Analysis Of GE, Clean Energy Group and Yingli Solar Energy Company Profiles - Essay Example

?SECTION GENERAL INTRODUCTION This paper will study the case of three companies operating in the clean energy renewable energy sector and how have they developed a sustainable form of business, will be the main subject of the study. Innovation, destructible creation and sustainable value portfolio will be the backdrop of these three company cases that will be studied in this paper. The business models and the strategies that are promoted by the company management will also be referred to. Beyond this, a general overview of the clean energy sector, issues, challenges, and factors that promote sustainability will be studies. Following this, there will be a conclusion which will present the recommendations to better manage sustainability and value creation in this sector. A number of studies have been taken up to assess the actual achievability and practicability of the renewable resources of energy. Issues have been raised about the concerns on sustainability of the alternative energy resources. One of them is the requirement of a detailed analyses of the suitability of the diverse technologies and expertise in the sector and efficient utilization of the by products, and managing of natural resources. This also consists of nature conservation issues, pollution control, demand supply of energy and the social acceptance by the society. The use and viability of this technology cannot be evaluated until it has been put to use on a large and long term scale and assess the results in the social and environmental contexts. Moreover, the complex social systems may lead to uncertainty in the minds of the project planners which might be enhanced by the lack of flexibility of the technology system to meet the demands of the social, economic systems of the society. However, all these concerns related to the development of the clean energy sector will not possibly hamper the continuing growth and production in the sector and the increasing importance of maintaining sustainability in the business sector. The renewable energy sector has continued to grow along with the climate change and control issues, high rise in the prices of oil, increasing international community support and encouraging energy regulation laws. Studying the various, environmental social technological and economical benefits arising from the sector, there are a number of them which can be counted upon. Sustainable clean energy business contributes to the environment with reduced carbon emissions, deceleration in the climate, reduced flood rate, improved air quality and land filling prospects, (Scott, 2010). Among the economic benefits, the chances of job creation, manufacturing and research – development expertise, increased supply as compared to the existing levels, higher investment in the sector are some of them. Among the social issues that may be benefitted due to a long term sustainable clean energy business are direct employment, retention of population in remote cities, increase in the skill and expertise of the remote population that gets employed and higher quality of life. Challenges to the Clean Energy Sector In this section, the challenges to the clean energy sector shall be studied. In spite of the fast growth of the renewable energy resources, there exist many challenges. Some of them are discussed below – Reliability?• The most popular renewable sources of clean energy – wind and solar are variable in nature and cannot be a reliable round the clock resources. Therefore, in order to cover up this drawback, constant sources of energy derived from natural gas and hydropower sources are required to be maintained as a dispatch able back-up generation source, (Bishop and Stettlar, 2003). Transmission and Distribution?• There has been some amount of public opposition to build the required infrastructure for the transmission and distribution of renewable energy. Further getting approvals from the local and national power governing authorities is complex in nature and takes a lot of time. Lastly, the centers for power generation are located quite far away from the population centers, which question the viability of the transmission cost and quality of energy, (Scott, 2010) Complex Engineering modifications?• Use of wind and solar sources for energy offer the potential for adding up of innumerous source of energy in a power grid, which ultimately leads to a complex engineering calculations and modification of a power grid. This will disturb the delicate balance of supply and demand within the electricity system. Also, new peaks and swings will require other balancing units. Factors that shaped the companies’ position with sustainability In this section, the three main factors / drivers that motivated the companies to shape their sustainability concerns will be studied. The basic behind this is that at first the companies understood the importance of sustainability and then established a connection between sustainability and business and competitive strategies. More importantly, the three companies under study in this paper have intelligently adopted the outlook that sustainability is a way to develop, not only a spring resource to venture into complex conditions and business risks. The companies have attuned their methods to promoting sustainability to enhance the environmental and social impacts of their business activities. The three main factors identified as promoters of sustainability for the three companies under the lens are – Easy Risk management?• Sustainable business practices followed by these companies have helped them greatly in managing the business risks in a much easier manner. The companies had already developed technologies that measured and controlled the environmental and social impact of their business activities. The study of these results helped the companies to plan, prepare and develop its corporate social policies related to every business activity. The policies on sustainability focused on the maximum risk potential of any business activity and then suggested recommendations to avoid these inherited risks. Competitive advantage?• The issue of sustainability management has been well used by the three companies to gain substantial competitive advantage. The main aim of the company management is to diminish the wearing down of the profits and the economic value in the average time period and to accomplish long period return profits by incorporating responsible business practices into their business activities. Use of international standards like ISO 14000, international Reporting proposals or eco-friendly certifications helped the companies to gain the much needed advantage in the market. After foreseeing the advantages of sustainable methods of doing business, the companies have now integrated the concept along the value chain and every business strategy, (Lubin and Esty, 2010). Marketing campaigns are loaded with sustainability slogans to drive the business change and evolve the communication levels with the stakeholders. Consumer awareness?