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

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  • Stategic Analysis
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  • AARTA– American Recovery & re-investment AcR Stategic Analysis
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  • Applied Materials Strategy Analysis Presentation

    1. 1. SHAYNE ARMSTRONG SETH BREEDLOVE ALBERT KING
    2. 2. Agenda <ul><li>AMAT Background </li></ul><ul><li>Current Strategy </li></ul><ul><li>Environmental Analysis </li></ul><ul><li>Key Considerations for the Future </li></ul><ul><li>Scenario Analysis </li></ul><ul><li>Short Term Strategies </li></ul><ul><li>Long Term Strategies </li></ul>
    3. 3. Applied Materials
    4. 4. 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
    5. 5. 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>
    6. 6. <ul><li>Market Strategy </li></ul><ul><li>Growth Strategy </li></ul><ul><li>Patents/technological investments </li></ul><ul><li>Partnerships/Acquisitions </li></ul><ul><li>Government tax breaks (A.R.R.T.A) </li></ul><ul><li>Developing cutting edge nanomanufacturing tools </li></ul><ul><li>Innovative Technologies (high efficiency/high output thin film) </li></ul><ul><li>Technological facilities (Solar Power Research in Xi’an China and Alzenau, Germany) </li></ul>Current Strategy
    7. 7. <ul><li>P.E.S.T. </li></ul><ul><li>Porter’s Five </li></ul><ul><li>Political </li></ul><ul><ul><li>Governments are major drivers of alternative energy—including Solar </li></ul></ul><ul><ul><li>Feed-in tariff </li></ul></ul><ul><li>Economic </li></ul><ul><ul><li>The World economic crisis is affecting the solar industry </li></ul></ul><ul><ul><li>Expensive technology, but tax incentives offset costs </li></ul></ul><ul><li>Social </li></ul><ul><ul><li>Carbon footprint reduction </li></ul></ul><ul><ul><li>Environmental consideration for all purchases </li></ul></ul><ul><li>Technological </li></ul><ul><ul><li>Alternative energy production becoming required </li></ul></ul><ul><ul><li>Efficiency and Cost effectiveness </li></ul></ul><ul><ul><li>Break through in alternative power transmission </li></ul></ul><ul><li>Rivalry </li></ul><ul><ul><li>Infant & Growing Industry – High Rivalry in Future </li></ul></ul><ul><ul><li>Current economy may shake out many new entrants. </li></ul></ul><ul><li>Substitutes: </li></ul><ul><ul><li>Electricity Doesn’t Have a Substitute </li></ul></ul><ul><ul><li>Source of Power Does (Coal, Wind, Solar, Oil, Hydropower, Bio-Fuel Nuclear etc.) </li></ul></ul><ul><li>Barriers to Entry </li></ul><ul><ul><li>No Industry Production Standard/Lack of Compatible Technologies </li></ul></ul><ul><li>Buyer & Supplier Power (Two Forces - Moderate) </li></ul><ul><ul><li>Applied Materials Can Manufacture It’s Own Supply. </li></ul></ul><ul><ul><li>Hard to Find Financing for Consumers </li></ul></ul><ul><ul><li>Lack of Consumer Awareness of Where and How to Purchase </li></ul></ul>Environmental Analysis
    8. 8. Considerations for Future Strategy <ul><li>Trends </li></ul><ul><ul><li>Climate Change </li></ul></ul><ul><ul><li>Evolving Solar Technology </li></ul></ul><ul><ul><li>Developing Countries Leapfrogging Technology </li></ul></ul><ul><li>Uncertainties </li></ul><ul><ul><li>Technological Advancement </li></ul></ul><ul><ul><li>Oil Prices and Alternative Energy </li></ul></ul><ul><ul><li>Government Legislation </li></ul></ul><ul><li>Stakeholders </li></ul><ul><ul><li>Government </li></ul></ul><ul><ul><li>Auto/Construction/Farming Industries </li></ul></ul><ul><ul><li>Consumers </li></ul></ul>
