Would you like to grow your core competencies into unserved markets?
Updated: Jan 13
As ConocoPhillips’ Manager of European Downstream Strategy @Paul Minton developed their strategies and solutions to mitigate reduced changing fuel demand as a result of biofuel introduction and increased vehicle fleet fuel efficiency. As Principal Consultant at SGS we asked him, in preparing for the Energy Transition, what can we learn from the past? This is what he had to say.
“Energy is in transition, fossil fuels to net zero. Strategy is an essential part of knowing how to navigate the transition. Lessons and messages from other industries and businesses that also transitioned can help.
Strategy is selecting markets and segments in which to compete, and fundamental to that is identifying business areas for competitive edge, generally interpreted as cheaper or better.
The intercontinental travel business transitioned massively in the 60's and 70’s, particularly crossing the Atlantic.
The UK and French Governments spent heavily subsidising a technology forward approach for supersonic transport, resulting in 7 Concordes going into service. The market decided that hundreds of jumbo jets were a better solution. The Boeing competitive edge included cheaper capital per passenger seat provided, and lower operating costs per passenger mile. London to New York in less than 5 hours might have been better, but it was not a competitive edge.
One might have thought the big losers would have been the ocean liners, but that is not the case, they re-invented themselves as cruise ships, and the flexibility in the assets, the liners, meant that they could transition their business easily to another market. In strategy terms, the liners still provided a mix of products and services that customers valued. The liner companies took their core competencies and flexed them into new, unserved markets.
So, what is the lesson and what is the message? Firstly, strategy matters, and throwing time, money and effort at numerous demonstration projects, proof of concept and promising new technologies is not a strategy if the market for those products is not established, the market does not welcome those products, or a competing product does it better or at lower cost. Secondly, the market might be different to what it at first appears, as the ocean liners found out, and matching core competencies to unserved markets created a whole new market with significant growth.”
Strategic Growth Services match core competencies to unserved markets enabling providers in the energy sector to flourish through the energy transition.
To find out how your core competencies can produce growth through the energy transition, contact SGS at firstname.lastname@example.org.