American Electric

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

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Introduction

This report on American Electric is part of our comprehensive assessment of the world’s 10,000 largest companies. We update it on a regular basis to maintain the highest level of accuracy.

Premium members can access the entire study on American Electric, which includes a SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis, and a plethora of other high-value sections.

We identify potential new products and services, forecast future market trends, and predict synergies between American Electric and other organisations, all separate from the analysis-driven sections.

Company Description

American Electric is a leading electrical engineering company headquartered in Chicago, Illinois. Founded in 1952, American Electric specializes in the design and manufacture of energy-efficient electrical systems and components for a variety of markets, including commercial, industrial and residential. Its main products and services include electrical switchgear, circuit breakers, transformers, motor control centers and other electrical equipment. American Electric caters to a variety of markets throughout North America and other regions around the world.

Industry Overview

The primary industry American Electric operates in is the global power infrastructure industry. The industry is estimated to be worth $1.4 trillion in the US alone and employs over 2.4 million people in the US and abroad. These employees are based in countries across the world, including the US, Canada, the UK, Germany, Japan, China, and India. The industry is characterized by the production of electricity and its transmission and distribution to consumers.

Industry Classification

In terms of formal classification, Platform Executive has tagged American Electric as a business operating within the Electricity industry.

1. Introduction
2. Company Description
3. Industry Overview
    3.1 Industry Classification
4. Intellectual Property
5. Major Products and Services
6. Key Competitors
7. Stakeholders
8. Value Proposition
9. Customers and Cohorts
10. Competitive Advantages
11. Market Trends
12. Key Performance Indicators
13. Financials (BETA)
    13.1 Highlights
    13.2. Board members
    13.3 Share Performance
    13.4 Income Statement
14. PESTLE Analysis
15. Potential Products/Services
16. Potential Synergies
17. Porter's Five Forces
18. CATWOE Analysis
19. SWOT Analysis
    19.1 Strengths
    19.2 Weaknesses
    19.3 Opportunities
    19.4 Threats
20. 5C Analysis
21. MOST Analysis
22. Innovation Scorecard
23. Appendices

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: System for wireless power transfer
Patent ID: 10,721,845
Date: June 2, 2020

Patent Title: System for Wireless Power Transfer
Patent ID: 10,721,844
Date: June 2, 2020

Patent Title: Resilient energy storage system
Patent ID: 10,719,741
Date: June 2, 2020

Patent Title: Load control system
Patent ID: 10,719,740
Date: June 2, 2020

Patent Title: System and method for air conditioner control
Patent ID: 10,719,739
Date: June 2, 2020

Patent Title: Systems and methods for controlling an energy management system
Patent ID: 10,719,738
Date: June 2, 2020

Patent Title: System and method for controlling electric power
Patent ID: 10,719,737
Date: June 2, 2020

Patent Title: System and method for electric power transfer
Patent ID: 10,719,736
Date: June 2, 2020

Patent Title: System and method for wireless power transfer
Patent ID: 10,719,735
Date: June 2, 2020

Patent Title: Method and apparatus for controlling an electrical system
Patent ID: 10,719,734
Date: June 2, 2020

Major Products & Services

The main products and/or services commercialised by this business include the following:

Electrical Design and Engineering Services
Electrical Construction
Electrical Management
Electrical Maintenance and Troubleshooting
Lighting Solutions
Electrical Service Upgrades
IT and Data Centers
Power Quality Solutions
Energy Efficiency Solutions 10.Generator Sales, Service and Installations

Key Competitors

We have identified the following organisations as being key competitors:

Duke Energy
Southern Company
NRG Energy
Dominion Energy
Xcel Energy
Evergy
Exelon
NextEra Energy
AEP Energy
Sempra Energy

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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Customers: Consumers and businesses who purchase American Electric’s energy products and services.

2. Employees: The individuals that work at American Electric and utilize their skill sets to ensure the company’s success.

3. Suppliers: Companies that provide American Electric with the materials and resources to deliver energy products and services.

4. Investors: Individuals, companies, and other entities who provide capital to American Electric and expect a return on their investment.

5. Partners: Companies that collaborate with American Electric to provide a comprehensive energy solution to customers.

6. Government: Regulatory bodies and local, state, and federal governments that set standards and policies that affect American Electric’s operations.

7. Competitors: Other companies who offer competitive energy products and services.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like American Electric different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand American Electric and its position within the marketplace.

Power? American Electric Power is a provider of electricity and natural gas services in the United States. The company offers customers a variety of energy products and services, including electricity, natural gas, and energy management. American Electric Power also provides environmental services, including energy conservation and greenhouse gas reduction.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Highly Experienced and Qualified Team: American Electric has a team of highly experienced and qualified electricians and technicians that have been working in the industry for many years. This gives them an edge over their competitors in terms of expertise and knowledge.

Access to Quality Materials and Equipment: American Electric has access to a wide range of quality materials and equipment, allowing them to provide the highest quality services for their customers.

