Macroenvironmental Analysis of the German Solar Panel Industry


Master's Thesis, 2012
98 Pages, Grade: 1,7

Excerpt

Table of Contents

List of Abbreviations

List of Figures

List of Tables

1. Introduction
1.1 Problem Definition
1.2 Objectives
1.3 Methodology

2. Framework of Analysis
2.1 Industry’s dominant economic Features
2.2 Competitive Forces
2.2.1 Intensity of Rivalry among existing Competitors
2.2.2 Threat of Entry
2.2.3 Pressure from substitute Products
2.2.4 Bargaining Power of Suppliers
2.2.5 Bargaining Power of Buyers
2.2.6 Remarks and Competitive Conclusion
2.3 Driving Forces
2.4 Market Positions of Market Participants
2.5 Strategic Moves of Rivals
2.6 Key Success Factors for Future competitive Success
2.7 Market Attractiveness Evaluation

3. Introduction of the technical Background
3.1 Solar Cell and Solar Panel
3.2 Scheme of a typical Photovoltaic System
3.3 Overview of different Cell Types
3.4 Supply Chain in the Photovoltaic Business
3.5 Germany’s Governmental Policy for Photovoltaic Systems

4. Analysis
4.1 Industry’s dominant economic Features
4.2 Competitive Forces
4.2.1 Intensity of Rivalry among existing Competitors
4.2.2 Threat of Entry
4.2.3 Pressure from substitute Products
4.2.4 Bargaining Power of Suppliers
4.2.5 Bargaining Power of Buyers
4.2.6 Remarks and Competitive Conclusion
4.3 Driving Forces
4.4 Market Positions of Market Participants
4.5 Strategic Moves of Rivals
4.6 Key Success Factors for Future competitive Success
4.7 Market Attractiveness Evaluation

5. Results and Conclusion

Appendices

Bibliography

List of Abbreviations

illustration not visible in this excerpt

List of Figures

Fig. 1: The Components of a Company’s Macroenvironment

Fig. 2: The Five-Forces Model of Competition

Fig. 3: Weapons for Competing and Factors Affecting the Strength of Rivalry

Fig. 4: Factors Affecting the Threat of Entry

Fig. 5: Factors Affecting Competition from Substitute Products

Fig. 6: Factors Affecting the Bargaining Power of Suppliers

Fig. 7: Factors Affecting the Bargaining Power of Buyers

Fig. 8: Example of Strategic Group Map

Fig. 9: Solar Cell and Solar Panel

Fig. 10: Scheme of a grid-connected Photovoltaic System

Fig. 11: Cell Types

Fig. 12: Supply Chain in Photovoltaic Business

Fig. 13: General Assembly of a Glas Film Panel

Fig. 14: Solar Panel Manufacturing Steps

Fig. 15: Worldwide Solar PV Growth [in GWp]

Fig. 16: Total Photovoltaic Installations in Germany 2000-2012 [in GWp]

Fig. 17: Capital Spending on PV equipment

Fig. 18: Buyer Groups Market Share in Germany and US

Fig. 19 Share of different Cell Technology [in %]

Fig. 20: Poly Si, Wafer, Cell, Module Worldwide Production Capacity

Fig. 21: Comparsion of Demand and Capacity [GWp]

Fig. 22: Production Cost Advantage of Asian Manufacturers [€/Wp; %]

Fig. 23: Price Development Solar Panels (Wholesale Prices)

Fig. 24: Price Development Solar Panels (Double logarithmic Representation)

Fig. 25: Quarterly Pricing of Chinese Made crystalline Panels [€/Wp]

Fig. 26: EBIT Margins of selected Top 10 Companies

Fig. 27: Scheme of a CSP Plant

Fig. 28: Strength of the Five Forces

Fig. 29: Strategic Group Map of Panel Industry

Fig. 30: Best Research-Cell Efficiencies

List of Tables

Tab. 1: Questions for Identifying Industry’s Dominant Economic Features

Tab. 2: The Most Common Driving Forces

Tab. 3: Common Types of Industry Key Success Factors

Tab. 4: Overview Cell Types, Efficiency, Applications

Tab. 5: New German 2012 FIT

Tab. 6: Photovoltaik Installations in GWp by Countries (2010-2012)

