Applied Materials Strategy Analysis Presentation
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Applied Materials Strategy Analysis Presentation

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An analysis on short-term and long-term strategies for Applied Materials and the solar industry

An analysis on short-term and long-term strategies for Applied Materials and the solar industry

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  • Stategic Analysis
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Applied Materials Strategy Analysis Presentation Applied Materials Strategy Analysis Presentation Presentation Transcript

  • SHAYNE ARMSTRONG SETH BREEDLOVE ALBERT KING
  • Agenda
    • AMAT Background
    • Current Strategy
    • Environmental Analysis
    • Key Considerations for the Future
    • Scenario Analysis
    • Short Term Strategies
    • Long Term Strategies
  • Applied Materials
  • BUSINESS APPLICATIONS CRYSTALLINE SILICON SOLAR MANUFACTURING SYSTEM LEADING/PATENTED FLAT PANEL DISPLAY MANUFACTURING SYSTEM SUNFAB THIN FILM PRODUCT 5.7m 2 SEMI-CONDUCTOR PRODUCTION EQUIPMENT
  • FINANCIAL HEALTH 10Q-Q1 EES– Energy Environmental Group (thin film and crystalline photovoltaic) <12% of revenue> Only division with an operating loss AGS– Applied Global Services (logistics support) <24% of revenue> Silicon (SSG)– Semiconductor Wafer Fab <58% of revenue> Flat Panel Display manufacturing Equipment <6.4% of revenue>
    • Market Strategy
    • Growth Strategy
    • Patents/technological investments
    • Partnerships/Acquisitions
    • Government tax breaks (A.R.R.T.A)
    • Developing cutting edge nanomanufacturing tools
    • Innovative Technologies (high efficiency/high output thin film)
    • Technological facilities (Solar Power Research in Xi’an China and Alzenau, Germany)
    Current Strategy
    • P.E.S.T.
    • Porter’s Five
    • Political
      • Governments are major drivers of alternative energy—including Solar
      • Feed-in tariff
    • Economic
      • The World economic crisis is affecting the solar industry
      • Expensive technology, but tax incentives offset costs
    • Social
      • Carbon footprint reduction
      • Environmental consideration for all purchases
    • Technological
      • Alternative energy production becoming required
      • Efficiency and Cost effectiveness
      • Break through in alternative power transmission
    • Rivalry
      • Infant & Growing Industry – High Rivalry in Future
      • Current economy may shake out many new entrants.
    • Substitutes:
      • Electricity Doesn’t Have a Substitute
      • Source of Power Does (Coal, Wind, Solar, Oil, Hydropower, Bio-Fuel Nuclear etc.)
    • Barriers to Entry
      • No Industry Production Standard/Lack of Compatible Technologies
    • Buyer & Supplier Power (Two Forces - Moderate)
      • Applied Materials Can Manufacture It’s Own Supply.
      • Hard to Find Financing for Consumers
      • Lack of Consumer Awareness of Where and How to Purchase
    Environmental Analysis
  • Considerations for Future Strategy
    • Trends
      • Climate Change
      • Evolving Solar Technology
      • Developing Countries Leapfrogging Technology
    • Uncertainties
      • Technological Advancement
      • Oil Prices and Alternative Energy
      • Government Legislation
    • Stakeholders
      • Government
      • Auto/Construction/Farming Industries
      • Consumers
  • Three Scenarios
    • Scenario 1: “Sunny days are here again”
      • New solar power cells have achieved at least 80% efficiency
      • Cost per peak watt hour is below $3.00
      • 65% of homes and businesses by 2025 are powered solely by solar power
      • US exports excess solar energy overseas
    • Scenario 2: “Running around in circles”
      • The depression of 2007 has lasted longer than expected
      • The consumer loses interest in the benefits of solar
      • Governments are still investing in green tech and innovation but the pace of progress slowed the movement toward greater efficiency and energy costs
    • Scenario 3: “It’s as hot as hell in here”
      • The intense resistance of oil companies win the market over
      • The U.S. government stops all funding for alternative energy
      • Innovation is non-existing and the U.S. public is more dependent on foreign oil than ever.
