From photovoltaics to microgrids : A case study on Loccioni and how its tailored solutions compete with standardized products in the energy utility industry
Abstract: Global industries are undergoing significant sustainability transitions, presenting new opportunities for R&D and innovation-driven companies. Rather than competing in large markets, these companies thrive in specialized niches. In the energy utility sector, which is experiencing rapid growth and the emergence of new niches, uncertainty surrounding future market dynamics and technology poses challenges for large-scale infrastructure investments. However, this uncertainty opens doors for smaller niche actors that prioritize innovation over mass production of standardized products. This study focuses on the challenges and benefits faced by small innovation-based companies as they offer tailored solutions in the face of growing standardization within emerging industries. To address this topic, the researchers conducted a case study at Loccioni, an Italian engineering firm involved in the energy utility industry. Loccioni has positioned itself as a niche player, emphasizing strong customer relationships, differentiation, and research and development to gain a competitive edge. During a two-month period in Italy, the authors conducted nine semi- structured interviews, engaging seven Loccioni collaborators and two customer representatives. Thematic analysis of the interview data revealed three key themes: Customer Relationship Management, Dominant Logic, and Loccioni's position in the energy market. The thesis concludes that Loccioni cannot effectively compete with standardization solely by developing components; instead, they must focus on designing integrated systems. This approach allows Loccioni to simultaneously compete in the present market and drive innovation for the future. Moreover, it enables the continuous development of core competencies, vital for the long-term survival of the company. To achieve this, small innovation-based companies must adopt a business strategy centered around flexibility and customer satisfaction, leveraging their customers' resources. However, it is crucial for these companies to utilize flexibility wisely, as it can hinder growth and innovation if mismanaged. Loccioni's dominant logic, which prioritizes customer contentment and investment in uncertain technologies and opportunities, positions them as a significant contributor to the global green transition.
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