First Solar, Inc. in 2013 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of First Solar, Inc. in 2013
An update to First Solar (A), this case highlights changes to the solar energy market between 2010 and 2013 and the resulting challenges that First Solar had to overcome. In addition to increased competition from highly subsidized Chinese manufacturers, First Solar lost its pricing advantage due to a steep decline in material costs for the competing solar cell technology, c-Sci. The 2008 global financial crisis spurred a dramatic decline in demand from subsidy markets, further intensifying competition. Within First Solar, the management team went through substantial turnover and was sharply divided over what the company's core strategy should be. Good financial discipline and several key business model decisions kept First Solar solvent. Through acquisitions, the company developed a competitive advantage in the systems business and pivoted away from subsidy markets, pursuing more sustainable markets elsewhere. Finally, First Solar hedged its bet on technology, adding c-Sci, the competing solar cell technology, to its portfolio through an acquisition. These shifts helped to restore optimism and position First Solar to resume a leadership role.
Authors :: Morgan Hallmon, Robert E. Siegel, Robert A. Burgelman
Swot Analysis of "First Solar, Inc. in 2013" written by Morgan Hallmon, Robert E. Siegel, Robert A. Burgelman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Solar Sci facing as an external strategic factors. Some of the topics covered in First Solar, Inc. in 2013 case study are - Strategic Management Strategies, Competition, Competitive strategy, Marketing, Policy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the First Solar, Inc. in 2013 casestudy better are - – there is backlash against globalization, geopolitical disruptions, increasing energy prices, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of First Solar, Inc. in 2013
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in First Solar, Inc. in 2013 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Solar Sci, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Solar Sci operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of First Solar, Inc. in 2013 can be done for the following purposes –
1. Strategic planning using facts provided in First Solar, Inc. in 2013 case study
2. Improving business portfolio management of Solar Sci
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Solar Sci
Strengths First Solar, Inc. in 2013 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Solar Sci in First Solar, Inc. in 2013 Harvard Business Review case study are -
Learning organization
- Solar Sci is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Solar Sci is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in First Solar, Inc. in 2013 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Solar Sci is one of the leading recruiters in the industry. Managers in the First Solar, Inc. in 2013 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Solar Sci is present in almost all the verticals within the industry. This has provided firm in First Solar, Inc. in 2013 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Solar Sci has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Solar Sci to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Solar Sci is one of the most innovative firm in sector. Manager in First Solar, Inc. in 2013 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Solar Sci digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Solar Sci has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Leadership & Managing People industry
– First Solar, Inc. in 2013 firm has clearly differentiated products in the market place. This has enabled Solar Sci to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Solar Sci to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Solar Sci in the sector have low bargaining power. First Solar, Inc. in 2013 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Solar Sci to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Solar Sci has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study First Solar, Inc. in 2013 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Solar Sci has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Solar Sci has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Leadership & Managing People field
– Solar Sci is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Solar Sci in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Solar Sci are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses First Solar, Inc. in 2013 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of First Solar, Inc. in 2013 are -
No frontier risks strategy
– After analyzing the HBR case study First Solar, Inc. in 2013, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Solar Sci products
– To increase the profitability and margins on the products, Solar Sci needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Morgan Hallmon, Robert E. Siegel, Robert A. Burgelman suggests that, Solar Sci is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study First Solar, Inc. in 2013, in the dynamic environment Solar Sci has struggled to respond to the nimble upstart competition. Solar Sci has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study First Solar, Inc. in 2013, is just above the industry average. Solar Sci needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study First Solar, Inc. in 2013 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Solar Sci 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the First Solar, Inc. in 2013 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Solar Sci has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study First Solar, Inc. in 2013, it seems that the employees of Solar Sci don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Solar Sci needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Solar Sci has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Solar Sci supply chain. Even after few cautionary changes mentioned in the HBR case study - First Solar, Inc. in 2013, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Solar Sci vulnerable to further global disruptions in South East Asia.
Opportunities First Solar, Inc. in 2013 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study First Solar, Inc. in 2013 are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Solar Sci can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, First Solar, Inc. in 2013, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Solar Sci to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Solar Sci can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Solar Sci to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Solar Sci to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Solar Sci has opened avenues for new revenue streams for the organization in the industry. This can help Solar Sci to build a more holistic ecosystem as suggested in the First Solar, Inc. in 2013 case study. Solar Sci can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Solar Sci can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Solar Sci can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Solar Sci to increase its market reach. Solar Sci will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Solar Sci can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Solar Sci can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Solar Sci can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Solar Sci is facing challenges because of the dominance of functional experts in the organization. First Solar, Inc. in 2013 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Solar Sci in the consumer business. Now Solar Sci can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Solar Sci can use these opportunities to build new business models that can help the communities that Solar Sci operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats First Solar, Inc. in 2013 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study First Solar, Inc. in 2013 are -
Stagnating economy with rate increase
– Solar Sci can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Solar Sci has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Solar Sci needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Solar Sci with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Solar Sci high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Solar Sci can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Solar Sci demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Solar Sci needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Solar Sci can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Solar Sci.
Increasing wage structure of Solar Sci
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Solar Sci.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Solar Sci business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Solar Sci needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Solar Sci will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Solar Sci can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study First Solar, Inc. in 2013 .
Weighted SWOT Analysis of First Solar, Inc. in 2013 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study First Solar, Inc. in 2013 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study First Solar, Inc. in 2013 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study First Solar, Inc. in 2013 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of First Solar, Inc. in 2013 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Solar Sci needs to make to build a sustainable competitive advantage.
