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The paper aims to research the capability of using the tools of domestic and international performance benchmarking for estimation of efficiency, determine its key factors and reveal the full reserves of inputs reduction and potential growth efficiency for gas distribution companies.

In the research, three models of data envelopment analysis (DEA) and other tools of performance benchmarking are used to analyse the efficiency of gas distribution companies. Some factors are examined for their impact on efficiency. There are the scale, regional location, property category and other endogenous and exogenous factors. The results are based on the samples of 54 Ukrainian and 20 US gas distribution companies.

International benchmarking vastly expand performance improvement for domestic companies. The results of analysis and tools of this research allows to widen the capability of reduced consumption of various inputs by 10 per cent and provide the general gain of Ukrainian gas distribution company's and industry efficiency two times as much.

The research is limited by single industry and by relatively short data set. The former is explained by requirement of technology (product and service) homogeneity when using DEA tools. The latter is connected with specificity of the industry and generally little numbers of firms in it.

The results of researching contain the data and recommendations to optimal scale, best proprietors makeup, specific reserves of input reduction for each company that was analysed. These results can be practicable for companies' management, present and potential investors and proprietors, regulative public authority. It is possible to use results of this research to make benchmarking for the other industries.

This is the first paper that adopts the various DEA models for measuring of efficiency in gas distribution industry of Ukraine and the tools of international benchmarking for Ukrainian and US companies.

The paper aims to test the hypothesis about increasing the efficiency of gas distribution companies in the period of high gas prices on the example of Ukraine that is highly dependent on this energy source.

The basic and super-efficiency models of data envelopment analysis (DEA), Malmquist total factor productivity index, three-factor production function and other tools are used to analyse the efficiency of gas distribution companies. Some factors are examined for their impact on efficiency. The results are based on the samples of 33 Ukrainian gas distribution companies.

The author detects the decreasing returns to scale in the gas distribution sector, which means that Ukrainian gas companies get advantage reducing the volume of gas supply. Rise in prices for imported gas is reflected positively not only on the income of the exporting Russian supplier Gazprom, but also on the profitability of Ukrainian gas distribution companies. The losses associated with the policy decisions regarding a pricing of imported natural gas moved on the consumers of natural gas – the manufacturing sector of the economy and the population. Reallocation of net profit from the key export sectors of Ukraine in the gas sector is mainly caused by the fault of the state regulatory body.

The research is limited by single industry and by relatively short data set. The former is explained by requirement of technology (product, service) homogeneity when using DEA tools. The latter is connected with specificity of the industry and generally little numbers of firms in it.

The results of researching contain the data and recommendations to companies' management and a state regulatory body to correct and optimize their decisions to make gas distribution system and economy more effective. These results can be practicable for companies' management, present and potential investors and proprietors, regulative public authority. It is possible to use the results of this research to make study for the other industries.

This is the first paper that studies the impact of high natural gas prices on the economy and gas distribution system of Ukraine.

The paper analyzes the relative performance of provincial gas distribution companies with different types of inputs and outputs. A data envelopment analysis (DEA)-based model is developed to construct an equilibrium efficient frontier in the presence of multi-type input/output variables.

A DEA-based model is developed to construct an equilibrium efficient frontier in the presence of multi-type input/output variables.

It has been shown that using this single equilibrium efficient frontier, a trade-off is made between efficient and inefficient companies so as to make all companies as efficient.

The study analyzes the relative performance of provincial gas distribution companies with different types of inputs and outputs. A DEA-based model is developed to construct an equilibrium efficient frontier in the presence of multi-type input/output variables. It has been shown that using this single equilibrium efficient frontier, a trade-off is made between efficient and inefficient companies so as to make all companies as efficient.

The learning outcome of this paper are as follows: enabling students to learn about business and marketing issues of the natural gas distribution industry. To expose students to organizational processes aimed at finding solutions to customer issues. To make them appreciate the aspects of service quality and SERVQUAL model. To make the students aware of the significance of market research for problem-solving. How to use market research findings to address the customer issues? Enabling the students to learn how cross-functional teams contribute to addressing marketing and customer issues. Students should appreciate how to study towards creating a customer-centric organization with an organization-wide commitment including that from the top leadership.

