Tata Solar- A Dawn under the Sun

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Porter’s Five Force Analysis 11. Tata Power Solar – An Introduction 6. Accounting Information 13. Various Strategies Followed by Tata Solar 9. What is Completive Strategy? 2. Strategic Recommendations 14. Competitors 8. What is Solar Energy? 4. How Tata Solar Follows Competitive Strategy? 7. References . Solar Power in India 5. Background 3. Pest Analysis 10. Tata Solar SWOT Analysis 12.Contents: 1.

It selects one or more attributes that many buyers in an industry perceive as important. provided it can command prices at or near the industry average.1. If a firm can achieve and sustain overall cost leadership. weaknesses. Differentiation Leadership In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. proprietary technology. They may include the pursuit of economies of scale. What is Competitive Strategy? Competitive strategies are the method by which you achieve a competitive advantage in the market. a firm sets out to become the low cost producer in its industry. According to Michael Porter. threats in the industry and then go ahead which would give one a competitive advantage. . A low cost producer must find and exploit all sources of cost advantage. then it will be an above average performer in its industry. Before devising a competitive strategy. The sources of cost advantage are varied and depend on the structure of the industry. A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average. It is rewarded for its uniqueness with a premium price. Such strategy helps firm to satisfy sufficient consumers and gain popularity. and uniquely positions itself to meet those needs. competitive strategy is devised into 4 types: Cost Leadership In cost leadership. opportunities. Cost focus exploits differences in cost behavior in some segments. Cost Focus In cost focus a firm seeks a cost advantage in its target segment. preferential access to raw materials and other factors. The fundamental basis of above average profitability in the long run is sustainable competitive advantage. one needs to evaluate all strengths.

energy provided by the sun. This energy is in the form of solar radiation. What is solar energy? Solar energy is. cells. which makes the production of solar electricity possible. (Photovoltaic literally means “light” and “electric. Background India’s strong economic growth. The need for renewable energy is obvious in today’s world.”) These cells are made from materials which exhibit the “photovoltaic effect” i. This type of differentiation is made to meet demands of border customers who refrain from purchasing competitors’ products only due to missing of small features. 2. when sunshine hits the PV cell. Electricity can be produced directly from photovoltaic. combined with country’s industrialization. It is a clear niche marketing strategy. increasing population and increased access to power has led to rising demand for power in the country.e. Differentiation focus exploits the special needs of buyers in certain segments. generating electricity. The problem is trying to get as many people as possible to recognize the need and to spend their hard earned money on this technology.Differentiation Focus In differentiation focus a firm seeks differentiation in its target segment. 3. . the photons of light excite the electrons in the cell and cause them to flow. PV. simply. Solar energy produces electricity when it is in demand – during the day particularly hot days when air-conditioners drive up electricity demand.

Solar radiation over India is 5000trillion KWH/year. in most parts of India. and meets the energy requirement in domestic sector in decentralized manner quite efficiently.000 MW was installed globally. In 2010. The exhibit below captures their estimates about solar market in India. an estimated total capacity of 17.4MWp is the total amount of energy derived in form of solar. Solar power from SPV (Solar Photo Voltaic) system and solar concentrating system is produced in environmental friendly manner.4. does not generate any waste or pollution. Thus this puts India amongst the highest solar radiation receiving countries of the world. Solar Power in India Globally. The country receives more than 4kWh/m2 /day. clear sunny weather is experienced 250 to 300 days a year. which shows that there is a steady growth in the solar market after 2017-22 . the solar power industry has been growing rapidly in recent years. Major states put together then 979.

cost and time. Tata Power Solar operates in three distinct segments – cutting-edge manufacturing. Tata Power Solar with 25 years of deep domain expertise. delivering sustainable value to all stakeholders. Tata Solar Power. Customers. Headquartered in Bangalore. Shareholders. The company has more tha118% growth in 2104 as compared to 2013. Mission: To earn affection of customers by delivering superior experience and value. Executing projects safely with predictable benchmark quality. . Being the lead adopter of technology with a spirit of pioneering and calculated risk taking. is one of the pioneering solar manufacturers in the world and India's largest specialized EPC player. EPC services for solar power projects and creating innovative solar products. Driving competitiveness by operating our businesses at benchmark levels. in focus geographies.5. Growing profitably across the power value chain and allied areas. People and creating a culture that will reinforce our values. Practicing ‘Leadership with Care’ by pursuing best practices on Care for our Environment. Community.Vision and Mission Vision: To be the most admired and responsible Integrated Power Company with international footprint. Enable employees and associates to achieve and unleash their full potential to deliver outcomes in a sustainable way. Tata Solar Power – An Introduction Tata Power Solar is India’s largest integrated solar company that is driven by the singular vision – harness the power of sun to enable solar everywhere. thereby making them our ambassadors.