Tab. 7: PV System Integrator Ranking 2010/11 (for Installations > 15kWp)

Tab. 8: Si-Panel Manufacturer Top 10 & German Companies

Tab. 9: Thin Film Manufacturer Top 10 & German Companies

Tab. 10: Data for Strategic Group Map

1. Introduction

The 20th century is marked by the industrial growth of all nations around the world. As a result the global energy demand is tremendously rising and most likely this will increase the threat of global warming. Mankind must therefore find a way to feed the energy hunger of the growing nations.

Due to this international development and the fear of nuclear plants1 the leading political parties of Germany have decided to focus on a nuclear free energy mix composed of renewable energy. This mix is seen as the problem solver and solution for the world wide energy demand. To push the development of the renewable energy sector a system of direct and indirect subsidies was therefore established by the leading political parties.2

1.1 Problem Definition

As stated before, the German approach is to push the renewable energy sector by direct or indirect subsidies. The photovoltaic sector in particular is very highly subsidised.

So far everything looked smoothly for the development of this plan. However, the last months have been dominated by press releases regarding German solar panel producers going bankrupt, like Solar Millennium, Solon, Solarhybrid and Q-Cells3.

1.2 Objectives

This development is raising the question: What has happened in the solar panel industry sector and what has lead to this development?

To answer this question it is necessary to analyse “the macroenvironment” of this industry. With these analyses it is then possible to determine the driving and influencing factors and forces in this industry sector. The findings of the analyses will be used to evaluate the attractiveness of the German solar panel industry. Finally it should be possible to answer the question.

1.3 Methodology

Companies which are acting in an industry sector or “macroenvironment” are influenced by the economy at large; population demographics; societal values and lifestyles; governmental legislation and regulation; technological factors; and closer to the companies of an industry sector, the competitive surroundings in which the companies are acting.4

Therefore, to answer the main question of the thesis, the macroenvironment of the German solar panel industry needs to be analysed from the market point of view, covering the before described factors and forces.

In detail a multi step approach will be used to answer the question and analyse the macroenvironment for the German solar panel industry. The analysis concept in this thesis will follow the basic approach of Michael Porter5 for structural analysis of industries and will be supplemented by the approach of Thomson / Strickland / Gamble6 for evaluating a company’s external environment.

In the first step it will be explained how the analysis shall be done. To analyse the macroenvironment of the German solar panel market the following questions will be answered by the use of different concepts and analytic tools:7

1. What are the industry’s dominant economic features?
2. What kind of competitive forces are industry members facing and how strong is each force (Porter’s Five-Forces Model of Competition)?
3. What forces are driving industry changes and what impacts will they have on competitive intensity and industry profitability (Concept of Driving Forces)?
4. What market positions do industry rivals occupy - who is strongly positioned and who is not (Strategic Group Map)?
5. What strategic moves are rivals likely to make next?
6. What are the key factors for future competitive success (Core Concept: Key Success Factors)?
7. Does the outlook for the industry present the companies with sufficiently attractive prospects for profitability?

In the second step the technical background of photovoltaic basics will be briefly presented to provide the needed understanding of the topic. After that introduction the analysis will be performed according to the setup done in the first step.

In the last step the findings will be used to evaluate the attractiveness of the industry, to answer the main question and to draw a brief future outlook for the German market participants in this sector.

