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The Maverick

2013
Submitted by:
Team Iguanas, IIM Ranchi
Team Members
Pulkit Bohra M106/12 pulkit.bohra12@iimranchi.ac.in
Pulkit Mathur M107/12 pulkit.mathur12@iimranchi.ac.in
Tarun Gupta M044/12 tarun.gupta12@iimranchi.ac.in

8986733521
8051173946
9000015915

Executive Summary: ABC should target N America, Middle East & Asia

Strategic
objectives

Analysis

Opportunity
Assessment

Value
Proposition

Go-To-Market
Framework

Regional Analysis

To assess global markets and


gauge market attractiveness

To determine the Value


Proposition for Client
Offerings

To determine the Go-ToMarket strategy

To analyse the health of


individual regions and their
business prospects

Analysed the global gas power


generation market

Compared E10 grade filters


with E9 and E12

Used equivalents to estimate


global filter market size by
value and volume

Performed a Cost-Benefit
analysis for different types of
filters using case data and
team estimates

Developed a GTM
framework based on
existing GTM frameworks
and case specifications

Analysed each of the


shortlisted region in detail
to identify favourable and
unfavourable factors

Analysed the potential


response from existing
competitors

Applied GTM: Analysed


prospects for JVs/
acquisitions

Performed macro-economic
analysis and used market size
to identify most attractive
markets
Insights

North America, Middle East &


Asia are the most attractive
regions
Middle East & Rest of Asia
reaches US$122m and US$75
m by 2022
North America is the biggest
annual replacement market of
~ US$333 m

Recommendation

Identified entry and exit


barriers
E10 has cost savings of
~1% & 10% over E9 & E12
due to lower downtime

GTM strategy is focused on


product life cycle and
target market

Cartridge (synth) filters are


more cost efficient than
cartridge (cell) filters

Competitor response may


vary from maintaining status
quo to JVs and hostile
takeover depending upon
their own competencies

ABC has expertise in air


filter servicing

NA has the biggest


replacement market, hence
ABC should focus on
customer centric
marketing
Middle east & Rest of Asia
has the highest growth
numbers, hence GTM should
be channel focused

It is an appropriate time for ABC to enter into gas-turbine air filter market. However, all regions do not provide equal
opportunities. It should target replacement market in North America; Growth market in Middle East and Rest of Asia in the
same order of priority; Restrain from entering into rest of the markets for now.

Opportunity
Assessment

Value Proposition

Competitors
Response

Go-To-Market

Regional Analysis

Recommendation

There is a tremendous growth in air filter market by volume and value in Middle East and Rest of Asia regions.
North America has the largest market in the initial years, but has almost stagnant growth.
Europe, Africa & Latin America have either very small markets or have shown negligible growth in market.

Inlet Air Filter For Gas Turbines-Market Sizing (>= 150 MW)

$350

North America

1,200
Synth-Catridge

$300
Value :

Cell-Catridge
1,000

Volume:

Cell-Catridge
Synth-Catridge

800

$200
600
$150

400

$100
Rest Of Asia

200

$50

$0
Europe Middle Rest Of Africa North Latin
East
Asia
America America

2012

Europe Middle Rest Of Africa North Latin


East
Asia
America America

2017

Source: Team analysis based on data accessed from Global Gas Observatory and case data

Europe Middle Rest Of Africa North Latin


East
Asia
America America

2022

Volume(in '000 units)

Value(in million $)

$250

Opportunity
Assessment

Value Proposition

Competitors
Response

Go-To-Market

Regional Analysis

Recommendation

Gas Turbine Industry: Regional & Global Trends


High growth markets
Rising power demand
Increased government
spending
Stalled pipeline
projects

Moderate base
Low growth
Decommissioning of old
plants

Biggest gas-fired
power market
Shale gas boom
Slow growth

Growing, but
still a small
market for gas
power

Trends & Issues in


Global Gas
Turbine Industry

Growing on a
very small base
Leveraging its
hydro-electric
sources

Large natural gas


reserve
Rise in power
demand
Limited regional
pipeline cooperation

Gas Turbine Industry Drivers

Gas Turbine Industry Constraints

Increasing global power demand


Environmental concerns & regulations
opposing coal and oil fired power plants
Mature technology
Nature of Gas Turbines: Efficient and
Flexible
Availability & Price

