http://forio.com/simulation/mit-sloan-solar/downloads/SunPower-Henderson.pdf

• Describe the SunPower company's main business and the specifics of the industry it operates in.What is the competitive structure of the industry the company operates in?
• What are the shapes of the demand and supply curves SunPower is facing? Is the demand elastic? How do you compare the marginal cost and average cost of producing the modules?
• Is SunPower company profitable?Would inspecting the income statement provide a reasonable answer?
• Discuss the cost and product curves of the company.
• In Exhibit 8 the drivers of cost savings are listed.Explain three of these drivers and their impact on the cost the firm is facing.
• Is the SunPower company a price setter or is it a price taker?What is the pricing strategy you would recommend for the firm?
• Discuss the impact of the macroeconomic environment on the business model and profitability of SunPower.
• Discuss the last paragraph of the case study text: "The key was choosing and formulating the right strategy. Should, for example, SunPower's strategy focus on the pricing of modules? Or should it focus more on investing in process improvements? Or should the strategy be some combination of the two? If so, what was the right formula based on the multitude of variables that solar cell producers like SunPower faced?

SUNPOWER: FOCUSED ON THE FUTURE OF SOLAR POWER Rebecca M. Henderson, Joel Conkling and Scott Roberts Figure 1 PV Module Price and Production History, 1975-2005 PV Module Price History $35.00 $30.00 $25.00 $20.00 US$/watt $15.00 $10.00 $5.00 . $0.00 2005 2004 1975 PV Module Annual Production 2000 1800 1600 1400 1200 MW 1000 800 600 400 200 1996 1998 2005 1975 2004 1990 2003 1997 2000 2002 1985 1980 Source: Maycock.Figure 3 Global PV Demand, 2000-2005 Global PV Demand 800 700 800 500 - U.S. 400 - Japan MWP 300 Europe ROW 200 100 - 0 2000 2001 2002 2003 2004 2005 U.S. 34.7 43.8 60.8 76 101.8 137.3 Japan 77.9 109.8 176.2 243.8 295.9 302.4 Europe 74.1 120 172.6 232.6 472.4 678.1 ROW 65.3 79.2 95.3 122 9 179.7 202 Source: Paula Mints, TV in the U.S.: Where is the market going and how will it get there?", Renewable Energy Watch, September 2006