MANAGING STRATEGY, STRUCTURE: PLANNING Bob has decided that he really needs to sit down and get strategic about Daylights future. He has too many thoughts swimming through his head: He thinks about how Daylight is in a good financial situation with reasonably high sales due to a great marketing team. But, the overall culture of Daylight is still lagging behind the industry, as they focus too much on consistency and not enough on adaptability. This is especially seen in the Manufacturing Division and the overall lack of Research and Development at Daylight. In addition, Daylights brand name isnt nearly as pronounced in the community as the new competitor SunTech, who also happens to have a 10% price advantage. Bob has great relationships with their specialised steel supplier and hopes this will help curb the competition. But now Bob really needs to do something about Daylights future. He cant stop thinking about the ageing Canadian population, the increasingly global competition, and the variety of new clean energy like wind or water power available. Daylight only operates in Canada, which is both good and bad. The government subsidies for solar water heaters definitely help sales, but Bob is concerned they are too dependent on only one solar market. Maybe the answer lies in diversifying their product base. Perth is arguably the third windiest city in the world, and wind power is catching on. The Wind Farm in Toronto is only the beginning for Canada Bob recently read about small wind turbines for domestic use. They require at least 3 hectares of land per wind turbine, which makes them perfect for rural areas, and WA has a lot of remote land. Small domestic wind turbines also mean a variety of customers and less capital requirements. The price of a large wind turbine is in the millions, but smaller ones for private use price between $2,000 - $10,000 each. Moving into wind energy is looking like a real possibility. The wind energy market is seriously up-and-coming with a 30% industry growth rate, due in part to the growing concern worldwide of climate change. In the worldwide market, there are well over 100 retailers of small wind turbines. In Canada, however, there are only five retailers of small wind turbines, four of which are in the eastern states. This is good news for Daylight. Three of the retailers in Canada seem to focus on low-cost, while the other two focus on high quality. But, then again, Bob cant stop thinking that there are a number of other power types such as gas, solar, or geo-thermal that customers may choose from. Although, if Daylight did diversify into wind energy, at least they would have two of the four covered: solar and wind. After looking into it further, Bob found that there are very few suppliers for small wind turbines, and most of them are concentrated in Northern Europe and the US. There is only one potential supplier in all of Canada, and they are located on the east coast. It would cost a bit of capital to start up, but he would not need to purchase too many initially as in this industry, it is uncommon for a business to purchase large quantities in order to get better prices. This is looking like a possible strategic move for Daylight. If they did diversify, it would mean that they would then be in three sustainable energy industries: Industry Industry Growth Rate Market Share in Perth Annual Revenue Solar Water 23% 40% $9m Solar Electricity 10% 60% $2m Wind Power 30% 15% (estimate) $1m (estimate) 1. Based on the case information, develop a SWOT analysis for Daylight. 2. Conduct a Porters 5 Forces on the Wind Power Industry, determining if it would be an attractive industry to be in for Daylight