Solar Business Organization - Term Paper Example

? Free Table of Contents Table of Contents 2 Executive Summary 3 Mission ment 4 Introduction 5 Overview 5 About the Company 5 Body 6 Country Choice 6 Political 8 Economic 9 Social 10 Physical 11 Business Strategy 12 Barriers to Business 13 Change in Indian Business Environment 13 Fluctuations in Indian Currency 14 Currency 14 Labor Market 15 Corruption 15 Conclusion 16 References 17 Executive Summary From the very beginning of the 21st century, there has been tremendous awareness amongst the masses all over the world for the process of focusing on the sustenance and preservation of the natural reserves of the Earth and thereby maintaining the diversified natural habitats and resources of the planet Earth. This has automatically resulted in the creation of needs among various technological companies to look for alternative sources of energy in order to focus on building next generation technological products which will be appealing to the highly aware eco friendly customers. Identifying this particular need, various companies around the world are focusing on developing products of new technology from alternative sources of energy. This has automatically led to the generation of evolution of hybrid automobiles, increased usage of wind and solar power in terms of developing products and machineries, etc. Talking in terms of new technology, it can be said that for the purpose of fulfillment of electricity needs of various products of commercial and domestic categories, the solar energy is often preferred because of unlimited supply and constant availability and very little harmful impact on the environment. Because of the high costs of availing new alternative forms of technology, the market for solar product is tremendously large. Because of the large amount of the entire Indian population who are staying in the remotely located towns and villages of India, there is a huge demand for solar technology based products in the developing and emerging market economies like India for the purpose of providing sustainable energy and lighting solutions in multiple domestic rural households (Bhave & Chatterjee, “Solar power on every rooftop”). SunGlo Corporation can focus on the process of fulfilling the energy and lighting requirements of this emerging market by its widely diversified product portfolio which comprises of both domestic and commercial focused product offerings. For this purpose, the paper evaluates the market of India from the points of political, economical, physical, social factors as well as the various risks and potential barriers and threats that can possibly arise in the Indian market. Mission Statement The vision and mission statements of a company highlights the company’s long term and short terms goals over the span of next two, five and even 10 years. It has to be mentioned that the vision of the company talks about the company’s targets for the longer period while the mission talks about small milestones and targets that the company needs to achieve in terms of attaining its long term vision. The vision statement of the company is to focus on producing solar technology products which has high standards of quality and thereby meeting the global demand for products of solar technology. The mission statement of the company is to cater to the solar technology products demands of the upcoming and emerging market of the new economies, thereby focusing on the process of the need fulfillment of the new markets. The mission of the company includes the point of investing in the setting up of a production plant in an emerging economy like India, China etc and thereby developing high quality solar products of global standards which will help the company to cater to the needs of the developed and other developing economies of the Asian region and other parts of the world. Introduction Overview The world of the 21st century, much like that of the past is moving at a rapid pace with a smooth and sustainable rate of overall developments happening in various parts of the world. However, the technological developments of the last decade has mostly happened and developed in line with the following of the energy guzzling models, thereby marking a tremendous depreciation of exhaustible natural resources and deposits of energy of exhaustible nature. For an economy, region or nation to grow and evolve in the international arena, achieving a significant rate of growth is very important. That particular growth rate is only achievable if the economy or nation is focused on increasing the efficiency of its private and public enterprises by the process of developing of new tools and technology that greatly enhances the level of productivity and output of the nation as a whole. At the current scenario, there is tremendous focus by the companies to look for alternative and sustainable sources of energy. This has created the need of various new technology based products which are of sustainable nature. Hence there has been a tremendous growth of demand for products based on wind and solar technology. About the Company SunGlo Company is a company, which is headquartered in the United States. The company was founded by a team of technological experts who trace their roots to their academic days at Massachusetts Institute of Technology. The company’s main product offerings comprises of the solar appliances which falls in both the domestic as well as commercial