Date post: | 12-Aug-2015 |
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Business |
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Company Overview: SITUATION▪ Xinjiang Goldwind Science and Technology Inc.
▪ Target of selling 30% of its turbines overseas by 2012
▪ Chairman Wu: Globalization is about more than sales
▪ “It could enhance Goldwind’s human capital and corporate culture, giving a company of its size the international pedigree it deserved”
▪ Goldwind USA
▪ Sold 18 turbines to small projects across 8 states in the U.S.
▪ 2 years of experience in United States (Founded Goldwind USA in spring 2010)
Company Overview:COMPLICATIONS▪ General▪ GE▪ Industry Growth Rate Decline▪ Operational Experience
▪ Technical Difficulties▪ Grid Parity
▪ Political▪ Government Subsidies▪ Tariffs
Company Overview:ENABLERS▪ General
▪ Parent Company▪ World Market Share▪ Experienced Team▪ US Sourcing
▪ Technical▪ R&D Centers▪ PMDD Technology▪ Experience Curve
▪ Political▪ Job Creation
▪ Financial▪ Strong Cash Position
Company Overview:CORE QUESTION
How can Goldwind USA capture a bigger portion of the wind turbine
market in the United States?
1. PESTLE MODEL
2. PORTER’S FIVE FORCES
PEST MODELEXTERNAL ANALYSIS
POLITICAL
1. Reduced Government Subsidies:▪ The U.S. government ▪ The Chinese government
2. Increased tariffs:▪ Lobbying from U.S. Wind Tower Trade
Coalition (WTTC)
3. Clean energy adoption by 2035PEST Model
ECONOMIC
Economic recovery:▪ Goldwind’s Timeline▪ Clean Energy Adoption
PEST Model
SOCIAL
▪ Perception of Chinese Goods:▪ China Quality
▪ Job creation after the recession of 2008:▪ Creating jobs in the U.S. was the
message that Goldwind USA tries to convey as a Chinese newcomer to the American market.
▪ Going Green▪Wind power is Renewable Energy
PEST Model
TECHNOLOGICAL
▪Mainstream technology—geared wind turbine
▪ Goldwind— first mover advantage with PMDD Technology
PEST Model
PORTER’S FIVE FORCESEXTERNAL ANALYSIS
Suppliers
New Entrants
Rivalry Buyers
Substitutes
POWER OF SUPPLIERS : LOW-MEDIUM
▪ Recession = Low Supplier Prices
▪ Raw Material Prices
▪ Vertical Integration Threat
▪ Switching Costs: Trust
POWER OF BUYERS: HIGH
▪ Diverse Customer Segments▪ Utility Companies: Oligopolies▪ Institutions▪ Banks
▪ Clean Energy▪ Unfavorable Gross Profit
THREAT OF NEW ENTRANTS: MEDIUM-HIGH
▪ Barriers to entry
THREAT OF SUBSTITUTES: HIGHIndustrial Structure- Diverse
▪ Fossil fuels▪ Solar▪ Hydroelectric▪ Biomass▪ Nuclear
RIVALRY- HIGH
WORLD US
COMPLEMENTS
▪ Wind Farms
RESOURCES, CAPABILITIES AND COMPETENCIES
RESOURCES AND CAPABILITIES
RESOURCES
▪ Strong financial position
▪ Small and nimble team
CAPABILITIES
▪ Commitment to research and development efforts
▪ Manufacturing
▪ Innovative- capacity to enter new product segments
▪ Turbines can work in harsher weather conditions
▪ Currently developing blades much larger than industry average
VRIN CORE COMPETENCIES
V R I N
▪PMDD technologyX X X X
▪Neodymium for its permanent magnetsX X
▪US suppliers network and strategyX X X
1. STRATEGY DIAMOND
2. SEVEN S FRAMEWORK
RECOMMENDATIONS
1. Project Initiation
2. Customer value
3. Branding
#1 PROJECT INITIATION▪ Focus on larger wind farms in a few places▪ California▪ Texas▪ Iowa▪ Illinois
#2 CUSTOMER VALUE
▪ Wind farm financing, development and management services▪ Project customization ▪ Product Innovation
#3: BRANDING
▪ Novel advertising campaigns▪ Human elements v machinery▪ Quality & Integrity▪ Continue partnering with established companies
IMPLEMENTATION▪ Strategy- Increase US market share through initiating projects, enhancing customer value
and branding
▪ Structure- Utilize matrix structure to benefit project implementation growth and customization.
▪ Systems- Customer satisfaction, CRM, product quality & efficiency, environmental impact
▪ Style- Leadership style that promotes honesty and integrity, innovation, motivation and productivity, close team relationships among employees
▪ Skill- Innovative and technological competencies
▪ Staff- Maintain current high standards of recruiting top talent, recruit marketing experts, strong project managers
▪ Shared Values- Commitment to clean renewable energy in lieu of climate change, steadfast commitment to innovation
THANK YOU
GLOBALIZATION▪ Globalization strategy: Adapt operations in USA to maximize effectiveness
▪ CAGE Distance Framework:▪ Cultural: different languages, ethnicities, and values; lack of connective ethnic or social networks▪ Administrative: differences in political and governmental systems in terms of the wind industry▪ Geographic: physical distance between China and the U.S.; no common land border, differences in climates, time-zones, and
geographic size and population▪ Economic: differences in consumer incomes and economic size, availability of human, financial, and natural resources,
infrastructure, distribution networks, and organizational capabilities▪ What should Goldwind do now?
▪ Continue to adapt
▪ Emphasize economic arbitrage: ▪ Leverage differences in labor and capital costs, and costs of knowledge inputs
▪ R&D locations are in Germany and China
▪ Leverage resources available in the United States
▪ Higher incomes in U.S. = selling wind solutions at higher prices will not impact consumer interests as much as in China
▪ U.S own supplier network instead of aggregating or adapting China’s supplier network
▪ Emphasize geographic arbitrage:▪ Leverage differences in climates to enhance performance of wind solutions
▪ Goldwind has exceptional wind capacity wind capabilities with thousands MW under its belt from Chinese operations
▪ Locally sourcing wind product components within the United States
By sticking to our expertise we can establish a better brand image and thus expand to larger wind projects in the United States.
LOCATION
GROWTH