Marketing and Competing

Fortnightly Magazine - July 1 1997
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Identifying a core competency is not as easy as it seems.

Utilities have developed a "Gold Rush" mentality. That is, they have begun to chase after the latest (em and sometimes fleeting (em opportunities, often abandoning their roots and their long-held strengths in the process. Supposedly, this first-in-market race will allow traditional utilities to remain competitive. Yet, all this racing has caused strong regional players to enter markets blindly, without the competitive knowledge or strategic underpinnings that will allow them to succeed in the long term.

"Utilities are trying to substitute core competencies with products and services. ... 'Give me a low rate and don't ever let the power fail,' is really what the customer wants but then we tend not to believe him and develop other things like alarm systems, cable TV and telecommunications." These are the frank words of Bill Guyker, a planning and compliance consultant with Allegheny Power System. His concerns were echoed many times at a Massachusetts Institute of Technology Electric Utility Program forum this past winter.

In this sprint toward investment, utilities have gone in three directions. First, utilities have homegrown new ventures, such as IPALCo's development of new distributed generation and energy storage technologies. Second, they have bought into other ventures, as Western Resources is attempting to do with the security system firm ADT. Third, they have established alliances, as Southern Co. developed with Hewlett Packard to create better metering and data analysis capability.

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