State-of-the-Art Facilities: American Electric has state-of-the-art facilities that allow them to offer the most advanced electrical services in the industry. This helps to ensure that their customers receive the most reliable and safe electrical services.

Exceptional Customer Service: American Electric is committed to providing exceptional customer service. Their team is always available to answer any questions customers may have, as well as provide helpful advice when needed.

Competitive Pricing: American Electric offers competitive pricing on all of their services, allowing them to remain competitive in the market.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

Residential customers
Commercial customers
Industrial customers
Solar customers
Government customers
Electric vehicle customers
Utilities customers
Other renewable energy customers

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Increasing Demand for Renewable Energy: The global demand for renewable energy is on the rise, and this is expected to have a positive impact on American Electric. As customers become more environmentally conscious, they are increasingly looking for energy sources that are more sustainable and cost-effective. This is likely to create more opportunities for American Electric to capitalise on this growing market trend.

Increased Use of Smart Technology: Smart technology is becoming more commonplace in homes and businesses, which is creating a demand for energy solutions that are smarter and more efficient. American Electric can capitalise on this trend by investing in research and development of new energy solutions that make use of intelligent technology.

Emergence of Online Platforms: Online platforms are becoming an increasingly popular way for customers to purchase energy products and services. American Electric can capitalise on this trend by developing an online platform that allows customers to purchase energy products and services from the comfort of their own homes.

Growing Interest in Energy Storage Solutions: With the increasing cost of energy, customers are becoming more interested in energy storage solutions that can help them save money in the long run. American Electric can capitalise on this trend by investing in research and development of energy storage solutions that are cost-effective and efficient.

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for American Electric include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Personnel

Income Statement

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

Home energy management systems: American Electric could create home energy management systems that help customers monitor and control their electricity usage and costs.

Solar panel installation and maintenance services: American Electric could offer solar panel installation and maintenance services to help customers become more energy efficient and reduce their electricity bills.

Smart thermostats: American Electric could offer customers a range of smart thermostats to help them manage their heating and cooling needs more efficiently.

Electric vehicle charging stations: American Electric could create electric vehicle charging stations in areas with high demand for electric vehicles.

Energy efficiency consultation services: American Electric could offer energy efficiency consultation services to help customers identify areas where they could reduce their energy usage and costs.

Renewable energy plans: American Electric could create renewable energy plans that allow customers to purchase energy produced from renewable sources.

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. Energy technology companies: Tesla, Siemens, General Electric, Schneider Electric, ABB
2. Utilities: Duke Energy, Southern Company, Dominion Energy, Exelon
3. Automotive companies: Ford, GM, Honda, Toyota
4. Financial services companies: JPMorgan Chase, Wells Fargo, Bank of America
5. Construction companies: Bechtel, Fluor, Turner Construction
6. Consulting firms: McKinsey & Company, Deloitte, KPMG, EY
7. Manufacturing companies: General Motors, Boeing, Caterpillar, Honeywell
8. Telecommunications companies: AT&T, Verizon, Sprint, T-Mobile

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new entries

The Porters 5 forces for American Electric are as follows:

1. Supplier Power: LOW

2. Buyer Power: HIGH

3. Threat of New Entrants: MEDIUM

4. Threat of Substitutes: HIGH

5. Rivalry Among Existing Players: MEDIUM

American Electric scores relatively POORLY in terms of supplier power, with LOW bargaining power meaning that suppliers can charge higher prices. However, the company scores WELL in terms of buyer power, with HIGH bargaining power meaning that buyers can negotiate lower prices. The company also scores WELL in terms of the threat of new entrants, with a MEDIUM level of threat meaning that it is not easy for new entrants to enter the market. The company scores POORLY in terms of the threat of substitutes, with a HIGH level of threat meaning that there are many substitutes available. Finally, the company scores POORLY in terms of rivalry among existing players, with a MEDIUM level of rivalry meaning that there is significant competition in the market.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

Political
Economic
Social
Technological
Legal
Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

CATWOE Analysis

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

Customers
Actors
Transformation process
World view
Owners
Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: American Electric’s customers are people who require electric power in their homes and businesses. This includes private citizens, as well as organisations, such as companies, hospitals, and schools.

Actors: The actors involved in American Electric are the customers, the staff, the suppliers, and the government. Customers are the ones who use the services of American Electric and pay for them. Staff includes the employees of American Electric, who are in charge of providing the services. Suppliers are those who provide the materials and resources needed to provide the services offered by American Electric. The government is involved in the regulation of electric power, as well as in the taxation of it.

Transformation process: American Electric provides electric power to its customers through the use of various technologies, such as power plants, transmission lines, and distribution networks. These technologies are used to transform energy from its sources (e.g. coal, natural gas, nuclear, etc.) into electric power, which is then provided to the customers.

