Competitive Strategic Analysis of Mr.

Sun Solar
Tai Huynh, Student Member, IEEE

Abstract—The purpose of this paper is to serve as a guide for
readers in the process of analyzing the current position and
providing strategic recommendations for a typical Portland-
based solar company – Mr. Sun Solar. In the first part of this
work, the most common analyzing frameworks such as Porter
Five Forces, SWOT and Resource-Based-Viewed model are used
to investigate the aforementioned company’s present standing in
the market, and in the second half, strategic considerations will
be accordingly provided based on the Hax’s Delta model.
Index Terms— Mr. Sun Solar, Porter Five Forces, RBV
analysis, strategic consideration, SWOT analysis, Hax’s Delta
model.
I. INTRODUCTION AND COMPANY BACKGROUND
solar pool heating. In addition to endorsing further solar
energy causes and awareness, Mr. Sun Solar offers
educational outreach through classes at Portland Community
College, and actively involves to energy policy legislation.
Mr. Sun Solar was a Limited Liability Company (LLC) for
over 32 years until it joined Neil Kelly Corp. in 2013.
Although today it is operating under Neil Kelly, Mr. Sun Solar
still functions as an independent company that provides
designs, installations, and services of solar panels and solar
energy products to the Portland, Oregon-based remodeler’s
portfolio of services.

R ECENTLY, energy generated from clean, efficient, and

environmentally friendly sources has become one of the
major challenges for engineers and scientists [1]. Among all
the renewable energy resources, solar power systems attract
more attention because they provide excellent opportunity to
generate electricity while greenhouse emissions are reduced
[1-3]. It is also gratifying to lose reliance on conventional
electricity generated by burning coal and natural gas.
Regarding the endless aspect of solar energy, it is worth
saying that solar energy is a unique prospective solution for
the current energy crisis.
Indeed, many governments around the world, including the
U.S government, have raised their incentives to encourage
entrepreneurs to venture into solar energy field, so that solar
energy production can reach to a higher level. As a result, in
the report of Solar Industries Association’s (SEIA), Fig. 1. New U.S Electricity Generation Capacity, 2012 vs. 2013 [4]
photovoltaic (PV) installation in the U.S dramatically
increased 41% during 2012 to reach 4,751 megawatts in 2013,
II. BUSINESS STRATEGIC ANALYSIS
plus an additional amount of 410 MW concentrated solar
power (CSP) was brought online. By the end of 2013, there To understand Mr. Sun Solar present business position,
were more than 440,000 operating solar electric system in the three main analytical techniques are deployed, including:
U.S, totaling over 12,000 MW of PV and 918 MW of CSP, Porter Five Forces of competition, Barney’s Resource Based
making solar the second largest source of new electricity View Model of strategy, and SWOT analysis.
generating capacity in the U.S, exceeded only by natural gas A. Porter Five Forces
[4]. Fig. 1 shows the growth of solar electricity generation in
In his book published in 1979, Michael E. Porter presented
the year of 2012 and 2013.
a comprehensive framework for analyzing the structure of an
Among numerous companies contributing to the sustainable
industry and its competitors. He stated that the industry
energy revolution, Mr. Sun Solar
structure is typically shaped by five leading forces: intensity of
(http://www.mrsunsolar.com/) has emerged as a small-sized
rivalry among competitors, threat of new entrants, threat of
but steady-growing solar company located inside the town of
substitute, bargaining power of buyers and bargaining power
Portland. Established in the 1980s, Mr. Sun Solar has sold and
of suppliers [5]. Managers seeking to improve the
serviced thousands of solar energy systems. They claim to
performance of their businesses need to understand how to
provide superior quality system installations that still produce
employ the Five Porter Forces analysis in practical situations
solar energy through many years despite the harsh destruction
and then benefit from increased understanding. Fig. 2
of time, and all the work they implement are all warrantied up
summarizes five forces and they are examined as the
to 20 years. The company enthusiastically serves customers
following.
through three main installation services that they are
1) Intensity of rivalry among competitors
specialized in: photovoltaic system, solar water heating and
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 Solar energy is not new to the world, but because it has
gradually escaped from the shade of the oil industry in recent
years, it holds the power to turn humanity away from the
influence of fossil fuel [6]. Acknowledging this energy trend,
numerous companies have established and dominated solar
power since people realized that solar was the solution for the
energy crisis [7]. Within Oregon and its vicinity, there are at
least fifty solar firms that also provide solar system installation
programs and various solar energy products [8]. Some of the
key competitive solar companies include: SolarWorld,
SolarCity, Elemental Energy, Solar Energy Solutions, Lear
Electric, and Sunset Solar Electric. The services and product
of these companies are perceived as commodity, meaning the
main battle will focus on lowering the cost and improving
service competition. By the time this report is written, Mr. Sun
Solar offers $4.72/watt to install solar panels on the
customer’s rooftop; it is $1.2 less than SolarWorld and $0.95
less than SolarCity. However, since the service is very similar,
the small differentiation in price still does not make the
intensity of rivalry amongst solar system installation industry
any weaker for Mr. Sun Solar.