2. Framework of Analysis

As stated in the chapter before, companies which are acting in an industry sector or “macroenvironment” are influenced by the economy at large; population demographics; societal values and lifestyles; governmental legislation and regulation; technological factors; and the competitive surroundings in which the companies acting. This relation is shown in Figure 1.8

illustration not visible in this excerpt

Fig. 1: The Components of a Company’s Macroenvironment

Source: Thomson, Arthur A. et al. (2008), p. 51, Figure 3.2

The outer ring records all relevant factors and influences outside the boundaries of the companies which are influencing the direction of objectives, strategy and business model. Changes in the outer ring of the macroenvironment may happen rapidly or slowly, with or without advance warning. The impact of changes in the outer ring can be big or small, but need to be watched carefully nonetheless.9 The inner ring factors and forces will have the biggest impact on the success of a company. Therefore, these close macroenvironment needs are to be watched most closely.10 As stated also in the chapter before, to gain a better understanding of the macroenvironment the following seven questions need to be answered by the use of different concepts and analytic tools:11

1. What are the industry’s dominant economic features?
2. What kind of competitive forces are industry members facing and how strong is each force (Porter’s Five-Forces Model of Competition)?
3. What forces are driving industry changes and what impacts will they have on competitive intensity and industry profitability (Concept of Driving Forces)?
4. What market positions do industry rivals occupy - who is strongly positioned and who is not (Strategic Group Map)?
5. What strategic moves are rivals likely to make next?
6. What are the key factors for future competitive success (Core Concept: Key Success Factors)?
7. Does the outlook for the industry present the companies with sufficiently attractive prospects for profitability?

Each of the following chapters is dealing with one of the before stated questions and will explain the approach and tools for the macroenvironmental analysis of the German solar panel market.

2.1 Industry’s dominant economic Features

The analysis of the industry competitive environment starts with the identification of the industry’s dominant economic features. Industry’s dominant economic features are factors like the market size and growth rate, the number of rivals and buyers, the scope of competitive rivalry, the degree of product differentiation, the speed of product innovations, the supply and demand conditions, the range of vertical integration and the cost effects of the economies of scale and learning/experience curve effects. Table 1 provides an overview of the economic features and the corresponding questions to consider for analysing the features.12

Tab. 1: Questions for Identifying Industry’s Dominant Economic Features

illustration not visible in this excerpt

Source: Thomson, Arthur A. et al. (2008), p. 53, Table 3.1

The analysis of the industry’s economic features also helps to foresee the possible next moves of the competitions. This can be seen on the following examples. If an industry, for instance, is driven by high speed product advances, companies have to invest heavily in research and development (R&D) to develop high innovation capabilities to outrun the competition. An industrial environment characterised like this can be found in video games, mobile phones and pharmaceuticals. To survive the competitive shake-out in such an industry sector, it is necessary to focus on cost reduction and improved costumer services. Other industries like the semiconductor producing industry is dominated by a strong learning/experience curve effect (each time the cumulative production volume doubles manufacturing costs decline around 20 percent). A simple calculation shows the impact of the effect. For example, if the first 1 million chips would cost $100 each with the 20 percent experience curve effect 2 million chips would cost $80 each and 4 million chips would cost $64 each and so on. To survive in such an industry, it is obvious that the market members will emphasis on volume increasing strategy.13

2.2 Competitive Forces

The competitive forces from one industry to another industry are never the same. One of the most powerful and used tool for analysing the competitive pressure and strength and importance of each in an industry/market is the five-forces model of competition, shown in figure 2. This model was first introduced by Michael E. Porter and basically expresses that the competitive pressure is operating in five areas of an industry/market:14

1. Competitive pressure coming form the rivalry among the competing sellers.
2. Competitive pressure related to the threat of new entrants in the market.
3. Competitive pressure associated from companies of other industries trying to offer substitute products.
4. Competitive pressure connected to the bargaining power of buyers.
5. Competitive pressure connected to the bargaining power of suppliers.15

The best approach to determine the strength and importance of each of the five forces is to analyse each in three steps:

Step 1: Identify specific competitive pressure associated to each force.

Step 2: Evaluation and graduation of the strength of each force (fierce, strong moderate to normal or weak).

