Lecture 15: Technology – Addendum

Source: Schmenner (1986)

Source: Schmenner (2004)

DEPARTMENTAL TASKS AND TECHNOLOGIES

Mechanistic

Strategic Planning Imagine that you are the CEO of a company that manufactures solar PV modules. I will provide some information about the industry, and then either in groups or individually I will ask you to formulate a strategy for the company.

Solar Photovoltaic Value Chain Engineering, Procurement and Construction Operation and Maintenance Source: First Solar (2010)

Some Expectations in 2010 about the Solar Photovoltaic Industry: There is likely to be an over-supply in the industry in 2010 Module average selling prices (ASPs) were expected to fall by 20% or more in 2010 Module manufacturers were expected to be hit hardest Downstream players (system integrators, project planners, installers, operators and those with access to credit) were expected to be more insulated

Questions If you are the CEO of a module manufacturer how might you respond? –What types of issues/factors do you need to take into consideration? –How easy is it to assess – or analyse – those factors?

Possible Factors to Consider (Task Variety in the sense may not have had to consider them before!) Take-overs - which firms? How? –Future interest rates? Future stock-market prices? Organic growth – how? Employees? Time to grow business? Alliances? Future demand – home and abroad, different market segments –Regulations, subsidies, and WTO rulings Competitors’ responses Investments in new facilities at home – where? How? Employees Investments abroad – where? How? Employees?

Question How would you change your strategy?

Solar PV Firms’ Responses Acquisitions (US SunPower) or establishment (German Q-Cells) of down- stream entities Establishment of production facilities in Malaysia, but greater role of home-country facilities for Q-Cells compared to SunPower

SunPower: A Leading US Firm 2006 acquisition of PowerLight, then acquisitions in Italy and Australia –substantially increased presence in Europe and Asia, and downstream presence in both commercial and utility-scale projects acquisition of SunRay Renewable Energy, –downstream strategy across all segments and geographies where solar is thriving. –Founded in 2007, SunRay is a developer of power plants in Europe and the Middle East; it has operations across six countries, and is skilled in project finance, large-scale power plant development, permitting, and transmission.

Q-Cells: A Once Leading German Firm Source: Q-Cells 2009 Annual Report

Technology and Interaction Technology can also be thought of as ways in which groups of individuals interact.

Interdependence and Co-ordination Mechanisms