  • Short Term Strategies
    • Provide Financing Solutions in Solar Industry
      • Partner with Banks for transferring of funds
      • Partner with solar panel installers to provide financing
    • Enter Solar Panel Installations
      • Partner/Purchase Solar Panel Installers to Gain Access to Consumers
    • Continue to Purchase Competitors and Patents (already successful strategy)
    • Continue Building Solar Farms
  • Long Term Strategies
    • Improve the Efficiency of Clear Solar Panels—One Technology, Many Applications
      • Auto Industry
      • Recreational Vehicles
      • Home Builders
      • Commercial Builders
    • Invest in Next Generation Solar Panels
      • Farm Industry Partnerships
  • Considerations for Future Strategies Imagine Playing fields Potential Playing Fields Judo Strategy Shaping the Playing Field Market Entry
  • Auto Industry Outcomes
  • Construction Outcomes
  • Farm Industry Outcomes Synthetic solar cells can be grown in tobacco plants and  E. coli  bacteria. The method offers a cheap, environmentally friendly way to make electricity
  • Questions?
  • Sources
    • LaMonica, Nartin. &quot;Transparent plastic solar cells fitted into wind.&quot;  CNET News  08 May 2009: n. pag. Web. 13 Mar 2010. <http://news.cnet.com/8301-11128_3-10235480-54.html>.
    • Semiconductor Equipment Industry Profile: Global; Mar2009, p1, 30p, 13 charts, 9 graphs http://0-search.ebscohost.com.opac.sfsu.edu/login.aspx?direct=true&AuthType=ip,cookie,url,uid&db=buh&AN=37370876&site=ehost-live
    • &quot;DATAMONITOR: Applied Materials, Inc.&quot;  Applied Materials, Inc. SWOT Analysis  (2009): 1-10.  Business Source Premier . EBSCO. Web. 13 Mar. 2010.
    • Anonymous, . &quot;Largest U.S. Solar Photovoltaic System Begins Construction at Nellis Air Force Base.&quot;  Red Orbit  23 Apr 2007: n. pag. Web. 13 Mar 2010. <http://www.redorbit.com/news/business/911267/largest_us_solar_photovoltaic_system_begins_construction_at_nellis_air/index.html 
    • Materials, Applied. &quot;Applied Materials Details Progress Towards Industrializing PV Solar.&quot;  Business Wire  21 Sep 2009: n. pag. Web. 13 Mar 2010. http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090921005896&newsLang=en
    • Applied Materials, Press Release &quot;Applied Materials Opens Advanced Solar Research and Customer Demonstration Facility in Xi’an, China.&quot;  Business Wire  26 Oct 2009: n. pag. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20091026005469&newsLang=en>.
    • Applied Materials Press Release, . &quot;REPLACING PHOTO Applied Materials Dramatically Reduces Cost and Increases Productivity of Solar Ingot Squaring with New HCT Diamond Squarer System.&quot; http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090921005499&newsLang=en . Business Wire, 21 SEP 2009. Web. 13 Mar 2010.
    • Applied Materials Press Release, . &quot;Applied Materials Details Progress Towards Industrializing PV Solar.&quot; http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090921005499&newsLang=en . Business Wire, 21 SEP 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090921005896&newsLang=en
  • Sources
    •  
    • Applied Materials Press Release, . &quot;REPLACING PHOTO Applied Materials Introduces Multiple Printing Capability for Producing Higher Efficiency Solar Cells.&quot;  Business Wire . Business Wire, 17 SEP 2009. Web. 13 Mar 2010. <http://www.appliedmaterials.com/news/solar_strategy.html
    •  
    • Applied Materials, Press Release &quot;Applied Materials Launches Strategy to Reduce the Cost Per Watt of Solar Power.&quot;  Business Wire  05 SEP 2006: n. pag. Web. 13 MAR 2010. <http://www.businesswire.com/portal/site/appliedmaterials/index.jsp?epi-content=GENERIC&newsId=20060905005378&ndmHsc=v2*A1167656400000*B1178676791000*C4102491599000*DgroupByDate*J2*N1002992&newsLang
    •  
    • Applied Materials, Press Release. &quot;REPLACING PHOTO Applied Materials Introduces Multiple Printing Capability for Producing Higher Efficiency Solar Cells CORRECTION…by Applied Materials, Inc. .&quot;  Business Wire 17 SEP 2009: n. pag. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/index.jsp?epi-content=GENERIC&newsId=20060905005378&ndmHsc=v2*A1167656400000*B1178676791000*C4102491599000*DgroupByDate*J2*N1002992&newsLang=en&beanID=547561197&viewID=news_view>.