Abhay Shankar, Sr. Manager-Customer Service at Reliable Gas Company Limited a state government piped natural gas (PNG) distribution utility whose customer service department is concerned about the provision of best service to its PNG domestic customers. Domestic customers are low volume but largest in numbers and are considered to be a tough, demanding customer segment. A general opinion among the marketing team of the company is that they are trying their best to serve its customers and that their efforts are no less than their private sector counterpart global gas customer service efforts. Abhay is in dilemma on what to do to improve customer services?

Masters students.

Teaching notes are available for educators only.

CSS: 8 Marketing.

The purpose of this paper is to establish groups of stakeholders who win and lose from changes in natural gas prices and to develop practical recommendations for a state regulator for the optimal setting natural gas prices in the domestic market through an example of Ukraine.

In this study, to identify groups of stakeholders with gains and losses from the pricing of natural gas, the author used traditional methods of correlation and statistical regression analysis, including the ordinary least squares (OLS) method.

The main profit from natural gas remains in the extraction sector. The remaining profit is distributed among the various stakeholders. The consumers during rapidly rising gas prices have to rely on energy efficiency and switching to alternative, less costly resources. The existing system of unified natural gas price for all industrial consumers is inefficient and leads to the losses of the largest industrial sectors in Ukraine – metallurgy and chemical industry. With the help of the developed models, the author determined the critical levels of natural gas prices for these two industries.

The study is limited by data about activity of eight key manufacturing companies, four gas distribution companies, and main state gas companies from two country only.

Defined levels can be used by a state regulatory authority as a boundary, above which these industries will be unprofitable and their fate along with hundred thousands of workers will be questionable.

This is the first paper that set the critical levels of natural gas prices for two manufacturing industries in Ukraine.

This case study focuses on the problems that a company have in segmenting a local market of a gas distribution company and some strategies that they can use for developing a viable market segmentation to target the right segment that will provide a good economics, revenue base customers who also have the mindset to change to a new product. At the end of this exercise, students should have a clear understanding of the following: the essentials concepts of market segmentation, targeting and positioning and how they can be leveraged so that businesses increase their returns; the main elements/steps that drive market segmentation and business positioning; the appropriate methods for market segmentation when targeting local markets for a city gas project; and the challenges companies might face when changing a product.

In 2018, commercial customers began asking Abu Dhabi National Oil Company (ADNOC) Distribution to provide a sustainable solution to ensure a continuous supply of safe gas and avoid the interruptions and hazards associated with the supply of liquefied petroleum gas (LPG) to their premises. The request was discussed with the ADNOC marketing, supply and trading (MST) Division to investigate the possibility of growing the natural gas business in the Emirate of Abu Dhabi, thus contributing to the Emirate’s security, economy, environment and community, and ultimately to ADNOC Strategy 2030. Khaled Salmeen, Director of the ADNOC MST Division, believed that industrial customers accounted for higher business volume and profitability. Nevertheless, he advised Shuhab Al Shehhi, the City Gas Project Manager, to study the potential benefits in targeting both residential and commercial customers as part of ADNOC’s responsibility towards community engagement and investments. Al Shehhi had to address several questions: How could the City Gas Project be strategized and positioned so as to target all market segments? What were the potential outcomes? Would targeting all market segments strengthen ADNOC’s brand position?

This case study was written for Marketing and Strategic Management courses in Bachelor of Business Administration programs.

Teaching Notes are available for educators only.

CSS: 8 Marketing

This study aims to identify the operational and financial risks associated with the city gas distribution project in India and suggest appropriate strategies to mitigate them.

This study aims to identify the operational and financial risks associated with the city gas distribution project in India and suggest appropriate strategies to mitigate them. The survey data is evaluated using factor analysis to understand the latent structure of the critical risk factors. Second, the author uses Situation, Actor and Process–Learning, Action and Performance framework to suggest the mitigation strategies for the identified operational and financial risk factors.