2) Threat of New Entrants
According to Michael E. Porter, the threat of new entrant
into an industry relies on barriers to entry that are present. If
barriers are high and newcomers can expect sharp retaliation
from entrenched competitors, the threat of entry is low [9]. In
this case, at a minimal level, it only requires some
transportation of supplies from warehouse to the field, a
numbers of licensed specialist contractors, and tax incentive
personals to start a solar company. In addition, there is an
acquisition of construction firms into renewable energy
industry. Companies such as Hoffman and Andersen are
expanding their design-build to reach into the lucrative solar
market. This means customers are offered the choice of
building their house with the solar systems already
implemented at a price even lower than that of installing the
system separately. With these aforementioned factors, barriers
to new entrant have been pushed back to its lowest level,
causing the threat of entry to therefore be extraordinarily high.
3) Threat of Substitute
Identifying substitute products is a matter of searching for
other products that can perform the same function as the
product of the industry [9]. The ultimate goals of Mr. Sun
Solar are to employ solar systems for producing electricity,
heating water and keeping the pools warm. However, the tasks
can be also accomplished with other energy resources,
especially where the availability of solar is not usually in
presence. For instance, in some area where the sun radiation is
limited, customers can either pay an utility for energy, or use
an alternative energy system such as wind, micro hydro and
even fossil fuel to generate electric power … The variety of
substitutions and their considerably low cost have made Mr.
Sun Solar end up facing another enormous obstacle – the
threat of substitute.
4) Bargaining Power of Suppliers
Supplier power is recognized as the ability to raise prices or
reducing the quality of purchased goods and services [9]. In
the solar manufacturing industry which can be considered
mature, the power of suppliers is a minimal threat for solar
installation companies. The number of suppliers for solar
system components does not allow any company to hold a
monopoly position in the market. Mr. Sun Solar therefore has
the flexibility to purchase solar panels and solar collectors
from a variety of providers with the competitive cost and
quality considerations going a long way.
5) Bargaining Power of Buyers
The vast number of options for customers to choose from
has increased the buyer power, especially when there are more
newcomers venturing into the solar field. Solar system
installation companies, including Mr. Sun Solar have had a
difficult time dealing with marketing and advertising to
establish customer foundation in this industry. While the
system performance efficiency is not really differentiated from
company to company, the cost of the system has tremendously
reduced as the demands for solar power increase. According to
the U.S Solar Market Insight Report, the price dropped by half
since 2008, and about 100 times lower than it was in 1977
[10]. Not only that, the price is also expected to drop in next
few years as the demand keeps on growing, and more financial
supports were given through government programs and
subsidies.
Fig. 2. Summary of Porter Five Forces applied for Mr. Sun Solar
B. Resource Based Model
In contradiction to the Porter Five Forces, which analyze
the external factors to determine company’s position,
Resource-Based View adopts the concept that competitive
advantages are driven by the internal forces, which are the
firm’s development of resources and capabilities. A good
resource can be relied on its own uniqueness, valuable and
durable characteristics [11].
1) Unique
The first aspect is the uniqueness. As aforementioned, Mr.
Sun Solar provides buyers with three main installation
services, including: photovoltaic system, solar water heating
and solar pool heating. This makes the products offered by
Mr. Sun Solar distinct from that of other competitors. While
most of the solar companies only provide one of the three
services, Mr. Sun Solar gives customers an opportunity to
possess a bundle of all contemporary solar systems at a
reasonable cost. The satisfactory of customers over the time
and the convenience of the solar package help Mr. Sun Solar
to acquire a special feature that is very hard to be imitated by a
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new company trying to enter the solar field.
2) Durable
The second factor that determines a good resource is the
durability. This specific characteristic examines the ability of a
company to maintain its producing capability of the same
product over a long period [11]. It has been proven that after
over 30 years of service, throughout many historical incidents
of energy industry, Mr. Sun Solar is still operating and
providing services to thousands of residents in Oregon and
Washington. In addition, with the rapid growth of sustainable
energy, the increasing demand of green power, and the
encouraging government’s incentives, it is worth saying that
Mr. Sun Solar will confidently survive in the market, and that
the durability of their service production is firmly secured.
