Case study 1

1.) Analyze the competitiveness of this industry using Porter’s five forces framework. Be sure to carefully define what market First Solar is in. To make it easier, rate the strength of each force as low, medium, or high, and justify your reasoning.

2.) What are the key resources for first solar? Analyze the strength of any resources you identify using Jay Barney’s VRIO (or S) framework.

Note that one way to assess a company’s competitive advantage quantitatively is to calculate the return on assets (ROA), or ROA= (Net Income / Total Assets). Using the balance sheets provided in exhibit 9, calculate the ROA for First Solar and for its competitors (that is, Suntech, SunPower, and Yingli) for the years 2008, 2009, 2010, and 2011. Do the numbers suggest that First Solar has a competitive advantage relative to its competitors? Does this align with your assessment of First Solar’s competitive advantage using Barney’s framework?

3.) Finally, make recommendations for what first Solar should do: That is, what market(s) should First Solar focus on? Where should it focus geographically? How should it deal with increasing competition? Be sure to justify your answer to each question.