Centrica PLC Employees, Customers, Suppliers, and Environment Issues

Centrica plc is a leading integrated energy company based in Berkshire. The company was created in 1997 when it was de-merged from British Gas. Centrica has operations in the UK, Canada, the U.S., Germany, Norway, Netherlands, Egypt and Trinidad & Tobago. The company has three key retails brands: British Gas, Dyno and Direct Energy. Centrica's current share price is 327.05p (Cenrica.com, 2011). This report will focus on four elements of Centrica that are critical to its operations: employees, customers, suppliers and environmental issues. Each of these will be discussed in turn, followed by concluding remarks.

Employees

Centrica has 34,643 employees worldwide, most of whom are in the main markets of the UK, Canada and the U.S. (Centrica.com, 2011) with 27,000 in the UK alone (EmployeeBenefits.co.uk, 2008). The company's human resources focus is on two main operating dimensions -- sales/service and technical. Centrica is a vertically-integrated company so there are opportunities ranging from exploration to information systems, from management to plumbers and electricians. The company seeks to attract employees with a combination of pay and benefits that it views as being attractive. In the UK for example, Centrica offers a pension scheme, private medical insurance, personal accident and travel insurance and a flexible benefits scheme (Ibid). The company seeks to tie its benefits to its financial targets.

Centrica is in the process of reducing its workforce, and this includes an ongoing outsourcing program. For example in 2007, Centrica reduced the size of its workforce by 2000. It has outsourced key functions such as human resources and finance. The company retains around 9500 engineer of different types (Ibid). A unique feature of the human resources policy at Centrica is its focus on health. Some bonus compensation is tied to health targets and the company has a proactive "cycle to work" scheme. The company admits it has some financial incentive to have fitter employees, as they are involved in fewer accidents and have fewer health care costs (Ibid). A survey indicated that 82% of employees agreed the plan has had a positive impact on their health and 94% have indicated that they will continue with the same level of activity, with 59% claiming that the scheme has changed their lifelong commitment to exercise (FCDP, 2010).

Customers

Centrica offers its products to a range of customers, depending on the business. British Gas markets to both residential and business customers in the United Kingdom, where they are the biggest supplier to the energy market. Centrica Energy runs power plants in the UK and Norway, and sells its products both internally and on the world markets. Centrica Storage stores gas under the North Sea for a number of customers in the gas exploration and extraction business. Direct Energy is primarily a gas production and marketing firm selling to residential and commercial customers in the U.S. And Canada. Dyno is a network of franchises providing drain cleaning, plumbing and lock fitting to residential and commercial customers in the UK and Ireland. The UK businesses total 74% of revenues while the North American businesses total 26% of revenues (Centrica.co.uk, 2011).

Centrica's strategy with respect to customers is to engage in both geographic and demographic diversification. Centrica's North America retail operations provide a buffer to shocks in the UK market, which can be affected by weather or economic shocks. In addition, that Centrica offers products and services to businesses, residences and even other energy firms improves the diversification of its customer base.

Suppliers

With respect to Centrica's core product -- gas -- the company is vertically integrated. It is engaged in the exploration business and utilizes its own gas primarily, both in Europe and North America (Centrica.co.uk, 2011). The company does, however, have a number of suppliers. As noted, it outsources many support functions such as human resources and finance (EmployerBenefits.co.uk, 2008). Centrica also needs to source equipment for the exploration, extraction, transportation and retail of its gas. The company will at times enter into deal with other energy firms for supplies in order to bolster the company's own supplies of energy during times of high demand (Donnan, 2000). The company also improves its access to supplies of energy through acquisition of smaller firms (UK Power, 2009).

Centrica also recognizes the opportunity that it has on account of its buying power with many of its suppliers. Centrica leverages this bargaining power to help improve the environmental standing of its suppliers, convincing them to adopt responsible business practices. Centrica applies this policy throughout its supply chain. The company is also signatory to the Prompt Payment Code, to the benefit of its suppliers (Centrica.com, 2011, 2).

Environmental Issues

As with all energy firms, Centrica faces significant environmental challenges. While the company concerns itself little with the generalized impacts of fossil fuel consumption, it does take steps to minimize the environmental impacts of its exploration, extraction and transportation activities. The company is focused on building for a low-carbon world, and is exploring alternative energy sources as a means of addressing the planet's ongoing energy needs. Nuclear energy is something that Centrica has looked at (Centrica.com, 2011). The company also has programs in place to govern its environmental management, water use, waste, biodiversity impacts, air emissions and environmental compliance. There are no major issues that Centrica has been involved in with respect to environmental catastrophe.

Conclusion

Centrica markets natural gas to residential and commercial customers in the UK, Canada and the United States, and extracts gas in a few other countries as well. The company is focused on being a responsible firm. It has tied employee wellness to bonuses, and Centrica leverages its power with suppliers to get them to engage in more environmentally friendly practices. For its part, Centrica has a good environmental record and is slowly exploring the potential for energy in a low-carbon world. Such a strategy would improve upon the diversification that Centrica already has geographically by adding new types of energy products to its markets.