SWOT ANALYSIS OF SUZLON ENERGY
STRENGTHS OF SUZLON
1. Integrated business model Suzlon Energy Ltd. Is having an integrated business model that they don’t have to go to other suppliers for raw products. They have very good vertical integration for supporting there production activities. So they don’t have to be dependent for supplies.
2. In house technology and design capabilities:- They are having enough in-house technology development capabilities as they have skilled employees so that they can design their products of their own. They don’t have to go to outsider experts for designing the products.
3. Market leadership in India and global presence :-It is the only company of India which is having a global presence and as it is a market leader it can have benefits of its brand image.
4. Prudent acquisitions and alliances:- Suzlon has entered in to very prudent acquisition which is helping it for increasing its main strength of vertical integration as well as provides chance of global expansion also.For example: It has acquired HANSEN which was the worlds second largest manufacturer of gear boxes.
5. Global Production:- As Suzlon has a global presence, it produces the products which can be used globally. Though it is not that much technically developed as compared to other global players, but its products can work at global level also.
6. Pricing Power As Suzlon is the market leader in India, it can drive the price and others will follow it. But , it is now necessary for it to produce and sell at low cost and the production must be cost effective, because new global players are entering in to the market.
7. Diversified Product line Suzlon is producing each type of wind turbines working in India. Ithas a wide range of products that has been sufficiently designed to cope with the specific conditions and to that give optimum results.
8. Sophisticated and modernized research and development facilities
9. Highly qualified and energetic work force
WEAKNESSES OF SUZLON
1. Operational Risk Suzlon as a market leader don’t have that much efficient operation management team. We can say this because there are many complaints of customers regarding their operating staffs who provide after sales service and it is also looking up to some extent in operating the business. So proper implementation of strategies is lacking.
2. Growth in Assets diminishing Growth in Profits Since last few years, Suzlon has focused more on integration. So it has gone for acquisition and backward integration which blocks its investments in assets. Thus its growth rate of profits has declined. So, compared to growth in assets the growth in profits is low which is not favourable for the firm
3. Unsupportive Stock Prices When a company’s stock price is more than its book value, it can be considered as a good sign for investors, but currently due to the unfavour market conditions Suzlon’s stock prices has fallen below the book value, while other competitor’s share prices has not declined below than their book value.
4. Unfavourable Ratings Before sometime, only Moody, a credit rating agency has down-graded Suzlon Energy Limited due ti its financial weaknesses. They have also found the improper operation management at Suzlon.
5. Improper Working capital Management Earlier Suzlon was a financially strong company. But the previous down-turn in the world economy has brought the company in a critical situation. And Suzlon is also facing this problem because of improper working capital management. Many experts also think that Suzlon has paid more for its HANSEN acquisition.
6. Weak Strategic Financial Management Suzlon when expanded its business through RE Power, it has signed a contract that Suzlon will pay 65 million Euro in December...
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