Creating New Company in the Sphere of Alternative Energy Sources - Case Study Example

Setting up of Anderson Solar Technologies Ltd.

Table of Contents

2.0 Organizational behaviour and human resource management3

3.0 Accounting and finance management5

4.0 Communication, Negotiation, Marketing and Market Economics7

4.1 Importance of Effective Communication and Negotiation in Management7

4.2 Marketing aspects of the chosen start-up company8

4.3 Factors of Market Economics for the company11

5.0 Areas of specialization12

5.1 International Business12

5.2 International Finance13

5.3 Entrepreneurship Responsibilities14

5.4 Trading Management16

5.5 Consultancy16

6.0 Conclusion17

Reference List19

1.0 Introduction

With the advent of industrial revolution there has been rise in use of improved technologies and the companies have focused on the use of renewable resources in order to reduce the environmental pollution. Solar thermal technologies are of great use during the sunny climates and government encourages the use of wind and solar technologies. As a result, the cost of using the solar technologies has decreased. In case there is abundant use of renewable energy sources apart from the large scale use of hydro-electricity, there are challenges in harnessing them. In the recent years there has been high investment in solar photo-voltaic due to the favourable subsidies and incentives provided by the government. Further, generating electricity from the renewable energy sources as compared to the fossil fuels offers different health benefits. Furthermore, the solar and wind energy plants require no water to function properly and thus, do not pollute the water resources. The photovoltaic cells that are made of the silicon alloys convert the sunlight into other forms of energy and the solar power is used to alleviate the capacity problems on local utility grids and reduce the Greenhouse Gas emission. The aims of the research are to suggest plans for setting up a new business for an Alternative Energy Sources Company named Anderson Solar Technologies Ltd. and focus on the different areas of business.

• 2.0 Organizational behaviour and human resource management

Human resource department within an organisation is meant to play an important role in designing the organisational sustainability culture. Moreover, Green HR management deals with increasing employee responsiveness within the organisations so as to enhance the overall performance (Mishra and Rani, 2014). It also helps in greater employee engagement so that the tasks are performed efficiently. The companies are expected to undertake environment friendly initiatives that results in greater efficiency of the employees. Green HR management policies to be undertaken by the newly established firms should be directed towards corporate environmental schedule so as to motivate the employees and make them participate in environmental sustainability management (Ahmad, 2015). There are cases when the employees may feel that it is not their duty to manage environmental sustainability and therefore, the employees are to be trained in order to change their psychological perspective. Anderson Solar Technologies Ltd is to set up its business as a renewable resources firm which takes care of reducing the environmental pollution. The HR managers of the company should develop policies for sustainability management and improve the organisation’s sustainability culture. The HR managers need to be highly skilled in order to train the newly hired employees regarding the proper use of the renewable resources (Bratton and Gold, 2012). The HR policies formulated within these organisation needs to be associated with the environmental protection. It is expected to create awareness among the employees about the use of natural resources. The employees are engaged in environmental friendly HR programs that lead to greater efficiencies and reduce the carbon footprints through promotion of energy efficient office spaces (Mishra and Rani, 2014).

As per the study, the Green HR schemes help the organisations to find different ways in order to cut the cost and reduce the situations of unemployment. The policies should be such that there is a balance between natural environment and industrial growth in order to minimise the overuse of natural resources. The employees need to be environmentally responsive so as to understand the green management. There are strategic tools that are employed in order to improve the system of Green Management and gain competitive advantage in the global market (Ahmad, 2015). It is expected that by undertaking Green Management Anderson Solar Technologies Ltd would be at a profitable position as compared to the other organisations. The managers within the organisation need to undertake environmental innovations in order to attract the customers in the international market. There is a huge demand for solar cells by many of the electronic goods manufacturing companies that in turn raises the revenue of Anderson Solar Technologies Ltd. Corporate environmental behaviour within the organisation is considered as a challenge in order to enhance its performance in the global market.

