Please read this short case study and answer following questions.

Q-Cells exemplifies the successes and challenges of global importing and exporting. Founded in

Germany in 1999, the company became the largest manufacturer of solar cells worldwide.LDK Solar,

Q-Cells and LDK Solar Announce Formation of Joint Venture for Development of PV Systems in

Europe and China. By 2010, however, it was

experiencing losses due, in part, to mistiming some strategies First, its important to know that Germany is a high-cost manufacturing country compared to China or Southeast Asia. On the other hand, Germany is known for its engineering prowess. Q-Cells gambled that customers would be willing to pay a premium for German-made solar panels. The trouble was that solar cells arent that sophisticated or complex to manufacture, and Asian competitors were able to provide reliable products at 30 percent less cost than Q-Cells. The Cost Advantage

Q-Cells recognized the Asian cost advantagenot only are labor and utility costs lower in Asia, but so

are the selling, general, and administrative (SG&A) costs. Whats more, governments like China

provide significant tax breaks to attract solar companies to their countries. So, Q-Cells opened a

manufacturing plant in Malaysia. Once the Malaysian plant is fully ramped up, the costs to

manufacture solar cells there will be 30 percent less than at the Q-Cells plant in Germany.

Then, Q-Cells entered into a joint venture with China-based LDK, in which Q-Cells used LDK silicon

wafers to make its solar cells. The two companies also used each others respective expertise to

market their products in China and Europe.Richard A. Kessler, Q-Cells, Chinas LDK Solar Form

Joint Venture for Export Push.

Although the joint venture gave Q-Cells local knowledge of the Chinese market, it also locked Q-Cells into buying wafers from LDK. These wafers were priced higher than those Q-Cells could source on the spot market. As a result, Q-Cells was paying about 20 cents more for its wafers than competitors.

(100-150 words)

1. Do you think Q-Cells could have avoided its current financial troubles? What could they have done differently?
2. Do you see import or export opportunities for entrepreneurs or small businesses in the solar industry? What advice would you give them?