Until today, most of the energy we use, such as electricity, comes from the

conversion of natural resources such as fossil fuels including coal, oil and natural gas.
But they are not inexhaustible, they will run out someday. Renewable Energy is an
energy source that replaces fossil fuels for us. Renewable energy refers to
inexhaustible and inexhaustible energy, that is, the problem of no depletion of
reserves. Energy that will not run out in a lifetime. There are several types of
renewable energy, including solar energy, wind power, tidal energy, geothermal
energy and others.
The PESTEL analysis model, also called macro-environment analysis, is an
effective tool for analyzing the macro environment. It can not only analyze the
external environment, but also identify all forces that have an impact on the
organization. It is a method of investigating the external influence factors of an
organization. Each letter of it represents a factor and can be divided into 6 major
factors which are Political, Economic, Social, Technological, Environmental and
Legal.
Under Political aspect, Malaysia government established some policies that
assists on developing renewable energy in Malaysia. First, there are incentives that
promotes the growth of renewable energy industry. Motivating forces have been set
up to embrave interest of money invested in the industry of renewable power. For
example feed-in duties, tax incentives, and renewable power source barters. Next, the
changing of government in 2018 election of Malaysia had help in developing
renewable power industry. The new government ministries formed the Ministry of
Energy, Science, Technology, Environment & Climate Change, implying a move in
concentrating toward energy and environmental sustainability. The policies and
regulations of government promotes the growth of the industry of renewable energy.
Under Economic aspect, Malaysia is one of the most popular countries in
Southeast Asia. Since 2010, Malaysia's annual foreign direct investment has
fluctuated between 9 billion and 12 billion U.S. dollars, and only in 2017 and 2018,
the background of the general decline in foreign investment in Southeast Asia fell
below 10 billion U.S. dollars, but in 2019 In the first quarter, the country's foreign
direct investment hit a record high, indicating that Malaysia's economic strength has
regained the confidence of foreign investors. Malaysia's services, manufacturing, and
mining industries attract the highest foreign investment. The government provides a
variety of incentives to foreign companies. In the World Business Environment
Report 2019 published by the World Bank, Ranked 15th in the body, up 8 places from
the previous year. However, the government has a great deal of discretion in
approving investment projects, and to some extent there are restrictions on companies
that want technology to be kept secret. Malaysia is a large exporter of natural gas and
has abundant oil reserves. Compared with other ASEAN countries with less energy
resources, Malaysia has unique oil and gas resources. The industry's export revenue
generating capacity ranks second in the country's industry sector. So far, Malaysia's
power generation energy structure is still dominated by oil and gas. However, in order
to reduce the country ’s energy consumption, the Malaysian government has set a
medium and long-term goal to improve the energy structure. It hopes to promote the
development of renewable energy to change the country’s energy structure, and
proposes that by 2025, the use of renewable energy will be reduced from the current 2
% Increased to 20% of target. For the development of green technology, the
government restarts Green Technology Financing Plan 2.0 (GTFS 2.0) in 2019-green
technology companies can receive 2% annual interest rate or profit margin subsidy
from the government in the first seven years of financing, and can receive government
financing The 60% guarantee provided by the green cost part of the medium, and the
Green Investment Tax Exemption Concession (GITA)-the maximum tax exemption
amount can reach 100% of eligible green technology capital. So far, the beneficiaries
of relevant incentive policies are still mainly Malaysian domestic investors, but the
government has welcomed global investment. This area can be considered as the
future investment direction of foreign companies in Malaysia.
Under Social aspect, the majority of the Malaysian gave positive criticism
towards the application of renewable power source industry. When all is said in done,
these days most of the Malaysians know that our regular natural resources are finite
and the cost is increasing consistently. Along these lines, Malaysia needs replacement
to save the natural resources and keep nature from being contaminated. The
development of renewable energy industry might carry advantage to society and to
earth. Thus, it promotes the development of renewable energy industry as the
Malaysia need the renewable energy.