• There has been a steep rise in the popularity of ethical and sustainable business practices in the last decade due to which the pressure on responsible behavior by companies has also increased. Consumers and stakeholders have become aware of the ecological and social repercussions of the business and therefore have become more concerned about their consumer decisions and purchasing of products and usage of services. Seeing to the emerging trend, the companies have already been refining their activities towards a more sustainable course. SECTION 2 ANALYSIS OF 3 COMPANY PROFILES GE GE is a global infrastructure, finance and media company and has been involved in the toughest challenges. Light bulbs, fuel cell technology, jet air planes, are some of the wide ranging examples of GE business portfolio. Established in the year 1900, General Electric has been witnessing several ground breaking researches that have led to modern development in almost every possible field. Apart from various product portfolios like daily appliances, healthcare, finance, railways, aviation, software, engineering, GE provides energy solutions and services in more than 120 countries. The company core activities in the energy sector indulge in coal, water, natural gas, oil, solar and wind technologies, GE has been providing sustainable business profits and cleaner environments to the people, (gepowercom). Strong enactment to reduce greenhouse gases, addressing the issues of climate change, GE Energy has a clear vision and aim to pioneer the next generation of renewable energy services to the people to help them lead to a smarter and a cleaner environment. In order to support this, GE has lately initiated a number of energy projects in the European subcontinent, to drive towards new energy grid solutions and green house gas reductions. GE implements continuous improvement strategies to drive its daily activities, like cutting down its inventories and managing cost solutions. The company management has laid down a strong foundation of reliability and predictability in its operational chain. Continuous improvement strategies with the help of control systems, equipments effectiveness systems, information management systems, standardized work methods, are carried on in GE. GE is committed to continuous improvement of its energy production plants by optimizing the plant performances by using operational improvement techniques. The international giant is keen to make its entry into emerging markets in the energy sector like China, India, Mexico, and Brazil, (gepower.com). GE has been working closely both with the local industry and government for easier entry into their markets. The main strategy that the company is using for these markets is the reverse innovation strategy. This process helps the company to adapt its existing business model to incorporate with the emerging markets into their global network. Based on a business model that has two elements – value proposition and the operating model, GE has been able to successfully work with a business model innovation which has helped them to manage a number of regulatory and technological shifts that actually demand new approaches. New products with new innovation, lower prices, less risk, have been the business strategy of the company, especially for new markets. For GE Energy, business sustainability is another tem for eco-efficiency and is a integration of both its economic and environmental competence. Less waste and pollution production, lower costs, stronger emphasis on the creation of product value both for the company and the end user are some of the basic concepts followed by GE to form a more sustainable business portfolio. GE energy has implemented major changes and modifications in the production process and is making a continuous improvement effort to integrate sustainability into its decision making process and other management issues, (Scott, 2010). Clean Energy Group Clean Energy Group (www.cleanegroup.org) was established in the year 1998 with the aim of dedicating the use of modern research and technology to better use in providing the clean energy to the people. With this aim, the core activities of the non-profit organization are in developing fuel cells and solar energy for the new energy markets. With a clear vision and purpose, the company clearly promotes strategies and agendas that maintain the idea of replacing the current electricity system with a new clean and less polluting clean energy system. CEG works on continuous improvement strategies. The organization has been closely monitoring all its activities and introducing changes at all levels to improve the system efficiency. Facilitating the employees with knowledge, skill and expertise is the first step that the organization took in order to introduce continuous improvement. This was followed by setting up engagements for the work force and a vision. This strategy has helped to organization to outperform and maintain its operational requirements as well. Creation of regulatory issues that are streamlined, improve on carbon reduction technologies, maximize waste reduction etc are some of the ways of continuous improvement that have been applied. The organization intends to address the energy needs from the demand side. The company intends to serve emerging markets – like Asia. Since the developed markets like the U.S. will have a declining trend, the company aims to engage countries like China and India for their energy related imports, (Cleanenergygroup.org) . These countries require new energy market players and since the company has long been into the sector with a strong presence, it plans on venturing into the developing economies and supply the needs of these economies on a long to medium term basis. The company has adopted a distributed innovation business model to create an efficient technology approach for climate stabilization in its efforts. The company intends to cover multiple areas which include innovation in technology and finance related initiatives, (Govindarajan and Trimble, 2010). Clean energy Group has built a decentralized and cooperative global business model structure and has made an effort to expand beyond to issues like technology innovation, finances, business models, policy developments for setting new benchmarks, (Hart and Milstein, 2003). The company has also been working on giving