PV Technologies- Case study

BYVenkata R.C. Tummala EPGP-05-159

Subject: B2B Markeing

Executive Summary• PV Technologies, Inc is market leader in the supply of Photovoltaic Invertors to Solar Energy field• PVT received RFP from his long time client Solenergy for

Supply of utility scale central inverters • PVT sales person received unconfirmed information that it is

trailing behind competitors in the bidding process• PVT has to take management decision to safeguard its

leadership position and also manage business market process to face low cost competitors

PV Technologies-Quick Facts• Founded in 1993 , Global specialist in renewable energy with

revenue $1.24 billion with US market share of 38%• Industry leader with reputation for product reliability,

efficiency and service response, but at higher cost• Developed excellent customer engagement by updating them

with latest products and technologies• Presence in three segments: Residential (30.1%) and

commercial/industrial (42.4%)and utility companies (27.6%)

Solenergy LLC- Vendor Evaluation• Part of companies operations risk management policy to

evaluate supplier’s financial status and and products• PVT’s product quality, reliability and maintainability is good

when compared to competitors• Price difference between PVT and competitor’s is huge• Solenergy committed for cost control so decision may favour

based on lower cost of product with some precautionary covers on maintenance schedules and proactive quality control program

Solar Energy- Market• World wide focus on renewable energy sources like solar due

to environmental impacts and rising energy costs• PV installation doubled to total 878 MW in 2010 from the 477

MW in 2009• US market was forecasted to expand at a 30.4% CAGR during

2010-2015• Policy incentives by various Govt.• Mostly relationship driven sales by sales force• No standard set of metrics to measure efficiency and

reliability of PV inverters

Alternative Solutions• Option 1:Extend warranty to 20 years

▫ Pros: Economic values offset the product cost related short comings▫ Cons: Impacts profitability. Existing warranty (10 years) is more than industry standard (5 years)

• Option 2:Offer 99% uptime guarantee during service life▫ Pros: Reinforce quality, reliability and durability of product▫ Cons: Cost in lost warranty revenues would negate most of the profit

• Option 3:Introduction of new generation 1.25 MW model▫ Pros: can impress Solenergy with efficient product and robust system▫ Cons: Potential malfunctions are under estimated

• Option 4: Approach Jordan and share information, request for reevaluation▫ Pros: can prevent damage in market reputation in case expected report is published ▫ Cons: May back fire as the leakage of evaluation report is unofficial

RecommendationsReassess Customer value• Constantly sense market priorities• Craft market strategy based on-”Total”

value of product(economical, technical, service, social)

Creating Value• Market offerings based on customer

requirement• Design customer driven marketing and

distribution channels

RecommendationsValue based positioning• USE 4 P’s: product, price, place, position • Manage Market Place relationships-both

current and prospective customersWorking Relation and Business Network• Develop connected relationships with

customers• Establish transactional and collaborative

relationships with customers