    9. 9. Three Scenarios <ul><li>Scenario 1: “Sunny days are here again” </li></ul><ul><ul><li>New solar power cells have achieved at least 80% efficiency </li></ul></ul><ul><ul><li>Cost per peak watt hour is below $3.00 </li></ul></ul><ul><ul><li>65% of homes and businesses by 2025 are powered solely by solar power </li></ul></ul><ul><ul><li>US exports excess solar energy overseas </li></ul></ul><ul><li>Scenario 2: “Running around in circles” </li></ul><ul><ul><li>The depression of 2007 has lasted longer than expected </li></ul></ul><ul><ul><li>The consumer loses interest in the benefits of solar </li></ul></ul><ul><ul><li>Governments are still investing in green tech and innovation but the pace of progress slowed the movement toward greater efficiency and energy costs </li></ul></ul><ul><li>Scenario 3: “It’s as hot as hell in here” </li></ul><ul><ul><li>The intense resistance of oil companies win the market over </li></ul></ul><ul><ul><li>The U.S. government stops all funding for alternative energy </li></ul></ul><ul><ul><li>Innovation is non-existing and the U.S. public is more dependent on foreign oil than ever. </li></ul></ul>
    10. 10. Short Term Strategies <ul><li>Provide Financing Solutions in Solar Industry </li></ul><ul><ul><li>Partner with Banks for transferring of funds </li></ul></ul><ul><ul><li>Partner with solar panel installers to provide financing </li></ul></ul><ul><li>Enter Solar Panel Installations </li></ul><ul><ul><li>Partner/Purchase Solar Panel Installers to Gain Access to Consumers </li></ul></ul><ul><li>Continue to Purchase Competitors and Patents (already successful strategy) </li></ul><ul><li>Continue Building Solar Farms </li></ul>
    11. 11. Long Term Strategies <ul><li>Improve the Efficiency of Clear Solar Panels—One Technology, Many Applications </li></ul><ul><ul><li>Auto Industry </li></ul></ul><ul><ul><li>Recreational Vehicles </li></ul></ul><ul><ul><li>Home Builders </li></ul></ul><ul><ul><li>Commercial Builders </li></ul></ul><ul><li>Invest in Next Generation Solar Panels </li></ul><ul><ul><li>Farm Industry Partnerships </li></ul></ul>
    12. 12. Considerations for Future Strategies Imagine Playing fields Potential Playing Fields Judo Strategy Shaping the Playing Field Market Entry
    13. 13. Auto Industry Outcomes
    14. 14. Construction Outcomes
    15. 15. 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
    16. 16. Questions?
    17. 17. Sources <ul><li>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>. </li></ul><ul><li>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 </li></ul><ul><li>&quot;DATAMONITOR: Applied Materials, Inc.&quot;  Applied Materials, Inc. SWOT Analysis  (2009): 1-10.  Business Source Premier . EBSCO. Web. 13 Mar. 2010. </li></ul><ul><li>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  </li></ul><ul><li>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 </li></ul><ul><li>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>. </li></ul><ul><li>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. </li></ul><ul><li>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 </li></ul>
    18. 18. Sources <ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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>. </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul>
    19. 19. Sources <ul><li>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>. </li></ul><ul><li>  </li></ul><ul><li>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>. </li></ul><ul><li>  </li></ul><ul><li>&quot;Applied Materials, Inc. &quot;  Hoover's Company Records   15 March 2010 Hoover's Company Records, ProQuest. Web.  16 Mar. 2010. </li></ul><ul><li>&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. </li></ul><ul><li>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 </li></ul><ul><li>  </li></ul><ul><li>&quot;The Photovoltaic Thin Film Study - Market Overview out Now. &quot;  Business Wire   27 June 2008  ProQuest Newsstand, ProQuest. Web.  21 Mar. 2010. </li></ul><ul><li>  </li></ul><ul><li>“ 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 </li></ul><ul><li>  </li></ul><ul><li>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>. </li></ul><ul><li>  </li></ul><ul><li>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/>. </li></ul>

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