Step 3: Conclude if the sum of the competitive pressure is beneficial to earn attractive margins.16

illustration not visible in this excerpt

Fig. 2: The Five-Forces Model of Competition

Source: Thomson, Arthur A. et al. (2008), p. 55, Figure 3.3

2.2.1 Intensity of Rivalry among existing Competitors

Rivalry among competing sellers is the strongest of the five forces.17 Rivalry takes place because at least one competitor feels pressure or sees a possibility to improve situation. In most cases moves by one company of an industry will have effects on the competitors which again lead to countermoves. This shows that firms are mutually dependent. This pattern of interaction may or may not leave the initiating company or even the whole industry better of. In case the interaction escalates the whole industry may in the end suffer losses in the end. Especially price cuts can lead to a downward spiral which in the end affects the whole industry. Advertising battles, as a counter example, can lead to higher demand which may have positive effects for the whole industry. The intense of rivalry depends on the interaction of the following factors:18

1. High Number of equally balanced Rivals. With a high number of equally balanced rivals the probability of moves by one competitor is high. This may result in instability of the market, because the resources for counteractions are available.
2. Slow Growth of Industry. With slow growth rates in an industry competition, companies with expansion desires must aim at the market share. This usually means more intense competition than with high growth rates. With high growth rates every participant can improve its share. With low growth rates, at least one participant has to loose share (usually not voluntary or without a fight).
3. High Fixed or Storage Costs. In industries with high fixed costs the force to utilize the capacity fully is high for every company. In case of overcapacity, this leads automatically to a price drop. Similar is the situation where products must be stored for high costs or if storage is not easy (for instance fish or lobster).
4. Lack of Differentiation or Switching Costs. In industries where products are a commodity or nearly a commodity, the buyer decision is usually based on price and service. This leads commonly to intense price and service competition.
5. Huge Enlargement of Capacity. In some industries the enlargement of capacity can only be done in large scale (for example chemical industry, aluminium production). As a consequence, the balance of supply and demand is disturbed. This very often leads to waves of overcapacity and price drops. 6. Diverse Rivals. Many rivals in an industry with different origin, background, history, relations and goals tend to have more conflict than a industry with more equal rivals. Because of these differences, the companies sometimes misinterpret the intentions of the others and rules of business may not be found. Therefore the competition is more intense for the market participants.
7. High Strategic Stakes. The rivalry is more explosive in industries where rivals have high stakes in having success. For instance, a diversified rival is seeking success to every price in a special branch to meet corporate strategy. Such an expansive strategy can also take loss leaders into account (if resources are available).
8. High Exit Barriers. Exit barriers are economical, strategical or emotional factors. These factors can keep a competitor in an industry even if he has low or negative margins. Such market participants can create intensive competition with extreme moves, which can affect the whole industry.19

Finally the level of rivalry in an industry needs to be evaluated. For the evaluation, rivalry can be divided in different grades:

1. Cutthroat or brutal Rivalry. Competition is characterized by heavy price wars or other aggressive tactics which is destructive to industry profitability.
2. Fierce or Strong Rivalry. The fight for market share is so intense, that the margin for most rivals is squeezed close to zero.
3. Moderate or Normal Rivalry. The level of competition allows most industry participants to earn sufficient profits.
4. Weak Rivalry. Weak rivalry is given when the rivals are satisfied with their sales growth rates, their market shares, the competitive actions are rarely offensive and the profits and returns are attractive.20

In figure 3 typical “Weapons” for tackling the rivals and attracting buyers are listed, further the factors which determine stronger or weaker rivalry are also listed.21

illustration not visible in this excerpt

Fig. 3: Weapons for Competing and Factors Affecting the Strength of Rivalry

Source: Thomson, Arthur A. et al. (2008), p. 57, Figure 3.4

2.2.2 Threat of Entry

The entry of new companies to an industry usually brings in new capacity, the desire of the new entrants to gain market share and new resources. As a result prices can fall or the existing participants are faced with new costs and in the end lower margins. The threat of entry is depending on the existing entry barriers. If potential entry’s facing high entry barriers, the threat of entry is naturally low. The following sources are the common major barriers to enter an industry:22