• 3.0 Accounting and finance management

Financial management is one of the most crucial parts of the management of any organisation and is much beyond the task of keeping accounting records of the company. It cannot be considered as a separate task that can be handed over to the finance staff or any expertises who do not have any association with company or do not have any idea about the core activities and objectives of the organisation (Brigham and Houston, 2011). Finance and accounting management of organisations includes planning, controlling, managing, organising and monitoring the financial resources for achieving the objectives of the organisation (Kaplan and Atkinson, 2015). Anderson Solar Technologies Ltd should have a sound financial management in order to bring efficiency in their operations and production and at the same time, minimise the costs of the company and achieve profitability.

The company can achieve an effective management of its finance with a well-built organisational plan. A plan in the context of an energy based company, pioneered in renewable sources of energy implies the setting up of objectives, develop and evaluation of the policies, strategies or methods for achieving the same. The company should recognise the key source to be used for supplying energy and solar energy can be the best possible source given its ready and abundant availability at all places compared to other alternative sources like wind or hydro energy which are available at particular places only.

The main operation of the Anderson Solar Technologies Ltd involves generating solar energy in company’s own energy plants and also developing solar energy equipments for the commercial and residential enterprises. A sound financial and accounting management for the company will involve long-run strategic planning and short run operational planning (Kaplan and Atkinson, 2015). In other words, the financial planning of the company should be an essential part of company’s ongoing processes.

The guiding principles for the management of finance and accounting system of Anderson Solar Technologies Ltd are:

• Consistency: The financial policies and the evaluation systems of the company should not change over time and remain consistent.
• Accountability: The company should be able to demonstrate and explain well its stakeholders, i.e. customers, employees, suppliers, distributors, investors and shareholders about all the resources used and achievements made by the company from time to time (Brigham and Daves, 2012).
• Transparency: The company should be open about its operations, processes, activities, business strategies and policies, finances and should provide detailed information of the same to the stakeholders.
• Financial Stewardship: The organisation should be proficient enough to handle the financial resources which are available to it and at the same time, ensure that those resources meet the intended purpose of the company (Brigham and Houston, 2011).
• Integrity: The individuals of the organizations should perform and handle their responsibility with propriety, dignity and honesty.
• Accounting standards: The company should have an efficient system for storing all the financial and accounting records as well as documentation and the system should well observe the external accounting standards (Brigham and Houston, 2011).

Anderson Solar Technologies Ltd. should have the following core aspects for its financial and accounting; an apparent and achievable finances strategy, a precise plan for generating income, a robust system for financial management and an appropriate internal environment.

• 4.0 Communication, Negotiation, Marketing and Market Economics
  • 4.1 Importance of Effective Communication and Negotiation in Management

Communication is an essential part of every organisation’s management which helps in enhancing employee relations and empowerment, achieving gains in productivity, developing quick problem solving and enriching relations with the stakeholders of the organisation (Dozier, L. Grunig and J. Grunig, 2013). This reflects that effective communication can help organisations in reaching their objectives and organisational goals while maintaining or sustaining their relationship with the employees and the stakeholders. Communication aspect in management of Anderson Solar Technologies Ltd. implies the systematic planning, implementation and monitoring of channels of communication in the organisation and within the members of the same, so as to achieve the aim and purpose of the organisation efficiently. Further, the company should emphasise on communication as it is essential for binding the employees with the mission, vision and goals of the organisation. Good channels for communication within the organisation are the main driver for employee engagement. Hence, the company should have a strategic approach for creating a sync between the organisational leaders or management and its employees for supporting the external and internal customer services, managing any necessary changes with the company and also for building integrity of the company’s HR department (Knapp, Vangelisti and Caughlin, 2014).

The management of Anderson Solar Technologies Ltd. should understand the importance of developing alliances through negotiations with other energy renewable companies or manufacturers for getting technological and mechanical support for their solar plants and also in purchase of inputs for their solar equipments. Effective communication can help the company in breaking down the limits or barriers of the company with the rest in the same industry and market (Dozier, L. Grunig and J. Grunig, 2013). On the other hand, internal communication can promote a collaborative atmosphere among the employees and persuade them to perform together as a team for achieving the goals of the organisation.

