The solar market is the next big global investment prospects in the alternative energy industry. The current challenges witnessed on the environmental platform leading to reduced rainfall patterns and drying rivers or springs requires a consolidated approach to provide alternative sources of clean energy that do not suffer overreliance on the environment. The world has created an over-reliance on hydraulic power propelled sources of energy leading to several impacts and disruptions witnessed on the environment (Ladd & York, 2017). Solar energy, therefore, comes up as an alternative source of energy providing the energy required for both home and in the manufacturing industry.
The business shall be operated under the name of Solar Biz Company seeking to manage the unserved populations through alternative energy in the industry. The business will provide products and services of marketing solar panels for homes and light companies in order to provide clean energy approaches to the targeted customers.
- Product or Service
This business identifies the energy gaps in the domestic and light business market and seeks to cover the gap through the marketing, installations, and repairs of contemporary solar energy systems panels as a source of clean energy needs. This product provides the advantage of higher tariffs from the national grid, improved access, and environmental friendliness.
- Target Market
The solar power business targets the entire economic drivers within the populations. Klingler (2017) explains that solar energy providers have neglected the bottom side of the grid focusing on the prime consumers who are rich business and malls or real estate agencies. The business will, however, start from the point of the direct beneficiary like residential homes, hospital among others as it builds its infrastructure to expand to the other larger markets. The business focuses to cover the gaps that exist in the economy at small offices, households, social institutions like local hospitals, religious institutions, and schools or colleges for clean and sustainable energy from the solar panels.
- Benefits of the proposed product or service
Globalization and technological innovations deliver higher manufacturing prospects, leading to increased energy demands even as the supply dwindles on a daily basis. Accordingly, energy requirements are on the increase and hence required to propel the running of production lines for commercial companies dealing with larger machinery (Ladd & York, 2017). As time goes by, it is becoming evident that alternative sources of energy are a mandatory requirement for every sector of the economy (Bilgen, 2014). Even though Nuclear is another great source of energy, the global politics around nuclear energy and the sanctions it encapsulates are enormous, yet the demand for clean energy continues to grow from every sector of the economy in the manufacturing and non-manufacturing sectors including at domestic levels. To ensure the energy levels required for economic growth are met albeit the difficult environmental situations leading to drying up rivers or springs and the unpredictable rainfall patterns, the solar energy business is proposed as the alternative source of clean and sustainable energy. The benefits of the products lead to the restoration of the environments and the availability of relatively cheap energy for operations to the target customer.
- Product or service positioning relative to competitors
Majority of the solar energy providers operate their business as partners with the government through the sale of solar energy to support the national grid (Ladd & York, 2017). Other larger installation companies target their supply business to shopping malls and real estate construction project that provide high-value assets and prospects in the solar industry. However, the business acknowledging the gaps left by large installation companies will take advantage of the opportunities in the market of those who are off the grid. The business will, therefore, position itself to serve the underserved populations of society through better-improved customer-oriented products and services. Accordingly, the business will target private homeowners, social institution, and religious organizations as the beneficiaries of the products and services in the market. This will give the business a competitive advantage since it will venture into an area previously neglected by bigger players in the industry.
- The Management Team
The business adopts a simple management structure to cut on costs during the preliminary business setup phase. The adopted structure takes care of the administrative process for the company, the sales and marketing, and the technical team including aspects of accounting and bookkeeping. del Alonso-Almeida, Bagur-Femenías, and Llach (2015) assert that businesses that adopt simple management structures are efficient in service delivery and experience optimum growth levels in their respective industry of operation. This structure will ensure that the focus on customer value is not overlooked during the operations of the business. The structure of the management team is indicated below.
During the business implementation phase, the management team shall work as a unit and gather information within the market to get the viewpoint of the industry about the viability of the proposed product and services to the market. The implementation phase, therefore, investigated the consumption levels of the product to the target market. The members of the management team will have the responsibility to ensure that business is positioned in the market and manages to make the first 100 successful orders.