1. Economic of Scale. This barrier refers to declining unit costs to increasing unit volume per period. This is a huge threat to the potential entry, because it forces the entry to high production volume and to powerful reactions of the existing companies or to low production volume and the related cost disadvantage. Economic of scale is present in almost every business function (production, R&D, distribution and so on).
2. Product Differentiation. Product Differentiation refers to the fact that the established companies have brand and buyer loyalty. This creates threat to the entry, because huge resources are needed to overcome this loyalty. These efforts usually lead to losses during the entry phase.
3. Capital Requirements. If large investments need to be taken to enter the new industry, a big entry barrier is created. Especially, if capital is needed for unrecoverable or risky tasks like an advertising campaign and R&D.
4. Switching Costs. Switching costs means one time cost for the buyers for changing the supplier. With high switching cost the new supplier needs to offer a better price or performance to get the buyers to switch.
5. Access to Distribution Channels. This factor can create an entry barrier. The new entry normally has to use the same channels as the established companies. Therefore the new company has to convince the channels to accept its product with enticements, for example lower prices (which again lowers the profit prospects).
6. Cost Disadvantages Independent of Scale. The established companies can have (sometimes unreachable) cost advantages over the new entrants. For instance: special and protected technology, better access to suppliers, subsidies by the government, better locations.
7. Governmental Policy. The government can limit or even close the entry into a domestic industry. Common instruments could be licensing, limiting access to needed raw materials, customs requirements, environmental laws, subsidies, rules for regulated industry and so on. This barrier needs to be analysed carefully by the potential entrants to avoid unpleasant surprises.23

In Figure 4 the factors are summarized which determine how strong the competitive pressure related to the threat of entry is.

illustration not visible in this excerpt

Fig. 4: Factors Affecting the Threat of Entry

Source: Thomson, Arthur A. et al. (2008), p. 61, Figure 3.5

To evaluate the strength of the force it is necessary to analyse first the above listed barriers and second to determine the growth and margin prospects. In general high barriers and low growth and profit prospects will minimize competitive pressure from potential entry.24

2.2.3 Pressure from substitute Products

In figure 5, the conditions which determine if the competitive pressures coming from substitute products are weak, moderate or strong are summarized.25

illustration not visible in this excerpt

Fig. 5: Factors Affecting Competition from Substitute Products

Source: Thomson, Arthur A. et al. (2008), p. 65, Figure 3.6

All companies of an industry are competing with other industries, which are offering substitute products. Substitute products limit the obtainable profitability margin of an industry. The more attractive the price / performance level of the substitute product is the fixer is the available margin. For instance sugar producers are confronted with large scale use of high fructose corn syrup, which puts a lot of pressure to the classic sugar producers. Also producers of acetylene (gas) and rayon (cellulose fiber) had to compete with upcoming substitute lower cost materials to most of their classic applications.26

For the participants of an industry it is important to identify substitute products, which are able to perform the same function as the industry product. Sometimes substitute products can be found in other industries or in other functions. The search is not an easy task. Finding substitute products can be a matter of the whole industry. The whole industry may have to tackle the existing substitute to strengthen the competitive position.27

The major focus should be on substitutes which are getting more attractive in comparison to the industry product and where the producers achieve high margins. Scouting the market and identifying trends early can give alternative ways in acting. For example: to try a strategy to tackle the product or consider it as a new competitive factor.

2.2.4 Bargaining Power of Suppliers

Suppliers can make use of their bargaining power by threatening to raise the price or lowering the quality. Strong suppliers are able to reduce the profitability of a branch which is not able to increase and redirect its prices by their own (for instance, self manufacture by strong suppliers as an alternative to the production by a weaker supplier). A group of suppliers is strong if the following conditions apply:28

1. Supplier group is dominated by few suppliers which are more concentrated as their costumer industry.
2. Supplier group does not have to deal with substitute products.
3. The industry is a relatively unimportant costumer to the supplier group.
4. The products of the supplier group are important and necessary factors to its costumers.
5. The supplier group products are differentiated or switching costs are created.
6. The group has the possibility to raise the threat of forward integration.29

Another supplier to consider is the work force, which can be counted as a very powerful supplier. Especially highly qualified employees or very well organized (unions) employees can have big impacts on the overall revenue of an industry. The before listed conditions can be also adapted to bargaining power of the labour.30

