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					b. Internal Environment
i. Organizational vision, infrastructure, governance, and stakeholder
ii. Key resources and capabilities, sources of competitive advantage
iii. Corporate strategy
iv. Business strategy or strategies
v. Firm value chain analysis
vi. Performance Analysis: historical financial and market performance and
vii. Summary of competitive position

i.Organizational vision, infrastructure, governance, and stakeholder
Vestas'strategy is called No. 1 in Modern Energy. To Vestas, being No. 1 means being
the best, and being the best means maintaining world class safety standards at all
Vestas'sites, having the most satisfied customers, the best performing wind power plants
and the greenest production. Being the market-leader in wind power, Vestas aims to
create the world's strongest energy brand.


Vestas Americas
Sales and service in North America. Vestas Americas’ head office is in Portland, Oregon,
USA and the sales and service offices are located in the US and Canada.Vestas Americas
has an accumulated installed capacity of 7,768 MW1 and in 2008 Vestas Americas
installed 1,630 MW.

Production facilities in the region
Blades factory in Windsor, Colorado, USA.Blades factory Brighton, Colorado, USA
(production scheduled for 2010).Nacelles factory Brighton, Colorado, USA. In addition,
Vestas has announced plans to establish tower manufacturing and a research center in the
USA (expected to be finished for 2010).Its Headquarters are located at 1881 SW Naito
 Suite 100
 Portland, OR 97201
 Tel. +1 503 327 2000
 Fax +1 503
327 2001 Management Martha Wyrsch, President


Annual Report page 30

Stakeholder management

Annual Report, page 22 & 132

ii. Key resources and capabilities, sources of competitive advantage

Annual Report, page 16

iii. Corporate Strategy

Annual Report, page 15, top left
Page 19, middle right
Page 22- strategy of not relying on a single market
Page 36- quotation
“WitH oUR no. 1 in MoDERn EnERgy stRatEgy, WE intEnD
to BUilD tHE WoRlD's stRongEst EnERgy BRanD. as a
sPoKEsPERson FoR oUR inDUstRy, tHis MEans tHat WE
MUst ConsoliDatE oUR lEaDERsHiP Position”
Torsten Erik Rasmussen

IV Value Chain analysis

Annual report page 19

Vestas in engaged in the planning, wind turbine (supplier), technology, service and
offshore segments.

Wind, Oil and Gas is Vestas' vision, which expresses the ambition of making wind an
energy source on a par with fossil fuels. At the end of 2009, wind power accounted for
less than 2 per cent of the world's combined electricity production. Wind power is
currently the best means among renewable sources of energy
 of ensuring that global
temperature increases caused by CO2 emissions are kept at a maximum of two degrees.
The necessity of limiting temperature increases was recognised by the UN member
countries at the COP15 conference on climate change in Copenhagen, Denmark, in
December 2009.
 Vestas expects that, if the necessary political decisions on a national
and international level to expand the power grid and appoint sites are made now, wind
power can make up at least 10 per cent of total electricity production by 2020. That
translates into installed wind power capacity of at least 1,000,000 MW, as compared with
approx 150,000 MW at the end of 2009.

