this case, I concern myself with the most viable pricing strategy for SunPower so as to not only earn the highest cumulative profit, but also expand market share. This will be done in the light of competitor pricing policies, in which case the said competitors are likely to charge prices that are lower than those of SunPower.
Discussion
From the analyses in Appendix 1 (Run 1) and Appendix 2 (Run 2), two themes emerge. As SunPower’s module price decreases, the market share as well as profitability increases. On the other hand, as SunPower’s module price increases, the market share drops, while profitability… Continue Reading...
Background
This discussion continues with the analysis of how Module Price adjustments impact the total profits and market share of SunPower vis-à-vis industry-wide performance. Further, the discussion highlights how improvements in processes yield unit costs reduction. Like was the case with the previous exercise (SLP1), four major decision points will be taken into consideration in the current exercise, i.e. SLP2. A more conservative pricing approach will, however, be adopted in SLP2.
Discussion
Decision 1: Beginning of Year 1: 2007 (See Appendix 1)
SLP1 Module Price: $0.15
SLP2 Module Price: $0.13
It is important to note, from the onset, that in SLP2, SunPower starts off with a more significant share of… Continue Reading...