The research identified five critical risk factors and suggested 39 mitigation strategies to address operational and risk factors impacting CGD projects. The findings of this research will enable the CGD companies to formulate long-term strategies for their business and adopt proactive measures to mitigate the operational and financial risks causing delay and increasing project costs. This study also highlights the importance of government support in developing a conducive environment for CGD industry to thrive.

The CGD projects are critical for natural gas growth in India’s energy mix. The project delay leads to a rise in the total cost involved and increases the payback period for the CGD companies. To the best of authors’ knowledge, this research is first of its kind that identifies the critical operational and financial risks affecting CGD projects in India and suggests the mitigating strategies for them.

Marketing - value proposition and value delivery, switching cost, customer acquisition and retention, positioning, pricing, distribution and retailing, role of trust and transparency to build sustainable relationship in B2B context, and efficient service delivery.

Undergraduate and graduate students in marketing, business administration, strategy, retailing, B2B marketing, services marketing and general management courses. Also, it can be used for executive management/training programmes.

The case focuses on an existing scenario of a natural gas business in Gujarat, India, in order to provide understanding of marketing challenges, especially in the B2B context, faced by organisations in this evolving business environment. The case examines the strategies and policies implemented by the company and their impact on the customer. The case presents reactions and responses from the concerned customers. The case illustrates the criticalness of understanding customer expectations and designing and delivering customer centric strategies to sustain market leadership in an evolving and competitive market.

The case study enables the students to understand and analyse: the current business environment; the important factors impacting natural gas business; economic analysis of energy; opportunity and challenges for doing cleaner and greener business; role of cleaner fuel to reduce carbon footprint; and carbon credit impacting top line and bottom line of a customer. The case provides students the opportunity to understand and analyse the importance of switching costs to acquire a new customer; and devising and implementing marketing strategies to expand customer base and enter into new territories.

Teaching notes.

The bankruptcy of Enron Corp. has evolved into a scandal of enormous proportions involving allegations of fraud, corruption and unethical practices on the part of Enron’s corporate executives, members of its board of directors, external auditors, and high government officials in the USA. No doubt there will be many articles written about various aspects of the Enron scandal. The focus of this paper is on the relationships between Enron’s business model and the deregulatory phase of the American economy during the 1980s and 1990s. It is the argument of this paper that deregulation in the US electricity and natural gas industries fostered the creation of the Enron business model, and that this model was unsustainable, resulting in the demise of Enron Corp. Furthermore, while Enron can be viewed as an example of capitalistic excess, the paper reveals how the Enron business model developed as an American form of a public private partnership, similar to the types of public private partnerships that have been created in recent years in the UK. Investigating Enron as a public private partnership may help us to better understand the role of public private partnerships in contemporary capitalism and shed some light on the advisability of deregulatory schemes and the unintended consequences that can result from such schemes.

The purpose of this paper is to respond to a call for research focusing on how and by how much new Product‐Service System (PSS) development methodologies and tools can help companies moving towards product‐oriented PSS, in the oil and gas equipment manufacturers industry.

This study has been conducted using a single case study method. The single case study enabled the authors to analyze the implementation of PSS in a complex project environment, where the unit of analysis is an organization that designs, builds and delivers integrated product‐service offers. The selected case study is Nuovo Pignone S.p.a., a brand of the “GE Oil & Gas” company, that produce products and services for the oil and gas industry.

The case study research confirms most of the statement reported in the state of the art, i.e. the oil and gas industries do not use a methodology to develop new PSS. Moreover, a new methodology for this specific sector seems not to be necessary, while a correct approach in the new PSS development process definition and the application of some tools of the existing methods could improve the servitization process performances of such companies.

The paper focuses on the product‐oriented PSS, where the ownership of the product is transferred to customer, and where manufacturer offers additional services directly related to the product through the use of contractual services.

This work adds a contribution in the use of a methodology for the development of a new PSS in the oil and gas industry servitization process.