The Five Forces Model of Competition

The structure of an organization is the sum of total ways in which it divides its labour into distinct tasks and then achieves coordination among them. (Mintzberg, 1979). An organization can be structured in many ways depending on their objectives. An organizational structure consists of activities such as task allocation, coordination and supervision which are directed towards the achievement of organizational aims. (www.wikipedia.org)

Competition is prevalent in various aspects of life, including sports, school, and jobs. Everyone at some point in their lifetime will have to compete against others in order to achieve a goal or earn a prize. It’s how the world has worked for a long time; it’s survival of the fittest and this minor competition between everyone is how we have continuously gotten smarter, faster, and stronger. Competition is necessary to a certain degree, but how much is too much? It’s definitely not a bad thing, and as long as there’s a healthy amount, it can be beneficial because it fosters self-improvement, and it will push people to go all out and try their absolute best.

When looking at Renewable Energy, with a closer look at solar energy, there could be an increase in the use of solar due to the recession or a trough in the business cycle. The cost of renewable energy on the decline and the increase in the cost of more common energy production, there will be an increase in demand. In the last few years, when economy was in an expansion period, solar power cost did rise and so did the construction cost that caused projects to be stopped. With the recession, that was worldwide, reduced the overall price for the construction of solar panels and made for a rapid growth of equipment manufacturing in Asia. This added competition to the market and made it more affordable to use solar power in the United States.

The solar energy industry creates jobs. The Central Valley is a major hub of agriculture in the United States. The produce in the valley varies from vegetables, fruits, wine, dairy products and fruit juices. To sustain Agribusiness in the region, businessmen and farmers needed to cut the cost of running their farms and ranch. The ability to cut the energy bills has helped many businesses to remain profitable and sustain the livelihood of many families. The increase in Solar Energy in the valley started to grow exponentially in the last decade. The Fresno Bee article, “Valley Solar Firms Shine …,” by Sandford Nax talks about the acceleration of solar company expansion and job creation. Sanford presents the different reasons for the solar

The big countries like US, Canada, Brazil, China and Germany still have the greatest renewable power generation capacity. These countries seem to rule when it comes to renewable energy source. For the first time, China’s new renewable power capacity has passed new fossil fuel and nuclear capacity. In the 2014 edition of the REN21 report it states that, while Europe and North America have become the top markets for renewable energy, other countries have seemed to pick up some of baggage and could also be the future leaders of it. REN21 has found so

Incentives (governmental regulations require utilities to purchase renewable electricity at higher rates), can only help the business to become established in the market, so are important in the short and mid-term only. Because European incentives diminish over time, in the long term all PV technologies will compete based on price and performance therefore cost

In sum, according to the EU experiences and the attitudes of the consumers, the definition of the market should not be confined to a renewable energy market, instead, a broader wholesale electricity market should be the appropriate benchmark. If the renewable energy market is adopted to measure subsidies,

Martin Roscheisen, CEO of Nanosolar must decide on the market they are going to focus, whether it’s Europe which has feed-in tariff plans with long term commitment (20 yrs) or jump-start into the nascent but high potential US market. The other problem plaguing him is the pricing and sales strategy to be employed. A low-pricing strategy is imperative for the US market as there are many players in it, as for Europe having a reliable pricing schedule- it’s all about pricing vis-a-vis its major competitor First Solar.

Solar energy is constantly improving, whether that be financially or more efficiently. As a result, solar panels, a large focus in solar technology, are becoming less expensive. The price of producing panels has decreased dramatically. However, a popular belief is that solar energy is more expensive than fossil fuels. A recent Arabia

Solar energy is constantly improving, whether that be financially or more efficiently. As a result, solar panels, a large focus in solar technology, are becoming less expensive. The price of producing panels has decreased dramatically. However, a popular belief is that solar energy is more expensive than fossil fuels. A recent Arabia

Chinese companies were ‘selling products below the cost of manufacture also benefiting from unfair subsidies from their government’ this results the domestic quantity supply of solar-panels to decrease as the price of domestic supplied solar-panels is higher than ones imported from China. But U.S consumers are paying a lower price when solar-panels are exported to the U.S from China and consumers get more variety of choices when buying. Even if America’s solar market contained no trade-barriers before this, the domestic quantity supplied would still decrease from Q2 to Q1 because most domestic solar companies cannot compete with the subsidized Chinese producers. ‘Inexpensive Chinese solar-products pushed many American manufacturers out of business’, causing structural-unemployment in America and this will be difficult for the U.S government to deal with because this will require retraining or other initiatives which can sometimes be

Household use of solar photovoltaic (PV) panel systems has grown significantly in Australia this decade behind increased awareness of the risk of dangerous climate change, the reduced cost of systems and a range of government incentives to encourage use of the technology.

Government incentives and policy factors serve as significant motivation for market entry especially in high-cost, highly competitive markets such as solar energy. Therefore, Nanosolar must take the types of incentives and the differences between them into consideration to ensure that they enter the best market. Government incentives are important because they not only provide reasons for consumers to switch over to solar energy from other less sustainable forms of electricity, but also attract solar power companies such as Nanosolar to enter the industry and provide those services. With this, Nanosolar is aware that European markets are highly profitable, especially in countries like Germany that enacted renewable energy laws that provide feed-in tariffs that required “utilities to buy solar electricity at a fixed price which allowed all key players to make enough profit”, in addition to France whom implemented tax credits and subsidies to entice citizens to shift to solar electricity, and Italy whom offered bonuses to schools and public health facilities that moved to solar electricity (Nanosolar, 10). Lastly, Nanosolar’s “existing relations with European power suppliers” and the assembly plant in Germany make Europe a more attractive industry because they can be “more price competitive” in Europe as a result (Nanosolar, 12).

Subsides are being provided directly to renewable energy generators by governments all over the world. German has launched an aggressive campaign to have 100% of its energy come from renewable sources. The German government gives direct subsidies to individuals and businesses for the installation of roof top solar panels on their property, thus making renewable energy more attractive for small renewable energy generators (Burgermeister, 2009). Direct subsidies have become a required part of renewable energy for small producers to find it cost effective and current efficiency levels show that they will be required for many years to come.

Early in 2012, Europe’s economy was shrinking and the euro zone’s economy had shrunk by .3 percent in 2011’s fourth quarter. Greece, Portugal, Ireland, Spain, and Cyprus all had defaulted on their debts and were unable to refinance them. The European Union had to consider what would provide the greatest benefit to all members of the Union, and how implementing anti-dumping and anti-subsidy laws would make it even more expensive for solar panels in the European Union. Secondly, China currently accounted for around 65% of the world production of solar panels. Due to this it gave them competitive advantage and the benefit of economies of scale. Due to the ability to sell Chinese solar panels at a lower cost in the European Union it caused around 40 EU producers to declare insolvency, 6 EU producers to stop production (some partially), and 2 EU producers to quit solar business between 2009 and 2012 (Memo/13/497). If something was not to quickly be done about the dumping of Chinese solar panels thousands of jobs would be lost within the European Union and EU producers of solar panels market share would drastically drop, considering it was already at a minimal 19% Union market share. Thirdly, the European Union had to consider overall relations with the Chinese regarding trade in general. An aggressive retaliation by the European Commission in regards to the dumping could burn trade