category. The company’s product portfolio can be categorized on the basis of their price bands. In the low end price bands, the company’s product offerings comprises of products that are targeted towards the end consumers of the market like individual customers and consumers. The products offerings in this category comprise of the solar lighting solutions like solar lamps, solar torch. Other products in this price band comprises of rooftop solar shields, solar bags for charging gadgets on the go, solar powered cooking solutions etc. In the medium range price bands, the company has product of commercial categories like industrial and commercial solar lighting solutions. The product offering also comprises of the commercial dish washing, dry cleaning and cooling solutions which runs by solely using the solar technology. In the large range price bands, the company has focused on the process of designing luxury category products like solar yachts, solar boats and other on ground vehicles which runs on the basis of solar powered battery technology. Talking about the company’s growth ability and size of market, it can be said that the company at the present times, holds around 15% market share in the entire solar market of the US. In terms of international presence, it can be said that the company has presence in some of the European markets, along with significant manufacturing abilities. Body Country Choice The country of India at the current times has become one of the most fascinating and highly interesting markets for the organizations of the West for the purpose of attaining significant growth in their businesses. The slowdown that has been initiated since the middle of 2008 with busting of the US housing bubble and its consecutive impact on the world’s financial markets triggered the need for various western companies to look for better markets that promises growth opportunities in the business. The strong financial parameters, rules and regulations that are being placed on the Indian economy and its banking and financial sectors by the Reserve Bank of India, Planning Commission Of India and various other government policy monitoring bodies of India has helped to keep the country getting insured in terms of getting impacted negatively by the global credit crisis and financial crunch. The market’s ability to stay more or less unaffected from the deep financial punches of the global nature has significantly created a huge appeal to the producers, manufacturers and marketers around the world. Also, with the increasing investment in various sectors for the purpose of developing the economy of India, India’s population is achieving a significant rise in income, more specifically in terms of disposable income. These factors have widely contributed in terms of generating the appeal for the Indian market as a prospect for the global arena. However, it has to be taken into consideration that despite the rise of the Indian economy, a majority of the population stays in villages, which have significant demand for electrical and energy solutions of alternative nature (IANS, “India can meet energy needs sans N-power: Study”). Hence, it can be said in these regards that the Indian market produces a significant amount of growth prospects for the company’s business. The company can target the rural market of India with its low cost lighting solution which will replace the need of electricity powered lighting solutions in these areas and thereby contribute to the process of eradicating darkness in the Indian country side, where the population has low per capita income and purchasing power parity (PPP). Political India being one of the largest democratic countries of the world has a very interesting political scenario as compared to the West. India as a developing and a surging nation has undergone a tremendous amount of change in its political scenario as compared to the old times of hostile politics promoted by various regional political parties in the past, that seriously dented the possibility for multinational and foreign companies to run a profitable and successful business venture in India. The change in the political scenarios can be attributed to the fact of the rise of education, urbanization as well as self awareness of the rising number of middle class population in various parts of the country who focus on getting their needs fulfilled by significantly exerting the power of having their voices heard in various public and online forums and thereby creating significant amount of pressure on the government or political parties (Deo, “Politics in the Time of Anna”). The Indian government focused on the process of promoting significant amount of growth reforms and hence has concentrated on the process of developing the infrastructure as well as clearing several other policy barriers of the country, to promote smooth growth and emergence of the business environment and scenario in India (Business Standard, “Govt. to keep reform pot boiling amid political heat”). Talking in terms of the government’s initiative to promote alternative sources of energy, it can be said that the government is focusing on the process of diffusion of innovative solar technology to the masses by the offering of subsidies in regards to their energy consumption (Singha, “Subsidy boost for solar power systems in homes”). However, it can be said that the rising number of macro and micro issues that are impacting the business as