Potential Markets
Modern Solar Systems Company is a new proposed company based in China, but targeting solar market technology in developing countries, such as Kenya, is not served by electricity in remote areas. The firm will design solar lighting equipment to provide alternative energy sources in those areas where the electricity grid has not arrived. The solar system will be powerful enough to provide lighting and heating energy in rural parts of Africa. The firm targets hot parts of the countries, such as Kenya, where they have adequate sunlight to heat the solar system and provide enough energy for domestic and commercial use.
Absolute and Comparative Advantages
The proposed business will be based in China because of technology’s availability to produce solar equipment at a lower opportunity cost compared to other nations. The country has been working on solar photovoltaic (PV) energy to solve high carbon emissions while providing better alternatives to conventional electric power (Iizuka 241). Since the technology is already available in the country, it will have a comparative advantage to produce solar systems for sales in developing countries, such as Kenya. It will produce panels and other devices at a lower cost than creating them in the developing country and market them at an affordable price to the target markets.
Business Opportunity Analysis
Development and sales of solar systems will be beneficial to developing countries, especially in areas not served by electricity. It is a cheaper alternative to creating the electric grid due to the low start-up cost and affordability of setting up the entire system (Sen and Bhattacharyya 388). Although the business suffers the risk of lack of intense solar energy and lack of acceptance by rural communities, it is still a feasible alternative to the electric grid.
Potential Competitors
Modern Solar Systems Company should expect considerable competition from existing companies in Kenya. The firm will compete with other solar companies, such as Kenital, Eco Solutions, and Kenya Solar Energy Limited. Besides, the companies, Modern Solar Systems Company, will compete with KPLC, which is the country’s main supplier of the electric grid.
Competitive Advantages
Regardless of the competition from the leading solar companies in Kenya, Modern Solar Systems Company will focus on its strengths to gain a competitive advantage. First, the company will provide its solar panels and related technology at a lower cost than competitors to gain an edge in the competitive business environment. Secondly, the company will offer higher voltage solar panels at an affordable price, making them useful for domestic and commercial needs. Lastly, the company will provide critical support in setting up and maintaining the solar panels and related equipment. Therefore, it will offer more advantages compared to competitors.
International Strategies
Modern Solar Systems Company will use an international strategy adapted to the needs of the target market. For example, sales in rural areas will include smaller panels since they will be limited to domestic use than in commercial settings. While the company could enter the market using one of the various strategies, such as exports and imports, licensing, franchising or collaborative partnerships, the most effective will be setting up operations in the target company to understand the market and meet its needs. While creating a fully-owned plant in the target company is costly, it is still the most feasible for Modern Solar Systems Company.
Works Cited
Iizuka, Michiko. “Diverse and uneven pathways towards transition to low carbon development: the case of solar PV technology in China.” Innovation and Development vol. 5, no.2, 2015, pp. 241-261.
Sen, Rohit, and Subhes C. Bhattacharyya. “Off-grid electricity generation with renewable energy technologies in India: An application of HOMER.” Renewable Energy vol. 62, 2014, pp. 388-398.
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