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What Could Be The Reasons For The Unfavourable Evaluation of PV Technologies by Greg Morgan?

Greg Morgan at Solenergy has concerns about PVT's bid prices being higher than competitors despite PVT's quality. Solenergy wants lower ownership costs even if upfront product quality is compromised. The best option for PVT is to directly speak with Morgan to understand his specific concerns about costs and how PVT can address them given Solenergy's priorities of lower ownership costs over highest quality. In the long run, PVT should develop a more flexible portfolio with basic low-cost models that can be customized, and use long tail marketing to attract additional revenue from customers initially interested in core products.

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Amit kaushal
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419 views2 pages

What Could Be The Reasons For The Unfavourable Evaluation of PV Technologies by Greg Morgan?

Greg Morgan at Solenergy has concerns about PVT's bid prices being higher than competitors despite PVT's quality. Solenergy wants lower ownership costs even if upfront product quality is compromised. The best option for PVT is to directly speak with Morgan to understand his specific concerns about costs and how PVT can address them given Solenergy's priorities of lower ownership costs over highest quality. In the long run, PVT should develop a more flexible portfolio with basic low-cost models that can be customized, and use long tail marketing to attract additional revenue from customers initially interested in core products.

Uploaded by

Amit kaushal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.

What could be the reasons for the unfavourable evaluation of PV technologies by Greg
Morgan?
 PV technologies is a global leader in PV inverter industry. The invest substantial
amount in R&D, and on technology to achieve industry best quality, innovation,
provide best performance. But all of this comes along with added cost.
 PVT is very confident about their service, product performance, superior product
delivery, but their bid prices are on higher sides as compared to their competitors.
 Solenergy have different expectations from their vendors. They want to have cost
cutting on the expense of increased operational cost, but lower net ownership cost.
Even, PVT is best in the market in terms of performance and quality but they come
at high bid price. Solenergy is fine if vendor product quality is bit compromised
because they are confident about their quality control systems.

2. Evaluate alternative course of actions available to PVT to gain favourable evaluation by


Solenergy for the Barstow Project?
 Extend product warranty to 20 years:
o Better than competitor which provides 5 years of warranty (Great value
addition for Solenergy)
o It would incur additional cost for PVT if they provide warranty for 20 years
(added cost for PVT)

Solenergy is not concerned about PVT product quality, but they are concerned about
price, and ownership cost, which remains the same.

 99% uptime guarantee for each inverter:


o Provide edge over competitor, because competitor can not promise this
because of inferior products.
o Cost incurred in warranty services may offset profits made from the deal,
and it would compromise future negotiations with Solenergy.

Differentiated product service, but comes at the cost of risk of losing the profits
made out of the profits. It would impact future business negotiations with
Solenergy.

 Provide next generation 1.25MW product:


o Most efficient and reliable inverter in the market.
o Morgan would be impressed with edge cutting technology, but there is
potential risk of malfunctioning because of compromised testing.
o Instead of April 2012, this new inverter can launch in Jan 2012, it would be
sold to large users in this way of introduction.
o In the time of lower cost approach, it would be better option to combine
small inverters, which would cost less as compared to bringing new one
inverter.

There is main two concerns, one is the malfunctioning, and other is the cost
cutting in the mind of Morgan. Even after providing latest technology, this does
not resolve the concern of cost cutting and capital expense for Solenergy.

 Approach Morgan directly before deciding anything:


o As source of information is unknown and also the concerns are over bid
prices, and cost of capital. Talking directly to Morgan should be the next
step, because in other alternatives, either profit or company image is getting
compromised.

3. What short term and long-term policies and processes should PVT develop and implement
to effectively improve its marketing programs?
 Flexibility in terms of features : Not all the businesses would require high end quality
products. Businesses would be very flexible and eager to cost cut. PVT must have
some flexibility in their products in terms of features, quality, and etc.
 Low basic cost for basic models (Lock-in Strategy ): They must have their basic
model in the market, which can be customized as per the business requirements.
This would help them to capture diverse set of businesses. Few would require more
features and rest not.
 Expanded product portfolio of diverse set of prices & Quality : They must have
products of different capacities, efficiencies in the market. It would help them to
capture more market segments and make them flexible.
 Long Tail marketing approach: Have many customization options available to
increase revenues. Customers would be visiting us for purchasing core models, and
then offer them customizable features which would attract revenues. It would help
us to save the customers rigid on cost cutting.

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