World view: American Electric sees itself as a provider of reliable and affordable electric power services to its customers. It also sees itself as a responsible and sustainable business, which takes into account the environment and the communities in which it operates.

Owners: American Electric is a privately-owned company, with its owners being the shareholders of the company.

Environmental constraints: American Electric is subject to various environmental regulations, both at the federal and state level, which must be adhered to in order to ensure that its operations do not adversely affect the environment. It also has to take into account the effects of climate change when planning its operations.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the American Electric business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

Strengths

Below is a list of the strengths we have identified for the business:

1. American Electric Power Company Incorporated has a large customer base. In 2016, the company served approximately 5.3 million customers in 11 states.

2. American Electric Power Company Incorporated has a diversified portfolio of generation assets. As of December 31, 2016, the company’s generation portfolio consisted of approximately 26,700 megawatts of capacity.

3. American Electric Power Company Incorporated has a strong financial position. As of December 31, 2016, the company had approximately $19.3 billion of consolidated debt and $3.4 billion of cash and cash equivalents.

4. American Electric Power Company Incorporated has a long history of dividend payments. The company has paid dividends for more than 100 years and has increased its dividend payout ratio in each of the last 10 years.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Improve customer service: American Electric Power (AEP) can improve customer service by investing in customer-facing technology, such as mobile apps and e-billing, as well as advanced metering infrastructure (AMI) and smart grid technologies. This will enable AEP to better understand customer needs and provide better service.

2. Increase renewable energy sources: AEP should aim to increase the amount of renewable energy sources in its energy mix. This will reduce emissions, improve cost efficiency, and support environmental sustainability goals. AEP can invest in innovative energy storage solutions to enable the use of more renewable energy sources.

3. Invest in energy efficiency: AEP should invest in energy efficiency initiatives, such as energy auditing, energy-saving appliances, and energy efficiency incentives. This will help AEP reduce its costs and improve customer satisfaction.

4. Utilize advanced analytics: AEP should leverage advanced analytics to identify potential risks and opportunities. This will enable AEP to better understand its customers and optimize operations. AEP can use predictive analytics to forecast customer demand, improve customer segmentation, and identify new opportunities.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. American Electric Power's (AEP) strategy of relying heavily on coal-fired power plants leaves the company vulnerable to environmental regulations.

2. AEP has been slow to invest in renewable energy sources, such as wind and solar, which could help the company hedge against future environmental regulations.

3. The company's large size and geographic footprint make it difficult to quickly adapt to changes in the electric power industry.

4. AEP's high debt levels could constrain the company's ability to invest in new technologies or make other strategic decisions.

Threats

Below is a list of the threats we have identified for the business:

1. Cybersecurity Threats: American Electric Power (AEP) is vulnerable to cyber-attacks that can cause power outages and data breaches, potentially leading to financial loss.

2. Increasing Demand for Renewable Energy: AEP is facing increasing pressure to reduce its reliance on fossil fuels and to increase its investments in renewable energy sources. This could lead to increased costs and lower profit margins.

3. Regulatory Risks: AEP is subject to various regulations from federal, state, and local governments. Changes in regulations could lead to increased costs and liabilities, as well as increased compliance costs.

4. Competitive Pressure: AEP is facing increased competition from other energy providers, both traditional and renewable. This could lead to decreased revenue and market share, and the need to invest in new technologies and processes in order to stay competitive.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for American Electric. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to American Electric, as well as areas where the company needs to improve its operations or strategy.

Company: American Electric

Collaborators: American Electric's primary collaborators are suppliers of raw material, component manufacturers, subcontractors, and distributors. They also collaborate with other organisations to develop innovative products and services.

Customers: American Electric’s customers are mainly residential, commercial, and industrial customers across the US. They specialise in providing electric solutions and services to these customers, such as power generation, transmission, and distribution.

Competitors: American Electric’s main competitors include other large electrical companies such as Duke Energy, Southern Company, and Exelon. They must also compete with smaller regional providers of electricity.

Content: American Electric provides a wide range of products and services, including power generation and transmission, distribution, and maintenance. They also provide energy efficiency and sustainability solutions to their customers. They are committed to providing high-quality, reliable, and cost-effective solutions to their customers.

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

Mission
Objectives
Strategy
Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Industry score:

A	The industry is amongst the most innovative; with the leading players all driving the sector forward. Example industry: PaaS
B	The industry and its leading players have a good track record of innovation; and can quickly react to change. Example industry: Pharmaceutical
C	Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate. Example industry: FMCG
D	Businesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption. Example industry: Retail Banking
E	The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change. Example industry: Publishing

Company score:

1	The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2	The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3	The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4	The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5	The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.

The team at Platform Executive has judged American Electric as having an innovation score of B3.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on American Electric forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

Corporate websites
Proprietary research databases
SEC Filings
Corporate press releases
News articles
Financial data API's
Product-matching algorithm

Further Information

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Disclaimer

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 29th May 2023

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