well as the domestic environments of the country like the rising inflation rates, interest rates, price fluctuation of liquid energy are forwarding the Indian economy towards an election process around the year 2014. Economic From the economic point, recently the economy of India is facing a significant amount of challenges from key micro variables like the interest rates, high inflation, as well as low rates of growth of the economy. The Indian economy is supposed to grow at a rate of around 5.5 % on a year on year basis, while in the long terms it may achieve a growth rate of over 7% (Mehta, “Indian economy likely to grow in the range of 5.5% to 6%: Moody's”). The economy is also facing a stalemate situation due to the existent of high interest rates as well significantly high rates of inflation. This has contributed in a prime way to trigger a slowdown in terms of attracting investments in the economy, and thereby resulted to the process of attaining a significant level of investment (PTI, “RBI may be able to cut interest rate as inflation eases: P Chidambaram”). The fluctuation in the oil prices of India was also impacting the growth cycle of India in the recent times, as various potential car buyers were focusing on reconsidering their decisions of vehicle purchase and thereby creating a shortfall of demand in the banking as well as the auto industry (TNN, “Over Re 1 cut in petrol prices spreads joy”). Another important factor that has to be taken into account is the limiting number of availing of LPG connections per household in India, which will significantly impact a record of over 100 million households in India (Modi, “Sorting out the LPG mess” ). So, analyzing the country of India from the economic point of view, it can be said that the though there are significant amount of challenges that are currently existent in the terms of high inflation and interest rates but there are tremendous growth opportunities as well. The significant limitation of the process of availing LPG connections in India will automatically create the needs to look for alternative sources of energy to cater to the domestic needs of millions of Indian households, which will automatically trigger the demand and rise of sale of the company’s low price band cooking solutions to the Indian market. Social Though India is an emerging market, yet the social inequalities and inefficiencies that used to exist in the previous decade still exists in the recent times. As per information, published in the first report of International Labor Organization, in the year 2012, it has been stated that India has lagged behind in the process of fulfilling its expectations and goals in regards to providing social security protection to the masses (PTI, “India needs to do more in social security space”). However, in an attempt to promote social welfare and thereby diffuse the benefits of the economy’s progress to the entire society including the population at the bottom of the pyramid, the government has rolled out various social welfare packages and programs like the national rural employment guarantee act (NREGA) scheme, health schemes as well as a bunch of social welfare schemes. Also, the government has focused on the successful implementation of Aadhaar project, which will help in the process of implementation and diffusion of various social welfare programs and thereby promote overall growth in the public welfare programs in areas of housing, education, healthcare and even food subsidies (Economic Times, “NIPFP study: 52.85 per cent returns expected from Aadhaar project”). Since, the product offerings of SunGlo which are mostly targeted towards the domestic and individual purposes fall mostly under the low price bands, the company can aid the country in the process of achieving a sustainable economic development, while significantly gaining market share in the Indian solar market. In an effort to increase the chances of product success in this particular new market with tremendous potential, the company should focus on going into partnerships with the regional governments for providing the masses with alternate sources of power and thereby cater to the extra energy needs of the Indian masses. Physical From the physical point of analysis, it can be recommended that India as a fast emerging market has achieved significant amount of stability as the geographical boundaries of India provides the country with a significant amount of physical advantage. But, it has to be mentioned that the emerging economy is still vulnerable to various factors that are beyond human control. A critical factor that is beyond the control of human efforts is the threat arising from natural calamities. Though the nation is located on a comparatively stable landmass as compared to that of other countries around the globe, yet natural calamity based factors like flood, earthquakes and other negative impacts of nature are hard to predict and beyond control. Another very relevant risk that highly exists in the Indian scenario is the potential attack of terrorism, which will automatically pave the way for logical and significant political repercussions leading to the course of war with other countries. Business Strategy Business strategy is very important for the purpose of maintaining a compatible fit of the company’s product offerings with the needs and demands of the consumers in a particular market or region (Campbell, Stonehouse & Houston, 1). SunGlo in