Discuss The Most Important Emerging Issues For Suzlon

Discuss The Most Important Emerging Issues That The Suzlon

Question 1: Discuss the most important emerging issues that the Suzlon Energy Ltd sector faces in the next five years. In your answer, use appropriate strategic frameworks of your choice to analyse the industry and external environment.

Question 2: Utilising Barney’s ‘VIRO’ and Porter’s ‘Value Chain’ models, critically evaluate Suzlon Energy Ltd resources and capabilities relative to their competition.

Question 3: Critically evaluate Suzlon Energy Ltd plans to develop a sub $1000 printer and partner software developers to develop apps for the consumer segment. Do you think this is a suitable strategy?

Question 4: Discuss two other possible strategic options that Suzlon Energy Ltd could consider and using Johnson & Scholes’s strategic options framework (SAF), conclude which one would be the most appropriate to implement alongside the proposed consumer strategy from Q.3 above.

Paper For Above instruction

Introduction

Suzlon Energy Ltd, a leading player in the renewable energy sector, faces a dynamic and rapidly evolving industry landscape. The next five years are crucial for the company as it navigates technological advancements, regulatory changes, market competition, and sustainability pressures. To understand its strategic positioning, it is essential to analyze key emerging issues using appropriate frameworks. This paper explores these issues, evaluates Suzlon’s resources and capabilities, assesses new product strategies, and explores additional strategic options aligned with its long-term growth.

Emerging Issues Facing Suzlon Energy Ltd

The renewable energy industry, particularly wind energy, is characterized by rapid technological innovation, fluctuating regulatory policies, and increased competition from both traditional energy firms and new entrants. One primary emerging issue for Suzlon is technological disruption. Innovations such as larger turbines, offshore wind, and floating wind technology threaten to render existing infrastructure obsolete. Using Porter’s Five Forces framework, the threat of new entrants and substitutes increases as technological barriers lower, enhancing industry rivalry (Porter, 1980).

Regulatory and policy uncertainty is another significant issue. Government incentives, tariffs, and environmental regulations influence project profitability and investment decisions (Kemp, 2019). Sudden policy shifts in key markets like India, China, and the U.S. can impact Suzlon’s strategic plans. Additionally, climate change mitigation policies may lead to stricter emission targets, compelling Suzlon to innovate continuously to meet emerging standards.

Market competition is intensifying with established global players such as Vestas and GE Renewable Energy expanding their market share. The commoditization of wind turbine components and price pressures challenge Suzlon’s profitability. The company must also address supply chain vulnerabilities, especially for critical components like blades and gearboxes, which can be affected by global disruptions (Chen et al., 2020).

Furthermore, stakeholder expectations regarding sustainability and corporate social responsibility are rising. Stakeholders demand transparent reporting on environmental impact and social contributions, influencing Suzlon’s strategic priorities (Moser & Dilling, 2019). Embracing technological innovation, regulatory agility, and stakeholder engagement will be vital in addressing these emerging issues.

Analysis of Resources and Capabilities Using Barney’s VIRO and Porter’s Value Chain

Barney’s VIRO framework assesses resources and capabilities based on valuable, rare, inimitable, and organizationally supported attributes (Barney, 1991). Suzlon boasts several key resources, including a robust patent portfolio in wind turbine technology, strategic supplier relationships, and a global installation footprint. These resources offer a competitive advantage if they meet the VIRO criteria.

Valuable: Suzlon’s technology and global installation base enable it to capitalize on emerging wind markets. Its R&D capabilities foster innovations in turbine design, supporting efficiency and cost reductions. Its established supply chain ensures timely delivery, an essential factor amid global disruptions.

Rare: While competitors also possess technological capabilities, Suzlon’s specific patents and localized manufacturing expertise in India provide it with some Rarity, especially in emerging markets.

Inimitable: Suzlon’s accumulated experience, patents, and supply chain relationships create barriers for new entrants. However, rapidly improving imitation technologies threaten this advantage over time.

Organized: The company’s organizational structure supports innovation and global operations, but internal bureaucratic challenges could hinder agility (Teece, 2014).

