This paper analyzes the expansion of Gazprom into the European downstream market from an interdisciplinary perspective. First, an analysis of the "macro perspective" gives insights into the strategic objectives of Gazprom in Europe and the peculiarities of the European gas market. Second, the focus is drawn to the "micro perspective", i.e. the European consumer of natural gas. Hereby an empirical conjoint analysis (ACA) has been conducted, giving insights into the preferences of European consumers towards the product gas. The respondents had to consecutively state their preferences towards hypothetical product combinations containing the predefined attributes price, contract duration, biogas share, supplier and origin. Finally, the findings of each "perspective" were consolidated into concrete strategic suggestions for Gazprom’s expansion into the European downstream market. The conjoint analysis revealed, inter alia, that the most important attribute towards a gas product among private gas customers in Europe is the price. Furthermore, the consumers prefer gas originating from stable, mature democracies - like Norway - over gas from Iran, Russia or Algeria. Furthermore, European consumers are willing to pay a premium of more than 25% (300 &u8364 per year) for gas that is not supplied by Gazprom. Although European consumers are positive about the possibility to receive a share of biogas among the supplied natural gas, a majority is not willing to pay a premium of 30% for a 45% biogas share. These results lead to the suggestion that Gazprom should reconsider its brand strategy in Europe, that the company should significantly improve transparency and public relations and that it should seriously consider embarking on a strategy more sensitive towards Corporate Social Responsibility (CSR).
Table of Contents
1 Introduction
1.1 Preface and Motivation
1.2 Research Objectives and Research Questions
1.3 Structure and Methodology
2 OAO Gazprom - Company Background
2.1 The Formation Period
2.2 Gazprom Today
2.3 Resources and Production
2.4 Exports, Infrastructure and Gas Prices
2.5 Strategic Objectives
3 Gazprom’s Activities in Europe
3.1 Characteristics of the European Gas Market
3.2 Regulatory Framework and Liberalization
3.3 European Demand for Natural Gas
3.4 Competition from Other Gas Supplying Countries
3.5 Gazprom’s Share Holdings in Europe
4 Conjoint Analysis of Consumer Preferences
4.1 Objectives
4.2 Theory and Methodology
4.3 Hypotheses
4.4 Operationalization
4.4.1 Technical Aspects
4.4.2 Identifying Attributes and Levels: Preliminary Qualitative Study
4.4.3 Questionnaire Design
4.4.4 Structure of the Sample
4.4.5 Data Analysis
4.5 Results
4.5.1 Part-Worth Utilities of All Attributes
4.5.2 Relative Importance of Attributes
4.5.3 Evaluation of Socio-Economic Criteria
4.5.4 Further Findings
4.5.5 Part-Worth Utilities and Euro-Equivalents
4.6 Testing of Hypotheses
4.7 Summary of Selected CA-Results
5 Strategic Suggestions for Gazprom
5.1 Reconsideration of Brand Strategy
5.2 Improvement of Transparency and Communication
5.3 Differentiation vs. Cost Efficiency
6 Conclusion
6.1 Summary
6.2 Methodological Critique
6.3 Further Considerations
Research Objectives & Key Themes
This master's thesis analyzes the expansion of the Russian state-owned energy giant Gazprom into the European downstream natural gas market. The primary research goal is to evaluate Gazprom's corporate strategy in the context of European energy market developments and to assess the preferences of private European gas consumers regarding gas supply attributes, such as price, origin, supplier, and biogas share. The ultimate objective is to formulate evidence-based strategic recommendations for Gazprom to achieve sustainable success in a liberalized European market.
- Analysis of Gazprom's corporate background and strategic objectives.
- Evaluation of the European gas market landscape and regulatory framework.
- Empirical Conjoint Analysis (ACA) of private consumer preferences.
- Investigation of the willingness to pay for non-Gazprom gas and biogas.
- Strategic recommendations regarding branding, transparency, and Corporate Social Responsibility (CSR).
