In the year 2010, First Solar was the worldwide leader in photovoltaic (PV) modules and seemed to dominate the marketplace going forward. In 2010, the business faced major challenges despite its success to date. Declining subsidies in major markets in the EU, increased competition from well-heeled Chinese manufacturing companies, and the risk of disruption from higher efficiency technologies threatened to undermine the progress that First Solar had made.
The case provides a backdrop for investigation of how essential changes in the external market environment change the relative importance of a company's distinctive competencies and necessitate the development of new competences. Particularly, the diminishing increase in subsidy markets demands First Solar to seek new sustainable markets in which PV solar is viable in the absence of subsidies. Success in these markets requires development of new skills not essential for pure-play module manufacturing. Additionally, the case explores key elements of mitigation and technology leadership of disruptive forces as the industry leader. Additionally, the case confronts the question of company definition and examines the justification for vertical integration within the solar industry. Management at First Solar must contemplate whether EPC abilities and its development have made it a more general energy firm or whether the firm is just in the module business in year 2010. The case also details the financial strategy of the firm, highlighting the linkages that are intimate with the overall corporate strategy. Ultimately, management control systems and the business's corporate culture are analyzed for their effectiveness at aligning the organization amidst critical external change.
PUBLICATION DATE: October 01, 2010 PRODUCT #: SM190-PDF-ENG
This is just an excerpt. This case is about TECHNOLOGY
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