Sabarkantha gas limited: challenges of marketing natural gas

Abstract

This case is set in June 2012 and brings out many operational issues and challenges faced by the management of Sabarkantha Gas Limited (SGL) to efficiently, effectively, and profitably market natural gas in Mehesana, Sabarkantha, and Gandhinagar districts of Gujarat, India. The company has been able to achieve some degree of success with its growing customer base, volume, and profitability. The business environment seems to be rapidly changing and SGL acknowledges the intensive competition in the near future, especially after the expiry of marketing exclusivity as granted by the regulatory body. Currently the company operates in small geographical territories but has the opportunity to expand. For SGL, economies of scale seems to be a big challenge. In India, the markets of some competing fuels are either artificially underpriced/subsidised and are cheap without consideration of environmental externalities. Marketing natural gas was found to be a challenging task. The company also faces emerging challenges like managing customer perception, customer acquisition and retention, price volatility, customer adoption cycle, and meeting customer expectations. Efficient management of such challenges could mitigate some of the business risks and improve the top-line and bottom-line. The opportunity of resolving pressing issues faced by SGL would keep the readers interested and allow them to test their knowledge on marketing and commercial strategy along with other functional strategies.