Vestas'strategy is called No. 1 in Modern Energy. To Vestas,being No. 1 means being the
best, and being the best means maintaining world class safety standards at all Vestas'sites,
having the most satisfied customers, the best performing wind power plants and the
greenest production. Being the market-leader in wind power, Vestas aims to create the
world's strongest energy brand.
 Wind power is modern energy because it is financially
competitive, predictable, independent, fast and clean.
 Vestas aims to provide its
customers with the lowest cost per MWh produced, “Cost of Energy”, and optimum
security for the capital invested in a wind power plant, “Business Case Certainty” –
Vestas delivers as promised. Under the “Easy to work with” principle, Vestas also
endeavours to become a more flexible and knowledgeable business partner because
significantly improved customer loyalty is a prerequisite for Vestas to retain its
marketleading position.
 A large number of initiatives aimed at optimising internal
processes and sharply enhanced focus on collaboration with customers and suppliers, will
support the above-mentioned improvements, and combined with new products this will
help build the foundation for strong growth in revenue and profitability in the years
ahead. Thus Vestas must achieve an EBIT margin of 15 per cent and revenue of EUR
15bn no later than 2015 – Triple15.
 Being the industry's leading player and a pure-play
spokesperson, Vestas aims to ensure that wind power remains at the top of the political
agenda. This is achieved through dialogue with politicians, public servants, interest
groups and NGOs the world over and through advice and information to the public about
the potential of wind power, both in individual markets and worldwide. Vestas' financial
priorities reflect its constant focus on profitability.

  EBIT margin
  Net working capital

In spite of the financial crisis, Vestas improved its EBIT margin in 2009, continuing the
streak that began in 2005. The Group reported an operating profit, EBIT, of EUR 856m
in 2009, equivalent to an EBIT margin of 12.9 per cent, against 11.1 per cent in
 At the end of 2009, the Group's net working capital amounted to EUR 1,235m,
which corresponds to 19 per cent of revenue. At the end of 2008, net working capital
amounted to EUR 299m, or 5 per cent of revenue.
 Revenue in 2009 amounted to EUR
6,636m, an increase of EUR 601m, or 10 per cent relative to 2008.

Culture: The Willpower

Vestas' employees have used their willpower, imagination and ability to constantly
develop the wind turbine technology and the Vestas organisation to maintain Vestas'
leading position in the industry. This is expressed by the sculpture entitled the Willpower,
which has been placed at a number of Vestas' locations.
 Vestas seeks to promote a
culture characterised by independent initiative and collaboration in which the dynamics
and sense of responsibility that usually characterise a small company are retained. The
solid foundation of the sculpture also expresses the reliability, common sense and
trustworthiness that is the cornerstone of all Vestas' activities.
 The updated Code of
Conduct that Vestas introduced in 2009 is to ensure that all employees and others persons
acting on behalf of Vestas know what is correct Vestas behaviour. Vestas' Code of
Conduct can be downloaded from under About
 Vestas' Code of Conduct has been made available to all
employees via e-learning, information material in 18 languages, presentations, etc.
Furthermore, all employees have been informed about Vestas' EthicsLine, which may be
used to report any violation of the company's policies and to seek guidance if an
employee faces a dilemma. Furthermore, e-learning modules have been tailoredand are
mandatory for selected employee groups and available to everyone. All new employees
will be introduced to the Code of Conduct as part of the induction programme.
standards and goals build on recognised framework agreements established by
international organisations such as the UN, ILO and OECD. In 2009, Vestas joined the
UN Global Compact initiative and follows the ten generally recognised principles in
respect of human rights, labour standards, the environment and anti-corruption. At least
once a year, Vestas will submit a progress report, Communication on Progress, on Global
Compact developments.
Outlook for 2010
In 2010, Vestas expects to achieve an EBIT margin of 10-11 per cent and revenue of
EUR 7bn against previously expected 10-12 per cent and EUR 7-8bn, respectively. The
narrowing is due to the fact that the year's expected order intake of firm and
unconditional orders of 8,000-9,000 MW is anticipated to materialise
 so late in the year
that it is considered unlikely that revenue will reach EUR 8bn.
 Adjusted for input prices,
in general Vestas expects that prices and conditions remain unchanged in 2010 relative to
2009. The slowdown in profitability improvement is due to Vestas having excess
capacity and the far majority of revenue, and especially profit, being expected in the
second half of the year. Net working capital is expected to fluctuate heavily in 2010 and
is expected to amount to 15 per cent of annual revenue at the end of the
 Investments in property, plant and equipment and intangible assets are expected to
be EUR 250m and EUR 350m, respectively.
 The completion in 2010 of recent years'
large investments in the USA and China will lead to lower investments in property, plant
and equipment than in 2009.

