The increasing awareness of the environment sustainability has raised the demand of the solar panel installation. In the environment, people are using the solar energy in the different ways according to their needs. It is because people are more serious about the problem of the environment sustainability.
It also brought the business opportunities for the companies to get profit by conducting business in the solar energy industry. This report is developed in the context of Megawatt solution that is leading energy solution organisation in India. The company has well reputed in clean energy technology and provides an economic solution to the customers.
This report represents the situation analysis for Megawatt solution. For this, PESTEL analysis is made for the company. PESTEL analysis of India depicts some important factors that influence the business activities of the company.
The findings of the Pestle analysis depicts that the company is supported by the political stability of the current government. There are a lot of business opportunities for the company in the India. The political factor in the PESTLE analysis contains the tax policies, laws and regulations, trade restrictions and tariffs and government policies regarding the industry.
At the same time, the economic factor in PESTEL analysis discuses the interest rates, economic growth, inflation rate and exchange rate in the context of India. The current GDP growth rate and FDI support industries. Hence, it is found that India economic is performing well that is favorable for the solar industry. Moreover, social factor has also impact on Megawatt solution business operation.
Social factor contains identifies the cultural aspect and social aspect of the country including the population growth rate, age distribution, changes in tastes and buying patterns of the customers in India. In this, is analysed that the company is supporting the changing customer trends towards the energy solution. Technology factor also affects the growth of an industry in the country.
It is associated with the application of new inventions and ideas such as R&D in the country. India is a developing country and technology is developing rapidly in the country. Its benefit is that company is successful to minimise the cost of operation.
Along with this, this report also finds that India faces different environmental issues and global warming issues. Due to this, the demand of solar panel is increasing that is helpful for the company. Furthermore, the legal changes in India also affect the operation of the company. These changes affect the cost and demand of the business.
This part of the assignment discusses the micro and macro environment in order to analysis the position of Megawatt solutions in the market (Jacobson & Delucchi, 2011). The use of PESTEL helps the marketers in monitor the macro-environment factors that can affect the organization.
In regards to SWOT analysis, it helps the company in determining the internal position of the company in terms of generating the profits, and it also helps in understanding the external factors like increasing competition, changing the market structure and much more that can affect the company effectiveness of growth.
Thus, in this section, PESTEL analysis of the solar panel industry will discuss and study also explain the SWOT analysis of the Megawatt solution and such practices helps in understanding the growth of the solar panel industry in India.
PESTEL analysis is the tool that helps to identify the external market factors that can influence the industry/ company in a both negative and positive manner. PESTEL analysis also plays a significant role for the companies in the term to develop the appropriate strategy (Kraemer et al., 2011). Likewise in this context, the study gives the detailed understanding about the external factors that can affect the solar panel industry in India.
The political environment of the India is quite strong as different parties actively take part in the politics system that allows developing and creates new ideologies for the welfare of the society as well as for the companies’ betterment.
At the same time, the taxation policy of the government also implemented in a systematic manner where income tax, services tax, property tax and sale tax has to pay by the people at the right time (Singh, 2013). Such stable and productive environment gives various opportunities to the solar panel industry to release its potential in across the market.
Likewise, the solar energy industry can also get the opportunity of enhancing their presence in the market through develops more solar projects. In that case, companies can take the support of the government in terms of providing subsidiary in taxation policy, provide financing of solar projects and develop the effective laws for the solar industry (Sharma et al., 2012).
Moreover, for the increasing the solar market, the government is taking various initiatives such as they provide two major financing for the solar projects such as debt project finances and private equity and venture capital.
Thus, this allows the solar industry to easily respond to the current & anticipated future legislation and able to protect the environment from the large emission of harmful gases.
The economic factors of the country are well built in regards to taxation reforms, interest rates, inflation, economic growth and exchange rates etc. Government also introduced the new industrial reforms in the country related to giving more licenses to the industries and liberalized the foreign investment (Sharma, 2011).
Besides that, government also focusing towards the GDP, per capita income, unemployment that is growing in the country and such practices destroys the economic environment of the country. Thus, solar panel industry in terms of attaining high economic growth, it requires to generate employment opportunities and need to allow FDI for enhancing investment rate in the solar industry.
It can also uplift solar products by increasing the investment in the solar energy sector. Moreover in order to increase the energy sustainability, the development of solar energy industry can be become the best way to built up the sustainability practices in the country.
For that government also encouraging private solar companies through reducing the customs duty on the solar panels plant by 5% and provide exemptions from exercise duty on solar photovoltaic panels.
This practice helps in exploring the opportunities for the solar companies to grow more in future. Solar industry should need to focus on the target population, growth rate, government policies and inflation rate before making an investment in the solar projects.
Thus, the below mention graph indicates that how government initiatives provide positive influences on the solar industry.
