CASE STUDY on Sunpower

Mgt 490.1, MFW

Submitted By:
Sabrina Rashid 1421297630
ASM Belwal Islam 1521145630
Md Khairul Islam Pranto 1530685030
Israt Jahan Lubna 1612424630
J.M.Nasir 1612148630

1. SunPower’s strategy focus on the pricing of modules? Or should it focus more on

investing in process improvements? Or should the strategy be some combination of the two?
If so, what was the right formula based on the multitude of variables that solar cell
producers like SunPower faced?

Answer:

Pricing of Modules

Sun Power has been a leader in module efficiency over the course of recent years, focusing on
technical advancement as opposed to low cost growth. Sun Power's modules are better in almost
every respect than the traditional crystalline-silicon and slim film boards, from metrics such as
panel degradation, energy output and performance, of course. Sun Power's high-efficiency panels
make it suitable for distribution markets, which are great for the company as the solar markets
are gradually heading towards generating.

Whereas Sun Power risks focusing too aggressively on innovation rather than achieving low
costs, up to this point the company is in a sweet spot for all accounts in terms of cost-
effectiveness. High-efficiency PV module manufacturer and project designer Sun Power said it
was reducing its focus on developing PV power plants outside the US and focusing more
resources on the US market.

The demand for high-performance modules was said to remain solid, so the company would add
100 MW of new X-Series module power. Nevertheless, layoffs were placed at around 1,200,
mainly from the closure of its Philippine module assembly plant and the relocation of production
equipment to its Mexican facility. Another hypothesis may be that the cost of the module is
falling due to excess capacity and sellers will wait with the ITC cutoff time gone for better rates.

Process Improvements

Sunpower should invest more on process improvement. By improving their process they can
reduce wastage and thus reduce cost the development method for Sun power involved
roughly twice as many measures as the normal production process for solar cells. Its
processes reflected the typical production process, and the company benefited from the
innovations in manufacturing equipment. Sun Power has also publicly committed to increase
its efficiency by 2007. They wanted to increase efficiency by reducing silicon usage,
reducing water thickness and was hopeful to do so. Other big players are Sharp and Q-cells,
who are market leaders. They r also growing very fast and considered to be have most of the
market shares. In order to be competitive with same resources, Sun Power should work on
their process improvements, which will help them grow more in this market.

Combination of both strategies

Sun power have two strategies in hand. One is focusing on modules and another is focusing
improvement of their manufacturing process. Sun Power is struggling to continue their expenses
and lacking innovation. By focusing more on modules Sun power can have more innovation in
their modules. Whereas focusing more on their process improvement they can make their
operation smoother and efficient, which will reduce time and cost. So I think focusing on making
strategy to combine both is a better idea.

Multitude of Variables

Solar panel producers like Sun Power faces different types of variables.

 They have to compete with various big players in the market.

 have expense issues
 Lacks a innovation and research

In order to stay in market after such issues they have to take right formulas in order to sustain.
Both strategies have good and bad signs for Sun Power but gathering all the variable they should
focus more on their mission and vison. They should set their standard and focus on keeping that
position in the market. That way they can adjust their costs and research needs more sustainably.