SONNEDIX SOLAR SOLUTIONS Harvard Case Solution & Analysis

SONNEDIX SOLAR SOLUTIONS Case Solution

OVERVIEW

This case is about the company, Sonnedix solar solutions; the company established in 2009 which deals in the power generation business. Initially the company entered into the market as a specialized photovoltaic power producer the market is high yield with low risk and government backed industry, Government in this sector investing significant funds to promote the use of solar photo voltaic system and solar energy which is seen in the form of European governments offering subsidies and grants to companies.

 The company focuses on integrated and roof mounted PV systems. Sonnedix has some very experienced professionals on its board with the experience of almost 50 years of experience in the power generation sector. Sonnedix considered a mix of growth strategies like they went for small acquisitions which resulted in expanding their operations across Europe and also through joint ventures and strategic alliances with suppliers who are locally were locally very well renowned. Recently they partnered with Assyce Fotovoltaica, a German-Spanish joint venture firm specializing in the installation of solar PV systems they joint ventured with this company to achieve economies of scale by acquiring panels from them which they intend to use in the production of solar power generation.

Many companies in order to achieve long term growth did vertical backward integration and bough their supplier companies to achieve material at lower prices they did succeeded but Sonnedix choose to do trade agreements with popular supplier to get advantage of vertical integration without buying the source company.The company board of directors are currently evaluating the financial forecast of one of their new venture which is 6MW project located in France. Board just want a go ahead and satisfaction from the financial point of view they want to assess the financial gains in more detail then they want to give this project a go ahead.

 INDUSTRY ANALYSIS

This industry is now on its feet especially European countries are using electricity largely through solar panels it has become one of the top three sources of power, hydroelectric dams and wind energy but the first ever concrete step to give this industry a balance was taken by German Government in 1999 like they introduced a number of subsidy tariff programs like subsidized loans, grants for PV manufacturing facilities, with the development of this industry and from the use of improved technology the prices are going down and many manufacturers are taking exit from industry the industry is still wide open because there is a capacity in the global power usage through solar power and in future it is expected that solar power will represent large proportion in the global source of power alongside hydroelectric dams and wind turbines.

Sonnedix strongly believes that there is an opportunity in the solar market which can be availed through mixture of growth strategies as competition is still increasing day by day. The current industry will not remain same in the future, according to some business analyst the usage of electricity through solar power will increase in future because many world economies as well as corporations are including solar energy consumption in the their infrastructure...............

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