• • 4.2 Marketing aspects of the chosen start-up company

Impactful approaches towards marketing strategies decide the failure and success of the small businesses. Being a start up company, Anderson Solar Technologies Ltd. should come up with low cost strategies of marketing for helping the business grow within a tight budget. The company should adopt the following framework described below to develop an appropriate marketing strategy for their start up business in the UK.

• Strategic positioning: This is the first step required for successful product or brand launch which includes the initial adopter of the target market situation. Correct positioning will help the company in targeting the right consumers for their business. The category of the products and the type of features or benefits of the products offered by the company determines the strategic positioning of the new business in the market (Mullins, Walker and Boyd, 2012). Anderson’s offerings included solar energy equipments and power stations for generation of the solar electricity. Thus, its target consumers will constitute of the residential households, commercial enterprises for the solar equipments and housing or business complexes in the country for energy generation.
• Brand development: Branding is crucial for any type of businesses in the world of endless competition. The name of the company, logo and an URL should be there for the company to make it stand out amongst the other energy based and renewable energy companies and emerge as something ‘really different’ (Mullins, Walker and Boyd, 2012). The company should have a quality yet instant program for developing a best fit brand name, image or iconography and start with the URLs that are accessible. A tag line for the company can further add to the image such as ‘A Cleaner and Bright alternative for You: Solar Power Shines’.
• Web Presence: In the era of digital marketing and social media, the web presence is an essential component of the marketing strategy of the companies. Getting a right web presence before the launch of the company can be beneficial for making people aware of the company and its products (Wang and Pizam, 2011). Furthermore, web presence of the company does not merely imply the functional site or webpage but it should be a sophisticated website built for multiple purposes. It should serve as a site for customer application rather than only a site for company information.
• Digital Public Relations and Partnering: A digital PR and partnership is essential for supporting and driving the web presence and social media promotions or marketing activities of Anderson Solar Technologies Ltd. It is essential not only for ensuring communications, networking and creating partnerships but also for evaluating the customer feedbacks, online reputation and WOM (Word of Mouth) (Wang and Pizam, 2011. For this purpose, company can use Twitter and Facebook as effective way for digital PR and partnering programs that should be well linked to the key business goals and help it to drive the revenues and sales as well as attract and retain customers.
• Online Advertisements: For promoting the company and introduce its products among the consumers, apart from print media, radio and television advertisements; Anderson Solar Technologies Ltd. should develop online advertisements. The Google AdWords is the best program to start online advertisements for the company as it is flexible, scalable, highly cost effective and result oriented. Apart from that, the company can further go for Facebook Ads, Yahoo, Bing Ads etc.
  • 4.3 Factors of Market Economics for the company

UK is one of the world’s leaders in renewable energy sources especially wind and marine energy, generating thousands of jobs, energy security and worldwide business opportunities for the companies pioneering in renewable energy businesses (Timilsina, Kurdgelashvili and Narbel, 2012). Furthermore, UK has stable and financially strong economic environment that can best possibly sustain the new or emerging start-up companies in the country. Like any other businesses, the renewable energy-based company, Anderson Solar Technologies Ltd. should be able to sell their products and services and generate revenues more than the costs it has to incur to produce them. The costs to the company involves operational costs of the generating solar electricity in established plants as well as distribution costs for supplying the same to business and residential complexes. Other than these, there are costs involved in manufacturing of equipments like solar thermal systems, domestic Solar PVs (Photovoltaic Systems), heat pumps, and heating or cooling installations etc.

Furthermore, the company will require establishing long term relationships with the suppliers in the market for buying inputs for their equipments and also find out dealers and distributors for facilitating the selling of their products and services. The UK industry for renewable energy work together with a large number of companies, suppliers and distributors, government, policies, regulatory framework of the government and the stakeholders. The company while entering the industry hence should integrate well with each of the components of the industry and should incorporate the governmental policies and regulations into their activities.

