Energy Corridor

-an analysis of the Energy cluster in Houston Texas

For many years, Houston has been declared the ‘Energy capital of the world’. The city is the home to many gas
and oil companies globally. United States leads in the energy industry by ensuring that competitive challenges
are overcome. The country has organized a number of symposiums such as “America’s Energy Future” to strengthen
the bright future of Houston. The theme was to discuss on how the renewable and traditional energy can expand
and enhance the energy future of America. The renewable and traditional energy sources debated on bio-fuels,
wind, smart grind, and solar energy. The symposium also talked about how the energy sector can create more
employment and opportunities. It also discussed on promoting the emergence of energy technology. Huston has
taken the new opportunities beyond its competitors in gas and oil into renewable energy (Hofmeister &
Chronicle, 2010).
Problem statement
According to Michael Porter’s forces of model competition, Houston Texas energy cluster has competitors in oil
and gas industry. The competitors are able to get access to cheap land and labor. High labor cost may minimize
the profit margins of the company leading to low revenue. Most of energy sectors have opted for the new energy
technology, but Houston Texas is still using the traditional methods. The Houston energy companies have
concentrated on gas and oil development rather than investing in the new technologies to increase productivity
(Buchanan, Cambron, Leyens, & Ridge, 2001). The other porter’s model is the threat of new entrants. This has
been influenced by politics and public policy. The energy industry has received too little support from the
government to compete in the 21st century. Main oil companies are located in the Permian Basin left, and they
were major research and development funders in the region. This raises another porter’s model of competition,
determinant of the supplier’s power toward the industry.
Houston Texas energy industries do not get quality research and development services from the best oil
companies. There is exposure to threat due to poor national energy policy. Other energy producing companies
have stable energy policies and allocate enough resources for development and research in engineering and
science. Due to stable research and development companies and use of new energy technologies, companies from
other nations have adopted to refining of renewable energy fuels creating threat to substitute of products
refined by Houston Texas oil and gas companies (Texas Energy Cluster, 2005,).
Research Purpose
The purpose of the study is to identify the competitive advantage of different types of energy in the energy
cluster and understand the market implication. Another aim of the study is to investigate the reasons for the
change in energy preference by the consumers. The objective of the project is to undertake a critical review
of the utility market and consumer behavior to determine how consumption pattern affects the energy cluster.
Another objective is to determine the factors that influenced the consumers to turn to clean energy in theory,
and evaluate the behavior through a survey. The third objective is to analyze and discuss the implications
from the findings. The scope of the research is to help identify the threats facing the Energy cluster in
Houston Texas, as well as how the different types of energy can increase their competitive advantage amongst
themselves.
Research Questions
The research will examine and answer the proposed research questions concerning the Energy cluster in Houston
Texas.
1. How is clean energy affecting oil and gas companies?
2. What are the competitive disadvantages of energies in the Energy cluster over clean energy?
3. How can the competitive disadvantages be used to their advantage?
4. Why have the demand of clean energy increased, and how much of it is being used compared to other
types of energy?
Research Methodology
The study was conducted by making use of both the primary and the secondary data. This research entails
qualitative and quantitative data. The secondary data offers the qualitative data that helps to get more
information concerning the Energy cluster in Houston Texas. It is easy and cheap to use secondary data as it
is readily available, and would help answer unanswered questions. Information is retrieved from secondary
sources search as books, research reports and journals. They can also be retrieved from wed portals and
electronic journals. The primary data was collected by the use of statistical survey. A reason for choosing
statistical survey to conduct the study was to get different opinions from a large number of respondents. It
is the best technique to use when there is a large population involved. They are very reliable as they are
standardized and this makes it very convenient for the researcher in making observations and analyzing data
(Neugebauer & Evans-Brain, 2009,). The computer program that would be used for analyzing the collected data is
Excel. This is because it is easy to compute and manipulate the collected data (Insightful Corporation, 2005).
Conclusion
The project will study about the Energy cluster in Houston Texas, and investigate on the new entry
threat, which is the clean energy. Being the energy capital, the research will focus on Houston Texas
especially on energy corridor. This is because the most of the gas and oil companies are based there. The aim
of the project will be to identify the threats, and to recommend effective solutions for oil and gas companies
so that they can gain the competitive advantage over clean energy. This will help restore the companies to
their top position in the Energy cluster.

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