Business Diversification Strategies in the Italian Energy Markets
The liberalization and privatization processes have
forced public utility companies to face new competitive challenges,
implementing strategies to gain market share and, at the same time,
keep the old customers. To this end, many companies have carried
out mergers, acquisitions and conglomerations in order to diversify
their business. This paper focuses on companies operating in the free
energy market in Italy. In the last decade, this sector has undergone
profound changes that have radically changed the competitive
scenario and have led companies to implement diversification
strategies of the business. Our work aims to evaluate the economic
and financial performances obtained by energy companies, following
the beginning of the liberalization process, verifying the possible
relationship with the implemented diversification strategies.
[1] G. Capece, and R. Costa, "Measuring knowledge creation in virtual
teams through the social network analysis", Knowledge Management
Research and Practice, vol. 7, pp. 329-338, 2009.
[2] Ministry of Economic Development, 2000. Legislative Decree N┬░ 164,
concerning the implementation of the Directive 98/30/EC and the
common rules for the internal market in natural gas, Rome, Italy.
(http://www.sviluppoeconomico.gov.it/).
[3] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "The European gas
market: The effects of liberalization on retail prices", in Energy and
Sustainability, vol. 105, Brebbia e Popov eds, Southampton, UK: WIT
Transactions on Ecology and the Environment, 2007, pp. 417-426.
[4] Ministry of Economic Development, 2000. Legislative Decree no. 164,
concerning the implementation of the Directive 98/30/EC and the
common rules for the internal market in natural gas, Rome, Italy.
(http://www.sviluppoeconomico.gov.it)
[5] Italian Parliament, 1999. Legislative Decree N┬░ 79, "Attuazione della
direttiva 96/92/CE recante norme comuni per il mercato interno
dell-energia elettrica", Rome, Italy.
(http://www.parlamento.it/parlam/leggi/deleghe/99079dl.htm)
[6] European Parliament and Council, 1996. Directive 96/92/CE concerning
common rules for the internal market in electricity, Bruxelles, Belgium.
(http://www.europarl.europa.eu/).
[7] K.G. Smith, and C.M. Grimm, "Environmental variation, strategic
choice and firm performance: A study of railroad deregulation",
Strategic Management Journal, vol. 8, pp. 363-376, 1987.
[8] M.A, Delmas, M.V.Y. Russo, and M.J. Montes-Sancho, "Deregulation
and environmental differentiation in the electric utility industry",
Strategic Management Journal, vol. 28, pp. 189-209, 2007.
[9] G. Rider, "Ten Lessons for the Changing European Electricity
Landscape", The Electricity Journal, vol. 12, no. 3, pp. 13-19, 1999.
[10] N. Haase, and H. Bressers, "New Market Designs and their Effect on
Economic Performance in European Union-s Natural Gas Markets",
Competition and Regulation in Network Industries, vol. 11, pp. 176-
206, 2010.
[11] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "A productivity
analysis of the Italian gas retail market", in Environmental Economics
and Investment Assessment II, vol. 108, Aravossis, Brebbia e Gomez
eds, Southampton, UK: WIT Transactions on Ecology and the
Environment, 2008, pp. 43-52.
[12] A. Asquer, "Liberalization and regulatory reform of network industries:
A comparative analysis of Italian public utilities", Utilities Policy, vol.
19, pp. 172-184, 2011.
[13] I. Arciniegas, C. Barrett, and A. Marathe, "Assessing the efficiency of
US electricity markets", Utilities Policy, vol. 11, 75-86, 2003.
[14] L. Cricelli, F. Di Pillo, M. Gastaldi, and N. Levialdi, "The mobile
telecommunications industry: The competition under the hypothesis of
price discrimination strategy", in Proc. 31st EUROMICRO Conference
on Software Engineering and Advanced Applications, Porto, 2005, pp.
372-379.
[15] J. Cubbin, "Efficiency in the water industry", Utilities Policy, vol. 13,
pp. 289-293, 2005.
[16] A. Calabrese, M. Gastaldi, and N. Levialdi, "Real options model to
evaluate infrastructure flexibility: An application to photovoltaic
technology", International Journal of Technology Management, vol. 29,
pp. 173-191, 2005.
[17] L. Cricelli, F. Di Pillo, M. Gastaldi, and N. Levialdi, "Wholesale
competition in the international telecommunications system", Networks
and Spatial Economics, vol. 5, pp. 261-277, 2005.
[18] G. Granderson, "Externalities, efficiency, regulation, and productivity
growth in the U.S. electric utility industry", Journal of Productivity
Analysis, vol. 26, pp. 269-287, 2006.