Vestas strategy is called No. 1 in Modern Energy. Triple15 puts two targets and a
deadline to the strategy turning our vision – Wind, Oil and Gas – into reality. With an
EBIT margin of 15 per cent on a revenue of EUR 15bn in no later than 2015 wind power
will be an integrate part of the energy mix all over the world. Vestas will improve its
profitability from leverage, levelling out activity through out the year, regionalising the
manufacturing footprint, reaching 6 Sigma and daily productivity gains. To this should be
added new turbines and a still stronger service offering to our customers. The Vestas will
power will take us to Triple15 in severe competition with existing and new competitors.


Vestas considers it natural to take into consideration environmental and occupational
health & safety aspects in the development, manufacture, sale, installation, service and
maintenance of its wind turbines. We have therefore chosen to report and document
environmental and occupational health & safety aspects. The tools used for this include
the annual report, consolidated data statements and site descriptions.

       Customer Loyalty

A continued dialogue with customers

       Customer Loyalty Survey 2007
       Customer Loyalty Survey 2008
Customer loyalty is extremely important to us at Vestas. It is a vital part of our ambitions
for global wind energy and we know that our future depends on having loyal and satisfied

Valuable Customer Insights
Every day, we strive to build long-term partnerships and maintain open communications
with our customers. Our customers have come to rely on Vestas and expect us to deliver
only the highest quality products and services. Once a year, we conduct a Customer
Loyalty Survey to hear from our customers what they think about working with us.
survey results give us valuable information about where we perform well and where our
products and services don’t live up to our customers’ expectations.

Safet y first – always
       Customer Loyalty

Safety always comes first at Vestas, and we are target-orientated and structured in our
work to continually improve safety and reduce the number of industrial injuries.
Management therefore has zero tolerance for actions and decisions that may undermine
safety to even the slightest extent. An uncompromising stance that builds naturally on
Vestas’ core values and mission.

Responsibility for safety
Working with wind turbines involves a number of risks. Heavy components, great
heights, difficult weather conditions and demanding work processes are examples of
factors that not only make demands upon the employees’ experience, but also upon their
sense of responsibility – and common sense.

At Vestas the responsibility for safety always begins with management, but the individual
employee shoulders a great deal of responsibility, too. If care is not taken during all work
processes, regardless of whether it is related to the production at a factory or during a
service inspection 70 meters up in the air on an offshore wind turbine, unnecessary risks
can easily arise.

Throughout the entire process, from development to installation and the servicing of wind
turbines, Vestas’ works consciously and systematically with safety – for example by using
occupational health & safety tools and the OHSAS 18001 certification.

Reduction of the accident rate
Vestas operates with an attainable objective of reducing the incidence of industrial
injuries to a maximum of 7 by the end of 2010. The incidence of industrial injuries at
Vestas for 2009 was 8.1. The long-term objective is an incidence of injuries of 3 by 2012,
whilst the ultimate objective is to avoid industrial injuries altogether in line with our
mission statement, “At Vestas, failure is not an option.”

Business partners
     Customer Loyalty

Vestas’ business partners play an important role for Vestas in order to be able to meet its
goals – with regard to both sustainability as well as fulfilling the aspiration for wind
energy to be beneficial for society as a whole. Business partners include customers, sub-
suppliers of components and raw materials for the manufacturing of wind turbines,
transportation companies and others. Two examples below illustrate their significance to
Vestas’ sustainability initiatives.

