The Future of Platform Business in B2B Markets. The energy sector


Academic Paper, 2021

23 Pages, Grade: 1,7


Excerpt

Table of Contents

List of Figures

List of Tables

List of Abbreviations

1 Introduction

2 Basic Definitions
2.1 Definition of platform
2.2 Definition of B2B markets

3 B2B platform business in the energy sector
3.1 Status quo regarding B2B platform business at E.ON
3.2 Analysis of current trends regarding B2B platforms
3.2.1 Digitization and the energy transition trend
3.2.2 Energy platform business trends
3.2.3 Geographical distribution of digital platforms
3.2.4 Social media platform trends for B2B marketers
3.2.5 Types ofbusiness with high impact by platform developments
3.3 Recommendations for action regarding B2B platform business for E.ON..

4 Conclusion and Outlook

Bibliography

ITM-Checklist

List of Figures

Figure 2 has been removed by GRIN for copyright reasons.

Figure 1: Scalability and market size for innovative business models, 2021

Figure 2: Geographical distribution of major digital platforms in the world, 2018

Figure 3: Overview of global figures influencing worldwide trends, 2020

List of Tables

Table 1: Platform trends overview and recommendation for action towards E.ON ..

Table2: ITM-Checklist IX

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

With the rapid development of the internet and digital technologies, platforms already have grown to a global phenomenon in 2016 (Evans & Gawer, 2016, p. 21). Nowa­days, the COVID-19 pandemic further accelerated the digital transformation, which led to more progress and diversification of digital platforms. (Sasikumar & Sersia, 2021, p. 336).

The rise of platforms like, e.g., Uber, AirBnB and Alibaba already disrupted traditional business models by connecting people, organizations and resources in an interactive way via digital technology (Parker, et al., 2016, p. 3). Through climate change in combination with digitization and new technologies, like smart meters, deep learning and a substantial stream of software platforms, the energy industry experienced massive changes due to the appearance of B2B platform businesses, such as virtual power plants or smart home platform solutions (Edelmann, et al., 2017, p. 36) & (Atterbury, 2020, p. 5).

These developments demonstrate the importance for strategic corporate manage­ment to stay up-to-date and to elaborate new B2B platform business models in order to remain profitable and competitive. Subsequently, the following questions can be posed. What is the future of Platform Business in B2B markets? How is the energy industry affected and what are fields of action to catch-up or outperform in this eco­nomic area? To examine the research problem, a descriptive method based on sec­ondary literature, reports and statistical data will be performed. Research in this area has been limited to the energy sectorwith an in depth status quo and recommenda­tion for action towards E.ON SE, one ofthe largest energy companies in Germany.

From a structure point of view, the study begins with definitions of basic terms, fol­lowed by the central chapter “B2B Platform Business in the energy sector”. The cen­tral part is divided into three sub sections, where first of all the status quo regarding B2B platform business at E.ON will be examined, following by an analysis of current trends regarding B2B platform business. The third sub section discusses fields of action for future B2B platform business at E.ON. Finally, a conclusion and outlook will summarize this research.

2 Basic Definitions

2.1 Definitionofplatform

In current literature no common definition of the term Platform exists. Parker defines a platform as:

“a business based on enabling value-creating interactions between external producers and consumers. The platform provides an open, participative infrastructure for these interactions and sets governance conditions for them. The platforms overarching purpose: to consummate matches among users and facilitate the exchange of goods, services, or social currency, thereby enabling value creation for all participants.” (Parker, et al., 2016, p. 5)

Similar aspects of platforms were published by Evans & Noel in 2008, describing its intermediation role between two or more groups of users, which is why these are also classified as multisided platforms (Evans & Noel, 2008, p. 663). Inherently, plat­forms are often associated with so-called “network effects”. That means, a platform becomes more valuable for the owner and users, the more users adopt the platform as of growing access to the network of users. These network effects are also corre­lated with complementary innovations (Gawer & Cusumano, 2014, p. 417). Most of the platforms today are more or less digital, meaning capturing, transmitting and monetizing data over the internet (Evans & Gawer, 2016, p. 5). Further, more current revealed characteristics ofdigital platforms are:

- Cross-subsidisation, meaning subsidize initial participants to increase the user base
- Constant user-engagement to extract more data form its users
- Reduced transaction costs for search, information, bargaining, policing and enforcement costs
- Reputation system as repeated transactions on the platform standardize con­sumer experience, which get formally translated into metrics, such as reputa­tional scores used by consumers as forms of evaluation of services
- Algorithmic managerial control, which enables capturing, processing and con­trol of each user activity as data record on a real-time basis (Sasikumar & Sersia, 2021, p. 339)

2.2 Definition of B2B markets

Business to business (B2B) markets refer to markets where goods or services are exchanged between businesses or companies and not as to the contrary in business to consumer (B2C) markets, where goods or services are traded between companies and consumers (Wöhe, et al., 2016, p. 174) & (Wirtz, 2019, p. 161).

3 B2B platform business in the energy sector

3.1 Status quo regarding B2B platform business at E.ON

E.ON is one of the largest energy companies in Germany. In order to examine the status quo at E.ON regarding B2B platform business, the latest annual report from 2020 has been reviewed. Furthermore, articles and news from the internet has been researched.

