Introduction and Background
Canadian Solar Inc. is one of the leading solar cell and module manufacturers in the world. It was established by Qu in October 2001 in Canada. The company provided three types of products for global market---Standard, e-Modules, BIPV. It runs its business all over the world, including Germany, Spain, China, South Korea, the USA, Latin America, and the Middle East. At the end of 2008, the company had 3,058 employees: 2,742 in manufacturing, 251 in general and administrative, 36 in research and development and 29 in sales and marketing.
Current Situation Analysis
Porter Model:
1) The threat of new entrants(high)
The low capital requirements, medium-low technological know-how to make a PV module, easy to get raw materials, and government incentive program, Those all make new entrants easy to launch its business. Therefore, the threat of new entrants is high.
2) The bargaining power of buyers(high)
The top five German customers accounted for over half of the company’s corporate sales.
The top 5 customers accounted for 68.2 percent of total sales. These means large percentages of a supplier’s sales are purchased by a few buyers. Large-volume buyers are powerful.
Nearly three-quarters of Canadian Solar’s sales were derived from selling standard solar modules. This means buyers can always find alternative suppliers.
3) The bargaining power of suppliers (high)
The most common semiconductor material for PV cells was silicon. A major driver behind the price of solar PV was the price of silicon. Those mean that supplier’s product is an important input to the buyer’s business.
4) The threat of substitute products and services (high)
There are so many non-renewable sources as substitute products compete with solar. The cost of solar PV was between $0.15 and $o.35 per kilowatt-hour versus non-renewable sources of energy between $0.03 and $0.15 per kWh.
5) The intensity of the rivalry among competitors in the industry (high)
There are many firm in the industry, such as Suntech from China, Sharp from Japan, First solar