(Sources: Ranjan, 2011: KPMG’s Solar Market Potential Model)
In the recent years, globally the solar power industry has shown the rapid growth in the India market. In 2010, it was estimated that 17,000 MW capacity solar panels were installed.
At the same time major states like Rajasthan, Gujarat and Tamil Nadu also put together 979.9MWp solar energy panels, and this indicates that India is the rapid growing market of the solar panel in across the world (Khare, et al., 2013).
Along with this, it is also found that the per capita income of the Indian people is very low from other countries due to this customer cannot afford solar installation. In India, there is a lots of consumer challenges for the Megawatt solution that affect the sale of the company. In this, it is identified that there is high cost of the solar panel installation.
Moreover, poor weather condition is also a challenge for the customers due to this solar panel damage. Furthermore, the efficiency of the solar panel is also concerning aspect among the Indian customer. Generally, solar panel can convert 20-30% sunlight into the electricity. It indicates to the poor efficiency of the solar cell in India.
At the same time, customer also face to maintenance and repair issue after the installation of solar panel. According to a survey, customers visit once in every three months regarding the maintenance and securing the panels to the roof.
In regards to social factors, India represents a different culture, values, traditions, beliefs, demographic features, and customs. There are different factors that always change in the society such as population, income distribution, attitude of people, taste and preferences of society; standards of living, etc.
So by studying such factors changing trends in the country, solar industry can generate the demand and supply of the solar power panels.
Since with the increasing environment issues in the country, there has a steady increase in demand for natural products and conservation of resources. Thus in that situation, the solar industry has the advantage to grab the market by indicating or educating the customer about the benefits of installation of solar panels.
To fulfilling the needs of all income level, solar companies can create the different ranges of solar panels for every income group as per their affordability. Thus, such exercise caters the needs of the each income group and best suited towards the taste of society (Yüksel, 2012).
India has shown its significances growth in terms of adopting the technology as the country has now introduced new sustainable practices in the products, process and distribution also. The new technology also influences in cost-cutting and improve the quality of services.
Thus by adopting the advanced technology, solar companies can cut the cost and reduce the rate from 5 to 7% per annum, and this will allow to attracting the global market and influences the buying behaviour in a positive manner.
Due to the existences of different environment in the country, the changes in climate and weather have a significant impact on the business operations. The major problem that has occurred with the environmental issues are the increasing global warming that provides negative impact on the environment as well as on the society (Amer & Daim, 2010).
The improper conserve of energy reduced the efficiency and can damage the environment and these issues are considering as a serious problem that require solving.
Likewise for removing the environmental issues, the solar panel industry has a prominent role in terms of protecting the environment and conserves the resources. So in that case, solar industry gets the opportunity to enhance their market by increasing awareness about the solar energy features and its usage.
By using awareness campaigns, solar companies can explain that how much solar energy will be prove beneficial for converse resources and energy in order to reduce high carbon emission. This initiative of solar energy can reduce the maximum global warming and green house effect.
The government of India has made various legal changes in relation to sustainability issues, minimum wastages system. Likewise in the case of solar panel industry, the government has also developed the renewable energy certification scheme for guiding the solar companies that at what level of energy should be used in carbon energy projects (Nielsen et al., 2010).
This legal regulation system has a positive impact on the solar companies as it assists the companies to develop the panels accordingly and able to attract the maximum market across the globe.
Solar power in India is a growing industry as the demand for power is increasing day by day in India and solar panels could be the best solution for deficit power. Due to increasing environmental problems in the country, people in India are widely accepted the solar power products in order to protect their environment.
This makes the solar market consider as a growing market in India. At the same time, the government also provided various type of financing, and they also involved in creating more awareness among the people, and this can create more demand in the near future.
The economic condition of India is also strong as it is identified that per capita income in India is $6162 and the total GDP is $8 trillion at the same time, in last five year, the economic growth of India was 6.7% (Chen, et al., 2014). This indicates that the country has good and stable economic condition.
At the same time, it is also found that unemployment rate is 3.5% of India and inflation rate is recorded at the 4.9% in India. So in order to generate more employment, the government promotes more solar energy industry and provide financing facilities for making an improvement in the quality of products.
In addition to this, the government also concentrates on the reduction of cost of solar panels by installing the advanced technology and government also tries to develop more innovation for increasing demand for solar panels in India. Thus, solar panel market brings various investment and development opportunity to the country.
SWOT analysis helps in providing the information about the Megawatt strength that requires exploring more and weakness that require overcoming (Lu, et al., 2013).
Besides that with analyze of the opportunities and threats, the company can determine the available opportunities and threats that can affect the company effectiveness. So in the context of megawatt solution, the internal and external position of the company will present below:-
· Provide quality products at affordable price
· Develop products with use of natural resources
· Adaptation of latest technology
· High thin film PV manufacturing capacity in India (Besselmann et al., 2016).
