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The future of the DSO Enexis : a research on the strategic position of the DSO in 2030 using scenario and trend analysis

Kuiper, Stephan (2015) The future of the DSO Enexis : a research on the strategic position of the DSO in 2030 using scenario and trend analysis.

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Abstract:The current state of the energy market gives lead to this papers research goal. As the future is uncertain, the main goal of this research is an assessment of possible future strategic positions for the Dutch DSO Enexis, and the implications of those positions for the firm. This is done by (1) assessing which trends and driving forces will have an impact on the energy market in 2030; (2) creating four scenario narratives on energy market composition in 2030; and (3) using scenario analysis to analyse the strategic position of Enexis in the energy market and energy network in 2030. This research has followed the linear path laid out by the scenario methodology by Schwartz. The starting point of this thesis is elaborating the current strategic position of Dutch DSO Enexis. Enexis is a core company of the energy market and energy network; they distribute energy and are the key players to keep the energy flow going. The DSO is the linking factor between energy production and the end user and as such, they are connected to almost any stakeholder within the energy network. The firm operates on both regulated markets and non-regulated markets. For their regulated activities Enexis occupies a monopoly position. Enexis follows a differentiated strategy to get a strategic advantage using their 4 strategic pillars of reliability, affordability, sustainability, and customer focus. The second phase of this research involved executing an environmental analysis using scenario analysis. This phase begins with identification of trends foreseeable in the near future. Expert interviews, Delphi workshops, and literature reviews resulted in the identification of 909 trends. These trends have been distilled into 29 trend clusters, which are elaborated in table 5.1-1. Based upon these 29 clusters, two key uncertainties were selected: ‘Desire for self-sufficiency’ and ‘new energy services and service providers’. Four distinct scenarios have been written based upon the two key uncertainties and all identified trends. The scenarios ‘coupled supply’, ‘together independent’, ‘everything organised’, and ‘do-it-yourself’ have been created, each depicting a different, but feasible and constructive world. The scenarios are summarized to the right. Multiple implications were found when comparing the company’s business models in each scenario with the current business model. Most notably the cost structure, key resources, and key activities have significant implications. Each scenario future shows a different role for the DSO Enexis; and also shows a different strategic position. When zooming in on the strategic position of Enexis within each world using the conceptual model by Kim et al., more overlap can be seen. Three out of four scenarios show significant threats to the strategic position in terms of new entrants, substitute products, and bargaining power of buyers. Environmental complexity also rises significantly due to either new services or service providers, or due to increasingly demanding citizens. This assessment of scenarios then leads to a strategic position for Enexis as energy system operator, a task in which they care for the energy system (regulated or not), and provide, together with market parties, supporting activities to optimize the energy supply. Retaining trust in large institutions like Enexis is also of importance for Enexis; their customer relations ought to be a focus point of the marketing department. Enexis should therefore follow a cost leadership strategy on grid operations, coupled with a focus strategy on advisory activities and market facilitation in order to position the firm as a high quality energy system operator.
Item Type:Essay (Master)
Enexis, The Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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