Building an innovative company in a high-tech industry carries both benefits and risks. Often, competition is low due to entry barriers. However, the costs of developing advanced technology can be significant.
A123 Systems, a company built on green energy storage technology, exemplifies the benefits and risks inherent in nascent industries. Strategically, A123 must balance overhead, production, and development costs against revenues received within an undeveloped market. While government incentives abound within this newly emerging industry, the company must align strategy and operations with the realization that these incentives will not always be available to subsidize its operations.