Consumer categories: -Domestic -Agricultural Solar powered equipment is more environmentally friendly and economical in its operation compared to equipment’s powered by an internal combustion engine (ICE) or nuclear power. A large number of these consumers are likely to start adopting solar power from 2017-18. And Solar Water Heating (SWH) applications could be used in residential. but combines this broad scope with a differentiation strategy based on design. How Tata Solar Follows Competitive Strategy? Tata Solar targets the mass market with its products. However. And Off-grid connected Solar Application Potential includes. The residential consumer category contributes to about 29 percent of the total Indian Power requirement. Residential Rooftops and Utility Scale Solar power (CSP and PV). Tata Solar has a generic cost leadership and product differentiation strategy in the solar energy industry. Solar Market Segment: -Grid Connected Solar Potential -Off-Grid Connected Solar Application Potential -Solar Water Heater (SWH) Grid Connected Solar Potential includes. In the off-grid space. solar power is already cost competitive with alternatives in certain applications. The solar energy is converted in to electricity by using a photo voltaic array. according to KPMG report. this is expected to increase to 34 percent by 2021-22. commercial as well as industrial sectors . telecom towers are an attractive market for solar PV installations. branding and user experience that enables it to reach the Indian common man. Solar water pumping system works on power generated using solar photovoltaic system. The current strategic goals of Tata Solar are market diversification and operations expansion. government involvement will be required in encouraging non-high-end residential and agriculture consumers to use solar power. For irrigation and drinking water solar PV water pumping systems are used in India. For example. Solar Powered Agricultural Pump sets and Solar powered Telecom towers. It is expected that high-end residential consumers will be proactive in adopting solar rooftop given their higher power tariffs.6.

Tata Solar Objectives Focus on retail customers in metros. Focus on both domestic and international markets. no electricity at all. Ports. in some cases. At Tata Power Solar. Tata Power Solar has played a pivotal role in making electricity accessible in off-grid villages. Customized systems for unique challenges. Meet Solar RPO & REC regulations. Programs with governments Partnering with multiple government and non-profit agencies. lowincome homes and isolated regions across India. It has many first to its credit like Solutions for Consumers Solution for Consumers Power cuts. we have developed an array of solar lighting. We have the prowess to manage solar energy projects of such scale and the much-needed know-how to work within the confines of regulatory policies or the geography constraints. Product Innovations Tata Solar product portfolio embraces more than 60 models today. Sunjevini a power converter that charge your converter with solar energy. Profit from power. Solar Projects with Power Producers Tata Power Solar can design a fully integrated and customized solar power plant project for you. A promise of No CAPEX and a low OPEX. Tata have helped countless businesses benefit from these policies while attaining their sustainability goals for the past 25 years. Refineries. affordable and green Solutions for Business Tata Power Solar. From big cities to remote villages. we are at the forefront of this mission – provide sustainable solar solutions.Turnkey solar solutions. our pursuit to enable solar continues like. Tata Solar Dynamo roof top solar power generators Product Differentiation Tata Solar reaches Indian mass and industries by launching new and innovative products since inception. . rising bills and. heating and power backup products that are reliable. ranging from Rooftops to solar pumps. Government Funded Projects to start new plant and to increase market share. Nearly 75% of sales is achieved from exports to Europe and USA. Industry leaders trust Tata Power Solar. every home today is facing at least one of these challenges. it is essential to increase production capacity.

schools. our broad range of solar energy panels and modules are among the top tier PV panels available to multiple customer segments including industrial. With an in-house production capacity of 200 MW for modules and 180 MW for cells. admin buildings etc. higher margins up to 15 per cent were offered to the dealers. Achieving supply chain superiority or excellence is within the reach of any company. For the B2C model. Many councils who own buildings with large roofs . commercial. However. which was higher than the industry average of 6 per cent to 10 per . as well as the organizational imperative and willingness to invest in the right direction. Consumer Spread energy mix Comply with regulation Would otherwise have to buy carbon emission credits (in the EU) Use solar powered lights or charges instead of oil lamps (especially in developing countries or remote areas) Use solar powered products for novelty val Tata Solar Distribution Networks Apart from the Product. often globally operating. both on-grid and off-grid solar projects and residential. Price and Promotion Tata Solar has shown strength in another significant aspect that is distribution network. a pioneer of the solar industry offers a broad range of photovoltaic solar modules that feature high efficiency and best-in-class manufacturing edge.Globally Trusted Module Tata Power Solar. Many companies with large roofs Reduce electricity costs Contribute to carbon emission reduction Take advantage of other incentives Increase value of property Reduce electricity costs Comply with carbon emission targets Reduce electricity costs Display corporate social responsibility Gain emission credits Sell electricity Sell carbon emission allowances Land Owners / Project Developers Electricity Companies Motivation Big companies. it requires a vision. Target Markets Who? House Owners Councils Corporations Where are they? How many? Millions of domestic roofs and developers / architects of new buildings.