3) Valuable
The last determinant is the product’s value, which decides
whether the product is important or needed, or customer can Fig. 3. SWOT analysis for Mr. Sun Solar
do without [11]. On the environmental and economic side, the
company presents customers a solid solution for global until the system is completed and producing energy, have
warming issue by reducing fossil fuel usage, along with committed to deliver superior quality work, and make honesty
cutting costs for their energy bill in the long-term, which make and work integrity their first priority. In March, 2013, in order
the value of the company’s product go even beyond the to advocate their outstanding services and positive
immediate savings on energy, and thus the company is on the contributions to the community, U.S State Department
right track of acquiring its production in term of product line featured Mr. Sun Solar in a documentary. The film was
and strategies it has employed. recorded in March, and released one month later [12].
C. SWOT analysis 2) Weaknesses
While being well-known in its area is virtuous, it is still
Along with Porter Five Forces and Resource-Based View
necessary to be recognized in other states. Mr. Sun Solar,
model, SWOT analysis is another analytical framework that is
when compared with other solar firms, is still quite unpopular
used to evaluate the Strengths, Weaknesses, Opportunities and
to residents living in other regions around the U.S. Another
Threats of an industry. The power of this technique is the
weakness of Mr. Sun Solar is the sensitivity to the government
capability of identifying the internal and external factors that
incentives. Being supported up to 30% of the installed system
are favorable and unfavorable to achieve a desirable objective
cost [13], Mr. Sun Solar does not have any chance to compete
in business. A summary of SWOT analysis applied for Mr.
with utility energy rates when these incentives are cut off.
Sun Solar is illustrated in Fig. 3 and examined below.
Therefore, it is of paramount importance to seek the long term
1) Strengths
and an achievable solution that assists the company to
Located in North-East region of Portland urban, Mr. Sun
independently operate without any aids from the government
Solar is considered one of the more well-recognized solar
incentive tax credit.
companies around the area. It is known for remarkable quality
3) Opportunities
and highly reliable solar energy systems that have been
Humanity is witnessing the momentous shifting of energy
installed in thousands of households all over the states of
usage as the golden era of oil has been gradually replaced by
Oregon and Washington. In fact, it has been proven that many
copious sustainable energy resources. The increasing demand
of their solar systems that were installed in 1980s are still
for solar systems around the country opens a huge door of
producing solar electricity for customers nowadays.
opportunities for Mr. Sun Solar. Moreover, all over the world,
With more than 30 years of serving, Mr. Sun Solar has
a large number of researchers and scientists have been
become the leader in cost reduction in the solar industry. Its
working and debating on the process of obtaining higher
average price for solar system is 21% less than that of the
efficient solar panels and solar collectors. The non-stop
well-established company – Solar World and 17% less than
working efforts have resulted in 44.7% efficient solar cells
well-known Solar City. The cost advantage brings benefits to
[14], and the concentrating solar collector can achieve the
both customers and the company when the rate of installation
temperature up to 1500 0 C with the parabolic dish reflector
is becoming an enormous concern within the rivalry of solar
system [15]. The opportunities are immensely emerging, and it
competitors.
is the Mr. Sun Solar responsibility to catch them up.
A team of seven skilled and enthusiastic people involving
4) Threats
solar specialists, certified electricians and tax incentives
One of the greatest threat to solar energy is it substitutions.
personnel together create a strong engine at the core of the
As discussed, customers have variety of options to achieve
company. The members of this team, dedicated to creating a
electricity via either renewable or non-renewable resources,
positive experience for their customers from initial contact
such as: wind energy, hydrokinetic, geothermal energy, fossil
Page 3 of 4
fuel.... All those substitutions offer the robust methodology,
remarkably high efficiency, and a reasonable low cost to
generate energy. Even with the support from the government’s
incentives, Mr. Sun Solar will thus struggle for a competitive
position in the energy industry. Another threat that has
emerged and challenged the whole solar industry is the solar
manufacturing in China. Undeniably, even the quality is not
usually comparable; its relatively low price is the mighty
weapon, aiming for the mass destruction of the whole solar
industry in The U.S. The negative influence of Chinese made
solar panel is more thoroughly described in [16].
