EVOLUTION OF SUZLON This company was formed in 1995 under the leadership of Tulsi Tanti.

At the time he was still running his family textile business. As an alternative to the high costs of electricity he set up a wind power plant. Seeing the potential in this industry he thereafter started advising others on the same and set up Suzlon. He would also assist investors in financing their expenses in setting up of the power plants. The company adopted a business model wherein clients would be responsible for 25% of the up-front capital investment and Suzlon would arrange the remaining 75% on loan. By 2001, Tanti saw the potential in the wind energy business and left the textile business. The market was nascent for an overseas expansion and so he rapidly started seeking out avenues to expand globally. He followed to a two pronged approach of rapid business development by setting up overseas subsidiaries and hiring internationally, as well as of improving technology through the acquisitions and Joint Venture route. In 2003, Suzlon got its first sale in USA, with an order from DanMar & Associates to supply 24 turbines in southwestern Minnesota. In 2004, he hired a Dane, Per Hornung Pedersen, to lead Suzlons entrance into the global wind market. A global headquarters was set up in Denmark, which had the maximum potential and investments in wind energy. Tanti realized that his expansion would be better enhanced by improvements in technology and further vertical integration. In 2006, it acquired Belgian firm Hansen Transmissions to manufacture gear boxes making it one of the most vertically integrated wind power companies. In 2007, it made its landmark acquisition of RE Power at a valuation of US 1.6 Billion $. The acquisition was sourced by a high amount of leverage. By early 2008, Suzlon was looking to double capacity by year end. Till 2008, Tanti had come to be regarded as one of the poster-boys of India Incs globalization story. His was a story of entrepreneurship and unbridled ambition as Suzlon became the fastest growing wind energy company in the world. In 2005, when Tanti entered the Forbes list of the 40 richest Indians, not many had even noticed him. By 2007, he had created a business that was valued at Rs. 57,000 crore in less than 13 years. - Forbes, Reviving Suzlon 21st November 2011 Since 2008, things stopped looking rosy for Suzlon. The recession hit in late 2008 and order booking fell substantially in European and US Markets. The same year, Edison International complained that windmill blades it had bought from Suzlon had begun to split at some sites. This became a major embarrassment for suzlon, which had to rectify the manufacturing defect and compensate customers for cracked blades. The comprehensive retrofit programme cost suzlon over USD 100 million. The story was carried in the Wall Street Journal and carried bad publicity of the company with it, like wildfire. Another issue which came up was that, while at the time of acquisition of RE Power they planned to start manufacturing from India. They later found out that a clause in the takeover stated that the technology could only be manufactured in the home country and not taken to India. Meanwhile, the farmers from whom they acquired land to build their factories in Maharashtra started demanding a higher compensation on account of the rise in land prices. The poor financial performance of the company on account of fall in revenues compounded by the leverage mounted losses on the company. In 2011, Suzlon sold its 26% stake in Hansen to pay off debts. Similarly in 2012, it sold stake in its China manufacturing facility to raise money. October 2012 was a terrible month for the company. Suzlon failed to repay $209 million of debt on 11 october 2012, after bondholders

rejected its request for a four-month extension, the biggest convertible bond default by an indian firm. The debt had to be funded by new bonds at a high premium. (Suzlon had raised funds via FCCBs to acquire REpower, but now its shares were at over 70% discount to the conversion price of FCCBs, so it had no choice but to repay the bond holders) It would need to raise more funds. However, it had loan repayments of around Rs 3,700 crore due in the financial year, including FCCBs payments. They managed to refinance the loan but at a high cost. The regulatory scenario was also changing rapidly with the removal of Generation Based Incentives, which caused a 50% fall in domestic sales in 2013. Fortunately these changes were reversed in the Union Budget 2014. EVOLUTION OF SUZLONS SHARE PRICE:

TECHNOLOGY STRATEGIES The wind industry was facing supply chain bottlenecks due to long lead times of production in key components such as bearings, gearbox and forging materials. Suzlon combined various stages of supply chain by vertically integrating into the upstream and achieved critical competitive advantage with better control over time, cost and quality. It was able to offer long service support to it customers at the same time was able to materialize faster product rollout. Integrated business model followed by Suzlon :

Two pronged growth strategy Suzlon brokered deals with utilities manufacturers to increase the grid capacities and on the other hand it vertically integrated with key component manufacturers. This enabled it to optimize its supply chain and improve its serviceability. Supply Chain Facilities: Foundry Forging Gearbox Blades Panels Generator Tower and and Machining Machining 120000MT 70000 MT Partial Complete Partial Partial Partial Foundry Forging demand demand met demand demand demand and and met by in-house met met met Machining Machining through production through through through infacility facility Hansen located in in-house in-house house facilities in India, China facilities facilities facilities in Belgium in & the US. in India, in India India Europe New unit at China New unit plus New Udupi India plus New at units in (with new unit at Coimbator China and WTG Coimbato e, India India assembly re, India unit) Venturing into end to end wind power solutions Benefits derived: Allows customers to benefit from cost efficiencies and from cost-efficiencies and economies of scale in wind farms Avoids need for customers to undertake cumbersome wind farm development process

Provides greater control Provides greater control over execution timeline Control on value chain from planning to maintenance Leverages Suzlons deep experience across Wind energy value chain

R&D Integration WTGs and WTG Component Design, Development, Upgrade & Customization Wind Turbine R&D in Germany Rotor blade R&D in The Netherlands Gearbox R&D Product & process engineering Innovation Centre in Europe

Internationalization Strategy
Location Strategy
The main aspect of the internationalization strategy is the choice of strategic locations to set up their global headquarters, manufacturing plants and R&D centers. They choose Denmark as the hub for their global operations and sales as Denmark was regarded as the Wind Turbines know-how capital of the world. Setting up headquarters at this location helped Suzlon to be at the location through which it could easily respond to the changing demands of markets. Denmark has the extensive network of component suppliers of the Wind turbines which helped in achieving economies of scale. The talent availability also adds the plus point for Suzlons to setup their headquarters in Denmark. An R&D base was set up in Germany and Netherlands. Germany and Netherlands were the leaders in aerodynamics. Setting up an R&D base would accelerate the innovation in the wind turbine industry. Manufacturing facilities were set up in Belgium, North America and China in order to be near the market to prompt response to the changing demands and preference of market. India was selected as the main hub for manufacturing the turbines due to the low cost labor factors and achieving the cost leadership in respect to the other European manufacturers.

Vertical Integration Strategy

Hansen Transmission Suzlon acquired the manufacturing and technology development capability in wind gearboxes. This acquisition enabled Suzlon to do an integrated R&D approach to design more efficient wind turbines. REpower Suzlon acquired the worlds largest manufacturers of offshore and onshore wind turbines. This helped Suzlon to enjoy the added technological capability, especially in the production of large wind turbines. Advantage of Vertical Integration i. ii. iii. iv. v. Accelerated Expansion in Europe Wider Market reach Production facilities near market Flexibility in response to local market Dedicated delivery capability

Organization Structure
The organization structure was changed in order to be successful in the international markets and having international work force. i. ii. iii. iv. v. Created strategic business units (SBUs) with matrix structure induced in it Decentralization and professionalization in its structure Increased presence of international managers in its top management team Each country head is responsible for creating its own deployment strategy and team. Performance-orientation in its HR and compensation policies

Culture
To compete in the international market, Suzlon aligned its culture towards getting more ethical and professional. They introduced and implemented the following changes in the culture. i. ii. iii. iv. v. Culture of Commitment, Accountability and Promise Greater transparency in decision making Corporate culture of motivation and people empowerment Process orientation in delivery Corporate Learning Center Leadership development programs