The Desirability of the Products
The desirability testing stage seeks to understand the actual views of the proposed products in the market. This included whether the product makes sense or it is reasonable to the target populations. The phase also inquired through the advantages of solar panels in the market and whether or not the product addresses or has the potential to meet the energy needs of the target clients and, in this case, give them an advantage over the available options in the market. Similarly, the phase also investigated the size of the market for the products along with the other technical aspects of manufacturing process and opportunities available for raw material within proximity. The general view of the respondents was that solar energy provided a near perfect alternative to the energy requirements and the environmental protections agendas of the country. Majority of the respondents felt that the solar industry is experiencing a delay in reaching out to the local individual since the ultimate focus was concentrated in big businesses like shopping and office malls and bigger hotels in the country. Therefore, there is a gap in the supply and installation of solar panels and their equipment to individual homes, schools, colleges, and other social institutions
Product Acceptability and Competitiveness in the Market
The objective of every business is to provide products and service that meet the needs and expectations of the targeted market. The solar panel installation, maintenance, and repair are initiatives that make sense, provide value, and are reasonable for the targeted market, especially those who are off the grid (Mukhopadhyay, 2017). This implies that the products and services will meet the acceptance levels since the marketing strategies will take advantage of the environmental protection rider used as a niche. Energy is a challenge in many countries, including Saudi Arabia. Clean and sustainable energy is a desire for all citizens due to the global increase in energy requirements. Solar panels installations, therefore, have no competitions in the market since it stands out as an alternative source of energy compared to the main grid and nuclear energy, which are used in minimal volumes.
Product and Service Timing
The increase of funding for solar energy investment has spelled aspirations for the solar industry (Almheiri, 2015). According to Suryadi and Velautham (2017), the majority of banks and other credit unions have developed financial products to support the purchase of solar equipment and fund their installations and repairs in order to provide relief to the national grid. This gives the solar panels, installations, maintenance, and repair business well-timed success to take advantage of the political and institutional support of the solar projects in the country.
Potential Flaws in the Market
Solar panels installations and maintenance business face challenges due to the preliminary investment expected from the points of the customer. The individual customer is projected to raise substantial amounts of money to take care of purchase of the solar panels, the solar kits, including power sources, lights and the procedure of installations as well as the process of wiring. This cost is relatively expensive compared to the connection to the national grid for energy. However, to ensure we manage the colossus financial expectation from the customer, the business seeks partnership with banks and financial institutions to provide credit facilities to the households, schools or religious organizations among the other targeted populations in order to accept simplified installments. Therefore, the initiative will enable the customer to have sustainable energy at a minimal rate while repaying the bank loans in reasonable installments.
- B) Product/Service Demand
Light solar energy panels are the next market drivers in the energy industry. In fact, the majority of real estate developers rely on the electrical connections from the national grid to power their products. The challenges of the national supply of electricity come from the cost fluctuations and blackout or rationing due to the escalating environmental challenges affecting the mainstream generation of electricity (Jamil, Ahmad, & Jeon, 2016). Light solar panels product will respond to the power demand in the market by providing close to perfect supply of energy for all the domestic and light industry demands. The demand for Light solar panels is high, especially when marketed with environmental protection rider.
Light solar panels will be promoted with complete lighting kits and hot water systems for the domestic market to provide real-time solutions and the advantage of savings compared to the other sources of energy like hydro-electricity or nuclear power. The advantage of the light solar panel is its efficiency and cost effectiveness including the consistency. Light solar panels have no blackouts. In addition, there are no monthly bills like electricity and nuclear energy, yet they are cheaper as they come with one-time purchase costs. Light solar panels also give ease to the already straitened environment, allowing for replenishment to the natural water sources. In this case, water sources are utilized for domestic use rather than electricity generation as has been the case with electricity generations.
- Industry/Target Market Feasibility
- A) Industry Attractiveness
The solar production is in its infancy compared to other electricity generating approaches in the industry, which have been known for several decades (Bhandari et al., 2015). The industry is in its early stages due to the nature of the market and product uptake. The global size of the solar energy was estimated to be over $65 billion, and it is likely to exceed $140 billion by the years 2023 (Bhandari et al., 2015). In fact, solar energy is in the growth cycle, which is developing at very high levels. The solar industry is broken into several products differentiated to suit every sector. These include solar panels, solar lights, and solar water systems among other products. The differentiation makes the industry competitive, leading to market categorizations and classifications through industry and user intensity.
