Arthur Januszkiewicz Silvan B. MeierSebastian Lachenit Vinzent Karger
CompanyProfileEmployees (2010) 20.000Turnover 2.9 bnHeadquarter WuxiFounded inby solar Dr. Zhengrong Shi2001Public traded ...
Where is SuntechActive?• Design, Development, Marketing & Manufacturing ofsilicon based PV products• Worldwide residential...
Strategic Intent• Suntech’s top prioritiesTechnology &superior valueHigh quality &low costCost & scaleleadership
Focused efforts on internal developmentsFocus on enduring capabilitiesStrategic acquisitions & Joint Ventures- Increasing ...
Internal Environment• Strong Market Growth Outlook• Leading Market Position• Leading R&D Capabilities• Quality Commitment•...
Growth prospectives
What’s Suntech’sStaging?• Solar Cells– Solar solutions: modules, systems, systemsintegrations• Staggering Speed– Productio...
Key Mergers &Acquisitions• Aggressive targeting of suppliers andmanufacturers of solar technology• KSL-Kutler, increase ex...
Cooperative Strategy AnalysisPartnerships & Alliances• Strengthen core business, solar developments,enhance R&D, and secur...
International Strategy Analysis• Adapting to local market differences– Building relationships with customer base– Distribu...
International Strategy Analysis• Tapping optimal locations– Leverage locations with access to low costresources and clean ...
Problems accure in 2008
Porters 5-Forces ModelThreat of EntryModerateThreat of BuyersStrongThreat of SubstitutesStrongThreat of SuppliersStrongRiv...
ProblemsSuntech announced insolvency in march 2013• High competition  less revenue• EU and US accused suntech and chinese...
• “What (Suntech) has done is increase supply to the market so much, that theyreally almost can’t sell anything at a profi...
Cultural Administrative Geographic EconomicCaring aboutenvironment(green movement)governmentalinterventions:weather Solar ...
RecommendationsExpand Capacity, Reduce Supplier Dependencies• Demand continues to increase, as costs are reducedand effici...
Recommendations• Engage gatekeepers for new energyinfrastructure and government subsidies• Advocate renewable energy and c...
QUESTIONS?
Suntech strategic analysis
Suntech strategic analysis
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Suntech strategic analysis

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Porter's five, Cage framework

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  • BUS 890: Culminating Experience in Strategic Management, FALL 2010 The culminating project is an in-depth case analysis of Suntech Power Holdings Co., Ltd. The analysis includes multiple concepts from the course to help explain the strategies, actions and performance of the company.
  • Suntech strategic analysis

    1. 1. Arthur Januszkiewicz Silvan B. MeierSebastian Lachenit Vinzent Karger
    2. 2. CompanyProfileEmployees (2010) 20.000Turnover 2.9 bnHeadquarter WuxiFounded inby solar Dr. Zhengrong Shi2001Public traded company in 2005 Volatile oil prices fueled concerns forrenewable energy12 million panels in 80 countries Production capacity increased to1400MW in 2010
    3. 3. Where is SuntechActive?• Design, Development, Marketing & Manufacturing ofsilicon based PV products• Worldwide residential, commercial, industrial, and publicutility applications and systems integration services• Key solar energy markets– US, Germay, China, Australia, Spain, Middle East,South Korea, Japan, Italy
    4. 4. Strategic Intent• Suntech’s top prioritiesTechnology &superior valueHigh quality &low costCost & scaleleadership
    5. 5. Focused efforts on internal developmentsFocus on enduring capabilitiesStrategic acquisitions & Joint Ventures- Increasing efficiency- R&D to increase cellefficiency- Cost reductions- Capacity expansion- superior value- Leveraging lowcost prod.- Creating scale economies- Rapid innovation- Increasing efficiency- R&D to increase cellefficiency- Cost reductions- Capacity expansion- superior value- Increasing efficiency- R&D to increase cellefficiency- Cost reductions- Capacity expansion- superior value- Corporate umbrella forover 36 differentsubsidiaries in operation- strategic acquisitions andinvestmentsWhat’s Suntech’s Economic Logic?
    6. 6. Internal Environment• Strong Market Growth Outlook• Leading Market Position• Leading R&D Capabilities• Quality Commitment• Strong Supplier Relationships• Broad Product Portfolio• International Management Team
    7. 7. Growth prospectives
    8. 8. What’s Suntech’sStaging?• Solar Cells– Solar solutions: modules, systems, systemsintegrations• Staggering Speed– Production capacities have doubled every yearsince 2004
    9. 9. Key Mergers &Acquisitions• Aggressive targeting of suppliers andmanufacturers of solar technology• KSL-Kutler, increase expertise inmanufacturing• Luoyong China Silicon, secure silicon suppliesfor solar cells
    10. 10. Cooperative Strategy AnalysisPartnerships & Alliances• Strengthen core business, solar developments,enhance R&D, and secure supplies– University of New South Wales: solar cell efficiency– Calisolar Inc. to secure solar silicon manuf. facility– Secure development of smart panel technology
    11. 11. International Strategy Analysis• Adapting to local market differences– Building relationships with customer base– Distribution and subsidies• Exploiting economies of global scale• Promote adoption of solar power• Operate manufacturing, distribution and sales offices worldwide• Exploiting economies of global scope– Deliver same quality and level of service regardless of location
    12. 12. International Strategy Analysis• Tapping optimal locations– Leverage locations with access to low costresources and clean energy mandates• Maximizing knowledge transfer– 36 subsidiary organizations and 13 sales offices– Manufacturing and R&D locations in China &Europe
    13. 13. Problems accure in 2008
    14. 14. Porters 5-Forces ModelThreat of EntryModerateThreat of BuyersStrongThreat of SubstitutesStrongThreat of SuppliersStrongRivalryStrong
    15. 15. ProblemsSuntech announced insolvency in march 2013• High competition  less revenue• EU and US accused suntech and chinese solar industry ofprice dumping and unfair subsidies.• Selling solar panels below costs in order to gain market share• financial crisis  unpaid customer bills• Miscalculation on ROI (bonds for investors)• Thought globally, did not act locally
    16. 16. • “What (Suntech) has done is increase supply to the market so much, that theyreally almost can’t sell anything at a profit now,”• “Suntech, as a private firm, went too fast in its expansion,” said Liu Wenping, apartner in Shanghai-based solar investment consulting firm Sapphire Capital.• “The founder, with the role of scientist-entrepreneur, didn’t have the experienceto manage such a big company with tens of thousands of workers.”
    17. 17. Cultural Administrative Geographic EconomicCaring aboutenvironment(green movement)governmentalinterventions:weather Solar panel is seen asan investment1) Subsidies forproduction (China)2) Subsidies forusage (EU)2) Tariffs (USA, EU)CAGE framework: solar industry
    18. 18. RecommendationsExpand Capacity, Reduce Supplier Dependencies• Demand continues to increase, as costs are reducedand efficiencies increase• Rapidly expand into new facilities that generateneeded capacity• Invest into sunny regions with less governmentinteraction• Acquire/Partner with silicon suppliers to reduce supplyshortages and obtain cost advantages
    19. 19. Recommendations• Engage gatekeepers for new energyinfrastructure and government subsidies• Advocate renewable energy and committingresources to gain favorable outcomes
    20. 20. QUESTIONS?

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