GAINS VISION: SHORT-TERM VS. LONG TERM AND FOCUS LOST
In a shocking turn, Holaluz and Solarprofit, big solar companies in Spain, announced the mass layoff of 30% of employees. The economic maelstrom is not new, but the reasons behind this move offer a critical lesson in how companies confront the challenges of the solar market. This analysis, based on an article by Xataka (November 2023), sheds light on the strategies that led to this turning point.
Both companies point to the reduction in the electricity bill and increases in bank interest as the main causes of their problems. However, digging deeper reveals a fundamental disconnect between the pursuit of short-term profits and long-term sustainability. The action of having opted for the strategy of internalizing its solar installation services, thus cutting contracts with external companies or freelancers, apparently to improve margins, has turned out to be counterproductive.
Instead of transferring those savings to the end customers, they only sought to keep the "profit" of the external installers. This voracity for short-term profits has led to poor adaptation to an ever-changing market. The disconnect between the need for immediate profitability and creating a sustainable base has resulted in mass layoffs. In a market that demands sustainability, companies are paying the price for focusing on short-term profits instead of building long-term relationships with their customers. The race to reduce the electricity bill has become a marathon, not a sprint, and many companies, caught in the trap of immediate profitability, are falling behind.
In contrast, when the Integration Coefficient IC is adopted, companies are demonstrating resistance. IC is more than a business strategy; It's a mindset that puts the customer first and embraces sustainability. While Holaluz and Solarprofit struggle with layoffs, or better say when, in general and worldwide, solar business shake up, companies with IC adopted seek to maintain efficient and collaborative supply chains. The Integration Coefficient IC advocates collaboration and specialization, allowing each link in the supply chain to shine in what they do best.
The IC also exposes the fallacy of thinking that payroll growth can equal market growth. Supply chain efficiency, not payroll size, is key. Outsourcing specialized services allows for adaptability and specialization.
This situation is not only an economic setback; It is a wake-up call. Greed for short-term profits and lack of long-term vision have led these companies to a crossroads. The lesson is clear: those who prioritize sustainability and customer satisfaction are the ones who will weather the economic storms and create a lasting halo in the minds of their customers, preventing them from getting caught in a monkey trap. Please Contact Us for more information by subscribing to our website.