Under Technological aspect, PETRONAS is constantly exploit and growing new
innovations to increase chances and fortify the ability and skill to turn into a head
worldwide investigation and creation player. In any case, as the involvement with
renewable power source is deficient, it had lack of capability to utilize renewable
power source innovation like offshore wind turbines. There is finite Malaysia aptitude
on productive exercise and managing of device and facilities. Thus, it is a big
challenge to renewable energy industry to develop due to lack of technology.
Under Environmental aspect, Malaysia ought to utilize the renewable energy, for
example, sunlight, wind, and biomass so as to fight against a long-term increase in the
average temperature of the Earth and different issues related with petroleum products.
Notwithstanding, all renewable power source innovations are not relevant to all use or
areas. There are a few natural associated issues should be think about in the process of
ordinary renewable power source creation. The increase of environment issues and the
problems duo to the usage of fossil fuels products like petrol of vehicles promotes the
development of renewable energy industry. The growth of renewable energy industry
may reduce the impact of climate change which is highly needed for Malaysia.
Besides that, the growth of wind energy might result in deadly impacts on utilize of
land as wind turbines need to cover some of the land in Malaysia and this might
needed to cut the trees from the forest. However, the wind energy does not cause air
and water pollution to the environment which does not harm the safety and health of
the people.
Under Legal aspect, there is RENEWABLE ENERGY ACT 2011 to give the set
up and performance of a unique duty system to accelerate the production of renewable
energy and also produce renewable energy products.
Porter's Five Forces Analysis is a standardized analysis of five aspects of the
industrial structure. It is one of the main frameworks for evaluating industrial driving
forces. When a company enters a new market, it can effectively analyze the market's
competitive environment from five perspectives. The five forces analyzed include: the
threat of new competitors entering, the bargaining power of suppliers, the bargaining
power of buyers, the threat of substitutes, and the threat of existing competitors.
The threat of new competitors entering is low
Economies of scale are one of the main obstacles for enterprises to enter the
energy field. In the renewable energy industry, economies of scale are difficult to
achieve. Enterprises that already have a large market share can often increase
production to reduce costs and continue to develop new Standards, which makes new
companies face barriers and pressure when entering the field, but if they go through a
difficult period of development, companies will not be too worried about the changes
in the pattern brought by new entrants.
 The renewable energy sector has extremely high capital requirements for new
entrants, and new companies will face high R & D and development costs. Malaysia
has launched three rounds of large-scale solar energy project tenders (LSS) with 434
MWac, 563 MWac, and 500 MWac installed. In addition to the results of the third
round of bidding to be announced at the end of 2019, the results of the first two
rounds of bidding have been announced. The winning bidders are mostly large groups
with many years of operating history. It can be seen from the perspective of capital
and technology that new enterprises undertake large-scale projects. The probability is
still extremely small.
In addition, the near-absence of product differentiation in the energy sector is
another disadvantage faced by new entrants. The measures that new companies can
adopt, such as brand recognition, corporate value, and service innovation, are not
prominent in the energy industry. The competition among enterprises finally returns
to the price competition, which will once again benefit the existing large enterprises in
the industry.
However, the Malaysian government has adopted a series of measures to increase
public-private cooperation and private financing in the renewable energy sector. In the
future, private enterprise investment in this field will see a foreseeable increase.
Although capital inflows are still difficult to significantly reduce the difficulty for new
players to enter, but Compared with other energy industries in Malaysia, the new
entrants in the renewable energy industry are likely to have a positive growth rate.
The supplier bargaining power is low
The bargaining power of suppliers in the energy industry often depends mainly
on the number of suppliers. The more suppliers and the more standardized the
products, the more freely the company has the right to choose, because the cost of
replacing suppliers is low, and many suppliers will use Price competition to gain
corporate favor. Malaysia's renewable energy plan is based on solar energy.
JinkoSolar, JA Solar, and Trina Solar, the top three global solar product companies,
are all Chinese companies. The global market share is only between 20% and 30%.