order to decide on whether to enter a new market, which has a high potential because of its demographic and income based differences, should first focus on the process of designing a highly effective business strategy while weighing the relevant positive and negative factors that can either contribute or act negatively for the growth of the company’s business prospects. Considering the analysis of the emerging aspect of the nation from the points of economic, political and social advantages, the US based company SunGlo should focus on the process of designing a multifold strategy. While designing the multifold strategy, the company should seriously conduct a financial analysis to analyze the cost implications of entering this new market. This will help the US based company to decide and consider whether to go for the factor of local manufacturing or global sourcing of the products, while catering to the demands of the consumers from the new market. Talking on the perspective of strategy design, it has to be said that the first part of the strategy is to enter the emerging Indian market, by the process of offering products with high quality which falls in the low price band category that are mostly targeted towards the end consumers. For a very effective strategy design, the company should focus on sourcing significant lots of initial batches of products from its international plants as it will help the company in the penetration of the Indian solar markets, with its steady flow of high quality products. The next part of the strategy is to focus on gaining significant amount of market share in the Indian market while concentrating on the process of investing significant amounts of capital in a phased manner for the process of building manufacturing plants in the Indian region. The process of building manufacturing plants will help in opting for local sourcing of the products and thereby attain a decrease in manufacturing and procurement costs. The third and the final part of the strategy is to focus on the process of the developing and attaining high quality products of global standards and then developing a significant export channel for the India manufactured products to various other new and emerging markets. Following this step, will significantly lead to the process of entering new markets with high quality products which will lead to the overall growth of the business process. Barriers to Business There are a couple of risk factors that has to be taken into consideration, while evaluating the business barriers for following the above mentioned business strategy. Change in Indian Business Environment The change in the Indian business environment with regards to the slowing rate of economic growth can severely impact the business environment of the country. The country, with regards to tackling the growing levels of inflation and high interest rates can enter into a deadlock situation in the upcoming days, if significant steps are not taken by the government. This can negatively impact the business as well as overall consumer sentiments of the market all over the country (Mehta, “Indian economy likely to grow in the range of 5.5% to 6%: Moody's”). Fluctuations in Indian Currency The fluctuations in the exchange rates of the Indian currency with regards to the domestic and international macro factors are acting as a continuous threat in the recent times. Though a strong rupee can provide a significant amount of advantage to the company’s export targets by manufacturing products in India, yet it can be said that in the initial phases, the company will face significant challenges since a strong Indian currency will promote a higher expense in terms of global sourcing of products, which is an initial and vital part of the strategy plan (Srivats, “Exchange rate fluctuations troubling Indian CFOs: Survey”). Currency The currency of one of the fastest growing emerging economies of the Asia Pacific region is witnessing a significant amount of fluctuations in terms of exchange rates. The challenging economic factors presented in a dangerous cocktail of high interest rates and rising inflation has directly impacted the rate of growth of the economy. The slow rate of growth promoted by the Indian economy in the recent times has automatically resulted in the process of low amount of foreign investments in the economy of the country. This impacted the strength of the Indian rupee in the global arena and as a result has created an impact in the possible weakening of the Indian currency in terms of the standard global currency (Economic Times, “Rupee to recoup in 2-3 months, RBI not likely to step in: FinMin”). Talking about SunGlo’s prospects in regards to significant amount of currency fluctuation in the country, it can be said that the designing and implementation of a proper business strategy by the company will promote a significant amount of growth for the company’s business in this emerging market. Labor Market It can be said that the labor market of one of the fastest emerging economies of the Asia Pacific region is highly segemented. As per the CIA factbook, the Indian labor force has a size of 487.6 million, among which around 14% is employed in various industries while another 34% is engaged in the services sector (CIA, “The World Factbook”). It can be said that because of the young work force of the emerging nation as compared to other economies of the West where the population is aging, it