GasCo Goes the Distance
Practice this intermediate market entry case interview question in the Energy sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This is a market entry case that tests both quantitative analysis (transportation cost calculations) and strategic thinking about competitive dynamics. Candidates must recognize that while Spain has lower transportation costs, China's higher gas prices and existing customer relationships make it the more profitable strategic choice, despite higher shipping costs.
Your client is GasCo, a US-based natural gas company. In the last year, natural gas prices in the US have declined while prices in APAC and EMEA have increased. GasCo currently has managed to develop a new way to transport gas. The new technology significantly lowers the cost of transportation. Due to the new technology, GasCo would like to expand in the global market.
GasCo would like to know if they should enter the APAC, EMEA, or both regions?
APAC - Asia Pacific & China EMEA - Europe, Middle East, and Africa
Clarifying Information
- GasCo’s new technology is unique to their company and no other competitors have this technology. The new technology significantly lowers the cost to transport gas. Gas normally has to be shipped in large containers, but now the gas is able to be liquified and then transported, significantly reducing cost of transportation.
- GasCo’s main concern is overall profitability when entering the market.
- GasCo is worried about 1) whether there will be demand in the region and 2) which market is more profitable
- GasCo has 2 major customers: 1 in China and 1 in Japan