SWOT Analysis PDF

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SWOT Analysis...

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SWOT ANALYSIS Strengths: (component 3 and 4) 

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Canadian Solar has employed over 13000 people in about 20 different countries giving the company the advantage of international sales. No other competitor has as many locations as Canadian Solar. 42% less CO2 needed to produce each Canadian Solar module compared to 2012, as confirmed by TÜV SÜD in 2015. More than 6,300 staff members were trained in 2015. It had a net income figure of $242,431 which was $139,448 more than the 2017 net income figure. The company in the past two years has shown these impressive increases due to its expansion of solar farms and manufacturing plants. Ranked #1 for corporate social responsibility in Randstad Awards 2015 Canadian Solar has created new products and improved their current generic product which leads to their products satisfying different customer needs. They also have an asset turnover ratio above the norm which also supports why their revenue is higher than most of their competitors. Has profitability ratios above its competitors.

Weaknesses: (component 3 and 4) 

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As the organizational structure is centralized that means that most of the decisions are made by the CEO and Vice Presidents of the company which may lead to when teams make decisions amongst themselves, they need to go through and follow up with the Vice Presidents or CEO which is time consuming and reduces efficiency. Canadian Solar has a working capital of -$22,709. This is something that they should worry about if it stays negative in the long-term too. They have a lower current ratio than most of their competitors. (they have a current ratio of 0.9 whereas the industry average is 1.5) The company has low levels of current assets compared to current liabilities which could lead to liquidity problems in the future.

Opportunities: (component 1 and 2) 

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People are getting more aware and health conscious these days. Canadian solar is taking advantage of this and they aim to spread knowledge and promote the benefits of solar energy as stated in their Roadmap 2020. Social media is a cheap platform that many companies already use to promote and advertise their products. CanSia can use social media to ask for feedback on their products and also to find out what are customer needs. This can be a source of market research that is affordable.

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Increased education and training has led to many skilled workers in the industry. CanSia can use this to their advantage and employ more skilled workers which could help them become more innovative and productive. They aim to create a stable policy and regulatory environment. They can do this by increasing its staff to strengthen their voice and have a stronger influence in shaping the policy. They aim to also reduce soft costs. They want to do this by collecting data and getting more involved in sponsored projects. Market feedback revealed customers wanted greater security and an extended return on investment. In response Canadian Solar’s R&D department has made breakthroughs that will see a 30-year warranty on many of their PV panels in the near future.

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As Canadian solar has many competitors, their competitors are constantly striving to be the best as well and hence technology developments may steal CanSia’s competitive advantage. As Canadian Solar is constantly striving to be the best by developing and improving technology it may also require its workforce to be up to date with the technology which could be time consuming and costly. This may also lead to the workforce not being productive and hence leading to less efficiency and may be even diseconomies of scale. As substitutes like gas, water, coal are available to customers, there is a high risk that customers might lean towards substitutes which may lead to a decrease in CanSia’s revenue. Political uncertainties in the country suggest being a barrier for the business. Such as the conservative party supports efforts towards a fair and effective global agreement but, the liberal party wants to invest $100 million into organizations that promote clean energy. Such ideas may contrast each other as they focus on different things and this leads to uncertainties.

References: https://www.macrotrends.net/stocks/charts/REGI/renewable-energy/financial-ratios...