Improving the Competitive Position in a Growing High Tech Industry : - Differentiation and Cost Leadership Strategies in Solar Photovoltaics -

University essay from Företagsekonomi

Abstract: Background: The purpose of this master thesis was to investigate what generic strategies are utilized by big players in the solar photovoltaic industry to improve their competitive positions. The continuous expansion of the solar market indicated the significance of this research, since the correctly chosen strategy has a direct influence on the success and prosperity of the growing and developing high tech companies.Aim: The first aim of the study was to examine the applicability of Michael Porter‟s theory of generic strategies to the high tech industry, to be more precise the solar photovoltaic industry. The second aim of the study was to explore the cases, if any, when the simultaneous pursuit of more than one generic strategy was possible. The last but not the least aim was to deeply investigate the potential of the differentiation strategy and the effect it has on the companies.Definitions: The continuous utilization of the following concepts is present in the research: Generic strategies – the three different strategic approaches – cost leadership, differentiation, and focus – the companies can undertake to build a strong competitive advantage and outperform their competitors Differentiation – a case when a firm‟s offering is preferred, on some buying occasions (or by some customers all of the time) over rival firm‟s offerings Solar energy – alternative solutions of receiving energy directly from the sun – using solar modules which convert sunrays into electricityMethodology: Qualitative research methodology was used in this study. The in depth analyses of three case companies were done mainly by means of collecting the secondary data. In addition to that two out of three companies were contacted in order to conduct personal interviews via phone and email. Their answers were used as a supportive tool for the developed propositions.Results: The collected and analyzed secondary data together with the outcomes of the interviews revealed the flaws and limitations of Porter‟s theory. The simultaneous pursuit of two strategies was proven not only to be taking place, furthermore, to be leading to prosperity in some situations. The new model was developed which showed that the pursuit of two strategies is more of a necessity under certain circumstances. A thorough examination of the differentiation concept resulted in discovering the ways and methods which could be used by companies to strengthen their market positions.

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