[19] R. Turvey, "On network efficiency comparisons: Electricity
distribution", Utilities Policy, vol. 14, pp. 103-113, 2006.
[20] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "Impact of
liberalization on Italian retail gas prices", in Proc. 16th IASTED
International Conference on Applied Simulation and Modelling, Palma
de Mallorca, 2007, pp. 403-408.
[21] M. Abbott, and B. Cohen, "Productivity and efficiency in the water
industry", Utilities Policy, vol. 17, pp. 233-244, 2009.
[22] G. Capece, "Technological and Conceptual Accessibility to Measure the
Soundness of an e-Business Idea", Knowledge and Process
Management, vol. 16, pp. 49-64, 2009.
[23] M.L. Corton, and S.V. Berg, "Benchmarking Central American water
utilities", Utilities Policy, vol. 17, pp. 267-275, 2009.
[24] M. Farsi, and M. Filippini, "An analysis of cost efficiency in Swiss
multi-utilities", Energy Economics, vol. 31, pp. 306-315, 2009.
[25] L. Cricelli, F. Di Pillo, M. Gastaldi, N. Levialdi, "Asymmetry in mobile
access charges: is it an effective regulatory measure?", Netnomics:
Economic Research and Electronic Networking, vol. 11, no. 3, pp. 291-
314, 2010.
[26] G. Romano, and A. Guerrini, "Measuring and comparing the efficiency
of water utility companies: A data envelopment analysis approach",
Utilities Policy, vol. 19, pp. 202-209, 2011.
[27] L. Cricelli, M. Grimaldi, N. Levialdi, "The competition among mobile
network operators in the telecommunication supply chain",
International Journal of Production Economics, vol. 131, no. 1, pp. 22-
29, 2011.
[28] E. Bacchiocchi, M. Florio, and M. Gambaro, "Telecom reforms in the
EU: Prices and consumers' satisfaction", Telecommunications Policy,
vol. 35, pp. 382-396, 2011.
[29] L. Cricelli, M. Grimaldi, and N. Levialdi, "The impact of regulating
mobile termination rates and MNO-MVNO relationships on retail
prices", Telecommunications Policy, vol. 36, pp. 1-12, 2012.
[30] G. Capece, and D. Campisi, "User satisfaction affecting the acceptance
of an e-learning platform as a mean for the development of the human
capital", Behaviour & Information Technology, in press, doi:
10.1080/0144929X.2011.630417.
[31] R. Costa, "Assessing Intellectual Capital efficiency and productivity: an
application to the Italian yacht manufacturing sector", Expert Systems
With Applications, vol. 39, pp. 7255-7261, 2012.
[32] T. Jamasb, M. Pollitt, and T. Triebs, T., "Productivity and efficiency of
US gas trsmission companies: a eruopean regulatory perspective",
Energy Policy, vol. 36, pp. 3398-3412, 2008.
[33] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "A cluster analysis
study based on profitability and financial indicators in the Italian gas
retail market", Energy Policy, vol. 38, no. 7, pp. 3394-3402, 2010.
[34] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "The Italian gas
retail market: A cluster analysis based on performance indexes", in
Energy and Sustainability II, vol. 121, Brebbia e Mammoli eds,
Southampton, UK: WIT Transactions on Ecology and the Environment,
2009, pp. 257-267.
[35] G. Granderson, and C. Linvill, "Regulation, efficiency, and Granger
causality", International Journal of Industrial Organization, vol. 20, pp.
1225-1245, 2002.
[36] B. Lev, Financial Statement Analysis: A New Approach. Englewood
Cliffs, N.Y.: Prentice-Hall Inc., 1974.
[37] G. Foster, Financial Statement Analysis. Englewood Cliffs, N.Y.:
Prentice-Hall Inc., 1986.
[38] J. Ou, and S. Penman, "Financial Statement Analysis and the Prediction
of Stock Returns", Journal of Accounting and Economics, vol. 11, pp.
295-329, 1989.
[39] G. Ferrero, F: Dezzani, P. Pisoni, and L. Puddu, Le analisi di bilancio.
Indici e flussi. Milano, Italy: Giuffrè, 2003.
[40] E. Pavarani,. L-equilibrio finanziario - Criteri e metodologie nella
logica di Basilea 2. Milano, Italy: McGraw-Hill, 2006.
[41] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "New regulatory
policies in Italy: impact on financial results, on liquidity and profitability
of natural gas retail companies", Utilities Policy, in press, doi:
10.1016/j.jup.2012.03.001, 2012
[1] G. Capece, and R. Costa, "Measuring knowledge creation in virtual
teams through the social network analysis", Knowledge Management
Research and Practice, vol. 7, pp. 329-338, 2009.
