Vestas: En strategisk analyse

Mads Hylleberg

Student thesis: Diploma thesis

Abstract

Vestas Wind System A/S is a Danish manufacturer of wind mills for power generation. Vestas has operations in many countries around the world, and has been a market leader since the early beginnings of the wind mill market. Purpose The purpose of this thesis is to analyze Vestas Wind System A/S, in order to determine the strategic focus of the company in the future. From the early 2000’s up until 2010 Vestas saw tremendous growth in its number of employees even though its market share in the same period dropped from 35 % to 14 % in 2013. After the financial crisis hit the world, Vestas has seen its share price drop due to financial problems caused by a belief in the market that never materialized. Methods To determine the strategic focus of the company, the factors affecting their business has been analyzed on 3 levels. On the macroeconomic level a PESTLE analysis has been conducted to identify the factors of the surrounding world. On the industry level, a Porter’s Five Forces analysis was used as a framework to determine the competitive intensity within the industry. A value chain analysis and benchmarking was used to analyze the factors of the internal environment of Vestas. A SWOT analysis and TOWS matrix was used to summarize the findings of the previous analysis and to determine the strategic actions to be taken based on these. Using Porter’s generic strategies, the strategic focus for Vestas going forward was identified. Finally a scenario analysis has been conducted to investigate some of the challenges facing the company going forward. Results The PESTLE analysis found that the major factors affect the wind mill market are global goals set for CO2-reduction and the government subsidy programs. On the industry level the major factors are an increasing amount of competitors, the entry of major power suppliers, and the low threat from other sources of green energy. The analysis of the internal environment showed Vestas’ strengths are a more flexible production setup, the growing service business and the technical know-how to company possesses. The weaknesses were found to be an increasing dependency on its supplier’s ability to deliver on time and to specified quality, and a bad track record for its service business. Conclusion After using the SWOT analysis to create a list of threats, opportunities, weaknesses and strengths, A TOWS matrix was used to examine ways the company can take advantage of opportunities and minimize threats by exploiting strengths and overcoming weaknesses. Strategic action points where identified to be that Vestas need to use these years of low activity to develop long running strategic supplier relationships to secure the necessary resources if/when the market picks up again. It also needs to further lower cost be outsourcing more of its production. The service business needs to improve its track record to ensure that more clients renew service agreements. Finally Vestas needs to follow a global strategy, where value is created by designing products for a world market and manufacturing and marketing them as effectively and efficiently as possible. A scenario analysis confirmed these findings by illustrating that Vestas needs to lower its variable costs

EducationsGraduate Diploma in International Business, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages85