went public in the next year. The power segment of Argan Inc is operated through Gemma Power Systems (GPS). Gemma Company is then divided into two main segments of operation, that is, Gemma power systems and Gemma Renewable power. Gemma power systems are dedicated to the power generation in gas and oil technologies. The other segment, Gemma Renewable Power is dedicated to the generation of power using the renewable resources such as power plants, wind and solar facilities.

Mission statement

Gemma companies are governed by a simple but very cross-cutting mission statement of ‘creativity, competitiveness, competency and commitment. This mission statement is the one that defines the company’s direction as it endears to provide quality products to its clients.

Business level strategy

Porter (1980) quoted in Dess (1984) argues that no company or a business unit has been known  to have been able to, in history, or will be able to achieve success in its ventures without formulationand implementation of workable strategies in its plan. Gemma Company is no exception. There are six models that define Gemma Company’s strategic plan. These modules define how the company goes on about the delivery of its consistently highly ranking products in quality and how it keeps its competitive edge in the market. These models are discussed in the ensuing paragraphs.

The basic strategies of the Gemma Company revolve around cost and differentiation models. In a market where the economy is increasingly forcing people to cut back on their spending because of wide spread inflation, a small relief financially works as a great incentive. Having realized this, Gemma Company has come up with strategies of churning out good quality products and lowering the cost to address the needs of the price sensitive market. There is no project too small for the company to handle and products are manufactured according to the contemporary needs of the client.

Differentiation is also another of Gemma Company’s strategic model. Here, different quality products are manufactured for different. The products are designed to address the needs of both the price sensitive consumer as well as the consumer who does not worry too much about prices.

For products and services that are initially costly to buy or offer, the company divulges into a low Cost with Product Lifecycle. Here, the cost of the product or service from the company reduces as the product undergoes a cycle. In this concept, product may be expensive at the initial stage maybe as a result of factoring in the marketing costs and initial costs but as the market embrace the product, the company reduces the cost preferring to get its profit from volumes of sale.

The same case applies with the model of differentiation. The company employs a differentiation with Product Lifecycle Focus. Here, the company makes differentiates products as the products get embraced in the market. Since different markets have different carrying capacity and buying power, differentiation is geared towards ensuring that all the markets get the same kind of product, albeit at a different price and sometimes different quality.

Organizational Structure & Culture Organizational Structure Gemma maintains a traditional corporate and business level structure. Power is designed and integrated in a hierarchical manner. At the corporate level, the CEO and the Chairman hold the fort. The Senior Vice Presidents not only represent the usual support structures such as the Finance and Marketing they also represent other functional sections specific to Gemma, such as Estimating,Metrics Technology and

Execution, Engineering, Procurement and Commissioning as well as the renewable power section. Many of these functional level Vice Presidents’s have their bases in the headquarters of the company in Connecticut, USA. In addition to the functional VP’s there are also Regional Vice Presidents located over the state.

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These Regional Vice Presidents will usually reside in the largest of the stores within a given region. Regions in general consist of major metropolitan areas such as Connecticut and Glastonbury

In general the stores are self - contained units with all of the elements needed to run the operations, but there is a tight connection to the company as a whole through Gemma’s strongly centralized systems of governance.

Organizational Culture of Gemma culture is credited to be among one of the best cultures in all of major US companies. They have been ranked in the top ENR 100 best companies.

They instill in their associates through training and reinforcement the company’s values of ethical behavior and respect for each other and the customer.

 They have accomplished this overall culture through two primary methods. One they value their employees. They continuously train their employees and make it a goal to retain them in the company for as long as possible.

The second method in creating their culture is a continuous desire to respect and serve their customers.

For Core capabilities & distinctive competencies

In the determination of the Gemma’s core competencies and capabilities, the collective functional departmeents are assessed. From the assessment, major competitive strengths are chosen as core competencies.

This collection of information along the value chain provides Gemma with a competitive advantage by allowing them to maximize efficiency within each department and continually improve their existing operations and processes.

The HR department focuses on hiring, training and development of its employees. Gemma employs unique hiring strategies using growth ratios as a condition in determination of how much to hire, how to direct, and where to place people depending on departmental needs.

Its flexible guidelines and policies adapts to the needs of stores in different geographic and demographic areas. As a result, Gemma hiring and training programs are a core competency that creates a quality staff and gives them a competitive advantage over its rivals.

As a result, their merchandising is deemed a core competency. The Marketing department employs a wide variety of advertising strategies and mediums in which to promote and market the company’s products.

This is done through a number of ways; outdoor advertising, media adverts in TV and radio as well as through their website, www.gemma.com

This creates a competitive advantage by improving customer awareness.

As a result, is deemed a core competency for the company. Distinctive Competencies To determine Gemma’s distinctive competencies, a VRIO analysis will be performed on the core competencies discussed. Each core competency will be evaluated by a yes or no answer based on the following questions:

  • Is it valuable?
  • Is it rare?
  • Is it difficult to imitate?
  • Does the organization use it well?

VRIO analysis

VRIO analysis is used as an analyses tool to determine the following concept; whether the concept under investigation is valuable, rare, imitable and whether the organization puts it to good use.

Environmental analysis

Environmental analysis is meant to analyze the general power industry and give the relationship and placement of Gemma Company in the industry. Under this, a number of concepts and factors of interest will be discussed. These are the strategic history of the industry.

Strategic history of the industry

The very basic necessity and absolute importance of energy has contributed to a great extent the massive developments in the energy industry all over the world. The world is consuming millions and millions of Megawatts of power each day. The advent of numerous industries and setups all hungry for energy has seen this industry explode in a monumental manner. Darby (2006) states that the average power consumption in households increased, in a span of one year only to over 10% per person while that of the general world power consumption saw a rise by over 20%. bp forecasts that the general demand for energy in the world by 2030 will have increased by over 87% if the current trend is not broken. The great hunger for energy by the world today has seen revolutions in this sector as players try to fill in the gaps and supply the market with the vital commodity. This has led to much exploration and speculation in a bid to identify the best and most cost effective way or source of energy to save the world. At this rate, if something is not done to make the power generated grow parallel to the demand, the world will find itself in lack of the precious commodity. The demand will surpass the supply with a great margin and this disequilibrium will result in hiking of prices of power resources.

The current systems of power generation are a far call from the modes that were in operation ages ago. From coal, that was the main source of power in the world a few hundred years ago, the world today is being powered by very diverse power sources ranging from water, wind, solar and the most advanced nuclear power.

Gemma Company is right at home here. Alongside other companies in the industry, the products and services that Gemma offers are felt far and wide by the common man. And with the rapid increase in the demand for power, Gemma’s place and mission in the society is solidified.

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