Competition in Photovoltaic Industry - Example

Competition in photovoltaic industry As one of the most developed countries in the 21st century, China has a very great influence in the markets where it gets involved. One of the areas where the country has had tremendous breakthroughs is in the photovoltaic industry. The photovoltaic industry is one that engages in the manufacture and the sale of modules and solar cells. The contemporary environment has seen many changes and one of them is regarding the manner in which people treat the environment. The concept of recycling has received attention from many countries and this is due to the increased activism with regard to environmental preservation. As evolution has continued, it has been noted that the use of solar energy is an effective way of preserving the environment. The Chinese government has paid much attention to the photovoltaic industry and the result of this attention has been the issuance of funds to develop this industry effectively. Chinese PV firms such as Suntech have the reputation of having quality industrial resources and it has assisted in developing the PV industry in Europe by providing these resources to the countries within the continent at a cheap rate (Tyrrell, 2008). With the provision of these resources, the country has had the advantage of gaining profits and consequently injecting more of the funds to the creation of more resources to the European market to develop this industry. Germany is another country in Europe that has made a great contribution to the development of the PV industry in Europe. By the year 2011, the country had increased the number of PV firms by around three times with one of the initial ones being Solarworld Company. The reason for this increase is through to increased advocacy of the effectiveness of solar cells in the country. The European Union through their numerous conferences and meetings has promoted this and requested capable countries to assist the entire continent by offering funds and any other means to increase the awareness of PV. Germany has assisted in the development of the European market by having the local companies creating many solar cells where they have had agents in different countries across Europe and these agents have the responsibility of demonstrating the use of these cells to people or rather to areas that do not understand the use of these cells (Stotlar, 2009). These demonstrations have increased awareness with regard to solar cells and the consequent of this has been people in these countries beginning their own industries. As a C.E.O of a Chinese company, I would gain competitive advantage over other firms engaging in the same venture through various ways. One ways is with regard to economies of scale. The PV industry does not have many firms and thus the managers do not incorporate the concept of economies of scale. I would ensure that I took this gap and used it effectively and this is by the manufacture of many solar cells and selling them in bulk at cheaper prices. The consequent of this is having many transactions where the profit for the company would increase despite the fact that the rate at which this would take place is slow. Another means through which I would have a competitive advantage over other firms is through rapid advertisement. Very few people understand the essence of solar cells and thus ignore them. I would ensure that I advertised my commodity vastly and while carrying out these advertisements I would ensure that I make the target market understand the advantage of using my commodity as compared to that of other companies. Internal management is another means through which I would gain a competitive edge and this is by setting goals for the employees where the workers that work effectively and achieve the goals receive rewards such as increased commission rates and even additional benefits such as picnics for their families. Moreover, to avoid failure, I would set standards where the employees that perform poorly with regard to the marketing of the commodity would receive punishment in form of demotion or salary adjustment. This form of challenge is critical for a company and it would ensure my company worked effectively and achieve market dominance. Numerous PV developments have taken place in China and Europe over the years. One of the developments is with regard to the perception of the PV industry. During early years, very few people appreciated the use of PV and this is because they did not understand the use (Samuels, 2011). However, with increased advocacy, people have understood the importance of this and the consequent has been the use of PV to reduce the rate of carbon emissions. Rather than having funds injected in fossil fuel extraction, the governments of most of the countries have engaged in the PV industry and consequently have had the ability to save the funds and used the money in the development of other sectors. Many homes and industries have used PV and this has increased the rate of production for the commodities that they aim at increasing. Another development that has taken place is increased coordination between European countries. The PV industry is new and does not have numerous players. China is one of the countries that had the advantage of having an early breakthrough in this industry. Due to this, it had the advantage of making connections to other countries in Europe through forums and this led to increased relations between countries. The contribution of China in the industry is through the creation of employments to people both locally and from the larger European Union. With the creation of this employment for the PV industry, the employees got to gain information and knowledge on the operation of PV and consequently took the knowledge home after training and eventually the other countries got educated on the importance and the use of the solar cells (Winter, 2009). This led to the introduction of PV companies in the countries. Technically, China witnessed many changes and this is because it was faced with the challenge of developing new technology to deal with the new PV industry. This had the government injecting numerous funds to assist in research on the best manner to maximize the output of this industry. Solar cells involve many technical operations and thus it is important to understand that the country had to ask for assistance from countries such as the United States that has made tremendous strides in the technology sector where it was aided with technicians from some of the excellent universities in the country (Burns, 2011). This was a great change to China and this is because over the years it has always viewed the United States as a competitor and thus opts to carry out its activities privately. However, for the sake of developing the industry, it asked for assistance. The other change that has taken place in the industry is with regard to the economy. The economic condition of China is quite impressive and the developments in the entire market have seen the country gaining a positive reputation and gaining market leadership across Europe. With regard to the PVC industry, it is critical to note that the country was among the first ones in the continent to introduce solar cells. This was a great advantage for the country and this is because it had many clients from both within and other European countries purchasing the commodities. The consequent of this was having the country gaining a lot of profit. By the year 2010, the government had already acknowledged the PV industry as one of the profitable sectors in the economy and the consequent of this has been the continued support of the industry by the government by injecting more funds to the industry (Jennings, 2010). This economic development for the company has been a positive influence in the European market and this is because it has had the advantage of offering financial support to other countries in the continent that have an interest in the PV industry. The profits that it gains