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The energy industry is currently navigating through rough waters. Governments pushing for liberalization generate powerful headwinds, and strong currents cause large convoys to break up and reassemble in different configurations. For all providers, the compass points towards stronger customer orientation and cost-efficiency. Only companies that are able to offer their customers more attractive terms and customized solutions will stay ahead of the market with the wind at their back.
The consequences of liberalization
No other industry is currently affected by major changes as strongly as the energy utility industry: Soaring energy prices, a politically unstable environment, potential supply bottlenecks and frequently obsolete networks necessitate high investments in the infrastructure and new, preferably renewable sources of energy. In addition, legally mandated liberalization measures are coming on stream, especially in Europe, but also in the U.S., where the increasing separation of network and marketing makes for an ever more competitive environment.
Mergers, alliances and partnerships are levers for maintaining or expanding market positions. Many large providers strengthen their customer base by using smaller regional or local energy providers or expanding internally, while regional providers are broadening their portfolio of services.
From utility to service provider
Adapting to new market conditions costs money, as does retaining customers and winning new ones. After all, the goal is nothing less than managing the transformation from utility to service provider. Whatever their size, market players must do everything in their power to successfully differentiate themselves by pushing innovative service concepts and customer orientation. If they also manage to significantly reduce their costs through economies of scale and offer their end customers more attractive terms in an increasingly transparent market, sustained profitable growth is a realistic possibility.