Even though the nature of the solar power is clean and abundant, the initial investments on the part of the company will be huge for establishing power stations for generation of electricity, office for managing the corporate responsibilities and other business operations, manufacturing unit for producing the solar equipments. The company should be hence securing private investments and loans from the banks and other financial institutions. This is also a kind of challenge for the company being a start up one and new one in the market as gaining the confidence of the investors is difficult (Timilsina, Kurdgelashvili and Narbel, 2012). In such a situation, Anderson Solar Technologies Ltd. can seek for governmental support for the purpose of the company through which it can send a strong message of the company’s commitment towards sustainable and renewable energy in the country.

• 5.0 Areas of specialization
  • 5.1 International Business

Conducting business worldwide is an essential part of the business strategies of any company; moreover, choosing of overseas market and assembling a team for international sales are the strategies of international business (Buckley and Casson, 2010). Anderson Solar Technologies Ltd. is a major start-up company in the UK which is supposed to bring sustainable and cost effective energy source for residential and commercial enterprises. The company shall have their own power stations for producing solar electricity to the residential complexes and business houses within their proximity through effective distributor framework. The company’s electricity services will be limited only in England in the initial stages of operations. However, with time it will plan to set up many more solar power stations in other countries in the UK. Thus, generation of solar electricity is strictly a domestic business for the company.

The company’s main aspect of international business is in its sale of solar equipments to the commercial and residential consumers such as solar thermal systems, Solar PVs (Photovoltaic Systems), heat pumps, room heating and cooling installations. It will also be responsible for designing and providing technology oriented heat recovery and solar energy harvesting solutions to those who seek to use renewable and sustainable energy in their every day purposes. The company will be supplying solar equipments and other services not only in the UK but also in some countries of Europe. The company will be trading its products through their international sales team to those countries of UK that have growing consciousness about the exhaustion of the conventional energy sources and are major supporters of global green and sustainable energy movement aimed at reducing the impact of carbon emissions (Folsom et al., 2012). The international sales team of the company should take help of the governments of those countries and appear to the European Commission (which is currently working for meeting 2020 renewable energy targets under Renewable Energy Directive) to facilitate the sale of their products in their markets.

• • 5.2 International Finance

Financing an international business should consider the political risks of the countries in which the company is going to operate. The sources for funding for any international business depend on its capital structure, in order to resolve the optimum debt-to-equity ratio which will maximise the value of the company. The optimum capital structure of Anderson Solar Technologies Ltd. is the one which maintains equilibrium between the best debt-to-equity range of the company and also minimises the cost of capital of the company. The following sources of finances for funding the international operations are available to the company.

• EXIM banks (Export-Import banks) offers two types of loans direct loans to foreign purchasers of the exports or provide intermediary loans to the governmental agencies which then lend it to the companies for purchasing capital items and other operation related services (Moffett, Stonehill and Eiteman, 2014).
• As an entirely new company in the market, it can raise funds from other external sources like debentures, public deposits, shares etc. It can also raise funds through issue of Eurobonds which is an essential capital source for the MNCs, companies large operations and government agencies (Moffett, Stonehill and Eiteman, 2014).
• The company after entering the market can raise its huge costs of operation through International equity markets (Moffett, Stonehill and Eiteman, 2014). As Anderson Solar Technologies Ltd. seeks to have international business by selling its products in other countries of Europe, it can issue in all those foreign markets where it tends to sell its products. Shares are perhaps the most effective source of accumulating long term capital from the market.
• Lastly, the company working with the agenda of bringing use of sustainable energies can borrow loans from development banks, or commercial banks, or any international financial institutions such as IFC (International Finance Corporation).
  • 5.3 Entrepreneurship Responsibilities

Anderson Solar Technologies Ltd. should come up with an effective strategy of entrepreneurship for establishing itself as a company pioneered in sustainable energy. There are various steps involved in entrepreneurship strategy of starting a new business of supplying solar energy and solar appliances and equipments. As an entrepreneur of solar energy supplier, the main responsibility of the company’s owner is to store, conserve and distribute the solar energy produced in its own station. Secondly, specialised in production of useful solar devices for homes and small commercial enterprises, it is also the responsibility of the company to provide experts for installation, maintenance and repair of those devices when demanded by the customers.