services to link technology schemes between developed and developing countries, and make available services for the participation of the private and public sectors and the society. Started in the year 1998, the clean energy group has to work harder to become a wholly sustainable business venture that has no negative impacts on the environment or the society. It has to set up more progressive environmental and hum rights polices also, which has not yet been given much of attention by the company management. The company management has been still focusing on technology innovation of products and services only. In order to achieve high business sustainability, the company management should take care that each of its decisions should incorporate principles of business sustainability, manufacture products and services that actually replace the demand for non green products and services, (Scott, 2010). Yingli Solar Energy Yingli Green Solar Energy is a NYSE listed company and is one of the leading energy companies and the largest producer of vertically integrated photo voltic cells in the world. The client base of the company reaches out to many countries in the world – which include Germany, France, Italy, China, United States and parts of Europe. The company was established in the year 1997 and already started its acquisitions with taking over Cyber Power in the year 2001. the company has managed to acquire a fast growth rate with more than 6500 employees and 10 branch offices around the world, and it was reported that the first quarter of 2010 has been the most profitable so far for the company. The core activities of the company include the solar energy production of over 700 MW per year. Also, the company supplies PV modules around the world, (yinglisolar.com). The aim of the company is to globally excel in all types of products that converts solar energy into electricity at cost effective solutions. Moreover, the company aims to become a global player in helping to reduce the impacts of climate change through its innovative systems and at the same time create new job opportunities for the people and foster a good and healthy living environment. The opportunities for the company has been growing fast owing to the tremendously rising clean energy markets around the world. The developing market economies, rising concerns over energy security, and increasing pressures from the social and environmental groups have been one of the many reasons of the growth of this sector and increasing opportunities for solar energy companies like Yingli, (Hart amd Milstein, 2003). Also, with the growing local demands of the Chinese market, Yingli has a vast amount of emerging markets to cater. Other neighboring countries, especially India, with its rising energy demands can pose to be a huge market opportunity too. With a vertically integrated business model, the company monitors its entire business manufacturing techniques and entire chain, and is able to create high quality products and services and also the first company to manufacture and also optimize their costs and emerge with a cutting edge in the market, (Yinglisolar.com). The company has been manufacturing almost every solar energy equipment, and leads the solar energy sector in this field. With its technology and innovation, Yingli has indeed pioneered the solar energy sector and has continued to become the most preferred company for pv modules. The company has been intelligent in engaging its clients and stakeholders with its rapid innovations in both its services for existing products and technology. The company has set up detailed sustainability plans which also encompass the economic opportunity plans for the business that intend to promote the clean energy and green growth options. CONCLUSION Looking at the rapid development of the three renewable energy companies studied in this paper, some main factors can be identified that have significantly led to the growth of these companies in this particular sector - the three companies that have been studied were first of all deeply committed and had the vision and aim clearly set for the company management, sector and the environment. The companies also understood the fact that it is equally important for the sector as a whole to grow, which motivated them to design a very clear and competitive business and operations strategy. The second factor that led to the fast growth of the companies in this energy sector is the effective management of the company’s internal structure and its growth patterns. This included setting up new facilities for expanding its capabilities. This was in turn integrated with other objectives. The companies made sure that the new facilities were opened at places with high unemployment so that jobs could easily be distributed to the local population, which made it less costly for the companies to hire skilled and unskilled labor from these places. The company in order to maintain its internal growth patterns, gave attention upon the employee retention and personal development. These companies made it a point to fairly share the profits both with the employees and shareholders. Also, another factor that was responsible for the growth of these companies was the attention of the management towards global expansion issues. It must be noted that all the three companies were deeply involved in expanding their business around the world and not just being limited to local and national business portfolios. At the same time, the positive role of the governments and the trade offs were also directly responsible for the rise of the sector as a whole and the companies in particular. Lastly and the most important was the sustainability and the environmental concern in the minds of the companies as being the leaders of the society. The continuous focus on developing benign and friendly technology was the main focus of the companies. References 1. http://www.gepower.com/businesses/ 2. http://www.cleanegroup.org 3. http://www.yinglisolar.com/ 4. Lubin, D. A. & Esty, D. C. (2010). The Sustainability Imperative. Harvard, Business Review, May 2010 5. Govindarajan, V. & Trimble, C. (2010) The Other Side of Innovation: Solving the Execution Challenge. Harvard Business Review Press. 6. Hart, S. L. & Milstein, M.B. (2003): Creating Sustainable Value. Academy of Management Executive, Vol. 17, No. 2, 56-69. 7. Hart, S., & Milstein, M. 1999. Global sustainability and the creative destruction of industries. Sloan Management Review, 41(1): 23–33. 8. Scott, J. (2010). The Sustainable Business. Special Supplement, Global Focus, Vol. 04, Issue 02. 9. Bishop, A., and J. Stettler (2003) Wind Industry: Playing the Waiting Game (London: Dresdner Kleinwort Wasserstein).   Read More