There are big plans for renewables in future: Countries target to 100 % domestic energy demand to be produced by renewable energies. High investments in the branch are supposed to bring the desired targets. The world’s demand for energy is growing rapidly since intensified globalization results in global economic growth and welfare giving companies the incentive to conquer new markets.
As more electricity is needed, its’ price is expected to rise worldwide that hampers economic growth. The world’s demand is calling for a global energy mix that adapts to our world’s changing economic and ecological conditions. Thus, providing and combining various independent new energy resources for sustainability with the outlook of reducing CO2 emissions in the long term and to assure and improve energy supply around the global.
China is successful due to its’ competitive advantage of producing lowcost solar modules which has badly affected the EU photovoltaic market and its competing enterprises, but granted the country itself a strong position in the global photovoltaic market with their financial opportunity to expand easily.
The implementation of tariff regulation and minimum prices to restrain imports for the protection of Europe’s domestic market forces China to rethink its’ strategies: China’s high government subsidies target for intensive investments in form of expansions to new territories. As subsidies may lead to overcapacities in the home country some solar companies are preparing for market entries in emerging countries eager surviving plans of PV companies in times of high competition and falling prices to increase sales volumes to prevent another insolvency in the sector. Combining South Africa’s potential and new business opportunities in highly competitive photovoltaic markets Shunfeng International Clean Energy Ltd could help to boost Wuxi Suntechs’ figures to be in black again.
Table of Contents
- Introduction
- Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power Co. Ltd.)
- Corporate background
- Financial Key Figures
- South Africa
- Characteristics of South Africa
- South Africa's energy market
- Porter's Five Forces
- Description of the model's approach
- Implementation of the model to the South African market
- Conclusion
Objectives and Key Themes
This seminar paper aims to explore the factors influencing a company's market entry strategy, specifically focusing on Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power) and its potential expansion into the South African market. The paper utilizes Porter's Five Forces model to analyze the competitive landscape and identify potential challenges and opportunities.
- The growing global demand for renewable energy and the need for sustainable energy solutions
- The competitive landscape of the photovoltaic industry, including China's dominance and the impact of government subsidies
- The opportunities and challenges presented by South Africa's energy market, including its reliance on fossil fuels and its ambitious renewable energy targets
- The application of Porter's Five Forces model to analyze the competitive environment of the South African solar market
- The potential for Shunfeng International Clean Energy Ltd. to leverage its strengths and achieve success in South Africa
Chapter Summaries
- Introduction: The chapter introduces the topic of renewable energy and its growing importance. It discusses the global demand for energy, the rising price of electricity, and the need for sustainable solutions. The chapter also highlights China's dominance in the photovoltaic market and the challenges faced by European companies due to cheap Chinese solar modules. It introduces Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power) and its potential market entry into South Africa as a strategic move to overcome competition and financial difficulties.
- Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power Co. Ltd.): This chapter provides a brief overview of Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power), its corporate background, and its financial performance. It highlights the company's strengths and weaknesses, setting the stage for analyzing its potential in the South African market.
- South Africa: This chapter focuses on the South African market, its characteristics, and its energy landscape. It explores the country's potential for renewable energy development, including its ambitious renewable energy targets and its dependence on fossil fuels. It also touches upon the economic and political context of South Africa.
- Porter's Five Forces: This chapter introduces Porter's Five Forces model as a framework for analyzing the competitive environment of a market. It provides a description of the model's approach and then applies it to the South African solar market. The chapter identifies the key forces influencing competition in the market and analyzes their impact on potential market entry.
Keywords
This paper explores the strategic management of renewable energy, focusing on the market entry and expansion strategies of Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power) into South Africa. Key terms and concepts include: renewable energy, photovoltaic market, Porter's Five Forces, competitive advantage, market entry strategy, emerging markets, South Africa's energy sector, and sustainable development.
Frequently Asked Questions
What is the primary focus of this paper regarding Shunfeng International?
The paper explores the market entry and expansion strategy of Shunfeng International Clean Energy Ltd. (Wuxi Suntech Power) into the South African solar market using Porter's Five Forces model.
Why is South Africa an attractive market for solar energy companies?
South Africa has ambitious renewable energy targets to reduce its dependence on fossil fuels and offers significant potential for sustainable development despite a highly competitive environment.
How does China influence the global photovoltaic market?
China has a competitive advantage in producing low-cost solar modules, supported by government subsidies. This has led to market dominance but also triggered tariff regulations and minimum prices in the EU to protect domestic markets.
What is Porter's Five Forces model used for in this context?
The model is used as a framework to analyze the competitive landscape of the South African solar market, identifying challenges and opportunities for Shunfeng's entry.
What challenges do solar companies face globally?
Companies face falling prices, high competition, overcapacities in home markets, and the need for sales volume to prevent insolvency.
What is the long-term outlook for global energy mentioned in the text?
The world is moving toward a global energy mix that reduces CO2 emissions and ensures a sustainable energy supply, with some countries targeting 100% domestic energy production from renewables.
- Quote paper
- Heike Stapf (Author), 2015, 5 Forces Analysis for the Market Entry and Expansion Strategy of Shunfeng International Clean Energy Ltd, Munich, GRIN Verlag, https://www.grin.com/document/300575