Global economic slowdown


Fluctuation and availability of natural gas
supplies
Volatile fuel prices
Emphasis on renewable energy

North America, Middle East & Rest of Asia seem to be most attractive regions
Source: Frost & Sullivan; International Energy Agency; MarketWire company website; TurbineTech company website; US Energy Information Administration

Opportunity
Assessment

Value Proposition

Go-To-Market

ABC: Providing unmatched


value to the customers
ABC E10 Filters

Huge Cost
Savings

Filter
Servicing
Expertise

Lower
Turbine
Downtimes

To provide the best customer


experience in filter industry
with the technologically most
advanced filters and expert
after sales services
Source: Team analysis based on data accessed from Global Gas Observatory and case data

Competitors
Response

Regional Analysis

Recommendation

High efficiency filter consideration set (Calculation per MW/12 months)


E9
E10
E12
E12
Market status
Available
Testing
Available
Available
Probable Type
Cart/Synth
Cart/Synth
Cart/Cell
Panel/Synth
No. of filters per
MW of power
generated
10
10
12
15
Filter price
$300
$330
$100
$100
Filter replacement rate
(months)
24
24
12
12
Filter Cost/yr
$1,500
$1,650
$1,200
$1,500
Turbine wash time
(hrs/yr)
90
120
180
180
Downtime for
filter cleaning
(hrs/yr)
60
20
300
300
Avg turbine
Capacity (MW)
160-180
150-190
160-180
160-180
Avg Turbine
Uptime
98%
99%
96%
96%
Net Turbine
Operation
8610
8620
8280
8280
Net Uptime
(hours)
8437.8
8533.8
7948.8
7948.8
Potential Elec
Production (MW)
8437.8
8533.8
7948.8
7948.8
Arid
(Middle East)
Avg Power Gen
Losses
2%
2%
4%
5%
Net Production
8269
8363
7631
7551
Price of Elec (per
MWh)
$60
Revenue
$496,143
$501,787
$457,851
$453,082
Revnue Net Filter
$494,643
$500,137
$456,651
$451,582
Cost Savings
$5,495
$43,487
$48,556
Mixed
Avg Power Gen
Losses
Net Production
Price of Elec (per
MWh)
Revenue
Revnue Net Filter
Cost Savings

(Asia, North America)


3.7%
8128

3.7%
8221

6.0%
7472

3.7%
7657

$60
$487,705
$479,267
$5,453

$493,254
$484,720

$448,312
$440,364
$44,356

$459,441
$451,492
$33,228

Opportunity
Assessment

Value Proposition

Competitors
Response

Go-To-Market

GTM Framework

Regional Analysis

Recommendation

Based on the product life cycle and the target market in a specific geography ,
one or more of the three pillars has been chosen as focus to meet our clients
business needs.
New Product Entry
Entry of Competition
Mature Markets
Customer
Customer
Customer

Customer

Marketing
Product

Channel

Product

Channel

Product

Primary focus

Channel

Product

Channel

Secondary focus

Post analyzing the primary and secondary focus for E10 in a region, we have studied the market entry strategy from various
perspectives and suggested the most preferred route.

From
Product

JVs/
Acquisitions

Distributors
/ Agents

Competitors Potential Response

Source: From-To Approach, BCG; Redefining GTM, AT Kearney

Channel
Partners

Marketing
Strategies

Maintenance
& Service
Providers

To
customers

Opportunity
Assessment

Value Proposition

Go-To-Market

Competitors
Response

Regional Analysis

Recommendation

Opportunity Assessment

Among all regions, North America currently has the highest air filters penetration
and about 75 % of which are either Panel filters or Cartridge (cell) filters.
Considering the advantages of Cartridge (Synthetic) filters over other filters , all of
which have a filter lifetime value of <=12 months, North America potentially has a
huge Annual Replacement market.
The opportunity can be tapped by pitching in the new filters at the time of
replacement of the old filters.
The annual growth for North American market is low @ 0.4%, making the
opportunity for new market growth sales limited.

North
America

Market Sizing

Risks/Concerns

Volume ('000 Units)

The Shale Gas boom in North America is on the decline. The Gas Turbine Market
has reached stagnation and is hence affecting the air filter market too.
The long & rigorous compliance needs for companies in North America makes the
operations in North America restricted.
Strong competition from imports by Middle-east & China.
North America is a mature market and should have a strong competitor presence.
They may attempt for a hostile takeover in pursuit of new technology.