from these investments it gets to develop the industry further both internally as the rest of Europe develops the industry from the investments got from China. The fact that the PV industry is new is a factor that has seen it go through different issues. In the beginning, the industry did not have many people involved. However, due to increased awareness, the number of people involved in the industry has increased. The increase has necessitated a change in policies and introduction of some rules to see to it that the industry thrives and performs effectively. One of the policies that the involved nations have introduced is allowing free marketing and trade in the participant countries. In the beginning, China did not have competitors and operated as a monopolistic market with regard to PV. After the introduction of PVC in multiple European nations, the industry has grown and this has eliminated any fears that entrepreneurs had with regard to the performance of the industry (Stanfield, 2008). The fact that the industry is successful has led the European Union urging China to open the trade routes of the products to allow for other nations to learn about the product and the consequent of this has been having many different nations engaging in the industry. Another policy change that has taken place with regard to the industry in China and in Europe is having the member governments introducing strict rules to see that energy is conserved and the environment is maintained. The governments have urged the players in the industry to ensure that they market their commodities and lower the prices of the solar cells to see to it that the use of expensive and pollution filed energy sources reduces significantly. It has been the hope of most of these nations to see to it that the use of PV and specifically solar cells becomes the basic activity for all households and industries over the next five years. An example of this is the Chinese government that has the goal of installing 150gw solar cells by the year 2020. With this policy, there has been a notable increase in demand for the solar cells and this has worked effectively to have the environment effectively conserved. The government has a very great role towards ensuring that industrial development takes place in China. One of the roles that the government has is ensuring that the particular industries receive the amount of funds that they require in order to maintain their activities. Research is critical in the development of any industry and thus the government ought to have sufficient funds and provide to these industries. With this, they are bound to attain their goals. The government also has the responsibility of marketing the particular industries internationally (Maisto, 2009). When a particular company attempts to promote its products internationally, it might face the problem of attention because individual companies do not receive the considerations they ought to have. However, when the government gets involved, it has the power to have other countries reviewing their products. In China, there has been success in the field of industry and thus receives attention from many countries and moreover, the fact that it rarely fails in its ventures is an advantage for the country and consequently industrial development is achieved. Many companies opt to engage in international marketing free from the assistance of the government and this is because they aim at eliminating the intermediaries because they view them as liabilities. This is an effective strategy for financially stable companies. However, upon witnessing financial hiccups, it is essential for these companies to incorporate the government where it can fund the marketing and receive a percentage of the profit gained by the companies. Another situation where the companies can request the assistance of the government is when engaging in a new international market. For already established international markets, it is essential for a company to engage in business directly (Beyer, 2013). However, it is vital to include the government when negotiating in new markets because the country’s name is what captures attention of the market and not the company name. In the last two years, the PV industry has increased the amount of interest that it brings into the income by two different manners. One of the ways that the companies have been able to do this is by quality check and management. Moreover, the companies have directed more of the resources towards the perfection of the new solar cell models. With this, the amount of money that the companies have brought back has led to the conclusion that the government is essential towards success. China has one of the largest markets in the world. However, the levels of unemployment have been found to increase due to the harsh financial periods that the globe is going through. The government has been essential in providing the industry with qualified engineers in the field. The government at the end of the year 2009 while it was setting the 5-year plan did not mention the sector of the low income making communities. However, by the end of the financial year 2010 the government realized that it had not utilized international marketing for the industry effectively and thus engaged in rapid marketing of the PV industry and the firms in the industry have appreciated the result of this. The European Union is very strict with regard to environmental preservation. Despite the fact PV industries have assisted in the renewing of energy and reduced the amount of waste present in the contemporary society, it is critical to understand that it has had its weaknesses and this is because of the dumping that the involved companies carry out. Dumping is a health hazard and puts the lives of many people in jeopardy. The fact that the European Union launched the investigations is a factor that will have the industry going through numerous losses. The strategy of the PV firms is ensuring market dominance and having as many countries as possible using solar cells (Steiback, 2010). This is a positive factor but the negative factor involved with this strategy is the fact that rapid marketing leads to a larger market and due to high demand the companies in the industries focus on production of many solar cells without paying attention to the manufacturing process. The manufacturing process leads to the creation of different kinds of waste as the raw materials are under processing. It is critical that this strategy operates in a subtle manner such that the involved companies have the ability to carry out safe and effective production processes. Chinese firms have a very high chance of surviving in the global PV market. The reason for this is the fact that most of the involved companies in this market also have firms involved in different fields rather than the PV industry. This is positive for they can refer to these other firms to convince the European Union that they have the ability to carry out effective business practices. If the European Union condones this glitch in dumping, the companies ought to manage their production processes better and avoid pollution. References Winter, T. 2009. Chinese PV industry. London: University of Cambridge University Press. Beyer, J. 2013. International Economic Relations. New York: Cengage Learning. Burns, A. 2011. Research Development, 4th ed. Upper Saddle River: Pearson Education Inc. Jennings, G. 2010. Technological and Commercial Trends in Photovoltaics, 2 edn. Milton: John Wiley & Sons. Maisto, S. 2009. Contours of Social and Economic Development. New York: Palgrave Macmillan. Stanfield, M. 2008. Trends in Solar Energy Research. New York: McGraw Hills Publishers. Steinback, R. 2010. Renewable Energy in Europe. London: Oxford in Publishing Press. Stotlar, D. 2009.Photovoltaics. New York: Palgrave Macmillan. Tyrrell, I. 2008. Industrial Policy in Europe. London: Oxford University Press. Samuels, D. 2011. Macro Engineering: An Introduction. Chicago: Chicago University Press Read More