Using Porter’s Value Chain analysis, Suzlon’s primary activities include inbound logistics (supplier relationships), operations (manufacturing turbines), marketing and sales (global presence), and service (maintenance and support). Supporting activities such as technology development and procurement underpin its competitive position. Enhancing these activities through digital integration and after-sales service innovation could create further value.

Evaluation of Suzlon’s Consumer Product Strategy

Suzlon’s plan to develop a sub $1000 printer and partner with app developers targets the consumer segment—an extension beyond conventional wind energy products. This diversification could open new revenue streams, increase brand visibility, and leverage the company’s technological expertise. However, the strategic fit remains questionable.

In assessing the suitability, it is essential to consider core competencies. Suzlon’s expertise lies in large-scale renewable infrastructure, not consumer electronics. Entering the printer market could stretch resources and divert focus from its core business, risking dilution of Brand equity and operational inefficiencies. Moreover, the sub-$1000 printer market is highly competitive, with established brands like HP and Epson delivering economies of scale and established distribution networks (Porter, 1985).

Therefore, while innovation and diversification are vital, this particular strategy may not align with Suzlon’s core competencies or strategic intent. It might be better positioned as part of a broader innovation initiative rather than an independent product line, ensuring resource allocation aligns with long-term strategic goals.

Alternative Strategic Options and Compatibility with SAF Framework

Beyond the consumer printer initiative, Suzlon could consider strategic options such as expanding into offshore wind projects or vertical integration of component manufacturing. Using Johnson & Scholes’s SAF framework (Suitability, Acceptability, Feasibility), these options can be evaluated in synergy with existing strategies.

Option 1: Expand offshore wind capacity. Offshore wind offers higher energy yields and less land competition, aligning well with Suzlon’s expertise in large-scale turbine deployment. It satisfies suitability (market growth), acceptability (high ROI potential), and feasibility (existing technological capabilities). This strategy complements the proposed consumer-focused innovation by reinforcing Suzlon’s leadership in renewable energy infrastructure.

Option 2: Vertical integration of key components such as blades and gearboxes. This could reduce supply chain risks and improve margins. It is suitable given current resource capabilities, acceptable with strategic partnerships, and feasible given technological expertise. It may, however, require significant capital investment and organizational restructuring.

Comparing these, expanding offshore wind capacity seems the most aligned with Suzlon’s core competencies and the industry’s trajectory. It enhances existing strengths while diversifying risk and market exposure, making it the optimal strategic choice in tandem with the consumer product initiative.

Conclusion

Suzlon Energy Ltd faces several emerging issues, notably technological disruption, regulatory uncertainty, and increased competition, which require proactive strategic responses. Analyzing resources through the VIRO framework reveals strengths in patents and supply chain capabilities but highlights the need to enhance organizational agility. The evaluation of the new consumer printer strategy suggests limited fit with core competencies, indicating a need for strategic refinement or alternative approaches. Expanding offshore wind capacity emerges as a more suitable complement, aligning with Suzlon’s existing strengths and market trends. An integrated approach—balancing core business expansion with targeted innovation—will ensure Suzlon remains competitive and sustainable in the evolving renewable energy landscape.

References

• Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99-120.
• Chen, L., Zhang, Y., & Liu, Z. (2020). Supply Chain Risks in Wind Power Industry. International Journal of Production Economics, 227, 107-130.
• Kemp, R. (2019). Regulatory Changes and Renewable Energy Deployment. Energy Policy, 125, 51-58.
• Moser, S.C., & Dilling, L. (2019). Risk, Uncertainty, and Local Stakeholder Engagement in Climate Adaptation. Environmental Science & Policy, 98, 25-33.
• Porter, M. E. (1980). Competitive Strategy. Free Press.
• Porter, M. E. (1985). Competitive Advantage. Free Press.
• Teece, D. J. (2014). The Foundations of Enterprise Performance: Dynamic Capabilities and the Role of Strategic Management. Strategic Management Journal, 35(13), 1790-1806.