The development of a proper business plan is one of the essential responsibilities of the entrepreneur especially coming up with a new product or service or an entirely new company. Anderson Solar Technologies Ltd. can devise its own business plan by taking lessons from other successful businesses dealing with the same products and services such as Dulas, Solar World etc. By looking at the fundamentals of entrepreneurships of those companies and incorporating them in its own model, the company can develop its own business development plan. Also, the company in order to analyse the demands and product specific needs of the consumers can conduct interviews in the target market with the potential consumers (Storey and Greene, 2010). Further, it should negotiate and contact with suppliers for achieving price quotas on intermediaries and other services which will be required to produce and deliver solar energy and solar appliances.

After devising a proper plan for business development, the company should figure out methods of financing each and every operation. Besides these, company should also strategise how to convince the people to use its products and services instead of other conventional alternatives. As mentioned earlier, this requires an effective marketing plan and marketing strategy which can present the purpose and motive of the company in the most appealing way to the customers.

• • 5.4 Trading Management

Trading management implies the management of activities that any trader or businesses implements after the sale of their products and services, for maximising their potential profits and simultaneously reduce their risks. Anderson Solar Technologies Ltd. should consider the maximum percentage of trading capital that can be risked in its business transaction. The most effective trading management technique of a start up company is to stop loss or take profit points strategy. These are two major way through which the company can ensure themselves from the risks of doing businesses in the market (McNeil, Frey and Embrechts, 2015). The company should estimate well the price which it can pay and the price at which it are willing to sell. It can measure the returns to their profitability of the shares that are hitting its goal. When the adjusted or estimated return is high enough, it can eventually execute trading of its products. As a new emerging trader in the UK market of renewable energy supplier, Anderson Solar Technologies Ltd. should know at earliest the ideal time for its plan for entering or exiting a trade before they are implemented. The use of stop losses tactfully can enable the company to minimise their losses and number of times of exiting the trade (McNeil, Frey and Embrechts, 2015).

• • 5.5 Consultancy

Anderson Solar Technologies Ltd. should seek to engage consultants in their major areas from operations, production, sales, and digital marketing services and distribution. The business experts from the consulting agencies will help the company to formulate strategies, vision and mission, corporate polices and recognise the areas of innovation. The sales expertise from the consultancy can help the company in providing support for analysis of the sales, make planning for domestic and global sales in the domestic, implementation of sales processes, monitoring the sales metrics and development of deliberate sales team (Storey and Greene, 2010). Consultancy support in the sphere of digital marketing will help the Anderson Solar Technologies Ltd. to devise its marketing strategy for creating an awareness of the usefulness of the solar equipments and solar energy among the consumers who are acquainted with the conventional source of energy. Lastly, operations expert from consultancy can help the company to incorporate its entity, build its brand, recruit right talents, set up infrastructure, build up its sales and marketing management and make business feasibility analysis on the various regions of the market.

• 6.0 Conclusion

The exhaustion of natural conventional resources like crude oil and coal and the rise in the cost of such energy prices, the countries are seeking for finding alternative sources to bring the cost of power as well as to reduce the impact of energy production on the environment. The renewable resource industry has been already driving the technological innovation and employment across many countries in Europe. Thereby, looking at the potentiality of the renewable energy market, a new company named as Anderson Solar Technologies Ltd. dealing with solar energy production and supply of different solar equipments will be set up with its major operations based in the UK. The HR policies of company formulated should be associated with the environmental protection. Its finance and accounting management includes managing, planning, monitoring and controlling the financial resources in order to attain the objectives. The management of the Anderson Solar Technologies Ltd. also should understand the importance of creating alliances through negotiations with other energy renewable companies or manufacturers for receiving technological support for its solar plant and also in procuring inputs for its solar equipments. Being a start up company, it should come up with low cost strategies of marketing that will help its business grow within a fixed budget. The company will also need to establish long-term relationships with the suppliers, dealers and distributors in the market for facilitating the selling of their products and services. Creating a new company in the sphere of alternative energy sources and introducing a new source of energy is a challenging task. However, with efficient business strategies and support of business consultants in the same field can initiate a new business.

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