· Strategic tie-up with the renowned companies such as Suntech, Trina Solar, etc.
· Installation of advanced technology
· Low cash position
· Ineffective in promotion
· Low distribution channel
· High debt on company
· Relatively small production capacity
· Less awareness about the Megawatt solution in the market.
· Multi-technology platform offer platform of providing the customized solution to customers.
· The thin film technology is well suited for the India environment due to it’s properly fitted towards the hot and low weather of the country.
· There are plans to tapping the 1750 production in next three to four years that can give high economies of scale.
· Technology obsolescence
· Lacks of awareness
· Largely dependences on the government subsidies
· Increasing competition with the entry of big players (Giambastiani et al., 2014).
· Changing legal and political environment may affect the solar company effectiveness.
Megawatt solution is a very competitive organization that works for the conversation of energy and it also financing their solar projects through the government subsidiary. At the same time, the company also collaborated with various players in the local area in order to grab the untapped market.
The company also uses advanced technology in their products, and this allows them to offer the products at the lower price to customers (Garimella et al., 2011). To develop the quality products, the company uses the natural resources like High thin film technology in their PV manufacturing that is well suited to India low and hot weather environment.
The weakness that megawatt solution has identified is that company has the poor distribution channel and small production units that make tough for the company to stand in the market with the competitors (Singh, 2013). Moreover, the company also have high debts from the public that can prove to be a loss for the company. Thus, megawatt needs to overcome such weakness.
The opportunities that are available to the megawatt solution are the changing technology that allows to developing the customized solution for the customers. For the company megawatt, there is an opportunity to tap the untouched market through the collaboration of key players (Niyibizi, 2015).
Moreover, the thin film technology is well suited for the India environment due to it is properly fitted towards the hot and low weather of the country. So in that case megawatt to properly implement such technology in their manufacturing unit then it can improve their quality system.
For the megawatt, there is the great risk is associated with handling the production units of solar energy and the Changing legal and political environment can also affect the company effectiveness.
Besides that, due to the largely depend upon the government subsidiary, a company does not get the chances to expand the operation in a global platform (Amer & Daim, 2010). Thus, increasing competition with the entry of major players in the local market can prove to be a major threat to the company.
From the macro analysis as the secondary research, it is found that PESTEL analysis is vital to influence the business of a company. PESTEL analysis contains the study on some major factors such as the political, economic, social, technology, environmental and legal factor.
The finding of the PESTEL analysis shows that company political situation of India is favorable of Megawatt solution. In current time, the government of India has full power, and there is not any pressure of the other parties on the government. The policies, rules, and regulation of the government are supportive for the business environment (Mekhilef, et al 2011).
The government has developed a systematic taxation system. At the same time, the government provides significant subsidy to the customers on the installation of solar panel. It encourages peoples the people to purchase the solar panel that also helps the company increase the sale.
The government also provides the taxation benefits to the solar industry. It saves the cost of the company and increases the net profit of the company. The government has also made the licensing process easy for the industry (Mishra and Bäuerle, 2012).
At the same time, it is also found that Megawatt solution is also supported by the current economic situation of the company. The economic factors are supportive for the solar company. The government is involving in the improving the economic performance of the country.
The improvement in the economic performance of a country directly supports the industries. Current time, the Indian economic is growing high in the world (Nazeeruddin, et al. 2011). From the analysis, it is found that in 2015, the GDP growth rate of India was 7.6 that was more than USA and Pakistan.
A good GDP growth shows that production is at the high and industries are getting achieving sales. At the same time, it is also found that per capita of in India is $6162. The total GDP of India is $8 trillion. In the last five year, the economic growth was 6.7% that also indicates a good economic condition of the country.
At the same time, it is also found that unemployment rate is 3.5% of India and the inflation rate is recorded at the 4.9% in India (Pospischil, et al. 2014). On the basic of these findings, it can be said that economic condition the country is favorable to solar industry.
To fulfilling the needs of all income level, solar companies can create the different ranges of solar panels for every income group as per their affordability. Thus, such exercise caters the needs of the each income group and best suited towards the taste of society (Perez, et al. 2010).
Form the above finding, Megawatt has to face issue to achieve sufficient sales in India. Therefore, the company has to need to improve its service so that it can get sufficient sales.
The company can adopt the servitization strategy to improve its service to achieve target sales. Embedded intelligence can be also beneficial aspect for the company. For this, the company will develop device that can tracks and monitor any type of issue by default and interact with customers intuitively. At the same time,
Megawatt should concern to improve cleaning service to that will support the sales of the company. Under this service package, the company will focus on the improve skills of the professional workers, taking precaution as to get them back into top condition.
Megawatt can also offer an option as the secure low cost financing. In this, the company can develop plan for customers to pay their investment via their monthly bill utility bill.
