Lecture 15: Technology – Addendum

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Source: Schmenner (2004)

DEPARTMENTAL TASKS AND TECHNOLOGIES

Mechanistic

Strategic Planning

• Imagine that you are the CEO of a company that manufactures solar PV modules.

• I will provide some information about the industry, and then either in groups or individually I will ask you to formulate a strategy for the company.

Solar Photovoltaic Value Chain

Engineering, Procurement and Construction

Operation and Maintenance

Source: First Solar (2010)

Some Expectations in 2010 about the Solar Photovoltaic Industry:

• There is likely to be an over-supply in the industry in 2010

• Module average selling prices (ASPs) were expected to fall by 20% or more in 2010

• Module manufacturers were expected to be hit hardest

• Downstream players (system integrators, project planners, installers, operators and those with access to credit) were expected to be more insulated

Questions

• If you are the CEO of a module manufacturer how might you respond?– What types of issues/factors do you need to

take into consideration?– How easy is it to assess – or analyse – those

factors?

Possible Factors to Consider (Task Variety in the sense may not have had to consider them before!)• Take-overs - which firms? How?

– Future interest rates? Future stock-market prices?• Organic growth – how? Employees? Time to grow

business?• Alliances?• Future demand – home and abroad, different market

segments– Regulations, subsidies, and WTO rulings

• Competitors’ responses• Investments in new facilities at home – where? How?

Employees• Investments abroad – where? How? Employees?

Question

• How would you change your strategy?

Solar PV Firms’ Responses

• Acquisitions (US SunPower) or establishment (German Q-Cells) of down-stream entities

• Establishment of production facilities in Malaysia, but greater role of home-country facilities for Q-Cells compared to SunPower

SunPower: A Leading US Firm

• 2006 acquisition of PowerLight, • then acquisitions in Italy and Australia

– substantially increased presence in Europe and Asia, and downstream presence in both commercial and utility-scale projects.

• 2010 acquisition of SunRay Renewable Energy,– downstream strategy across all segments and

geographies where solar is thriving. – Founded in 2007, SunRay is a developer of power

plants in Europe and the Middle East; it has operations across six countries, and is skilled in project finance, large-scale power plant development, permitting, and transmission.

Q-Cells: A Once Leading German Firm

Source: Q-Cells 2009 Annual Report

Technology and Interaction

• Technology can also be thought of as ways in which groups of individuals interact.

Interdependence and Co-ordination Mechanisms