       In order to improve the sustainability of the products, Vestas has to work closely
       with sub-suppliers of components and raw materials, which today account for
       more than 80 % of the energy consumed in the product manufacturing process.
       In order to ensure the health and safety of Vestas employees, for example when a
       turbine is erected, customers and sub-suppliers must be both aware of – and
       follow – the Vestas safety rules and procedures.
In addition to this area of Vestas' work with sustainability and business partners, Vestas
has prepared a Code of Conduct in accordance with the UN Global Compact, the
International Bill of Human Rights and the International Labour Organization
conventions. Vestas will work actively to ensure that partners also respect the Code of
Conduct, and, to the greatest extent possible, will prioritise working with business
partners who are dedicated to and support Vestas' view on sustainability, with particular
emphasis on the following:
       ensuring that work is carried out safely – the first priority in any situation
       respecting the freedom of association and the right to collective bargaining with
       respect to legislation and practice in the country the business partner operates in
       eliminating all forms of forced labour
       eliminating child labour
       eliminating all forms of work-related discrimination
       protecting the environment
A wind turbine consists of several thousand components each with its own sub-suppliers.
Thus, Vestas' supply chain is complex with many links. Vestas Business Units have their
own procurement functions which are responsible for handling their respective business
partners. In total, there are several thousand partners worldwide. There are business
partners in the entire Vestas value chain, meaning that the values and standards in Vestas
are propagated to a large number of different business partners with different interfaces to
the Vestas organisation. Initiatives with sustainability and business partners is currently
being systematised in order for the organisation to base its work on the following
fundamental principles:

Competence development
Vestas wants to develop competences and understanding of its sustainability activities
among its business partners. 
 Over time, Vestas wishes to influence relevant
development of institutions and competences in the countries where its business partners
operate. This to an extent which makes it possible for government and authorities to
enforce legislation and international conventions. Again this will increase the focus on
collaboration on more productive activities with Vestas' business partners and reduce the
resource-heavy aspects that are primarily intended to minimise risk.

Segmented approach
Vestas has a focused approach when identifying the business partners and focus areas that
are most relevant to Vestas’ sustainability work. With respect to some business partners, it
makes more sense to collaborate thoroughly and, for example, aim to reduce energy
consumption, whereas for other partners it can be relevant to build up necessary safety
understanding and competences. On the other hand, there will be partners who have made
such progress in their sustainability work that Vestas’ involvement will be limited. In
these instances, Vestas will be able to enter into a knowledge-sharing process with them
Focus on dialogue and continuous improvement
A precondition for generating improvement is the ability and willingness of business
partners to work on safety, environmental and human rights issues and to fight corruption
and bribery, both for their own organisations and for their sub-suppliers. Thus, the long-
term work is a combination of requirements, advice and guidance.

ustainabilit y
      Customer Loyalty
                     Wind turbines and the environment
                     Management systems
                     UN Global Compact
                     Code of Conduct

The world is growing. It is estimated that by 2050 there will be 9 billion people. It takes
large amounts of energy to develop a modern society and the world’s energy consumption
is expected to double from 2002 to 2030*.

How long can fossil fuels last?

One of the central questions that come up when people look at current developments is:
How long can conventional energy forms last? No one has a definitive answer, but with
current energy demand we are already using significantly more fossil fuels than we are
finding. Sooner or later we will become dependent upon energy sources such as biofuels,
sun, water, hydrogen – and wind.

There are several reasons why wind is an important source of energy:
       Wind is an unlimited resource
       Wind power can compete with fossil energy sources if the comparison is made on
       equal terms
       Wind power enhances energy independence
       Wind power makes it possible to establish a large number of MW in a relatively
       short time
       Wind power is a CO2- neutral form of energy and is proactive in reducing
       greenhouse gas emissions
Our vision: Wind, Oil and Gas
In 2005 Vestas presented a new vision: Wind, Oil and Gas. As No. 1 in modern energy,
this vision expresses our aim to make wind energy the preferred supplement to oil and

*Source: The International Energy Agency (IEA), “World Energy Outlook 2002,” Paris,


Figure 1. Corporate governance
Retrieved from Vestas Annual Report 2009, page 30
Viewed on March 11th, 2010