RedFlow Technologies Ltd - Challenges for Growth in a Renewable Energy Industry - Case Study Example

RedFlow Technologies Ltd: Flexibility and agility, the challenges for growth in a renewable energy industry. Student’s Name: Instructor’s Name: Course Code and Name: Date assignment is due: RedFlow Technologies Ltd: Flexibility and agility, the challenges for growth in a renewable energy industry. Introduction Renewable energy systems industry has recorded a considerable growth. The advancement in the sector of energy has been attributed to investment and research through public and media attention. Renewable energy sources are the kinds that are continuously replenished and hence sustainable. They include solar, wind, geothermal power, various types of biomass and hydropower. These energy sources nature means power supply is not real continuous. RedFlow Technologies Ltd is an energy provider company that was founded by two brothers, who wanted to put their engineering innovation skills to use. Provision of the environmental friendly energy sources guided the visionary focus of RedFlow Technologies Ltd, and its founders. This paper presents the analysis of the case study exploring the internal and external factors affecting the expansion of the company. Background RedFlow Technologies Ltd is an Australian company involved in high-tech, and it developed energy storage system that is renewable. RedFlow entrepreneurial exploration commenced in the year 2000. Alex Winter and Chris Winter were brothers employed in an oil industry when they resolved to change their careers. They all wanted to do something technical before they grew old. They had the motivation, and wanted to nature their passion for science and technology while at the same time enjoying the freedom of business decision making, and turning into their own employers. Using personal savings as the initial capital, they tried to develop an advanced two-stroke engine. The venture did not materialize. Nevertheless, in the year 2001, an opportunity that was promising was singled out in technology of reduction-oxidation (redox) flow battery. Alex consulting experience with battery developer Company of Australia provided the initial expertise and knowledge in the redox flow battery technology. The brothers were motivated by the little competition, fascinating challenges of the technology and original value to pursue the opportunity. In 2001, Alex and Chris moved their business into the family home garage and emphasized rapid early development and low cost in evaluation of technological risks, reduce uncertainties and assumptions. Following this, RedFlow expanded at a steady speed, bootstrapping for finance by surviving without salary, seeking government grants and support, and using family savings, the true brothers did everything within their means to make the company a success. By the year 2009, the company had expanded to the level of employing twenty full time workers. It delivered a zinc flow battery that was environmental friendly, and when combined with, photovoltaic solar panels, provided a renewable energy source that was able to be stored and utilized on demand. A summary of the company history has been represented in a diagram in the case study, for easy following. Challenge of starting up Generating revenues as well as creating value, posed a new challenge. Passion for technology was the initially the driving force for the two brothers. They needed to work hard in order to gain the recognition of potential investors. The quest of investors for reduced risks and returns posed another huddle. To overcome the challenge by investors, the company joined iLab, a Queensland government funded incubator in order to provide an appealing value proposition to the investors. The main goal of iLab development was to provide support and mentoring for entrepreneurs. The company was exposed to extensive networks and skilled people. The two brothers were deficient of network before joining this incubator. The business value of RedFlow was transformed due to business environment of iLab. This was the main factor that enabled RedFlow to get across the innovation’s ‘valley of death’. The technology characteristics were reformulated into a business model which assisted the company to meet the expectations of investors and at long last raise the needed funds for building the capabilities for the sake of commercialization. The brothers were forced to link technology and needs in the market, come up with an entry strategy that would reduce risks, and maximize the returns of investors, give an appraisal not only the technical risks but also the managerial, financial and human risks. To cross the innovation’s ‘valley of death’, the company received valuable support from the government of Queensland through the Queensland Sustainable Energy innovation Fund (QSEIF) and Innovation Start Up Scheme (ISUS). RedFlow internal environment Strengths Various factors contributed to the value proposition and identification development of the niche market that sustained the success of RedFlow Technologies Ltd. A management style that was flexible, coupled with opportunistic vision, proved to be of much importance to the business. The vision was centered on a technology platform that was robust, and it was supported to realize visionary development like the early integration of systems of communication that permitted distribution communication. Strong focus was demonstrated within the business. Small prospects and small firms searching for one prototype were ignored, and concentration given to big firms with large opportunities. By cutting deals with big players, the company reduced competition to a great length. The focus on the big players gave a strategic alignment between networking, management, and development. The engineering background possessed by Alex and Chris really help in the advancement of the company. They were able to instill expert working skills within the worker. The academic background of Chris and Alex enabled them to be innovative. The realization that technology is not exclusively about technology, but delivering a novel value proposition, helped to shape the vision of RedFlow Technologies Ltd. The competencies emanating from the interaction of the founders of the company propelled the growth witnessed. Chris and Alex were qualified engineers who had a Masters and PhD between them. After recognizing their potential in business, they sought to develop the required or necessary skills in business. Their technology thorough understanding created an upper hand in developing a feasible and realistic product solution. The agility to identify and seize opportunities in the environment was occasioned by their focused and flexible management style. Weaknesses The success of Chris and Alex Company did not come easy. There were more challenges that were overcome as compared to opportunities that presented themselves. Starting the business from scratch was difficult. The family savings and personal savings could not be counted as substantial for starting the business. The big investors were looking for a business that will give them high returns and minimize risk. Initially RedFlow Technology Ltd did not present the sought for environment by the investors. Gaining the trust of investors was a daunting task. Investors preferred established firms that they were sure of returns. Opportunities The company still has got a chance to increase its production owing to the opportunities presented in the market. The market niche discovered by the brothers could be exploited fully if more effort is directed towards research and development as explained in the case. Need for more efficient provision of power is another case of availability of opportunity. Power provision market will not come to an end as far as human beings still need to operate normally. There is hardly saturation when it comes to energy provision, in most circumstances; the energy provided is not enough. RedFlow Technology Company grew from business with promising technical characteristics to a business with an attractive pitch of investors. The company has a great chance of crossing the innovation’s valley of death. The fact of the investors having more faith in the company is a great opportunity for the company to invest more. The unreliable supply of other energy sources creates a chance for RedFlow Ltd to complement the energy requirement by the various sectors. External environment RedFlow Technology Ltd is affected by the advancement made in the other sectors regarding energy provision. The prototype zinc discovery was a major breakthrough for the company although it was influenced by eternal forces in the market. iLab idea helped RedFlow to gain support and network required for getting across the innovation’s valley of death. The government Queensland support through grants played a major role in steering to performance of the two brothers’ company to success. SWOT Analysis Strengths Enabling technology for renewable energy Systems Qualified engineers with a feasible and focused Management style Valuable support from Queensland government Acquisition of valuable know how by workers Contracting with big utilities to block competition Agility to find and seize opportunity Thorough understanding of technology Weakness Difficulty in applying for grants Initial challenge in attracting investors Opportunity Focusing on low-competition niche Challenge in the electricity industry Matching technology in energy requirement Passion driven innovation Chance to acquire more funding from investors due to growing reputation Threats Unreliable supply of electricity Competition from other energy providers Never-ending demand for innovation Conclusion Like any other business venturing into a unique niche market, RedFlow Technologies Ltd was surrounded by different factors that affected its growth. 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