Business Plan for SolarWorld - Assignment Example

Business Plan Introduction In the highly competitive current business environment, it is difficult for one to enter a newbusiness sector or keep an existing business competitive. In this context, a well structured business proposal can provide a high-level review of the different elements of the business and benefit readers and potential investors to understand the firm’s goals and unique proposition. This paper will propose a business plan for SolarWorld, a small scale business operating in the US energy sector, to keep its stakeholders informed of the current market position of the company. Company Description SolarWorld is a small scale business operating in the renewable energy industry, and the company was founded in 1999. The company is committed to the production and distribution of photovoltaic products across the major cities of the United States. The company raises most of its revenues from the sale of solar panels. The modern world is extremely aware of the threatening environmental issues like global warming and climate change, in which combustion of fossil fuels is a major contributory factor. In addition, fast depletion of non-renewable energy sources poses serious threats to the industrial world and personal lives because continuation of this trend would end up in severe energy crisis. In this context, renewable and potential energy sources like solar energy have greater scope, because they can serve the human/market needs without hurting the environmental sustainability (EPA). The products and services offered by the SolarWorld can really assist the modern world to meet its growing energy needs in an eco-friendly way. Currently, the SolarWorld serves the energy needs of many of the country’s local government organizations and other reputed industrial sectors like auto manufacturing. The company maintains a potential workforce which is capable of delivering uninterrupted and quality services to its clients on a regular basis. The efficient supply chain operations of the company can have the ability to create value for its customers. Market Analysis Evaluating in a global scenario, the US renewable energy industry has been performing well over the years. The country’s renewable energy represented 12.9 percent of the domestically generated electricity and 11.2 percent of the total power generation in 2013 (EIA). The solar industry in US employed over 143,000 people as of 2014. The firm’s target market is comprised of local government organizations, small scale industries, and households. These customer groups are really in need of energy to meet their daily needs, but they often find it impractical to depend on non-renewable energy sources as they are expensive and not easily available. The energy needs of small scale industries and households are likely to grow over the next years as the US economy has regained its growth momentum after the recent global recession. The company plans to increase its market share by 20 percent over the next two years by investing heavily in R&D and promotion. The SolarWorld follows an innovation-based business model to meet the fast changing customer expectations and to stay live in the industry. The company’s gross margin target is 25%, and it follows the price skimming policy to take advantages of the initial hike in market demand. The growing market competition in the renewable energy sector appears to be a serious threat challenging the long term sustainability of the SolarWorld. In this business sector, regulatory restrictions raise little threats to the organization, because solar energy hurts environmental safety in no way. Financial Projections While analyzing the financial background of the company, it is identified that the SolarWorld has been successful throughout its corporate history despite some financial struggles during the global financial crisis 2008-09. Over the last five years, the company improved its market growth rate by 9 percent. As the SolarWorld has been well established in the US renewable energy sector, today the company has potential access to a variety of financial sources including bank loans, investors, and other creditors. However, the company plans to expand its business horizon abroad and huge additional investments are required to implement this business venture successfully. Currently, the organization plans to spread its business to Asia where the demand for renewable energy is significantly fuelled by emerging economies like China and India. The following table (Table 1) gives a detailed view of the prospective financial data of the SolarWorld over the next years. It can greatly benefit investors to form good understanding of the financial future of the organization. 2012 2013 2014 (estd) 2015 (estd) Sales $200M $212M $240M $300M Profits $30M $32M $40M $50M Assets $100M $105M $130M $175M Book value $250M $270M $300M $350M Table 1 How to make your business plan stand out The industry (renewable energy) in which the SolarWorld operates itself provides the organization with a set of potential advantages as the modern people are increasingly concerned about environmental sustainability. In addition providing eco-friendly energy and related products, the organization has proved its excellence in delivering superior quality customer services. The company’s expert and experienced personnel are efficient in providing timely post-sales services to clients, and this competitive strength assists the organization to meet customer satisfaction to its highest level. In addition, the company has greater competencies in telemarketing and online marketing, which are two modern promotional techniques to capture customer interests. Any person who gives a missed call to the firm’s phone number will be contacted by SolarWorld customer care executives to answer his/her queries. The company also maintains a professionally developed official website to manage its online sales. It seems that many other solar companies do not offer related services like installation to their clients so as to cut down their operating expenses. However, the SolarWorld has been delivering all related services from system installation to post-sales maintenance to its customers at absolutely no cost. Undoubtedly, those business approaches would assist SolarWorld to obtain a competitive edge over its market rivals. Conclusion From the above discussion, it is clear that SolarWorld has a prosperous future primarily because the organization is operating in the renewable energy sector. The company has been successful throughout its history in terms of financial growth. Currently the SolarWorld plans to enter the Asian energy sector as part of its global business expansion plan. Works Cited EPA. Energy and Global Climate Change in New England. Solar Energy. Web http://www.epa.gov/region1/eco/energy/re_solar.html EIA. Web http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1 Read More