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School of Business | Department of Management Studies | MSc Degree Programme in Strategy | 2014
Thesis number: 13892
Fortum, how an incumbent should deal with a disruptive innovation
Author: Noteboom, Arno
Title: Fortum, how an incumbent should deal with a disruptive innovation
Year: 2014  Language: eng
Department: Department of Management Studies
Academic subject: MSc Degree Programme in Strategy
Index terms: johtaminen; management; strategia; strategy; innovaatiot; innovations; arvoketju; value chain; energiatalous; energy economy; aurinkoenergia; solar energy
Pages: 101
Key terms: Solar PV, disruptive innovation, value chain, value network
Solar PV as a disruptive innovation is changing the established energy industry. It forces energy incumbents to compete on a new market, and on new features. This research sets out to investigate how Fortum should be dealing with this disruptive innovation.

This study is conducted in two parts, first it is analysed what the effects are of solar PV being labelled disruptive. This determines whether Fortum should at all be participating in this new disruptive market. The second part analyses the value chain to determine what parts Fortum should be active in, as well as the value network to determine what role Fortum should be playing amongst other parties in the network. For the empirical research eight expert interviews have been conducted.

The market entry advice for Fortum in the solar PV industry is a wholeheartedly yes. It was found that solar PV will slowly but surely invade the established energy industry, and to avoid from being disrupted in the future, it is recommended Fortum plays a role in this new industry. The value chain analysis indicated that Fortum should focus on the sales operations of solar PV panels, and the after-sales service. Fortum is able to build comparative advantage around these activities using current capabilities and assets. Fortum is furthermore recommended to create a value network around itself, for which it was seen to have a strong foundation.

The report ultimately recommends Fortum to pursue a platform strategy that would benefit all participants, value network partners and prosumers alike. Fortum would benefit from this platform by entrenching itself in this disruptive market and driving more value its own way.
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