"AES Corporation Business Review" of Capstone Project AES Corp

 . Business Review Information [Pick the AES Corp. is a global company involved in electricity generation and distribution business. It operates in 27 countries across 5 continents. As of December 2011, AES owns and operates 33,800 MW of generation capacity and serves 12 million consumers through its distribution companies. In 2011, AES Corp (AES : NYSE) had revenues of $17.8 billion. Mission As a global power company, AES is dedicated to improving lives by providing safe, reliable and sustainable energy solutions in every market it serves and continuously creating value for its shareholders. Vision Over the last two years, AES has seen a transformation in its vision. Recent change in leadership as well as efforts to counter the effects of global economic challenges are shaping the Companys vision. In the recent 10-K filing, the Company describes its vision as: "Our goal is to maximize value for our shareholders by growing cash flow and earnings per share and achieving better returns on our investments. We will expand our platforms in our core markets, specifically Brazil, Chile, Colombia and the United States, and will work to develop growth platforms in key markets including Turkey, Poland and the United Kingdom. Over time, by focusing our growth and exiting select non?strategic markets, we expect to narrow our geographic focus to achieve better results with fewer countries. Across our portfolio, we will work to optimize profitability, as well as reduce our overhead and business development costs" (AES Corp, 2012, p. 3) Primary Stakeholders Management AES has a strong and industry-respected management team. The fact is evident by a recent smooth change in leadership. The current CEO Andres Gluski took over the leadership of this global company without much difficulty when the last CEO Paul Hanrahan decided to leave after a long and celebrated tenure. Similarly, the Companys Group CFO and President of Global Services Group Victoria Harker also recently decided to move on. The Companys recent financial performance despite these changes exemplifies a strong culture and business management acumen. Shareholders, The Market and the Board of Directors The Board of Directors has 11 members with vast industry and global business experience. Mr. Philip Odeen is the current Chairman of the Board and has been serving in this position since 2003. AES Corporation (Symbol AES) trades on NYSE. As of May 25, 2012, AES closing share price was $12.55 and a market capitalization of $9.63 billion (Yahoo Finance, 2012). The Company currently does not pay dividends but has shown an intent of doing so in 3Q 2012 (AES Corp., 2012). The Company regularly holds investor road shows and shareholder meetings. Customers As of December 31, 2011 AES has a customer base of 12 million people. Majority of the customers are served through its Utility Business. For the Generation business, the customers include regional utilities and other government-owned distribution companies. Regulators Electricity generation and distribution business around the world is a highly regulated sector with a strong influence of local government agency, referred to as Regulators. The mandate of these regulators, as given by the respective governments, is to secure customers interest and provide the independent power producers (IPP) and Utility operators a conducive environment for business. Lenders and Financiers Electricity generation and distribution business, similar to other sectors within the energy industry, is highly capital intensive. This means that most energy companies require high leverage in order to finance business growth. Most of this finance comes from Lenders and Financiers, which are generally large banks and governments. These entities have a strong influence on growth and development of electricity producing companies like AES Corp. Porters Five Forces Analysis In the following section, forces that affect and shape the electricity generation & distribution are analyzed according to the Porters Five Forces Analysis model. Rivalry Among Existing Competition Within industry competition does not seem to be very strong. AES generally faces some challenge during the initial period of starting in a new region or a new power generation facility but there is not much competition in existing or established business areas (AES Corp, 2012, p. 5).