In the annual report 2020, E.ON communicated its strategy: “Leading Partner for the Sustainable and Digital Energy World” (E.ON SE, 2021, p. 14). E.ON wants to enable Europe to become carbon neutral. In particular its distribution network serves as plat­form for the energy transition. They see many associated possibilities with it, such as providing sustainable solutions for customers (B2C) and helping companies, cities (B2B) and residential customers to become climate-neutral (E.ON SE, 2021, p. 14).

To further improve network billing, E.ON started in 2020 an alliance with SAP to de­velop a cloud-based platform. The platform shall handle around 15 million grid cus­tomers in Germany by end of 2023. Here the new platform business model was mainly driven by cost optimization, improvements in service quality and customer satisfaction (E.ON SE, 2021, p. 16). The segment of Customer Solutions stays clearly focused on profitable net customer growth. This shall be achieved by system­atically optimizing and digitalizing its processes and operating models. Two major digital transformation programs are in place for its largest markets. In 2020, around

4 million customers in Germany have been migrated to a new digital platform, which was developed in the B2B segment with a variety of business partners, such as Salesforce.

The other large program is about building an entire new platform business in the United Kingdom: “E.ON Next”, which is based on the innovative cloud-based tech­nology platform named Kraken from Kraken Technologies, a subsidiary of Octopus Energy, focusing on energy sales. Again, customer centricity and cost efficiency are key objective of the initiative to stay profitable and competitive in the residential, small and medium enterprise customers area (E.ON SE, 2021, pp. 17, 23).

In response to the emission restrictions, carmakers’ strong commitment to electric vehicles and government subsides, the global electric mobility market is growing ex­ponentially. As a leading actor for operating critical infrastructures, E.ON recognized the opportunity to leverage the attractive infrastructure potential of this growth and focuses its future electric mobility activities on the development of charging infra­structure solutions and operations (E.ON SE, 2021, p. 17).

In order to explore which technologies, applications, platforms and services will be­come relevant in the future, E.ON partners with innovative start-ups, Blue Chips, and technology companies in the years ahead. Additionally, E.ON established an invest­ment platform “Future Energy Ventures” that secures E.ON’s access to outside in­novation to test new technologies and their customer acceptance. In 2020, €12 mil­lion with 24 start-ups have been agreed by E.ON business units. In case the test results are successful, the solutions can be deployed at other E.ON business units in order to tab new growth areas for future business (E.ON SE, 2021, pp. 26, 27).

The distribution networks of E.ON are seen as the backbone of the energy transition. Solar systems, wind farms, battery storage systems, and further climate-friendly technologies are connected to the distribution grid of E.ON. With the further digitiza­tion of the grid, it becomes a smart grid, which will serve as a platform for innovative business models that are essential to the energy transition’s success (E.ON SE, 2021, p. 103).

3.2 Analysis of current trends regarding B2B platforms

The Cambridge Dictionary describes a trend as “a general development or change in a situation or in the way that people are behaving” (Cambridge Dictionary, 2021).

3.2.1 Digitization and the energy transition trend

Digitization and the energy transition already changed the way energy is produced and consumed. Decentral energy sources, like wind and solar plants, led to the emer­gence of so-called micro grids, where consumers supply themselves with energy (Edelmann, et al., 2017, p. 34). Therefore, large and central power plants lose their significance. Furthermore, the integration of storage technologies into the electricity grid enables more effective provision of control energy, which is the difference be­tween generated and consumed energy to be fed into the grid to keep it stable (Bundesnetzagentur, 2021) & (Edelmann, et al., 2017, p. 35).

New technologies changed the existing business processes in the energy sector and drives cooperation’s with other companies to develop new business. Furthermore, energy companies have competitive advantage in the development and operations of a charging infrastructure as well as the engagement regarding smart cities and the broadband rollout as of their knowledge and experience in operating a critical infra­structure (Edelmann, et al., 2017, p. 36). Summarizing the findings, energy compa­nies, especially the distribution network operators, are best suited to be the enabler of the energy transition. To fulfil their role, they need to position himself as independ­ent data and platform service providers (Edelmann, et al., 2017, p. 37).

Through the COVID-19 pandemic the digital transformation accelerated, which led to more progress and diversification of digital platforms. (Sasikumar & Sersia, 2021, p. 336). New data processing technologies, such as cloud computing enhances com­puting capacity, which enables massive business data processing and analyzing, including large scale customer data and other information (Xiong, et al., 2012, p. 96). The adoption of complex network theory and cloud computing technologies will fur­ther decrease transaction times and increase benefits. Digital B2B platforms are in­creasingly playing a powerful role in shaping business collaboration. Companies use such platforms to approach customers, suppliers, and service providers to reach a wider market and to improve cross-sectoral collaboration (Desai, et al., 2020, p. 1). The following section concentrates on such platform trends in the energy sector.

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Excerpt out of 23 pages

Details

Title
The Future of Platform Business in B2B Markets. The energy sector
College
The FOM University of Applied Sciences, Hamburg
Grade
1,7
Author
Year
2021
Pages
23
Catalog Number
V1168649
ISBN (Book)
9783346582713
Language
English
Keywords
Platform Business, B2B, Energy Sector, E.ON
Quote paper
Claudia Peter (Author), 2021, The Future of Platform Business in B2B Markets. The energy sector, Munich, GRIN Verlag, https://www.grin.com/document/1168649

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