Managing Energy

Business

Aura light: From a light bulb manufacturer to

an Energy saving solution provider
Group: 3
Harsh Bhatt (20)
Samidha Rai (38)
Viren Joshi (51)
Aura Light (1/4)
Aura Light, a Swedish lighting
company, is currently in a
transforming phase from a
lighting products company
into lighting solution
provider. 
Customers: hospitals, tunnels
Core product- production of
managers, oil platform. Those
fluorescent light sources or
for whom changing light
light which emitted a closer to
source was complicated or
natural light 
costly. 

Subsidiaries in Germany and

Among top 3 lamp provider in
five northern European
Sweden, Finland, Norway. 
countries 
Aura Light (2/4)
In 2006
FSN acquired Aura Light. FSN Capital is a private equity investment firm. Then, it was the second largest
private equity investment firm in Sweden. 
In 2007
Aura Light appointed Martin Malmros as it’s CEO, and together they expanded their market from North Europe
to other parts of Europe
• Started putting focus on sales force
• Set up subsidiaries in Italy, Spain, France
• Managed other foreign account from Sweden
Aura light (3/4)
In 2012
New strategy approved
• Transforming aura into a lighting solution provider
• Developed a new product portfolio Light-emitting diode (LED) technology which was environment friendly
and more energy efficient.
In 2014
Portfolio included light sources, luminaries, lighting control, and energy saving solutions
• They offered sustainable lighting solutions
• Company was appreciated for in-house manufactured and high quality, ‘long life’ fluorescent tubes which had
3 times longer durability than the standard ones
• Management team ambitious to make aura significant player in $55 billion lighting industry
Aura light (4/4)

There are two options to pursue by the management of Aura Light in the next five
years and with current resources and financial condition, Aura Light can only
choose one of those options instead of doing both at the same time

Focusing on building the transformation and

Expanding market to India and Brazil by selling settling solutions and LED market in Europe.
traditional products that potentially double its Meanwhile, the long-term goal of Aura Light is
revenue in five years. to be a leader player of lighting solution and
LED in Europe market
Five Force analysis

Rivalry
Threat
ThreatAmong
Bargaining of
of Substitutes
Power Competitors
Potential
of Suppliers
Buyers
Entry
Bargaining Power of
(-)(-)
(-) (-)
(-)
 Emerging markets of India and brazil are High risk proposition.

Significant resources have been spent on setting up solutions and LED market in Europe.

Problems in
Strategic capabilities in providing energy efficient lighting solutions and now moving
again to products market for short-term goals does not seem viable.

India and Existing competitors within both the Brazilian and Indian markets can produce such
traditional lighting products at far lower prices than Aura.

Brazil Existing competitors within the Indian market possess manufacturing bases within the
country and geographically advantageous economies of scale that drastically reduce both
operating and transportation costs.

Significant costs associated with challenging and unfamiliar Indian and Brazilian markets.

Financial reports suggest company has no borrowings capacity to fund any overseas
expansions and a low profitability level.
Recommendation
To aggressively pursue overseas market opportunities is an ill-suited idea if we see firm’s current resources and capabilities.

Unfavorable industry dynamics generate a scenario where the likelihood of short and long-term profitability is low or non-
existent.

Weaknesses present within Aura’s balance sheet.

Instead of overseas expansions Aura should favor an alternate business strategy better suited to its current resources and
capabilities and look for markets possessing smaller institutional distances and comparatively favorable industry
characteristics.
Strategic focus has been on development of a lighting solutions-based market offering, the competencies and strategic
advantage built up within this sector remain better suited for more mature domestic markets of the firm within both
Scandinavia and Europe generally.

We recommended for the firm to improve its existing business to european countries instead of starting new market in
emerging countries.