Case Evaluation-PVT Inc.

By Group-
1 AMANDEEP SINGH CHAWLA
B2B-C AKSHAY MENON
ARNAB MANDAL
FENIL DALAL
INTEKHAB ASLAM
KSHITIZ GOEL
PUNEET MARWAH
SHIKAR JEET
Evaluation of PVT in Solenergy
Regularly scheduled and confidential vendor evaluation- Financial conditions & products offered (Operational Risk management policy)

Conducted by Greg Morgan, Solenergy’s chief electrical engineer

PVT’s product superior in terms of: Efficiency, Reliability, Productivity

Bid prices for PVT was significantly higher than the competitors

As a result, PVT was ranked below the competitors (Third)

If the result got published, it could have a negative impact on PVT

The relationship between PVT and Solenergy didn’t had an added advantage on the evaluation as Solenergy had a renewed focus on
expense control.
Brush Fire or an Important Issue?
It is a very Important issue to
be taken care of (long term)
If the report is to be true, and Loss of a huge client and might Internal operations might be
the press release is done of the effect future dealings with the affected
decision: company
Endorsement of the
competitors
Morgan is an influential figure
in the industry, other
companies might follow
Solenergy
 Profitability of Alternatives
Current Alternative 1 Alternative 2 Alternative 3
Total Project Revenue $18000000 $18000000 $18000000 $15000000

Warranty Premium 3240000

Maintenance contract 1600000
income
Total Revenue $18000000 $21240000 $19600000 $15000000
Total Cost of Sales 10800000 10800000 10800000 8460000
Warranty expense 3240000
Gross expense- guarantee 6980172

Maintenance contract 1450000

expense
Sales commission 72000 72000 72000 60000
Project cost of sales 10872000 14112000 19302172 8520000
Project Gross Profit $7128000 $7128000 $297828 $6480000
 Alternative 1: extend • Pros: Value added benefit
warranty from 10 to 20 • Cons: Already competitive advantage with 10 year warranty, Additional
expense, impact on profitability
years

Alternative 2: 99% • Pros: Value added service, reinforce quality, durability, and reliability
• Cons: loss of warranty revenues, low profitability, negative impact on future
uptime guarantee dealings

Alternative 3: • Pros: would be the most efficient and reliable inverter in the market, price the
model lower, first mover advantage
Introduction of higher • Cons: could be a failure due to lack of proper testing, alternative of coupling
capacity product the combinations of smaller inverters

Alternative 4: Confirm • Pros: A conservative approach, previous relations between PVT and Solenergy,
the reported findings of can take a course of action based on the actual decision taken by Morgan
• Cons: Difficult to convince Morgan
the evaluation
PVT New Launch Promotion Strategies

ANNOUNCEMENT OF TRADE JOURNALS SALES COLLATERAL TARGETED EMAIL

NEW OFFERING BY MATERIALS CAMPAIGNS TO
PRESS RELEASES GENERATE LEADS
 Price Conscious Consumer

Reliable Productive
Need a
Reliable and
cost
effective
Bull’s Eye product
Efficient
Integrated
Excellent
Photovoltaic
innovative

Positioning Most
solution conversion
method Market
Model for efficient
and
Leader in
inverter
PVT 1.25 reliable
inverter Best for my money Value for
industry

MW CI on the
market
98.5%
efficiency rate
money PVT 1.25
MW CI is a
great cost
efficient
Double offering
Warranty

Economical
Sturdy Design Constraints

Soma Energy, BJ Solar

Stakeholders view about Accelerated New
Offering
 ENGINEERS
• It is most efficient and reliable
• Cost-saving and new state of art manufacturing
techniques would allow PVT to price new inverter
very close to existing 1.0 MW inverter which
otherwise not been possible.
R&D
• Convenience for Solenergy to use PVT & latest
market product
• Expressed concern about compressed time-frame
which could lead to malfunctioned product being
introduced in the market damaging overall
reputation
SALES & CUSTOMER SERVICE
• New product with new objections (putting
negative impact on downtime)
• Sold at new reasonable price as utility
projects were becoming larger
• Cannibalism of existing 1.0 MW product
PUBLIC RELATIONS
Strengthen PVT’s position in the market
for being first to innovate and introduce
new market that could create positive
impact on revenues.
FINANCE
• Expressed concern in regards to potential
malfunctions and not serve requirement of
Solenergy
• Lower cost options were feasible by
coupling two smaller size inverters rather
than one single large inverter
• R& D cost are not covered up
PVT’s Short and Long
Term Improvement
Policies
SHORT TERM POLICY

Review the current policy of testing equipment

performance and specifications against competitor’s
offerings

Revaluate the needs of its business segment and key

customers on more frequent and regular basis to mitigate
similar problem in future

Review the manufacturing cost to find the opportunity to

price the product more competitively
LONG TERM POLICY

PVT technologies should involve in market analysis to assess

the varying customer requirements and needs

Customized package offerings in terms of addons at

convenient prices to customers

Check on competitor regarding its products along with its

offers and prices and set its own product at reasonable
price without comprising on quality. PVT can set various
price points to cater the need of various segments
 Recommendation
• PVT should go for Alternative 4 first.
• PVT can reduce already offered double warranty by industry
standards to half and offer the cost benefits by this, directly passing
to Solenergy.
• Coupled with Decreased costs and giving Add on packages like
Extended warranty, Priority repairs Etc. can change the tide in favor
of PVT