Elec-Tech, Inc. (A1)

Abstract

The purpose of this case is to explore the strategic options that open in an industry under conditions of deregulation. Excerpt UVA-E-0139 Elec-Tech, Inc. (A1) Jill Martin surveyed the stack of reports on her desk and sighed. After weeks of review, countless meetings, and hours spent poring over various market surveys, regulatory updates, analysts' reports, and reams of related data, she was still no closer to developing a set of recommendations for her boss, F. R. Roshus. Roshus was the newly appointed division manager for Elec-Tech America, one of the largest independent power producers in the United States. Roshus's appointment signaled Elec-Tech International's renewed focus on the U.S. market after recent years spent concentrating its efforts on acquiring or building electric power facilities in developing nations. Given the current momentum for deregulation of the electric power industry in the United States, the time seemed right to re-evaluate Elec-Tech's strategy in its home country. However, given the patchwork of unfolding state and federal deregulation, it was unclear which strategic path made the most sense for Elec-Tech. Martin poured another cup of coffee and resigned herself to spending another long night at the office reviewing the stack of materials on her desk. Elec-Tech Operations Since its incorporation in 1983, Elec-Tech (ET) gained a reputation for building and operating electric power facilities that were significantly cleaner, safer, and more reliable than the industry average. The company became an industry leader in repowering older, less-efficient facilities as it transformed them into extremely efficient, low-cost, modern power plants. The company also became expert in the development and construction of greenfield plants although these were primarily located in emerging markets. In 1995, ET and its subsidiaries and affiliates sold electricity to customers in eight countries—the United States, Argentina, Brazil, India, Pakistan, Uganda, China, and Taiwan. Its 17 plants represented 2,076 megawatts (MW) and over $ 2 billion of total assets. . . .