7. This total is usually pretty high. the target market of professionals was reached. spec sheets. * XL Telecom & Energy Limited 8. Services and ideas: have expert and experienced salespeople. inverters. Various Strategies Followed by Tata Solar Products Goods: panels. where corporate selling was involved. and warranty info to better inform the client of what they are buying. and come up with a total. tie ups with major corporate houses saved the margins of the distributors and Tata Solar could provide the corporate houses a lesser price than the market. In B2B model. Thus. Perform analysis of the property and financial implications of the purchase. transformers.cent. In the proposal include all the equipment needed. tally it up. Competitors * Azure Power * Bharat Electronics Limited (BEL) * Bharat Heavy Electricals Ltd. (BHEL) * Central Electronics Ltd. engineers. Price Give the customer a detailed accounting of all equipment and service fees. necessary construction equipment. Perform maintenance at no charge if anything breaks. This helped them penetrate the market deeper into the urban markets. * TRA International * Waaree Energies Private Limited * Webel SL Energy Systems Ltd. Use marketing to . (CEL) * HHV Solar Technologies Private Limited * Micro Sun Tech Private Limited * Moser Baer India Limited * Photon Solar Energy Systems * Punj Lloyd Delta Renewables * Reliance Industries Solar Group * Renewable Energy Systems Limited * Solar Semiconductor * Sun Energy Systems * TATA BP Solar India Limited * Titan Energy Systems Limited * Titan Energy Systems Ltd. and installers.

to reach out to customers across the country and overseas Advertising: newspaper. reliable and cost-effective alternative to kerosene lamps for home lighting in areas such as Uttar Pradesh.DuPont is collaborating with Tata Power Solar to provide a safer.get the client to think of the purchase as an investment. Sales Promotions: Direct marketing: uses direct communication to generate a response in the form of an order or a request for further information. radio. named Project Disha.Tata Power Solar. TV. Informs the public of the benefits of solar without having to spend money on advertising. where the electricity supply is unreliable. Meet face to face with the potential buyer to understand their goals and resources.Transphorm Partners With Tata Power Solar to Introduce India’s Most Efficient Solar Inverter. billboards. Solar Panels are complex and customized. Public Relations: media is constantly reporting about new developments in the renewable energy industry. Manipal varsity unveil solar car prototype . Place Salespeople need to be available to travel to the individual sites to perform the analysis. Give them immediate feedback. more efficient. . . anything to get your message across Personal Selling: very important. rather than a huge expense. Promotion Tata BP Solar has embarked on an extensive retail distribution network.Tata Solar working on Indo-China partnership for solar energy . and go wherever they need to close the sale. Tata Solar Collaborations .

Growing environmental awareness which is defined as the increasing knowledge and understanding of the finite nature of many of the world’s resources. improved manufacturing techniques. Social There are two overall forces in the social environment that are influencing the growth of the renewable energy industry: increasing environmental concerns and increasing energy demand.59/ kWh to INR 12.24/kWh for solar-thermal and between INR 10. and the impact of global warming on biodiversity. Economical In the recent round of reverse auctioning process for the solar projects under the National Solar Mission. Technical Technological developments and investments catalyze the advancement of technology. solar hybrid lighting. have led to increasing environmental concerns.49/kWh to INR 12. and improve manufacturing equipment and techniques that enable low cost production. the price discovery for levelized tariff was in the range of INR 10. Tata Solar PEST Analysis PEST Analysis The government has huge presence in the Solar Energy market. strengthen the ability of energy consumers to harness solar energy.9. The government has initiated a Renewable Energy Certificate (REC) scheme. In addition to emerging technology. setup. the negative impact and contribution to climate change from burning fossil fuels and deforestation. which is designed to drive investment in low-carbon energy projects. . future technology being aggressively pursued by research and development include thermal and electrical storage systems. nanotechnology.76/ kWh for solar PV projects. but also facilitate businesses in the arena. (MNRE) provided financial assistance to the installation of around 33 grids of solar photovoltaic power plants. It Political regulates the market through MNRE (Ministry of Renewable Energy) and financial assistance is provided by IREDA (Indian Renewable Energy Development Agency Limited). IREDA has come up with several schemes to not only encourage the use of solar-powered systems. and improving concentrating solar power systems. companies engaged in R&D in solar power are also offered several subsidies and tax exemptions. The budgets has also encouraged private solar companies by reducing customs duty on solar panels by 5% and exempting excise duty on solar photovoltaic panels. and the stability of delicate ecosystems.

