Michael Camarena, Eric LeDuc, Teo Tertel

Company Profile

• World’s largest producer of silicon PV modules and solar panels– Suntech designs, develops, manufactures, and

markets solar power products– Applications include off-grid systems, homes, and

solar power plants• Mission

– Promote the global adoption of solar power

Company Profile

Strategic Intent

• Suntech’s top priorities– Superior technology and superior value– High quality, low cost solar solutions– Cost and scale leadership– Achieve grid parity

• Suntech’s goal is to drive the cost per watt of their solar panels below $1 by 2012

Brief History

• Founded in 2001 by solar Dr. Zhengrong Shi– Solar manufacturing in China was nonexistent

• Public traded company in 2005– Volatile oil prices fueled concerns for renewable

energy• 12 million panels in 80 countries

– Production capacity increased to 1400MW in 2010

Challenges

• Demand for their products exceeds their ability to supply due to capacity constraints

• Solar PV technologies are not commercially viable without government incentives

• Rapid technological advancements• Reducing downstream costs

External Environment

• Market Volatility– Industry wide shortage of polysilicon in 2008

• Industry Demand – Demand fluctuates with market prices

• Technological Uncertainty– No dominant technology

• Government Support– Crucial towards growth of solar energy output

Porters 5-Forces Model

Threat of EntryModerate

Threat of BuyersStrong

Threat of SubstitutesStrong

Threat of SuppliersStrong

RivalryStrong

Internal Environment

• Strong Market Growth Outlook• Leading Market Position• Leading R&D Capabilities• Quality Commitment• Strong Supplier Relationships• Broad Product Portfolio• International Management Team

Elements of Strategy

Arenas

Vehicles

Staging

Differntiators

Economic Logic

Where is Suntech Active?

• Design, Development, Marketing & Manufacturing of silicon based PV products

• Worldwide residential, commercial, industrial, and public utility applications and systems integration services

• Key solar energy markets– US, Germay, China, Australia, Spain, Middle East,

South Korea, Japan, Italy

How Will Suntech Get There?

• Focused efforts on internal developments– Increasing efficiency of manufacturing– R&D to increase cell efficiency– Cost reductions– Capacity expansion

• Strategic acquisitions & Joint Ventures

How Will Suntech Win?

• Product Differentiation– High conversion efficiency– Manufacturing quality– Warranty certified power output– Credit for customers

What’s Suntech’s Staging?

• Solar Cells->– Solar solutions: modules, systems, systems

integrations• Staggering Speed

– Production capacities have doubled every year since 2004

What’s Suntech’s Economic Logic?

• Heart of Suntech’s product strategy– Low cost & high conversion efficiency– Superior consumer value

• Focus on enduring capabilities– Leveraging low cost production– Creating scale economies– Rapid innovation

Corporate Strategy

• Corporate umbrella for over 36 different subsidiaries in operation– A result of strategic acquisitions and investments

• Strengthen Suntech’s position in vertical chain– Upstream: Key access to high quality supplies– Downstream: Systems integrations and project

development

Key Mergers & Acquisitions

• Aggressive targeting of suppliers and manufacturers of solar technology

• KSL-Kutler, increase expertise in manufacturing

• Luoyong China Silicon, secure silicon supplies for solar cells

International Strategy Analysis

• Operate manufacturing, distribution, and sales offices worldwide– HQs: Asia, America, and Europe

• Promote adoption of solar power

• Become energy leader in solar technologies– Requires converting global presence into a global

competitive advantage

International Strategy Analysis

• Adapting to local market differences– Building relationships with customer base – Distribution and subsidies

• Exploiting economies of global scale– Largest producer of silicon solar products– Spread fixed costs over a larger volume

• Exploiting economies of global scope– Deliver same quality and level of service

regardless of location

International Strategy Analysis

• Tapping optimal locations– Leverage locations with access to low cost

resources and clean energy mandates• Maximizing knowledge transfer

– 36 subsidiary organizations and 13 sales offices– Manufacturing and R&D locations in China

Cooperative Strategy Analysis

Partnerships & Alliances• Strengthen core business, solar developments,

enhance R&D, and secure supplies– University of New South Wales: solar cell efficiency– Calisolar Inc. to secure solar silicon manuf. facility– Secure development of smart panel technology

Recommendations

Expand Capacity, Reduce Supplier Dependencies• Demand continues to increase, as costs are

reduced and efficiencies increase• Rapidly expand into new facilities that generate

needed capacity and satisfy local requirements for government subsidies

• Acquire/Partner with silicon suppliers to reduce supply shortages and obtain cost advantages

Recommendations

Proactively Reduce Downstream Costs• Reach grid parity and mitigate risks of reliance

on government subsidies• Reduce downstream costs • Certified Value Added Resellers (VARs)

– Impose Guidelines, Create Incentives, Evaluation Criteria

Recommendations

Engage Stakeholders• Engage gatekeepers for new energy

infrastructure and government subsidies• Advocate renewable energy and committing

resources to gain favorable outcomes • Building brand awareness to increase visibility

and prepare for new customer markets

QUESTIONS?