GREENoneTEC Company analysis
GREENoneTEC Company was initially a one-man company that was developed to manufacture flat plate solar thermal collectors for water heating purposes. It aimed at producing high quality products for the end users, and used the research and development strategy to achieve a competitive advantage. Despite this, the introduction of the Chinese cheaper low quality products threatened the production and existence of the GREENoneTEC products. Based on this, one can deduce that one of the prime strategic opportunities that the company’s management has include the ability of the company to diversify its product in other markets. Its ability to deviate from the market norms and concentrate on research and development as well as production gave it an upper hand over known brands since it was able to sell its brands to other leading solar companies. This option enabled the company to produce high volume under the economies of scale, enabling them to produce and sell high quality products at low prices.
The problems that the company’s management is facing include the transition issues being brought about by the falling prices of the photovoltaics. Competition was another challenge that the company was bound to face as well as the effects of the chine products, which had compromised quality. The firm is asking, how will we position our products to outdo the Chinese market? What are we going to do with the falling photovoltaic prices? The management also faces issues in terms of how to protect their intellectual property in China.
Several environmental trends are affecting the GREENONE TEC Company. Economically, the company had been faring well until the Chinese substitutes affected the company’s product performance. The company’s products are highly priced as compared to the Chinese products, affecting the company’s production trend. At the same time, the introduction of low products in terms of the social environment is well accepted in America and in other parts of the world. Technologically, the company has been able to maintain high quality production because of its innovation and research and development. This has benefited the company since it is able to adapt to the technological changes in the industry.
The external factors that affect the company include the opportunities and threats. One of the opportunities that the firm have is the ability to occupy the markets that other firms in the industry are leaving for example when the German decided to discontinue offering their products to the market, the company took the opportunity to fill the gap and offer the supply instead. At the same time, the firm has the opportunity of diversifying to other areas as well as in new product range. This would ensure increased competitive advantage over others in the industry. Threats that the company faces include the falling prices of the photovoltaic products, thus risking the prices of the product and the capability of the consumer to make a buying decision. At the same time, the changing government policies as well as the substitution affect affects the company effectiveness.
In terms of industry analysis, the company competes in the manufacturing industry as well as in the service sector. This is exhibited by the firms manufacturing of solar thermal collectors as well as the KIOTO photovoltaics. The customer base is evenly distributed across the globe with the main concentration of the customers being situated in the US. The market segment is not well discerned as the market is distributed globally. Competitors for the flat collector assembly include the sun master, Roth, Winkler, Mintec and Kingspan.
Porter’s five forces
Using the porter’s five forces, the firm has low supplier power. Initially, the company had a high supplier power since it was trying to use the available supplier to deliver its products, but the current situation with supplier concentration works for the organization. Despite this fact, there is supplier differentiation in the product output and no threat of forward integration.
Since the firm has positioned itself as a brand leader, there is little threat of entrant since the company is able to mass produce thus achieving the economies of scale and cost advantage. The company has distribution channels well-structured and there are limited threats by the existing producers except the Chinese firms who are selling cheap products. There is at the same time a threat of substitute especially from the Chinese firms who are offering cheaper and less quality products. The implication of the substitute is that they will compromise the quality of the existing products as well as affect the market prices. The bargaining power is high especially in the solar energy since the firm is acting as a monopoly in the market. The discontinuation by the German to produce solar energy gave the company a competitive advantage since it took the existing supply grids. A key proportion of the market encompasses rivalry among firms. The Chinese firms are producing cheaper and less quality products as compared to the company. This is likely to create barrier to entry especially to the Chinese market where labor and cost of production are cheap. However, on the manufacturing of the flat solar designs, there is low rivalry since very few companies’ embraces that technology.
In the internal analysis of the company the company possesses both strengths and weaknesses. One of the firm’s strength is its ability to produce innovative products that are of high quality in the market. The company has the advantage of producing its own solar power to distribute to industries and other private holdings. At the same time, the company has unique products that differentiate themselves from those of the competitors, creating a unique brand in the market. As a result, customer loyalty is created since the products and services have high quality.
Weaknesses include the high costs of production compared to the reducing prices in the market brought about by the entrance of the Chinese cheap products. The firm’s capability to produce high quality solar collectors acts as a competitive advantage over the others in the market. However, this fact has been delimited by the rising costs of production materials and the incumbent cheap products from the Chinese and other markets. This leaves the firm in a dilemma – whether to compromise on quality, or brand itself as a quality producer in the market. The firm’s financial position is stable as the last reported net profit indicated an increase in profits. The balance sheet also shows an increasing trend from the last reported figures, indicating a growth in the company’s performance. Value chain has been created by the company especially upon the buying or the German solar energy factory.
Analysis of Business-level Strategy
Based on the performance of the company, GREENoneTEC Company is a market leader in the solar panels and power production. The company has positioned itself as a market leader in quality production. Though this includes an added cost, the company has been able to brand itself differently from the competitors. The high quality products enable an increased usage of the product, in this case the solar collectors, thus enhancing a value for money strategy.
Analysis of Corporate-level Strategy
Having started the manufacturing of the flat plate solar thermal collectors, the company decided to devise strategies to start manufacturing the photovoltaics (KIOTO). The company has also in addition to manufacturing the photovoltaics for private and industrial buildings erected solar power stations to help improve its business base. These products have been able to add value to the whole manufacturing and marketing chains in that the erection of power stations in 2012 after the intention of other companies including Siemens and ABB, and negotiating grid lines, permissions and insurance, the company was able to incorporate its other product- the solar collectors to the network that had been established. Synergy was created as a result of the construction of the various power stations as the company could then sell its products in the new market that was established to complement each other.
Following the performance of the firm and the market trend, the GREENoneTEC Company has the opportunities of differentiating itself from the competitors by offering unique branded products. The high quality in this case is likely to create a brand name, thus improving the customer base. To counter the cheap products, the firm should add devise strategies that would improve the products and at the same time add value to the product. This means that the firm should aim at providing differentiated products from those of the competitors, while at the same time, market segmenting its product. It can also diversify its production lines, partner with other companies so that its production and distribution costs can reduce as well as the uncertain costs.