In the context of the social factors, it is found that social trend also has influence on the solar energy industry in India. It includes the various aspects such as culture, values, traditions, beliefs, demographic features and customs taste. In the recent years, many changes are observed in the Indian society. People has become more educates that become them more caring about the environment.
It increased the sale to the solar panel companies including Megawatt solution. At the same time, it is also identified that country is also facing the issue of environment suitability that is why people become more responsible about the environment (Quoilin, et al. 2011).
For this, people are choosing the solar energy system to get the energy for meeting their daily needs. In the country, the demand for the sustainable products has raided due to increase environment issues. Thus in that situation, the solar industry has the advantage to grab the market by indicating or educating the customer about the benefits of installation of solar panels.
At the same time, it is also identified that India is a developing country. The technology is not wholly developed here. Due to this, companies face cost and production related issues.
But in the last years, India showed adopted significant growth in technology development. Researcher and engineers are involving the developing of new technology so that cost business operation can be reduced (Razykov, et al. 2011).
Thus by adopting the advanced technology, solar companies can cut the cost and reduce the rate from 5 to 7% per annul, and this will allow to attracting the global market and influences the buying behaviour in a positive manner.
Additionally, from the environmental study, it is found that company is facing the environmental issue. The major problem that has occurred with the environmental issues are the increasing global warming that provides a negative impact on the environment as well as on the society (Roa, et al, 2015).
However, there is a vital role of environment issue on the sales of solar panel industry. People attitude toward green or ecological products has also changed that is also a favourable aspect for the company. The Indian government is implemented various legal rules and regulation on the business process of the industry. There is some limitation in the production and resources. Megawatt solution also has to face these issues Solang.
On the other hand, from SWOT analysis, it is found that there is some major strength of the company such as it provides quality provides at the reasonable price. The operation of the company is based on the latest technology that helps the company to remain the cost low and get a competitive advantage.
It also has high thin film PV manufacturing capacity in India. There are also some weaknesses of the company such as low cash position, ineffective in the promotion, low distribution channel, high debt on the company (Solangi, et al. 2011).
It is also identified from the SWOT analysis that there some opportunities for the companies including multi technology platform, development of thin technology, increasing the issue of environment sustainability.
The threats of the company are technology obsolescence, lacks of awareness, largely dependences on the government subsidies and increasing competition with the entry of big players (Yang and Garimella, 2010).
From the above discussion, it is analysed that there solar industry is one of the most growing industry in the current business scenario. Companies in the solar energy industry are supported by the government policies and environment policies. It is because counties are facing the issue of global warming.
At the same time, it is also summarised that Indian economic is performing well that provide business opportunities to the company. Megawatt solution also has some other opportunities such multi-technology platform, development of thin technology, increasing the issue of environment sustainability. The company can get benefit from them by using advance technology.
In order to improve the operation activities of Megawatt solution, it is recommended to the company that it should invest in the research and development. However, the company is doing good invest in the research and development, but there is a need to improvement.
The company should encourage development and implement effective strategies regarding the research and development. It will help the company to minimise the operation cost and improve the efficiency of the operation (Lenert and Wang, 2012).
Under the research and development practices, the company should seek the way of improving the efficiency of the solar panel. In regard of this, it is recommended to Megawatt solution that the company should try with new material that can enhance the performance of the solar panel in the bad atmosphere. It can be seen that in the bad atmosphere, the performance of solar pane decreases.
In order to an ideal development of the company, Megawatt solution should take the effective and strict action that can enhance the efficiency of the company. For this, the company can adopt possible measures and techniques. The company should adopt modern technology and equipment so that it can minimise the cost of production (Lovegrove, et al. 2011).
In the context of marketing, the company should also concern on the development and implement the new strategy. The company should plan a training and development program for the member of its marketing team. Along with this, it is also recommended to Megawatt solution that it should conduct the market research to know the market trend.
It will help the company to know about the competitors’ strategy in the market (Luna-Rubio, et al. 2012). Through this, the company can develop its marketing strategy to compete with the competitors. It will help the company to achieve profit over the competitor in the market.
The company should also increase employees implement in the decision making process. Sometime, employees have great ideas regarding the organisation growth, but they cannot express. Megawatt solution should provide a chance to employees to involve in the decision making process and suggest their ideas.
Megawatt solution should also identify the areas where improvement is necessary. After this, the company must prepare a strategy to improve organisation performance. It is also recommended to Megawatt solution that it should also deeply research on company strengths weakness.
Along with this, it should also depth research market opportunities and threats. The company should also develop a strategy and plan for expansion business. It should also develop increase its sales in the exiting and news market (Martín, et al. 2010).
The company can also introduce new product range in the solar energy. The company should try to expand its business over the world. It will be helpful for the company to increase revenue.
For this, the company can concern on opening franchises and branch of company at the different market. The company can also enter in the new industry that will also expand its business.
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