Abengoa: Sustaining Worldwide Leadership in the Solar Industry

This case study is set in 2013 and describes the growth strategy of Abengoa which has become the global market leader in the Concentrating Solar Power (CSP) industry. The case firstly introduces the megatrends which are shaping the demand and offer of energy for the next 40 years with the increase of the share of non-fossil energy, mostly because of the need to tackle the global warming issue. The following section presents the main characteristics of the CSP solar industry with an overall presentation of the CSP industry value chain, a detailed analysis of the costs for CSP as well as a picture of the competitive landscape. The subsequent section gives an historical perspective of Abengoa strategy since its creation in the 80´s, as a business unit of the giant Spanish construction company Abengoa to 2013. The last part of the case depicts the perspectives for the CSP industry whose main challenge is to be competitive with other alternative energy, fossil or renewable. The question is how those elements may have an influence on Abengoa strategy for market leadership.The case has been tested with MBA students and works very effectively in a basic course of strategy where it can be used to teach industry analysis (especially with the importance of the overall political and governmental influences), as well as internal analysis( e g, vertical integration, innovation as a capability for growth). The case is also valuable to illustrate the concept of industry lifecycle as the Renewable Industry is a very young industry. Finally the case can be used in specific Executive Programs dedicated to Energy where the finesses of Abengoa can be discussed with experienced professionals.