In figure 6, the factors which determine the strength of the bargaining power of suppliers are listed.

illustration not visible in this excerpt

Fig. 6: Factors Affecting the Bargaining Power of Suppliers

Source: Thomson, Arthur A. et al. (2008), p. 69, Figure 3.7

2.2.5 Bargaining Power of Buyers

The buyers competing with the industry by bargaining for lower prices, higher quality or more service and trying to play competitors against each other. All these actions are driving the profitability of the industry down. The circumstances which are making buyers powerful are similar to those making suppliers powerful. A buyer group is strong if the following conditions apply:31

1. Group is concentrated or purchases large volumes relatively to the seller sales.
2. The products which the buyer group purchases from the sellers are a huge fraction of the overall buyer costs or total purchases.
3. The seller products are standardized or not differentiated.
4. The switching costs are low for the buyer group.
5. The buyer group is able to threaten the sellers or suppliers with backward integration.
6. The quality and performance of the seller product is not important to the product produced by a buyer group.
7. The buyer group is fully informed about competition, prices, demand, sellers cost structure and so on.32

Figure 7 lists all factors which determine whether the bargaining power of buyers is stronger or weaker.

illustration not visible in this excerpt

Fig. 7: Factors Affecting the Bargaining Power of Buyers

Source: Thomson, Arthur A. et al. (2008), p. 72, Figure 3.8

The above described factors are changing with time or as a result of strategic decisions taken by the sellers. The bargaining power of the buyers therefore can rise or fall.33

2.2.6 Remarks and Competitive Conclusion

The government is another factor to consider in the structural analysis. Since the seventies and eighties the government is affecting every competitive force. The government can be a supplier (for example supply of raw material) and a buyer (for instance military vessels). The government can influence the entry barriers (for example by customs), the rivalry (by for example regulations with regard to cost structure or influence on growth) and even substitute products (by laws, subsidies and regulations). For the structural analysis it is more useful to identify the impact on every single competitive force instead analysing the government as its own competitive force.34 With the identification of the forces and the underlying causes it is possible to draw conclusion with regard to the position of particular companies.

2.3 Driving Forces

For the analysis of the industry it is important to watch were an industry is in its life cycle. But there are also other factors which need to be identified. These factors driving industry changes and changes in industry condition more. Because key forces are driving the market participants to change their actions; “…the driving forces in an industry are the major underlying causes of changing industry and competitive conditions - they have the biggest influence on how the industry landscape will be altered…”35.

Some of these forces arise from the inner ring and some of them from the outer ring of macroenvironment (figure 1). The analysis of the driving forces takes place in three steps:36

Step 1: Identifying the driving forces.

Step 2: Assessing if the driving forces are strong enough to change the attractiveness of the whole industry.

Step 3: Determining the strategy changes which are needed to prepare for the impact of the driving forces.

The last step is necessary for analysing the macroenvironmental condition for a specific company. In the Thesis the last step for analysing the macroenvironmental conditions of the whole industry will be not applied.

There are a lot of developments, which can have an impact on an industry and which are important enough to be qualified as driving forces. Some of them are special to a specific industry, but most of them fall under the following categories:37