can be said that the India will be adding around 110 million people in the workforce around the globe (PTI, “India will add 110m people to global workforce by 2020: Study”). So talking in these lines, it can be said that having a young workforce which is high on energy will automatically lead to the fact of a high productivity for the SunGlo’s businesses and thereby will enable the US based company to achieve and grow in global terms. Corruption India, which is recognized as one of the emerging economies in the Asia Pacific region that promises high opportunities of growth from various businesses around the world faces a tremendous threat in the form of corruption. The recent series of scam ranging from the 2G telecom spectrum scam, the common wealth games scam as well as the coal mining scam has seriously dented the country’s image in terms of moral behavior and thereby poses a significant threat to the emerging and growing business environment of the country in terms of attracting foreign investments (Sripathi and Ravikumar, “India's top corruption scams and controversial deals”). However, it will be highly relevant to mention that as a direct impact of the various kinds of mal practices of corrupt government officials of top levels, various social representatives like Anna Hazare, Arvind Kejriwal are creating pressure on the government in an attempt to form an anti corruption committee which will be responsible for monitoring of various activities and will prevent the process of tarnishing of India’s image in the global forums. Conclusion Talking all the factors in to account, while analyzing the country India, which is one of the fastest emerging economies of the entire Asia Pacific region, it can be said it will be highly prospective for the US based solar business organization to significantly enter the Indian market and follow the well designed strategy plan to attain fast growth in this market as well as other fast emerging global economies. References Bhave, M.P. and Chatterjee, D. Solar power on every rooftop. 19 Sept. 2012. Web. 26 Nov. 2012. < http://www.thehindubusinessline.com/opinion/article3915083.ece > IANS. India can meet energy needs sans N-power: Study. 4 Oct 2012. Web. 26 Nov. 2012. < http://www.thehindu.com/sci-tech/energy-and-environment/india-can-meet-energy-needs-sans-npower-study/article3964452.ece > Deo, K.S., Politics in the Time of Anna. 30 Sept. 2011. Web. 26 Nov 2012. < http://indiatoday.intoday.in/story/kalikesh-singh-deo-on-anna-hazare-lokpal-movement/1/153254.html > Business Standard, Govt. to keep reform pot boiling amid political heat. 19 Sept. 2012. Web. 26 Nov 2012. < http://www.business-standard.com/india/news/govt-to-keep-reform-pot-boiling-amid-political-heat/486915/ > Sripathi, A. and Ravikumar, M. India's top corruption scams and controversial deals. Nov. 2012. Web. 26 Nov 2012. < http://in.finance.yahoo.com/photos/revealed-india-s-major-corruption-scams-controversial-deals-slideshow/india-s-top-10-corruption-scams-photo-1345770967.html > Economic Times, Rupee to recoup in 2-3 months, RBI not likely to step in: FinMin. 25 Nov. 2012. Web. 26 Nov 2012. < http://articles.economictimes.indiatimes.com/2012-11-25/news/35333809_1_global-currencies-rupee-cent-stake-sale > Sirvats, K.R. Exchange rate fluctuations troubling Indian CFOs: Survey 15 May 2012. Web. 26 Nov 2012. < www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=rja&ved=0CGsQFjAJ&url=http://www.thehindubusinessline.com/industry-and-economy/economy/article3420960.ece&ei=MzWzUP3WFaeNmQXh24HgAQ&usg=AFQjCNH4yK5iytA7HR75Axi4FeNlG0hmoA > Mehta, S. Indian economy likely to grow in the range of 5.5% to 6%: Moody's. 22 Nov. 2012. Web. 26 Nov. 2012 < http://articles.economictimes.indiatimes.com/2012-11-22/news/35302455_1_indian-economy-fiscal-deficit-india-outlook > Economic Times, NIPFP study: 52.85 per cent returns expected from Aadhaar project. 10 Nov. 2012. Web. 26 Nov. 2012. < http://articles.economictimes.indiatimes.com/2012-11-10/news/35032814_1_aadhaar-project-unique-identification-authority-corruption-and-pilferage > TNN, Over Re 1 cut in petrol prices spreads joy. 16 Nov. 2012. Web. 26 Nov. 2012. < http://articles.timesofindia.indiatimes.com/2012-11-16/chandigarh/35156036_1_diesel-prices-petrol-and-diesel-petrol-prices > PTI, India needs to do more in social security space. 17 Nov. 2010. Web. 26 Nov. 2012. < http://www.thehindu.com/news/national/article891661.ece > Singha, M., Subsidy boost for solar power systems in homes. 21 Aug. 2012. Web. 26 Nov. 2012. < http://www.thehindu.com/news/national/article891661.ece > PTI, RBI may be able to cut interest rate as inflation eases: P Chidambaram. 23 Nov. 2012. Web. 26 Nov. 2012. < http://articles.economictimes.indiatimes.com/2012-11-23/news/35317181_1_repo-rate-cash-reserve-ratio-monetary-policy > Modi, A. Sorting out the LPG mess. 18 Nov. 2012. Web. 26 Nov. 2012.< http://www.business-standard.com/india/news/sorting-outlpg-mess/492819/ > Campbell, D., Stonehouse, G and Houston, B. Business Strategy. Web. 26 Nov. 2012. < http://books.google.co.in/books?id=jxidZzihptYC&printsec=frontcover&dq=business+strategy&hl=en&sa=X&ei=zAyzUNDDLsmjmQWX3IGwBw&ved=0CDQQ6AEwAA#v=onepage&q=business%20strategy&f=false > CIA. The World Factbook. 14 Nov. 2012. Web. 26 Nov. 2012. PTI, India will add 110m people to global workforce by 2020: Study. 28 July 2012. Web. 26 Nov. 2012. < http://www.deccanherald.com/content/84443/india-add-110m-people-global.html > Read More