The growth in the solar industry is fast growing given the under-served demand of the customer. Solar power is one of the most environmentally friendly sources of clean energy. Bhandari et al., (2015) add that solar power only utilizes that sun rays to convert the light into energy sources, which is a free non-depleting resource. Therefore, no environmental restrictions will affect the retailing of solar power panels on the targeted market. Given that majority of solar power equipment manufacturer target the large-scale market and those with higher electricity demands, the business will target light user and companies with light energy equipment needs. Therefore, the products will attract customers from the semi-formal settlement and industry that have energy challenges in the market
- B) Target Market Feasibility
Majority of businesses rely on the energy sources supplied from the main national grid. However, the solar energy as an alternative form of energy is fast gaining momentum in the market. The gaps in the solar installations and maintenance are informing our campaigns for the products and services. These gaps exist in individuals and businesses that cannot successfully operate without the alternative sources of energy (Jamil, Ahmad, & Jeon, 2016). The main target, therefore, is banks and financial institutions operating branches within a building with no energy alternatives and the several blue chip companies in the country. In this case, schools, colleges, and hotels are our targets.
On the other hand, we are targeting religious organizations, individuals and households and especially the real estate industry that forms part of our primary target for installations and maintenance. Al-Maamary, Kazem, & Chaichan (2017) explain that due to the overgrowing demand for energy and renewable solutions in the country, the cost of the national grid is rising leading to smaller organizations and social institutions going for alternative sources of energy. The target demographic for the business, is therefore mapped out to target schools, colleges, religious organizations more compared to the commercial building and malls, which majority has already planned and established systems allocations for the solar energy.
- Organizational Feasibility
Surviving in the solar installation and maintenance industry requires technical knowledge and expertise in maintenance and repairs. The competitive solar market requires highly trained and dynamic individuals who are down to earth (Jamil, Ahmad, & Jeon, 2016). Our competitive advantage lies in the professional qualifications of our staff members who bring together their professional dynamism to complete the team. The business has a team of highly trained engineers and technicians with excellent qualifications and experience with a bias in the solar panel installations and repair industry. The teams have members with corporate marketing qualifications expected to lock in bigger sales deals with corporates, including like real estate industry and malls during design and construction stages. Our carefully selected team of the industry best employees together with their synergies will be guided by industry best practices in order to provide the best of service to our targeted clientele.
The strategic positioning comes with a background of knowledge in Human resources issues and employee welfare models. This positioning will ensure employees’ welfare is well managed, and motivations approaches and incentives are well advanced to the staff to increase productivity, efficiency, and quality of service expected to translate to higher customer satisfaction.
- Financial Feasibility
A business in the solar panel installations, maintenance, and repair require a level of non-financial assets to support the operations. Collier, (2015) explains that non-financial assets like vehicles, machinery, or equipment help a business meet its operational obligations to its customers better. The solar panel installations, maintenance, and repair business, therefore, require non-financial assets like service van, office for operations and a toolkit for repairs and maintenance. Even though the non-financial assets required in the business are of high financial values, the business shall employ the lease model to acquire the assets. The business will, therefore, enter into agreements with several service providers to lease vehicles and only pay when engaged in business assignments. However, the business will endeavor to mobilize financial instrument to take care of the non-financial assets like toolkits for engineers and technicians and the aspects of rents among others.
Financial feasibility assessment helps in the identifications of business startup expectations, including the expenses, revenues, and investor disbursements within a business. The financial feasibility of a business, according to Collier (2015) focuses on a summary of Start-up capital requirements, startup capital sources, and the potential returns for investors in a business. The solar panel installation, maintenance, and repair business require several financial startup expectations like the startup rents and equipment.
|S/No||Item||Per Month||The cost in (Saudi Riyal) 3 months|
|1||Office rents in Middle-income Mall||6240||18720.00|
|2||Internet 8 Mbps in a month for 6 months||311.00||933.00|
|Engineers (1 Person)||32000.00||96000.00|
|Installation technicians (2 people)||25000.00||75000.00|
|Office Administrator (1 Person)||25000.00||75000.00|
|General Manager (1 person)||60000.00||180000.00|
|Operation & Sales Manager (1 Person)||50000.00||150000.00|
|Accountant (1 Person)||35000.00||105000.00|
|5||Website development and hosting||10000.00|
|6||Service van Hire Per Trip||500.00||1500.00|
Performance of Industry Competitions
The solar industry in the country is attracting several players due to its growth within the energy sector. The financial performance of the solar panel installations, maintenance, and repair industry performs high on the profitability scale. The higher profits witnessed in the solar panel installation industry come as a result of growth witnessed in the industry and the customer product’s desirability. Intertek is one of the prime competitors in the solar industry, which recorded revenue of £2,769 million in the financial years 2017 with the operating profits knocking a high of £467.7 million.