1. Emerging new Internet capabilities and applications: All across the world the Internet entered everyday’s business operations and everyday’s life since end of the 90s. The new technology was and still is a major driving force which affects and changes industry after industry. The internet is offering new distribution channels for businesses. For the customers, the internet offers huge possibilities to search easily for the best value in a specific product group. For companies, this puts new pressure to most of the market participants because the competition is now just a mouse click away. The development of the new technology is not finished, the internet of the future will be faster, offering more features and further new possibilities to companies and private persons. The challenge to access this force is to formulate the impact on the specific industry precisely.38
2. Increasing globalization: As soon as market members starting to look for customers in foreign countries or production of companies moving to countries with lower wages, the competition begins. Globalization of competition really starts if one or two market participants seeking for the world wide leadership by expanding into more and more countries around the world. Globalization is ramped up by reducing trade barriers between different countries across the world. Further, the significant differences in labour cost around the world are a big incentive to spread the operations of a company and transfer production to countries with lower labour costs. In industries like cell phones, digital cameras, computer equipment, motor vehicles, steel, video games, public accounting, textbook publishing, globalization is a major driver of industry change.
3. Changes in an industry’s long-term growth rate: Changes in the growth rate are always a driving force, with influences on supply and demand, entry and exit and strength of competition. An increasing buyer demand will stimulate a fight between the market participants for the new sales opportunities. A downturn will lead to a fight between the competitors for the existing market share. If the overall sale in an industry decreases suddenly after a long time of growth, market consolidation out of acquisitions and exits may occur. If the sale stagnates, market growth oriented participants may try to sell their business to business which decides to stay in the market. These remaining businesses may be forced to become more effective or have to close some of the existing plants.39
4. Changes in who buys the product and how they use it: Changes in the buyer demographics in combination with new use of a product can drive change in the competition. Especially new ways for distribution of the products are opened and adjustments in the distribution channel are needed like new mixes of retailer, dealers and outlets, different sales and promotion approaches, narrow or open the products lines and costumer service changes. For instance the new popularity of downloading music from the internet and storing it on the PC or burning it to CD was forcing the record companies to new distribution strategies and was putting a question mark on the classic retail music store. But in line with this development, sales for PC storage devices, disk burners and blank disks was raising tremendously. Also the growing number of households with Internet connection gives new customer service possibilities for banks by online services and for online retailers by complete turnaround of an order via the Internet.40

5. Product innovation: The race for being the first industry participant who is introducing a new product or product version is always affecting the competition in an industry. The ongoing enhancement and development of products influences the pattern of competition in an industry by attracting new buyers, boosting growth and/or creating narrower or wider product differentiation. The market introduction of more innovative products usually strengthens the company position at the cost of the other market participants, which are not able to follow. In industries like digital cameras, golf clubs, video games, toys and prescription drugs, product innovation is a key driving factor.41
6. Technological change and manufacturing process innovation: Innovations and advances in technology can tremendously affect an industry surrounding, by creating the possibility to produce new and better products at lower cost levels or offering new technological advances in other industries. Examples can be found in a lot of sectors. The Voice over IP Protocol (VoIP) offers the possibility for low cost Internet-based phone calls and therefore VoIP- providers stealing large numbers of customers from the traditional telephone companies (where the more wire based installation creates higher operation costs). The flat-screen-technology for PCs is nearly ending the demand for cathode ray tube (CRT) monitors. The Liquid Crystal display (LCD), plasma and high definition technology is killing the demand for CRT TV screens. Digital technology is driving the change in the video and camera industry. Technological progress can also affect the capital requirements, plant size, distribution channels and learning/experience curve effect. For instance the founding of container shipment has significantly boosted the globalization possibilities. In the steel industry the advances in electric arc minimill technology (allows the recycling of metal scrap) has given the steelmakers with up to date minimills competitive advantage to tackle the steelmakers with traditional mills which run at higher production cost. Nucor Corporation started its operation around 30 years ago using minimill technology and is now the leading U.S. steel producer.42

[...]


1 cf. APuZ (2011), p.12, p.15 cf.

2 BMU (2011a), p.1-6

3 cf. Habit, Steffen (2012), p.1; Anon (2012a), p.1

4 cf. Thomson, Arthur A. et al. (2008), summarized from p. 49-51

5 cf. basic literature: Thomson, Arthur A. et al. (2008)

6 cf. basic literature: Porter, Michael E. (2008)

7 cf. Thomson, Arthur A. et al. (2008), questions and approach taken from p. 52

8 cf. Thomson, Arthur A. et al. (2008), summarized from p. 49-51

9 cf. Thomson, Arthur A. et al. (2008), summarized from p. 49-51

10 cf. Thomson, Arthur A. et al. (2008), summarized from p. 49-51

11 cf. Thomson, Arthur A. et al. (2008), following questions and approach taken from p. 52