The bargaining power of suppliers in different industries is relatively low. Malaysia
also has expectations for the development of wind energy. The top three global wind
turbine manufacturers Vestas, Goldwind and Gamesa have a global market share of
40% to 50%. Compared with solar suppliers, they have a relatively medium
bargaining power.
 The buyer bargaining power is low
In the case of small product differentiation and low replacement costs, the
number of buyers and sellers often determines the bargaining power of buyers in the
industry. For the renewable energy industry, due to the large initial capital investment
demand, the producers of renewable energy are often a few large enterprises with
strong strength. Generally speaking, there are a large number of buyers and users of
electricity and lack of bargaining power over energy prices. However, Malaysia's
National Energy Corporation (TNB) has been in a monopoly position for a long time.
Fang, as a buyer, has a higher bargaining power when purchasing power from other
independent power plants, and customers of power end users have basically no
bargaining power. However, with the reform of Malaysia's electricity supply industry
2.0 (MESI 2.0), renewable energy producers do not need to sell electricity to TNB,
but can introduce market-based competition through the retail and wholesale of
electricity. Malaysia's new energy future prices There will be more vitality and
uncertainty, and most independent producers will also bear the volatility of risks and
returns. The introduction of market pricing has broken the monopoly position of TNB,
but customers of power end users still do not have the bargaining power.
The threat of substitutes is high
If products produced by companies in different industries are substitutes for each
other, it will threaten the profitability of products in the specified industry. Oil and gas
energy is an unquestionable substitute for renewable energy. Malaysia has excellent
oil and gas reserves, and the current energy structure is still dominated by oil and gas.
Despite the decline in recent years, foreign direct investment has continued to flow
into this area, new project approvals and facilities commissioning have continued, and
production has increased steadily. In the short term, the country's oil and gas energy
has significant advantages over renewable energy. But in the long run, with the
intensification of new technology research and development and production facilities,
the cost of renewable energy continues to decline, and green energy is the direction of
global energy reform, but the completion of this reform may still take decades time.
Threat of existing competitors: high
TNB established a subsidiary, TNB Renewables Energy Sdn Bhd (TRe) in
January 2018 to lead and accelerate the company's development in the renewable
resources industry; President and CEO of Malaysia's state-owned enterprise giant
Petronas said , While maintaining the leading position of the original oil and gas
industry, consider adding renewable energy project investment to the strategic plan,
and separately deploy in the directions of solar energy and wind energy. Due to the
huge size of these leading companies and their leading position in the energy industry,
it is difficult for SMEs to compete with them.
Due to the high capital investment required for operations and the very high
barriers to the exit of the renewable energy industry, this makes existing companies in
the industry reluctant to leave the industry, and will continue to produce even if
profits enter a decline cycle, which will intensify competition among enterprises .
However, the renewable energy industry is an industry that will flourish in the
coming decades, which means that competitors do not need to commit to grab market
share from each other, but need to strengthen cooperation to jointly tap market
potential. Therefore, competition among enterprises Sex does not heat up. And with
the further development of Malaysia's energy reform and the continuous advancement
of policies such as GTFS 2.0 and GITA, new enterprises and small-scale private
investment still have good development prospects in the industry.
In my opinion, government can set up new study focuses and foundations to
research about renewable power source in Malaysia and what practice that is fit for
Malaysian. Examining information in renewable power source and vitality proficiency
assist to advance green technologies in the nation. Besides that, additional financing
policies are needed in the industry of renewable power source. Colleges and R&D
focuses ought to be a piece of this attempt. The government ought to dispense more
capitals or money in the academic grade. So as to build Malaysian consciousness
about the surrounding, projects that train people how to save the earth ought to be set
up in the academic institution. Moreover, more focus area ought to be given to green
technologies during the procedure of technologies move in Malaysia. Lastly, Malaysia
ought to step up to begin developing Green brand. Malaysia had a good result in
developing HALAL food brand. The investigator trust that Malaysia are able to
develop green brand that sketch out the features of green products and services.
(2413 words)
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1. explain the term globalization and the causes that lie behind it
2. why do firm internationalize their activities and what the risk they face