agriculture. only a small part of residential segment i.e. like rural. -High switching costs for the firm in the industry is high. The time taken to reach grid party would also depend on the bargaining power of the developers. hospitals.10. Buyers Power: The industry’s major power lies within the buyers’ side. etc. Tata Solar Porters 5 forces Analysis Suppliers Power: Solar technology has oligopoly characteristics dominated by a small number of players. hotels. Since the awareness in the market is very low. higher quality -Low switching costs for the buyers -Substitute products are available . since the consumers are price sensitive -Consumers are demanding in terms of value-added. Degree of influence exerted over the industry by the suppliers: -Product is unique and scarce. -Suppliers are more concentrated in the European market because of better technology. but then with government intervention and rising awareness the price of solar energy is coming down. The Suppliers of the solar energy supplies also too many industries. Degree of influence exerted over the industry by the buyers: -Forcing down the prices. high end residential consumers is the pro-active group. But for the non-high end residential consumers’ government’s role will be important. There is no substitute product for solar. The product is critical for the company.

The exit barrier is expected to go down after the grid parity is reached. whose brand image is much higher. Solar power has tremendous potential to meet almost 7 percent of our power needs by 2022.e. mitigate 2. are: -Market is crowded with indirect competition from indirect competition but with some direct competition. this represents a significant investment opportunity. -Switching cost for the consumers for the conventional market is low. The substitute i. Mahindra. -Product is not differentiated. Degree of influence exerted over the industry by the threat of new entrance. Threat of substitute product: Another prominent power in the industry is the threat of substitute. are: -Low scale of economies before the grid parity. Degree of influence exerted over the industry by the threat of substitute product. -The technology is not protected. -Government policy makes the entry barrier lower but after the grid parity it is expected to go down. The imperative for action today is strong and therefore is the case for persistence and consistency on part of the Government. Moser Baer. etc. like Reliance.e. Degree of influence exerted over the industry by the industry rivalry. Investment opportunities across the value chain from manufacturing to EPC to project development over the next decade.Threat of New Entrance: The threat of new entrance is not that prominent now but it will be high as soon as grid parity is reached.6 percent of our carbon emissions in that year and save over 71 MTPA of imported coal in that year (equal to USD 5. Industry Rivalry: The intensity of rivalry from the direct competition i. BHEL. -Some prominent companies in the solar market. . Since the solar prices are coming down and the support from the government will be the major driver in this regard.5 bn of imports). -The major barrier to entry is the distribution channel. Now the segment has high entry barrier but not very low exit barrier so the segment is attractive. For the industry. is low but from the indirect competition i. are: -There are many substitute products available -Customers’ switching cost is low as they can easily switch over to them as there price is less. conventional sources of energy are already present in the market and it is dominated by them. companies dealing in solar equipment. companies dealing in conventional residential pump it is very high.e.

High cost of the product. Threats Chinese solar lighting products providing cheaper alternatives For water heating. Opportunity Existing supplier network be strengthened. Quality of the products manufactured is durable Weakness Limited portability of products available. biogas is another cheaper option compared to solar water heating systems. Supply from Tata subsidiaries for component could improve margins To expand its product mix. Use of its R & D Centre’s for development of newer cheaper products.11. Newer and bigger entrants like Philips entering the solar lighting system market . Products limited for indoor use mostly Poor efficiency of the solar panels as compared to competitor products. Present systems utility limited to lighting and heating. Portable product market yet to be tapped. Beneficiary of major Solar lighting system schemes Warranty of upto 5 years is a major benefit Manufacturing plant based in the country Huge supply network and service facilities. Tata Solar SWOT Analysis SWOT Analysis Strength First established manufacturer in the country.

12. Financial Performance and Sales: .

e. Invest in R&D for cost effective technologies and increase the segment – like developing the Solar Water Purifiers. it shows a band representing solar rooftop costs. 4. Technological advancements 9. This refers to the point when the cost of the solar power equals the cost of conventional power. And India will reach its grid parity by 2019-20. In the exhibit below. Cost reduction is achievement of economies of scale 8. i. Increase the plant capacity to cater market demand. Improve the cell efficiency and production cost. Strategic Recommendations The key driver of the growth of this sector is the concept of Grid Parity. It is expected that the solar tariff to lie anywhere within this band depending on the bargaining power of the developers. Emergence of low cost manufacturing locations. 3. . Company to reach out to as many people and organizations as possible to through different marketing media. Promote low cost solution to convert existing inverters to solar. The band variation signifies the margins. 2. In order to meet the rapidly growing electricity requirements in coming years. used to track the sun movement – improve 20% solar power 5. the difference between cost and price (includes margins across the value chain).13. Promote Single Axis Tracking System technology. 6. Tata Solar have to focus on following:1. 7. 4. IREDA (Indian Renewable Energy Development Agency Limited). bridgetoindia. References 1. moneycontrol.renewableenergyworld. 2. . www. tatasolar. www. MNRE (Ministry of Renewable Energy) 8. Google finance 3. Mercom Communications India 5.

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