Product Overview

This case describes the growth strategy of Mahanagar Gas Limited (MGL) from its inception as a joint venture (JV) firm between GAIL (a state-owned enterprise [SOE]) and British Gas plc (a multinational conglomerate) in 1986. The case covers three distinct periods. The first stage examines the formation of the JV and the challenges faced by the company in establishing its business. The second stage focuses on the consolidation of growth strategies, the company’s transformation into a listed company and the eventual exit of British Gas plc. The third phase encompasses the phasing out of monopoly rights and the challenges encountered during the pandemic and beyond. The key objective of discussing this case is to understand MGL’s growth strategy to date and determine how the company should strategise for future growth. Should MGL pursue forward integration or backward integration, or remain a pure-play natural gas distributor? Considering the prevailing uncertainties and geopolitics surrounding the energy market, how can the company safeguard its dominant market position? Finally, since the energy sector is heavily regulated and politically influenced, what type of nonmarket strategy should the company adopt to ensure continued growth in the face of new private-sector firms entering the market?

Learning Objectives

Understand how companies develop business strategy in light of the conflicting expectations of its multiple shareholders? Get an insight into how companies when faced with threat to the existing market position, use the opportunity to grow through vertical integration. Develop an insight into the inherent transitionary nature of joint venture firms and the impact of the changing dynamics between the joint venture promoters on the fragility in these organization structures. Understand the pivotal role played by the SoEs in the business operations in the emerging market context.