Essay about Exelon Case Study

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OVERVIEW Exelon Corporation is an electricity generating and distributing company headquartered in the Chase Tower in the Chicago Loop area of Chicago. Exelon came into existence in October 2000 after the merger between two large utilities: Unicom corp., the parent company of ComEd (Illinois) & PECO Energy Co. (Pennsylvania). Unicom owned Commonwealth Edison. Exelon has 5.4 million electricity customers and serves 485,000 natural gas customers in the Philadelphia suburbs. Exelon is the largest nuclear operator in the U.S. and the 4th largest power generator (in GW) of the nation. Question & Answers Question 1: How will branding benefit Exelon power? Answer: Exelon’s plan to brand Environmentally Preferable Power…show more content…
Answer: Points to be considered before choosing any option: Companies are used to purchasing electricity as a commodity and focusing only on price. * Currently companies have only been purchasing between 5% - 10% of their needs in renewable energy. * EPP is something intangible that customers seem reluctant to pay a premium for. Many purchasers argue that they cannot bill their own customers for being environment friendly. * Energy represents a huge expense for Industrial customers, which are accustomed to negotiate purely on price. * If price premium is added for EPP then most likely the current share of renewable energy will not change & will continue to be 5% - 10 % or maybe a little more after the brand is establish. However there is still a risk of brand dilution due to blend of EPP & traditional power. Based on all the above points I’ll suggest not to add any price premium & rather choose Option 2 i.e., Increase the market share by offering the same price & running awareness campaigns so that societal pressure can be created to force the companies to go for clean energy. Another option can be to price EPP at a slightly higher (but lower than the intended Margin) price so that Industrial customers don’t see a very
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