Optimal distinctiveness of incumbent and new entrant firms in the South African energy sector – A dynamic capabilities perspective

Abstract

The renewable energy transition represents a fundamental regime change globally and in South Africa, due to the limited supply of fossil fuels, low electrification rates in many regions and the threat of climate change. South Africa signalled its commitment to this transition by creating the Renewable Energy Independent Power Producers Procurement Programme. Power producers play a critical role in this transition and face numerous challenges, strategising to shape a competitive position with the industry context whilst simultaneously managing stakeholder perceptions. This study leveraged the dynamic capabilities perspective to understand how incumbent and new entrant firms in the South African energy sector achieve optimal distinctiveness, which lies at the intersection of strategic management and institutional theory, by reconciling the tensions between seeking differentiation and gaining institutional legitimacy. The study adopted a qualitative research design Interviews were conducted with participants across incumbent and new entrant energy firms and organisations with sectoral level relevance in the South African energy sector. The research outcomes revealed critical insights into the various orchestrating mechanisms, and associated contingent factors, that incumbents and new entrants used to achieve optimal distinctiveness. These outcomes contribute to the literature on optimal distinctiveness.