Sun Integrators Strategy
University of Phoenix
Sun Integrators, SI, is an integrated solar products and services company that designs, manufactures and markets high-value solar electric power technologies. SI operates in the photovoltaic, PV, industry, specializing in the installation of PV residential and commercial systems. SI forecasts revenues will grow to over $15 million by the end of 2010, in a market valued at $500 million. The company will create profits as a system integrator of solar cell assemblies, purchased from silicon cell suppliers, and install and service the electric generation systems. SI will sell directly to consumer and commercial organizations.
The key challenges for SI are in securing sufficient capital in 2008 to fund the necessary capital expenditures for plant and equipment. SI’s management has devised several contingency plans to deal with potential shortages of capital during its expansion. The first contingency is to secure a line of credit from a local financial institution and take advantage of the federal government’s Small Business Association, backed loans. Secondly, SI’s management believes it can secure very favorable trade credit terms with its suppliers that will increase their cash flow during the company expansion. In addition, SI plans to use a just-in-time manufacturing system to help control and inventory costs.
The objectives of SI match the current state of the growing alternative energy market, which is a major opportunity. The PV industry forecast, in particular, will grow to over 25 percent between 2008 and 2010. While social factors, fear of fuel shortages, will help drive demand, government incentives will greatly influence the PV industry. Federal government incentives and state incentives can effectively reduce the cost of a typical consumer PV installation by up to 30 percent.
The challenges for SI are in the cost of PV, to mitigate the... [continues]
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