[2] Ministry of Economic Development, 2000. Legislative Decree N┬░ 164,
concerning the implementation of the Directive 98/30/EC and the
common rules for the internal market in natural gas, Rome, Italy.
(http://www.sviluppoeconomico.gov.it/).
[3] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "The European gas
market: The effects of liberalization on retail prices", in Energy and
Sustainability, vol. 105, Brebbia e Popov eds, Southampton, UK: WIT
Transactions on Ecology and the Environment, 2007, pp. 417-426.
[4] Ministry of Economic Development, 2000. Legislative Decree no. 164,
concerning the implementation of the Directive 98/30/EC and the
common rules for the internal market in natural gas, Rome, Italy.
(http://www.sviluppoeconomico.gov.it)
[5] Italian Parliament, 1999. Legislative Decree N┬░ 79, "Attuazione della
direttiva 96/92/CE recante norme comuni per il mercato interno
dell-energia elettrica", Rome, Italy.
(http://www.parlamento.it/parlam/leggi/deleghe/99079dl.htm)
[6] European Parliament and Council, 1996. Directive 96/92/CE concerning
common rules for the internal market in electricity, Bruxelles, Belgium.
(http://www.europarl.europa.eu/).
[7] K.G. Smith, and C.M. Grimm, "Environmental variation, strategic
choice and firm performance: A study of railroad deregulation",
Strategic Management Journal, vol. 8, pp. 363-376, 1987.
[8] M.A, Delmas, M.V.Y. Russo, and M.J. Montes-Sancho, "Deregulation
and environmental differentiation in the electric utility industry",
Strategic Management Journal, vol. 28, pp. 189-209, 2007.
[9] G. Rider, "Ten Lessons for the Changing European Electricity
Landscape", The Electricity Journal, vol. 12, no. 3, pp. 13-19, 1999.
[10] N. Haase, and H. Bressers, "New Market Designs and their Effect on
Economic Performance in European Union-s Natural Gas Markets",
Competition and Regulation in Network Industries, vol. 11, pp. 176-
206, 2010.
[11] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "A productivity
analysis of the Italian gas retail market", in Environmental Economics
and Investment Assessment II, vol. 108, Aravossis, Brebbia e Gomez
eds, Southampton, UK: WIT Transactions on Ecology and the
Environment, 2008, pp. 43-52.
[12] A. Asquer, "Liberalization and regulatory reform of network industries:
A comparative analysis of Italian public utilities", Utilities Policy, vol.
19, pp. 172-184, 2011.
[13] I. Arciniegas, C. Barrett, and A. Marathe, "Assessing the efficiency of
US electricity markets", Utilities Policy, vol. 11, 75-86, 2003.
[14] L. Cricelli, F. Di Pillo, M. Gastaldi, and N. Levialdi, "The mobile
telecommunications industry: The competition under the hypothesis of
price discrimination strategy", in Proc. 31st EUROMICRO Conference
on Software Engineering and Advanced Applications, Porto, 2005, pp.
372-379.
[15] J. Cubbin, "Efficiency in the water industry", Utilities Policy, vol. 13,
pp. 289-293, 2005.
[16] A. Calabrese, M. Gastaldi, and N. Levialdi, "Real options model to
evaluate infrastructure flexibility: An application to photovoltaic
technology", International Journal of Technology Management, vol. 29,
pp. 173-191, 2005.
[17] L. Cricelli, F. Di Pillo, M. Gastaldi, and N. Levialdi, "Wholesale
competition in the international telecommunications system", Networks
and Spatial Economics, vol. 5, pp. 261-277, 2005.
[18] G. Granderson, "Externalities, efficiency, regulation, and productivity
growth in the U.S. electric utility industry", Journal of Productivity
Analysis, vol. 26, pp. 269-287, 2006.
[19] R. Turvey, "On network efficiency comparisons: Electricity
distribution", Utilities Policy, vol. 14, pp. 103-113, 2006.
[20] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "Impact of
liberalization on Italian retail gas prices", in Proc. 16th IASTED
International Conference on Applied Simulation and Modelling, Palma
de Mallorca, 2007, pp. 403-408.
[21] M. Abbott, and B. Cohen, "Productivity and efficiency in the water
industry", Utilities Policy, vol. 17, pp. 233-244, 2009.
[22] G. Capece, "Technological and Conceptual Accessibility to Measure the
Soundness of an e-Business Idea", Knowledge and Process
Management, vol. 16, pp. 49-64, 2009.
[23] M.L. Corton, and S.V. Berg, "Benchmarking Central American water
utilities", Utilities Policy, vol. 17, pp. 267-275, 2009.