12 cf. Thomson, Arthur A. et al. (2008), summarized from p. 52

13 cf. Thomson, Arthur A. et al. (2008), summarized from p. 53, p. 54

14 cf. Thomson, Arthur A. et al. (2008), summarized from p. 54

15 cf. Thomson, Arthur A. et al. (2008), points summarized from p. 54

16 cf. Thomson, Arthur A. et al. (2008), summarized from p. 54

17 cf. Thomson, Arthur A. et al. (2008), summarized from p. 55

18 cf. Porter, Michael E. (2008) summarized and translated from p. 52

19 cf. Porter, Michael E. (2008) points summarized and translated from p. 52-57

20 cf. Thomson, Arthur A. et al. (2008), points summarized from p. 60

21 cf. Thomson, Arthur A. et al. (2008), summarized from p. 56

22 cf. Porter, Michael E. (2008) summarized and translated from p. 39

23 cf. Porter, Michael E. (2008) points summarized and translated from p. 39-46

24 cf. Thomson, Arthur A. et al. (2008), summarized from p. 63

25 cf. Porter, Michael E. (2008) summarized and translated from p. 58-59

26 cf. Porter, Michael E. (2008) summarized and translated from p. 58-59

27 cf. Porter, Michael E. (2008) summarized and translated from p. 58-59

28 cf. Porter, Michael E. (2008) summarized and translated from p. 62

29 cf. Porter, Michael E. (2008) points summarized and translated from p. 63-64

30 cf. Porter, Michael E. (2008) summarized and translated from p. 64

31 cf. Porter, Michael E. (2008) summarized and translated from p. 59

32 cf. Porter, Michael E. (2008) summarized and translated from p. 60-61

33 cf. Porter, Michael E. (2008) summarized and translated from p. 62

34 cf. Porter, Michael E. (2008) summarized and translated from p. 64-65

35 cf. Thomson, Arthur A. et al. (2008), p. 74

36 cf. Thomson, Arthur A. et al. (2008), summarized from p. 74

37 cf. Thomson, Arthur A. et al. (2008), summarized from p. 74

38 cf. Thomson, Arthur A. et al. (2008), summarized from p. 74-75

39 cf. Thomson, Arthur A. et al. (2008), summarized from p. 75-76

40 cf. Thomson, Arthur A. et al. (2008), summarized from p. 76

41 cf. Thomson, Arthur A. et al. (2008), summarized from p. 76

42 cf. Thomson, Arthur A. et al. (2008), summarized from p. 77

Excerpt out of 98 pages

Details

Title
Macroenvironmental Analysis of the German Solar Panel Industry
College
University of applied sciences, Munich
Grade
1,7
Author
Year
2012
Pages
98
Catalog Number
V210603
ISBN (eBook)
9783656382225
ISBN (Book)
9783656435785
File size
4136 KB
Language
English
Tags
Dominant Economic Features, Demand, Supply, Scale, Attractiveness, Feed-In Tariff, Rivals, Five Forces, Supply Chain, Governmental Policy, Market Size, Growth, Product differentiation, Thin Film, Einspeisevergütung, Marktanalyse, Photovoltaik, Makroumwelt, Analyse, Angebot, Nachfrage, Modulhersteller, Übersicht, Solarworld, Markt, Q-Cells, First Solar, Cell, Panel, Module, Modul, Branchenstrukturanalyse, Downstream, Upstream, Strafzoll, penalties, antidumping, treibende Kräfte, Porter, Porter’s Five-Forces, Strategic Group Map, Driving Forces, Branchenanalyse, Solar, Industrie, Industry, Branche, Solarzelle, Solarpanel, Solar panel, Solarmodul, Modulindustrie, Überkapazität, Stukturanalyse, Solar-Modul, GW, Solar-Industrie, Deutschland, China, Prognose, Ausbau, Zubau, Welt, Wachstumsraten
Quote paper
Jürgen Schwießelmann (Author), 2012, Macroenvironmental Analysis of the German Solar Panel Industry, Munich, GRIN Verlag, https://www.grin.com/document/210603

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Title: Macroenvironmental Analysis of the German Solar Panel Industry


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