Commercial Strategy and Rethinking of the Business ModelFIRST STAGE STRATEGY

2 Different

Activities

of RISS:

1st-The development of K2Hotel, due to a purchasing order that came from a local hotel via TIC Group2nd-Creation of a sales department and marketing actions to launch RISS’ K2Energy.

2 opposite

points of

view among

the

shareholder

s of RISS:

1st-The view shared by the industrialists’ partner was in favor of having an experienced

professional sales force external from RISS and coordinated by their industrial partner.2nd-The academic founders preferred a wholly

internal sales department independent from the TIC Group.

They thought that Carles spent too much time working for RISS and was neglecting his responsibilities in TIC Group.

The team decided to create their own sales department, independent from TIC Group but incorporating CARLES as sales manager and another salesman that used to work in TIC Group, JOSEP.

In the meantime,

Carles’ shareholders

from TIC Group

were upset with

Carles’ involvement

in RISS.

Mac was really worried about the possibility

of having an external sales. Department. He

thought that it could limit RISS’ revenues

because he considered that TIC Group’s

competitors would never buy a product from

one of its competitors.

Carles and Josep as experienced salesmen, were paid market salaries which were further

exceeding what the rest of the team was earning. In the beginning, this fact was not a problem because the team believed that the money was

well-invested and they relied on the salesmen’s capacity of generating revenues. But after half

a year, the situation changed dramatically.

Another problem

occurred:

WAGE POLICY

Although having a limited sales budget, Carles and Josep had managed to take part in several

specialized trading fairs, wrote several articles in energy related journals, & sent brochures to numerous TIC Group customers’ mailing lists.

In addition, new competitors from abroad were appearing on the scene.

In December 2005:

Carles and Josep had

not succeeded in

their sales strategy

and the result was

that no single sale

was made

The environment was changing for remote supervision companies. This changer in the environment significantly affected RISS; their competitors caught up with RISS’ embedded technology by using better microprocessors and embedded systems of offering the same benefits at a low cost.

RISS’ main problem was probably the long maturation time before sale conversion. In the building industry, it takes at least one or two years from the planning stage until the building is constructed. Only now is RISS receiving purchasing orders from the offers made in 2005.