    •  
    • Applied Materials, Press Release. &quot;Solar fab2farm™ Model Offers a Blueprint for Affordable Clean Energy and Local Economic Development.&quot;  Business Wire  10 SEP 2009: n. pag. Web. 13 Mar 2010. http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090910005290&newsLang=en
    •  
    • Applied Materials Press Release, . &quot;Applied Materials Announces IEC Certification of World’s Largest Solar Panels.&quot;  Business Wire . Business Wire, 29 May 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090910005290&newsLang=en
    •  
    • Applied Materials Press Release, . &quot;Sunfilm and Applied Materials Achieve Solar Industry Milestone with Certification of World's First Tandem Junction SunFabTM Line.&quot;  Business Wire . Business Wire, 20 APR 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090419005070&newsLang=en
    •  
    • Applied Materials Press Release, . &quot;Applied Materials Delivers Major Advances to Lower Solar Cell Cost with New HCT MaxEdge Wire Saw.&quot;  Business Wire . Business Wire, 16 MAR 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090419005070&newsLang=en
    •  
    • Applied Materials Press Release, . &quot;Applied Materials Revolutionizes Solar Module Manufacturing with Breakthrough SunFab Thin Film Line.&quot;  Business Wire . Business Wire, 20 APR 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/?ndmViewId=news_view&newsId=20090419005070&newsLang=en
    •  
    • Applied Materials Press Release, . &quot;Applied Materials to Accelerate Its Solar Roadmap with Acquisition of Baccini.&quot;  Business Wire . Business Wire, 19 Nov 2009. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/template.MAXIMIZE/menuitem.f087c2effa21866f46727587e6908a0c/?javax.portlet.tpst=ae0ed867f9c9a6e86d598c87a909a92c_ws_MX&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_vie wID=news_view&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_newsLang=en
    •  
  • Sources
    • Applied Materials Press Release, . &quot; Applied Materials Acquires HCT Shaping Systems to Expand Solar Manufacturing Solutions.&quot;  Business Wire . Business Wire, 23 Aug 2007. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/template.MAXIMIZE/menuitem.f087c2effa21866f46727587e6908a0c/?javax.portlet.tpst=ae0ed867f9c9a6e86d598c87a909a92c_ws_MX&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_viewID=news_view&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_newsLang=en&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_ndmHsc=v2*A1167656400000*B1218694464000*C1199192399000*DgroupByDate*J2*N1010872&javax.portlet.prp_ae0ed867f9c9a6e86d598c87a909a92c_newsId=20070823005282&beanID=2009756526&viewID=news_view&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken>.
    •  
    • Applied Materials Press Release, . &quot; Applied Materials Completes Acquisition of Applied Films.&quot;  Business Wire . Business Wire, 07 Jul 2007. Web. 13 Mar 2010. <http://www.businesswire.com/portal/site/appliedmaterials/index.jsp?epi-content=GENERIC&newsId=20060707005423&ndmHsc=v2*A1167656400000*B1178676791000*C4102491599000*DgroupByDate*J2*N1002992&newsLang=en&beanID=547561197&viewID=news_view>.
    •  
    • &quot;Applied Materials, Inc. &quot;  Hoover's Company Records   15 March 2010 Hoover's Company Records, ProQuest. Web.  16 Mar. 2010.
    • &quot;Applied Materials opens expanded FPD and solar equipment manufacturing facility in Taiwan. &quot;  Telecomworldwire   11 Mar. 2010: ABI/INFORM Trade & Industry, ProQuest. Web.  21 Mar. 2010.
    • Datamonitor Semiconductor Equipment Industry Profile: Global; Mar2009, p1, 30p, 13 charts, 9 graphs http://0-search.ebscohost.com.opac.sfsu.edu/login.aspx?direct=true&AuthType=ip,cookie,url,uid&db=buh&AN=37370876&site=ehost-live
    •  
    • &quot;The Photovoltaic Thin Film Study - Market Overview out Now. &quot;  Business Wire   27 June 2008  ProQuest Newsstand, ProQuest. Web.  21 Mar. 2010.
    •  
    • “ GE Sees Bright Future for Thin Film Solar Technology; Increasing Investment in Promising Thin Film Photovoltaic Technology; Engaging Global Resources to Deliver Best-in-Class Product” ENP Newswire 19 march 2010 : http://0-global.factiva.com.opac.sfsu.edu/ga/default.aspx
    •  
    • Anonymous, . &quot;Applied Materials: It's Crystalline Clear the Amorphous Business Isn’t Working.&quot;  Seeking Alpha 16, MAR 2010: n. pag. Web. 23 Mar 2010. <http://seekingalpha.com/article/193870-applied-materials-it-s-crystalline-clear-the-amorphous-business-isnt-working?source=feed>.
    •  
    • Humphries, Mathew. &quot;Konarka creates transparent solar cells for windows.&quot;  Geek.com  11 Mar 2010: n. pag. Web. 23 Mar 2010. <http://www.geek.com/articles/gadgets/konarka-creates-transparent-solar-cells-for-windows-20090511/>.