[24] M. Farsi, and M. Filippini, "An analysis of cost efficiency in Swiss
multi-utilities", Energy Economics, vol. 31, pp. 306-315, 2009.
[25] L. Cricelli, F. Di Pillo, M. Gastaldi, N. Levialdi, "Asymmetry in mobile
access charges: is it an effective regulatory measure?", Netnomics:
Economic Research and Electronic Networking, vol. 11, no. 3, pp. 291-
314, 2010.
[26] G. Romano, and A. Guerrini, "Measuring and comparing the efficiency
of water utility companies: A data envelopment analysis approach",
Utilities Policy, vol. 19, pp. 202-209, 2011.
[27] L. Cricelli, M. Grimaldi, N. Levialdi, "The competition among mobile
network operators in the telecommunication supply chain",
International Journal of Production Economics, vol. 131, no. 1, pp. 22-
29, 2011.
[28] E. Bacchiocchi, M. Florio, and M. Gambaro, "Telecom reforms in the
EU: Prices and consumers' satisfaction", Telecommunications Policy,
vol. 35, pp. 382-396, 2011.
[29] L. Cricelli, M. Grimaldi, and N. Levialdi, "The impact of regulating
mobile termination rates and MNO-MVNO relationships on retail
prices", Telecommunications Policy, vol. 36, pp. 1-12, 2012.
[30] G. Capece, and D. Campisi, "User satisfaction affecting the acceptance
of an e-learning platform as a mean for the development of the human
capital", Behaviour & Information Technology, in press, doi:
10.1080/0144929X.2011.630417.
[31] R. Costa, "Assessing Intellectual Capital efficiency and productivity: an
application to the Italian yacht manufacturing sector", Expert Systems
With Applications, vol. 39, pp. 7255-7261, 2012.
[32] T. Jamasb, M. Pollitt, and T. Triebs, T., "Productivity and efficiency of
US gas trsmission companies: a eruopean regulatory perspective",
Energy Policy, vol. 36, pp. 3398-3412, 2008.
[33] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "A cluster analysis
study based on profitability and financial indicators in the Italian gas
retail market", Energy Policy, vol. 38, no. 7, pp. 3394-3402, 2010.
[34] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "The Italian gas
retail market: A cluster analysis based on performance indexes", in
Energy and Sustainability II, vol. 121, Brebbia e Mammoli eds,
Southampton, UK: WIT Transactions on Ecology and the Environment,
2009, pp. 257-267.
[35] G. Granderson, and C. Linvill, "Regulation, efficiency, and Granger
causality", International Journal of Industrial Organization, vol. 20, pp.
1225-1245, 2002.
[36] B. Lev, Financial Statement Analysis: A New Approach. Englewood
Cliffs, N.Y.: Prentice-Hall Inc., 1974.
[37] G. Foster, Financial Statement Analysis. Englewood Cliffs, N.Y.:
Prentice-Hall Inc., 1986.
[38] J. Ou, and S. Penman, "Financial Statement Analysis and the Prediction
of Stock Returns", Journal of Accounting and Economics, vol. 11, pp.
295-329, 1989.
[39] G. Ferrero, F: Dezzani, P. Pisoni, and L. Puddu, Le analisi di bilancio.
Indici e flussi. Milano, Italy: Giuffrè, 2003.
[40] E. Pavarani,. L-equilibrio finanziario - Criteri e metodologie nella
logica di Basilea 2. Milano, Italy: McGraw-Hill, 2006.
[41] G. Capece, L. Cricelli, F. Di Pillo, and N. Levialdi, "New regulatory
policies in Italy: impact on financial results, on liquidity and profitability
of natural gas retail companies", Utilities Policy, in press, doi:
10.1016/j.jup.2012.03.001, 2012
@article{"International Journal of Business, Human and Social Sciences:49419", author = "F. Di Pillo and G. Capece and L. Cricelli and N. Levialdi", title = "Business Diversification Strategies in the Italian Energy Markets", abstract = "The liberalization and privatization processes have
forced public utility companies to face new competitive challenges,
implementing strategies to gain market share and, at the same time,
keep the old customers. To this end, many companies have carried
out mergers, acquisitions and conglomerations in order to diversify
their business. This paper focuses on companies operating in the free
energy market in Italy. In the last decade, this sector has undergone
profound changes that have radically changed the competitive
scenario and have led companies to implement diversification
strategies of the business. Our work aims to evaluate the economic
and financial performances obtained by energy companies, following
the beginning of the liberalization process, verifying the possible
relationship with the implemented diversification strategies.", keywords = "Business diversification strategies, M&A, the Italian
energy market liberalization, economic and financial performances.", volume = "6", number = "11", pages = "2745-7", }
