Technology: Logistics; R&D; materials science research; applied physics research Environmental: Green movement; efficient energy usage Legal: trade regulations; warranties/product liability 5-Forces: Barriers to Entry: Low Little capital requirements; one of the fastest-growing industries in the world; moderate knowledge requirements; increased emphasis on reputation, branding, and product quality is making entry somewhat more difficult Bargaining Power of Suppliers: Moderate Bargaining Power of Buyers: High Buyers tend to purchase in large amounts; high product-quality demands; high pricing pressure
Substitutes: High All other energy sources: Wind; nuclear, coal, etc. Rivalry: Very High Competition mostly based on cost, branding, and R&D (either need to cut costs or make a significant amount of investment to differentiate); branding is extremely important (newer, smaller companies need to find a specialized focus) Attractiveness of the Industry: Not attractive - Large amounts of rivalry; high bargaining power if buyers; lots of substitutes - High growth potential; opportunities to specialize CAGE ANALYSIS Comparison to Canada: C A G E China *** **1/2 ** **1/2 Germany ** *1/2 *1/2 - ** 1/2 Global effects are moderated by high standardization in the industry (business conducted in English, set standards for PV modules) Financial Analysis: Gross margin the least of it all of its competitors Other numbers to look at: top-line growth, major expense categories, financing activities, R&D intensity Company is breaking even while competitors are turning a profit VRIO: V R I O Location of plants Yes No No No Production/Suppl y chain management Yes No No No Canadian Brand Yes Yes No No Government Relations Yes No No No Technical Innovation Capabilities Yes No No No Recycling Program Yes Yes No No Quality Assurance Yes No No No
Recommendation: Improve production processes to maximize volume and reduce cost/unit
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