The electric utility industry is at the brink of the most far-reaching disruptions since the industry emerged and formed the incumbent electric utility business models. As other sectors recently have shown, industry-wide disruptions can decimate, or bypass, entire portions of an industry to ruin old sources of income, but also offer windows of unprecedented new opportunities for new ventures. The incumbents’ challenge lies in figuring out how to best use a century of experience and heavy resource accumulation to capture these opportunities and transform their business models to fit with the next industry order. To this end, a number of entities are in collaboration to tackle this challenge: Linde Energi, a local electric utility; Jämtkraft and Scandem Market, where the latter is a B2B-focused subsidiary of the former; Karlskoga Energi och Miljö, a local multi-utility; Kumbro Utveckling, a catalyzer for eco-friendly alternatives; and Örebro University, a research institution.
The research aim of the project is i) to map future scenarios for a disruptive industry, and ii) to explore the course of experimental endeavors to transform incumbent actors’ business models to fit in relation to the expected future nature of the industry. The research question asks: "How would incumbent actors need to transform their business models to fit with a new industrial order?" The broader objective of this research project is to initiate a discussion that helps electric utilities, owners and policymakers to focus attention on the timing, scope and impact of the expected business model disruptions.
The methodological approach taken in this project includes generating scenarios, informed by case studies and a two-round Delphi study, as well as the setting up of a business model lab for experimental testing of possible results of business model transformations.
The project contributes to ongoing debates on industry evolution and business model transformation by helping to close the gap between the industry change literature and the business model literature on the basis of evolutionary concepts and the importance of fit between company-level conduct and industry-level order. This link has not been made clear in previous research on business model transformation, especially not in relation to processes of transformation during the disruptive industry stage.