Excerpt from the Book
4.4.2 Identifying Attributes and Levels: Preliminary Qualitative Study
Defining the attributes and levels for a conjoint analysis is the most crucial and critical step of designing a good study (Orme, 2006, p. 43). The choice of attributes highly affects the final results of the research process and therefore there is a high risk for biased results, namely finding the results one intended to find. In order to define the appropriate attributes and levels for the CA, a preceding qualitative study had to be conducted. This study consisted of four parts:
I. Secondary Analysis
II. Selection in the Light of the Research Objective
III. Expert Interviews
IV. Standard Criteria for Attributes
I. Secondary Analysis
Within the first stage of the selection process various information about the characteristics of gas were collected by analyzing gas offers of various commercial gas suppliers, former research on CA and consumer protection associations in Germany and Switzerland. These inquiries lead to a comprehensive list of attributes that could be used within the CA. Studying earlier CAs on similar topics enabled a first importance ranking within the acquired list of attributes. The majority of CAs include price and brand. When it comes to energy, attributes like environmental friendliness, contract duration, quality certificate, reliability, security and consulting services are very often considered as well.
Summary of Chapters
1 Introduction: Outlines the motivation, research objectives, and the broad interdisciplinary methodology chosen to examine Gazprom's expansion in Europe.
2 OAO Gazprom - Company Background: Provides a historical overview of Gazprom's formation, its role in the Russian energy sector, and its current strategic objectives.
3 Gazprom’s Activities in Europe: Analyzes the characteristics of the European gas market, the regulatory environment, demand trends, and competitive dynamics.
4 Conjoint Analysis of Consumer Preferences: Details the empirical study, explaining the ACA method, survey design, hypothesis testing, and the analysis of results regarding price, origin, and biogas.
5 Strategic Suggestions for Gazprom: Offers recommendations based on the study's findings, focusing on brand strategy, transparency improvements, and CSR-based differentiation.
6 Conclusion: Summarizes the key empirical findings and provides a methodological critique, reflecting on the study's limitations and implications for future research.
Keywords
Gazprom, European downstream market, Natural gas, Conjoint Analysis, Consumer preferences, Corporate strategy, Energy security, Biogas, Liberalization, Price sensitivity, Brand strategy, Corporate Social Responsibility, Russia, Market entry, Energy policy
Frequently Asked Questions
What is the core focus of this research paper?
The research examines Gazprom's expansion into the European downstream gas market, specifically analyzing corporate strategy in relation to European consumer preferences and energy policy.
What are the primary themes addressed in the study?
Central themes include Russian energy strategy, European market liberalization, consumer behavior regarding energy attributes, and the feasibility of CSR and biogas-oriented strategies for Gazprom.
What is the primary goal or research question?
The study aims to identify Gazprom's strategic objectives and evaluate how it can achieve sustainable success in the European market by aligning its actions with consumer preferences and political requirements.
Which methodology is used to analyze consumer behavior?
The research employs an empirical Adaptive Conjoint Analysis (ACA) to identify and rank consumer preferences for specific attributes of natural gas products.
What topics are covered in the main section?
The main part of the thesis covers the background of OAO Gazprom, an assessment of the European gas market, a detailed conjoint analysis of private consumers, and strategic recommendations for Gazprom.
Which keywords best characterize this work?
Key terms include Gazprom, Conjoint Analysis, Consumer Preferences, Energy Security, European Downstream Market, and Corporate Social Responsibility.
How does the author interpret the negative consumer sentiment towards Gazprom?
The author suggests that the negative sentiment is largely driven by Gazprom's perceived association with Russian political interests and a lack of transparency, recommending a shift towards CSR and improved public communication.
What role does biogas play in the proposed strategic recommendations?
Biogas is highlighted as a strategic opportunity for differentiation and CSR, though the analysis shows that consumer willingness to pay a significant price premium for it is currently limited.
- Quote paper
- Fabian Zähringer (Author), 2007, The Expansion of Gazprom into the European Downstream Market, Munich, GRIN Verlag, https://www.grin.com/document/120953