The financial performance advantage of the operators in the solar industry is, however, evident from levels of support and willingness to invest in the solar panels and installation industry. Financial performance can also be forecasted from the current trends in the home, building and real estate industry. Almost every sector of the economy, building, homes and real estate industry has adopted the solar energy approaches as an alternative source of clean energy in the market. However, the financial performance of the players in the solar sector in the country was not readily available for analysis and information due to the challenges of unavailability of the data on the company websites.
- Business Model
The disruptive business model seeks to re-engineer and optimize products and services, including their market category and functions in the industry of operations (Serrato & Ramirez, 2017). The business strategy in the solar panel installation market in the country has been typically based on the standard models of operations (Al-Maamary, Kazem, & Chaichan, 2017). Therefore, the implementations of the disruptive business strategy will ensure high returns and target market penetrations by the company. Our business selling point will, therefore, aim to support the environmental replenishment process through protection and care for the environment using clean solar energy as the alternative source of energy in the market. This will enable our core values and statement to filtrate the perception in the market to generate positive synergies in the market.
The Barringer / Ireland Business Model Template
The mission of the business is to provide superior solar panels, and solar energy equipment that meets the individual unique energy demand and follow up on maintenance and repair works aimed at value addition to the customers.
|Basis of Differentiation
The major differentiation of the business will be based on the target customer and the service offered. To ensure faster market filtrations, the business shall focus on the individual supplies and differential through service and product pricing. Our pricing differentiations will seek to provide value at reasonable costs. Given that solar installations are a secondary business reliant upon the manufacturing sector, our differentiation models shall also be based on customer energy needs in the market. The business shall, therefore, target from the highest to the lowest offering unique and customized products and service at competitive prices.
The target market for the business will be the entire commercial and local operations in the economy that rely upon the supply of energy for its operations. The target market will, therefore, include residential homes without solar connections, religious institutions, real estate developers, hotels, hospitals, and players in the hospitality industry.
|Product / Market scope
The scope of our products runs through the entire economy. However, to ensure we gain a competitive advantage in the market, the business will focus on the smaller unserved or targeted market like domestic and individual private residences, Social organizations like schools primary and secondary including hospitals with few of limited supply of alternative forms of energy.
The core competency required in the solar panel sales, installations and repairs are the technical abilities for installation and repairs. Our competitive strengths are solidly based on the power of our team. Our team has certified solar trained installers. The excellence qualifications and experience in the several solar panel installations is a niche we shall gain in the market. The core competencies of the business, therefore, include knowledge in solar installations and repairs, which will be managed by employee with engineering qualifications and artisans of relevant exposure and experience. Sales and marketing qualifications are also important in the business since they shall propel the sales and improve revenues. The business shall take advantage of training and development approaches to induct presentations skills, communications, and interpersonal skills within the team to ensure quality and service accrues to the customers.
The key assets required for the business include.
i. Startup capital
ii. Service, sales, and marketing van
iii. Office Equipment (Tables, desks, and seats)
iv. Computers and printers
The revenue streams of the company are projected to come from three sections. The marketing of solar panels, the installations of the solar, the repair, and maintenance of solar panels. The revenue division will be allocated per every category of the stream. Therefore, this implies that ordinary marketing of Solar panels to companies or individuals who do not require installation services will attract revenues to the company. Similarly, those customers who require solar panels and installation will also attract double revenue based on the products and the installation service charge, which will remain minimal. The solar panel is an industrial/ manufactured product that depreciates over time or develops operational challenges that may require repair (Bilgen, 2014). The repair services based on the diagnostic process of the technician and engineers will also drop into the company reasonable revenues from the services they offer to the clients.
Every business accepts a level of cots to propel its operations. The Cost structures for the business will include.
a) Rents and
b) Recurrent utility costs
c) Salaries or wages and the
d) Maintenance costs for equipment
The business will endeavor to keep the costs low in order to maintain a healthy revenue margin that can sustain the operations of the business in the market.
Solar business has an operating advantage emanating from the support of the government. The business will, therefore, rely on the goodwill on the country to marshal financial support from bank loans and credit union support. In addition, it will seek international and governmental partnership and support to purchase and install solar energy alternatives for social institutions like schools, colleges, and other religious institutions.