III. STRATEGIC RECOMMENDATIONS
Besides three aforementioned paradigms employed to
analyze a business current position, Delta Model emerges as a
relatively new strategic analyzing technique that places the
customer at the center of management [5]. Based on three
aspects of the Delta Model, the current position of Mr. Sun
Solar is analyzed, and then the recommendations to obtain
sustainable competitive advantage will be provided
accordingly. Fig. 4 shows the Delta Model along with three
distinct options: best product, total customer solutions, and
system lock-in.
Fig. 4. Delta Model with three distinct options [5]
The best product relies on the effort to promote low cost
and product differentiation. Mr. Sun Solar has achieved only
one aspect where they have adopted the low cost offering. To
ultimately achieve the best product position, it is necessary to
differentiate their products from other competitors. Solar
system with the latest technology and high efficiency with an
affordable rate is one of the propositions Mr. Sun Solar should
consider.
On the total customer solutions, Mr. Sun Solar is offering
customers with the system performance warranty up to 20
years. This is a very good start. However, to more be locked-
in, they should increase the duration of warranty. A life time
warranty always sounds attractive to even the most difficult
customers.
The final element of the Delta Model is the system lock-in.
To achieve this particular option, Mr. Sun Solar must focus on
working alongside with suppliers and other imported business
to satisfy customer needs. Although Mr. Sun Solar is
cooperating with several solar companies, such as: Solar
World, Energy Trust, and Solar Oregon, it is recommended
the company be a partner of other utility industries, including:
PGE and Pacific Power to form a solid lock-in system that
cannot be destructed by any means.
IV. CONCLUSION
Though three fundamental strategic frameworks, the current
position of Mr. Sun Solar was analyzed, and the
recommendations for a sustainable competitive advantage
were provided based on Delta Model. The present standing of
the company is either bad or good, but it is necessary to make
strategic moves for a sustainable strategic advantage based on
the clearly understanding of the business structure along with
competitor’s situation, and creating a strong bond with
customers.
V. REFERENCES
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Photovoltaic generation system,‖ IEEE Trans. Ind. Electron., vol. 55, no.
1, pp. 240–250, Jan. 2008.
[2] W. Xiao, W. G. Dunford, P. R. Palmer, and A. Capel, ―Regulation of
photovoltaic voltage,‖ IEEE Trans. Ind. Electron., vol. 54, no. 3, pp.
1365–1374, Jun. 2007.
[3] N. Mutoh and T. Inoue, ―A control method to charge series-connected
ultra electric double-layer capacitors suitable for photovoltaic generation
systems combining MPPT control method,‖ IEEE Trans. Ind. Electron.,
vol. 54, no. 1, pp. 374–383, Feb. 2007.
[4] GTM and SEIA, “New Report: U.S. Solar Market Grows 41%, Has
Record Year in 2013”, 2014
[5] Hax, A (2003), “The delta model – a new framework of strategy,”
Journal of Strategic Management Education 1(1), 1–21.
[6] Hirsch, Robert L., Roger Bezdek, and Robert Wendling. "Peaking of
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Oil and Gas Depletion. 2005.
[7] Maycock, Paul D. "PV review: World Solar PV market continues
explosive growth." Refocus 6.5 (2005): 18-22.
[8] Energy Trust, “Solar Trade Ally Contractors”, 2014 [Online]. Available:
http://energytrust.org/residential/find-a-contractor/solar/SR/SA
[9] Porter, Michael. “Competitive Strategy: Techniques for Analyzing
Industries and Competitors”. London: Collier Macmillan. 1980. Free
press.
[10] Cost of Solar, “How Much Do Solar Panels Cost Today?”, 2013
[Online]. Available: http://costofsolar.com/how-much-do-solar-panels-
cost/
[11] J. Barney, “Firm resources and sustained competitive advantage,”
Journal of management, vol. 17, no. 1, pp. 99–120, 1991.
[12] Suzanne Olsen, “US State Department Features Mr. Sun Solar in
Documentary”, 2013 [Online]. Available:
http://www.mrsunsolar.com/us-state-department-features-mr-sun-solar-
in-documentary/
[13] Andy Giegerich, “With Mr. Sun deal, Tom Kelly looks on solar's
brighter side”, 2013 [Online], Available:
http://www.sustainablebusinessoregon.com/articles/2013/05/tom-kelly-
sees-the-sunny-side-of-solar.html?page=all
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[Online], Available: http://cleantechnica.com/2014/02/02/which-solar-
panels-most-efficient/
[15] Rabl, Ari. "Optical and thermal properties of compound parabolic
concentrators." Solar energy 18.6 (1976): 497-511
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"Innovation and international technology transfer: The case of the
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