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Hybrid strategic thinking in deregulated retail energy markets

Hybrid strategic thinking in deregulated retail energy markets Purpose – The purpose of this paper is to present the results of research undertaken to test the use of traditional strategic approaches in developing competitive advantage through the assessment of the importance to small‐ and medium‐sized firms of cost and services available in a competitive retail market. Design/methodology/approach – A survey involving 181 small‐ and medium‐enterprises provided responses to a questionnaire that measured the importance of key success factors to the customer when making a decision regarding their choice of natural gas supplier. Findings – The findings suggest that, the use of a low‐cost strategy alone may not be sufficient to create a competitive advantage for suppliers and that a hybrid strategy of cost, service quality, enhanced communication and unbundled services will. Research limitations/implications – The sample was limited to natural gas customers in Ontario, Canada at a specific period of time in the deregulation process reducing the ability to generalize results across other regions and other energy types. This limitation is defended by the recognition that the importance of variables measured is consistent between regions and energy types. Practical implications – Energy suppliers can create a competitive advantage over their competition if they can differentiate themselves through the application of enhanced service quality and communications. Originality/value – Little, if any, empirical research exists that addresses the response of customers to strategic approaches of suppliers in deregulating energy markets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Energy Sector Management Emerald Publishing

Hybrid strategic thinking in deregulated retail energy markets

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-6220
DOI
10.1108/17506220810883225
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to present the results of research undertaken to test the use of traditional strategic approaches in developing competitive advantage through the assessment of the importance to small‐ and medium‐sized firms of cost and services available in a competitive retail market. Design/methodology/approach – A survey involving 181 small‐ and medium‐enterprises provided responses to a questionnaire that measured the importance of key success factors to the customer when making a decision regarding their choice of natural gas supplier. Findings – The findings suggest that, the use of a low‐cost strategy alone may not be sufficient to create a competitive advantage for suppliers and that a hybrid strategy of cost, service quality, enhanced communication and unbundled services will. Research limitations/implications – The sample was limited to natural gas customers in Ontario, Canada at a specific period of time in the deregulation process reducing the ability to generalize results across other regions and other energy types. This limitation is defended by the recognition that the importance of variables measured is consistent between regions and energy types. Practical implications – Energy suppliers can create a competitive advantage over their competition if they can differentiate themselves through the application of enhanced service quality and communications. Originality/value – Little, if any, empirical research exists that addresses the response of customers to strategic approaches of suppliers in deregulating energy markets.

Journal

International Journal of Energy Sector Management – Emerald Publishing

Published: Jun 27, 2008

Keywords: Natural gas; Electricity; Competitive strategy; Market forces; Energy industry

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