Final Global Business Plan – Vertical Axis Wind Turbines in China
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Final Global Business Plan-Vertical Axis Wind Turbines in China
Wind energy is the fastest growing energy source in the world today. Wind energy offers a significant opportunity for businesses with the foresight and wisdom to take advantage of it. Wind energy is a “clean, abundant and renewable source of energy that contributes to combating harmful environmental changes brought about by global warming” (Nature Canada, 2007 p. 1). Since the wind is free, operational costs are nearly zero once a wind turbine is up and generating energy. “Globally, wind generation more than quadrupled between 2000 and 2006” (National Geographic, 2011, p. 1). Industry experts are now predicting that at this rate of growth, “by 2050 the answer to one third of the worlds electricity needs will be found blowing in the wind” (National Geographic 2011, p. 1)
China is the worlds “largest wind power market by installed capacity” (EV Winds, 2011, p. 1). Domestic wind power companies are beginning to “look off Chinas shores to grow, as the country plans to start large-scale development of costal wind farms” (EV Winds, 2011, p. 1). The subject of this paper is presentation of a final business plan for a vertical axis wind turbine manufacturing plant. This plan will highlight areas of marketing, finance, proper chain of command for communication of tactics, and possible exit strategies. Team A will finalize the paper by preparing a final recommendation of feasibility in establishing a wind turbine manufacturing plant in the northern region of China.
Findings Summary
At this time, China offers a climate ready for capital investment. However, risks exist when dealing in any foreign investment opportunity. Political risks begin to emerge in the form of vague laws governing work contracts. Small protests still occur throughout China as workers show high levels of frustration in the stagnation of income levels despite a rising GDP. Although many workers continue to speak out against this perceived unfairness, growing opportunity in the country is beginning to dampen the anger over human rights and freedom issues. “China tries to strike a balance between economic growth and political stability between a market-oriented economy and authoritarian state, to sustain its continued economic growth in its modernization efforts” (Zhao, 2010, p. 419).
Economic conditions are favorable in China. Establishing a wind turbine plant will prove a successful and profitable business venture. As wages continue to rise in the country, many trading opportunities exist. As a world leader in the wind power market, competition demands the lowest pricing finance available. Locating the manufacturing plant in China will assist in achieving the status of lowest cost producer of vertical axis wind turbines. This plant will prove successful in the northern region as China continues to seek foreign direct investments, offering attractive financing options at competitive rates.
Although China continues to experience the environmental issues of water scarcity and rising energy demands, the country does maintain the worlds most aggressive renewable energy law. The vertical axis wind turbine will offer a source of power that continues to improve the environment by promoting incentives for clean power while using less water.
Rationale for selecting China
There are four key components to consider when creating an international competitive product: 1) Product Natural Resource Availability, 2) Cost of Raw Materials, 3) Production Labor, and 4) Distribution Infrastructure. Considering each of these components, Team A believes the country of China is the best choice. With the availability of natural raw materials,