In September 2011, the Director General of First Energy Private Ltd, launched the company in the alternative energy sector in India, faced with a flash. Commercial technology company furnaces biomass for cooking and has since 2007, clean and affordable cooking solutions for customers in rural India. Marginal hike in the price of fuel from biomass at the beginning of 2011, however, led to a sharp drop in demand makes the continuation of rural consumer market unstable. The Company has no equal in the household segment, because rival products, liquefied petroleum gas (LPG), has a value of subsidies provided by the federal government. First Energy were quick to find their bearings, sending its market niche in the urban commercial market, consisting of restaurants, cafeterias and dormitories. While the high margin in this segment, the volumes are low. Therefore, the company is to build the scale to be able to maintain investments in production capacity, which is currently in full. The case allows students to come up with a strategy to expand the market for the CEO. They will also take a call on how to get out of it or to hold consumer segment, where margins are low, but the volume, in light of the de-subsidizing LPG, would be high. "Hide
by Ramasastry Chandrasekhar, Niraj Dawar Source: Richard Ivey School of Business Foundation 13 pages. Publication Date: February 17, 2012. Prod. #: W12705-PDF-ENG
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