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Corporate Strategic Planning – Using MarketBuilder to inform key decisions

Analyzing market changes to understand the effect on your business and the decisions you make

Strategic planning involves predicting how markets are likely to evolve and how your company can insert assets or businesses into those markets. Corporate strategy operates at a higher level than specific plants or assets; its goal is to achieve margin-producing businesses. Achieving this goal depends on corporate planners understanding (for their current and prospective businesses) such factors as:

  • Location (geography)
  • Commodity (oil, gas, power renewables)
  • Technology (conventional technology, R&D)
  • Geology (what is down in the ground, where is it, and how much does it cost to get it)
  • Asset mix (what assets do we have? What scale or scope economies can we get?)
  • Political and tax issues
  • Price and basis

Understanding these factors is a formidable task and dramatically more difficult in the future time-frame of strategic corporate decision making. The resulting market behavior might vary considerably depending on which possible future market changes actually occur.

What's needed is a way to analyze these factors together with the ability to apply combinations of potential market changes (price, quantity, and capacity additions) to enable what-if analysis and compare the various outcomes.

For example, you might examine corporate strategies such as:

  • Should we consider entering South American heavy oil production?
  • Should we acquire merchant or regulated generation units in the Eastern Interconnect?
  • Should we buy companies or build new assets?
  • Should we expand or stay pat in Caspian upstream?

These decisions might be considerably different depending on evolving market changes.

MarketBuilder (Deloitte MarketPoint's premier decision-support software solution) was designed to help companies perform the analysis for such decisions. It has many differentiating capabilities that facilitate analyzing markets globally or regionally and altering selected factors to help customers examine the combined effects of potential market changes on market behavior and prices.

Specifically, MarketBuilder models the supply chains for the energy commodities pertinent to your analysis. In MarketBuilder, each component of the supply chains is treated as an independent agent, competing against the others, as they do in real-world markets, helping users to analyze market fundamentals and forecast prices, simulating the real market behavior under a variety of potential conditions. MarketBuilder helps you place markets and impacts at the center of your strategic planning, making decisions and justifying them based on good information and a time-tested methodology.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.