Canadian Solar Pestel Analysis

Factor | Impact |

Political |

* Government incentive programs are being introduced globally. * I.E. The U.S President to introduce ‘endorsement of renewable energy’. | * These incentives create an opportunity for Canadian Solar to enter new global markets, and become recognized as a credible Canadian company. |

Economical |

* The temporary shortage of silicone in 2008 led silicone prices to incline dramatically ($500 per kg). The production of modules are highly dependent on silicone. * Being a multinational organization, the global economic downturn in 2008. | * This led production costs to incline significantly until the supply of silicone sufficed. Fluctuation in raw material prices will affect the company’s ability to sell modules at a fixed price. * Fluctuating solar demand resulted in an oversupply of panels in 2009, then an undersupply when forecasts were exceeded. Financial analysists found trouble with predicted sales. |

Socio-cultural |

* Solar and renewable energy are being regarded as a popular new trend. * High volume of diversified employees (Canada, China, and Germany). | * Attraction of consumers such as developers, corporations, and building owners. |

Technological |

* Management is introducing the ‘Inverted vertical integration’. * Has initiated a recycling process for reclaimable silicone. | * Allows for flexibility in short-term demand shifts and frees the company from the capital investment needed. This will reduce manufacturing costs, improve cash management as well as inventory control. * Creates a competitive advantage. |

Environmental |

* Sales offices in 10 different countries and several manufacturing plants in China. * Global networking advantage. | * Transacting with CIDA and taking part of Canadian tariff incentives (FIT program) is made possible even whilst operating business internationally. * Low manufacturing costs in China. |

Legal |

* Changes in...