The financial funding will also be managed on behalf of customer’s having challenges to raise their preliminary equipment costs like panels, power source, lights among other requirements.
|Products or service production
The business will provide product and services to the market.
The products for the business will be:
i. Solar power panels
ii. Solar hot water systems and
iii. Other solar equipment like lights.
|Supply chain Channels
The mega-suppliers for the business will be Solar Panel manufacturers. The business will market the solar products to targeted customers, and upon sealing the supply deal will place a supply order from the manufacturers for the installation process to take place for the client. The business shall equally have sample equipment within its showroom to take care of drop-in clients who wish to purchase a few panels for their private budget use.
The key partner of the business will be solar manufacturing companies within the country and in offshore destinations like China and Malaysia. The business will employ a simple supply chain model to create linkage between the solar panel manufacturers and the end user customers acting as an installations and repair venture.
Summary and Recommendations
Solar installation is a new emerging industry taking advantage of the structural limitations in the energy sector that is informing the refocus to lean and sustainable energy. Whereas previous innovation has supported machines and equipment that utilize the higher capacity of energy, environmental conventions, manufacturing experts, and world economic advisers have provided strategic advice within the manufacturing sectors leading to a refocus of the energy consumption levels for machines. The majority of modern-day equipment are developed to utilize limited energy sources powered by simple solar panels.
The solar installations business is, therefore, a model that provides clean and sustainable energy alternatives to the communities living in the country. The main focus of the business will be to target the small and underserved sectors of the economy. These sectors include individual households, schools and colleges and other social institutions. The business has higher prospects of growth and upon gaining knowledge and recognition in the market; it will compete for the bigger players who take up large commercial malls and other high energy requirement through a sophisticated approach to solar energy support.
Within the first year of operations, the business will seek to enter into an agreement with a direct solar manufacturing company for partnership and supply of solar energy equipment like panels and batteries on credit terms payable after the business receives payment from clients. Business in the solar energy market is still in the growth stage and yet to mature. Therefore, this implies that there is enough opportunity for the growth of the business.
Al-Maamary, H. M., Kazem, H. A., & Chaichan, M. T. (2017). The impact of oil price fluctuations on common renewable energies in GCC countries. Renewable and Sustainable Energy Reviews, 75, 989-1007.
Almheiri, A. K. (2015). Is the United Arab Emirates Capable to Create a Green and Sustainable Future? (Doctoral dissertation, The British University in Dubai (BUiD).
Bhandari, B., Lee, K. T., Lee, G. Y., Cho, Y. M., & Ahn, S. H. (2015). Optimization of hybrid renewable energy power systems: A review. International journal of precision engineering and manufacturing-green technology, 2(1), 99-112.
Bilgen, S. (2014). Structure and environmental impact of global energy consumption. Renewable and Sustainable Energy Reviews, 38, 890-902.
Collier, P. M. (2015). Accounting for managers: Interpreting accounting information for decision making. John Wiley & Sons.
del Alonso-Almeida, M. M., Bagur-Femenías, L., & Llach, J. (2015). The adoption of quality management practices and their impact on business performance in small service companies: the case of Spanish travel agencies. Service Business, 9(1), 57-75.
Jamil, M., Ahmad, F., & Jeon, Y. J. (2016). Renewable energy technologies adopted by the UAE: Prospects and challenges–A comprehensive overview. Renewable and Sustainable Energy Reviews, 55, 1181-1194.
Klingler, A. L. (2017). Self-consumption with PV+ Battery systems: A market diffusion model considering individual consumer behavior and preferences. Applied Energy, 205, 1560-1570.
Ladd, A. E., & York, R. (2017). Hydraulic Fracking, Shale Energy Development, and Climate Inaction: A New Landscape of Risk in the Trump Era. Human Ecology Review, 23(1).
Mukhopadhyay, B. (2017). Solar energy based entrepreneurship and rural development: analyzing institutional arrangements that support solar energy entrepreneurs in India (Doctoral dissertation, University of Sussex).
Serrato, M., & Ramirez, J. (2017). The Strategic Business Value of Big Data. In Big Data Management (pp. 47-70). Springer, Cham.
Suryadi, B., & Velautham, S. (2017). INDC and Low-Carbon Technology Deployment Scenarios: Cambodia, Lao PDR, and Myanmar. In Globalization of Low-Carbon Technologies (pp. 283-331). Springer, Singapore.