CREE INC.

INTRODUCING THE
LED LIGHT BULB

C A S E S T U DY P R E S E N TAT I O N BY :
ASTRI HAPSARI (29116446)
A G U N G J AT I P RA M O N O ( 2 9 1 1 6 3 7 1 )
C A H AYA N U R A L A M ( 2 9 1 1 6 5 3 5 )
RISMANTO (29116409)
SCOPE
I. INTRODUCTION
II. PROBLEM DEFINITION
III. ANALYSIS OF THE SITUATION
IV. ALTERNATIVES OF THE SOLUTION
V. SOLUTION
I. INTRODUCTION
In 2010 incandescent bulbs became the most common used bulbs in U.S
Energy Independence and Security Acts (EISA) make higher standard for
energy efficiency for the new bulbs had to be 25% - 30% more efficient than
typical incandescent bulbs that available in 2007, and 80% in 2020
Cree Inc. was co-founded in 1987. North Carolina-based manufacturer of
LED with more than $1 billion in sales to industrial and government
customers
In the mid-2000s mobile phone market reached saturation along with cell
phones manufacturer began squeezing blue LED prices
Cree began to expand their business activity to pursued the general lighting
market
I. INTRODUCTION (CONT.)
II. PROBLEM DEFINITION
The needs for the lighting market is still dominated by incandescent and CFL
The profitability of Cree from government and commercial industries are
decreased, so Cree is looking for new promising market that it has never
been touched, general lighting market.
The new regulation of standard for energy efficiency of light bulbs as
mandated by Energy Independence and Security Act of 2007 (EISA) has
become a challenge and boon.
In United States, sales of light bulbs reached 2.8 billion units. LED only
contributed for 30 million units or only accounted for 1%, meanwhile the
biggest contributor is incandescent which contributed for 1.5 billion units or
accounted for 53%.
III. ANALYSIS OF THE SITUATION
When a company is trying to enter new business, it should deliberate to
identify the strengths, weaknesses, opportunities, and threats involved. Thus,
we will elaborate it into analysis of the situation using SWOT analysis as
below: STRENGTHS WEAKNESSES
Company Strengths:
Company Weaknesses:
- Expert and well known for industrial LED product
throghout the years. - New comer for general bulb market.
- Integrated internal supply chain for all component of - Unknown brand (lower brand awarness) for general bulb
LED bulbs (independent from third party's supplier). market.

Product Strengths:
- Energy efficient design.
- Longer lifespan compared to other product either Product Weaknesses:
incandescents and CFL. - Low market share compared to other product such as
- Mercury free incandescent and CFL.
- Lower price may severely affect financial condition in
the years to come.
III. ANALYSIS OF THE SITUATION
(CONT.)
OPPORTUNITIES THREATS

Company Opportunity: Company Threats:

- Selling lower price product compared to existing
- Stiff competition among the bigger existing player.
competitors.

Product Opportunity: Product Threats:

- Government regulation for energy efficiency creates

- Less understanding of LED product in society.
wide market for bulbs product in U.S.

- Product Innovation - Cheaper price products in consumers' opinion

- Trendsetter for energy efficiency product.

IV. ALTERNATIVES OF THE
SOLUTION
Based on the SWOT analysis of the problem definition, here are the alternative
solutions possible to achieve the expected level of sales for the next three
years and address brand building :
Cree to expand the supply chain distribution to enchance the sales of LED
light bulbs
Cree to increase the selling price of LED light bulbs in the market
Cree to create a product tagline to strengthen its product positioning in
consumers mind
Cree to increase the brand awareness by making more printed advertising
V. SOLUTION
As Watson and James appraised the product launch, they considered
Swoboda's questions. What level of sales might Cree bulbs generate over the
next three years?
Based on the elaborations of the alternative solutions that available, the most
proposed solution in order to answer Swobodas question of sales level and
brand building are:
Cree to expand the supply chain distribution to enchance the sales of LED
light bulbs
Cree to increase the selling price of LED light bulbs in the market
Cree to increase the brand awareness by making more printed advertising