Case Analysis Note On PV Technologies Inc.

(Business To Business Marketing)

PV Technologies Inc:Were They Asleep At The Switch?

CASE SUMMARY
PV Technologies (PVT) was a premiere supplier to several segments of the solar energy technology field. In late July 20 ! PVT received a "e#uest for Proposal ("$P) from a long%time client! &olenergy 'evelopment (()! a ma*or developer of energy generation systems. &olenergy was see+ing a supplier of utility grade central inverters. &olenergy was loo+ing for a supplier of utility grade central inverters for their 00,- plant! which was going to .e setup ad*acent to an e/isting 20,- plant. In the e/isting 20,- plant! the PV technologies central inverters were used and they are performing flawlessly. 1reg ,organ who is the chief engineer in &olenergy! started his evaluation to select the .est .id among all the .ids which were received from all the suppliers. The e/ecutives at PVT +new they offered undou.tedly the .est product in the entire mar+et. 2owever! it had .een unofficially revealed that PVT trailed the other competitors! leaving PVT to most li+ely lose the contract.

PRO !EM "E#I$ITIO$

1. PVT%s prices were higher th&n co'petitors PVT3s .etter #uality could e/plain the difference 2. Solenergy w&s co''itte( to c)t costs &'ong the co'p&ny 3. In*erior per*or'&nce co)l( +e co'pens&te( 4n enhanced maintenance schedule and a proactive #uality control program! the inferior performance could .e compensated. The bid rices o! the co" etitors# roducts $ere signi!icantly lo$er than PVT#s . ,organ3s

evaluation was highly critical as it had significant influence on the industry.

A!TER$ATIVES
A%T&'NATIV& &)tending *arranty (5/tending the product warranty to 20 years while the industry standard is 0 years) 7 7 Too costly! high impact on the profit. <on sustaina.le in the future= +ey should .e to focus on low cost solutions li+e other competitors Ne$ "odel o! -../ M* (4ccelerate the introduction of the <5- I<V5"T5" ( .20 ,with 9>.0: efficiency) 0irect a roach to Morgan <o change in pricing strategy! this is what the industry sector is loo+ing for. P'O( "elia.le 6 &ign of good #uality. 2igh standard CON(

7 7

"elatively costly. -arranty is not +ey factor

++, u ti"e guarantee (8ffer a 99: ;PTI,5 1;4"4<T55 at no cost for the customer)

The offer would .e unmatcha.le .y the competitors. &ignal of high relia.ility.

5/tremely ris+y and e/pensive

(Initiate a 'I4(81;5 with ,organ to find out the real output of the evaluation)

,ore personal approach 6 Personali?e the product for them

)all for help could ma+e themloo+ as desperate

S,ORT TERM-IMME"IATE RECOMME$"ATIO$S

N&T*O'1IN2 and Custo"er relationshi successful company. "anage"ent forms an integral part in .uilding a

 directly a path

roach Morgan! which seems to .e less e) ensi3e and less risky. ;nderstand if the

evaluation is real and what his real needs are and .ased on his decision opt for the .est possi.le

If ,organ confirms that the evaluation is real! PVT should understand the roots o! roble" and con3ince hi" about the su eriority their roduct ossesses and its e!!ecti3e bene!its(refer to the section @ANA%4(I( O5 COMPA'ATIV& 5&AT6'&( AN0 P'IC&7) 8" If PVT is not a.le to sell him the superiority of the product! it can ado t a strategy based on his needs to sell our roducts.

!O$. TERM RECOMME$"ATIO$S

-e would recommend following policy changes for .etter customer communicationA 5valuation of competition and competitive offerings more fre#uently Building ne$ Marketing 8 (ales strategy 6 &o far PVT has mostly relied on the relationship of its sales team with customer to ma+e the proposals! .ut considering the cost cutting measures and introduction of cheap products .y competitors! PVT should think o! creating tea"s to $ork on ro osalsB assist sales people such as &alvatori. &uch teams would helpA

o o

In stopping the reliance on +ey individuals In enhancing PVT3s mar+et analysis and competition evaluation s+ills

-or+ with its key custo"er during its Product de3elo "ent li!ecycle to better understand "arket needs $ith res ect to cost9 er!or"ance and other key roduct e3aluations "easures look !or o ortunities to ro3idestrategic co"bination o! Product:Maintenance rice compared

to that of its competitors

 5nhance its we.site to !eature ho$ its

roducts are better than its co" etitors and show

tangible:intangible bene!its of its little higher cost of products.

,OW "I##ERE$T PRO"UCT #ARE /I$"USTRY0WI"E1

5eature No"inal AC out ut o$er &!!iciency rate (,) &) ected ser3ice li!e (years) %ist rice (a) *arranty (years) (OMA &nergy .0 ,9C.0 2.0 F D0!000 0 B; (olar .0 ,90 0.D F C0!000 0 PV Tech(Current) .0 ,9D.0 E.2 F >0!000 0 PV Tech (Ne$) .20 ,9>.0 E.2 F >D!000 0

A$A!YSIS O# COMPARATIVE #EATURES A$" PRICE /*or &2&il&+le &ltern&ti2es1

&!!ecti3e o$er out ut G <ominal ac output power H 5fficiency rate &) ected li!eti"e o$er out ut G 5ffective power output H 5/pected service life
Metrics &!!ecti3e Po$er Out ut &) ected %i!eti"e Po$er Out ut (b) %ist rice:&) ected %i!eti"e Po$er Out ut (a : b) (OMA &nergy 0.9C0 2.0C20 I09E.2C B; (olar 0.90 0. C0 0DI0.2> PV Tech(Current) 0.9D0 2.>D E>C0.0 PV Tech (Ne$) .2E 20 C.2020 0EC.C>

The ta.le a.ove clearly shows that ,organ3s assessment of PV inverters .ased on price is simply flawed as it doesn3t ta+e into account other vital factors such as the lifetime of the product. Jased on the warranty that he gets with PV inverters! we can clearly see thatA The ti"e that he gets a consistent o$er out ut is "a)i"u" in case of PV inverters
The rice he needs to shell out !or the in3erters is the least in comparison to the

competitors