Tapping the
Replacement Market
Customer

Product

Channel

Go-To-Market Strategy

5,000

Existing Total No.


of Filters

4,000
3,000

Annual
Replacement
Market
New growth
Market

2,000
1,000
0
2012

2017

2022

Since the majority opportunity lies in the replacement market , hence the primary focus should be the existing
Customers and secondary focus should be on Channel & Product. Key to-dos are:
Develop a sales force which will target the turbine operators directly pitching the Value Proposition of the
new product.
Turbine maintenance providers, OEMs, Agents etc. who are in touch with the clients directly can be used
for pitching the product.
The existing channel of the competitors can be used to reach new customers. The competitors can be given
margin per sale.
Providing additional services like maintenance & Filter service with the new product will help increase
the reach.

Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

Opportunity
Assessment

Value Proposition

Go-To-Market

Competitors
Response

Regional Analysis

Recommendation

Opportunity Assessment

Middle east shows the highest growth among all the regions, making it an
attractive market for new product sales.
The replacement market is also growing at a steady rate , which can be harnessed
by using customer centric marketing.
22 % of the market in middle east for air filters is captured by Cartridge
(cellulose) filters. Given our value proposition, this is a prime market to target
replacements.
The majority of energy requirements of Middle east is fulfilled by gas powered
power plants, further the dependence on oil fired power plants is set to reduce.

Risks/Concerns

Burgeoning gas demand in the region combined with concern over security of long
term gas supply
Increased domestic gas demand, delayed supply response, limited regional pipeline
cooperation, and below-market pricing pose long term threats
Growing investments by countries over alternative sources of energy (Solar &
Nuclear).
Non-Homogenous distribution of gas reserves.

Tapping the
New Growth market
Customer

Go-To-Market Strategy

Product

Channel

Middle
East

Market Sizing
Volume ('000 units)
1,600
1,400
1,200
1,000
800
600
400
200
0

Existing Total No.


of Filters
Annual
Replacement
Market
New growth
Market
2012

2017

2022

Significant Annual Replacement market can be targeted by targeting the Customer pillar of the
GTM model.
Tie ups with Turbine operators, Maintenance providers, OEMs .
Focus Agents, sales representatives in matured markets like UAE, Egypt , Qatar etc.
Opportunities in New Growth market can be harnessed by focusing on building the Channel pillar
Collaboration with Distributors in the region to enhance the reach.
Tie-up with other companies operating in this region, on share of margin basis.

Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

Opportunity
Assessment

Value Proposition

Go-To-Market

Competitors
Response

Regional Analysis

Recommendation

Opportunity Assessment

ASEAN countries along with Japan, South Korea, Australia and New Zealand have
more than 35% of their energy requirements met by Gas Power plants.
The share of gas in the overall fuel mix is expected to rise strongly in the above
countries in the current decade.
ASEAN is promoting the development of a trans-ASEAN gas pipeline system
(TAGP) by 2020, aimed at improved cross-national links.
The Fukushima nuclear accident has marked a fundamental shift in Japanese
energy policy, turning away from nuclear energy towards other sources. This
implies strong growth for gas-fired power generation as a substitute.

Rest
of Asia

Market Sizing

Risks/Concerns

Volume ('000 Units)

India and China have a high dependence on coal making the role of natural gas in
fuel mix extremely limited.
Unstable regulatory environment in some of the Asian countries.
Lack of gas resources, Japan and South Korea are highly dependent on foreign
supplies.
Capacity expansion has been significant till now, however, countries like China and
India are also investing heavily in Solar & Wind Energy

1,400
Existing Total
No. of Filters

1,200
1,000
800

Annual
Replacement
Market
New growth
Market

600
400
200
0

Tapping the
New Growth market
Customer

Product

Channel

Go-To-Market Strategy

2012

2017

2022

To tap the opportunity in the Replacement and New Growth Market


India & China (Growing Market)
Salesmen to take brochures to new plant owners, explaining the cost benefits of their air
filter.
Joint venture with similar companies operating & maintenance providers in the region.
ASEAN Countries & OPAC (Mature Market)
Tie ups with Turbine operators, Maintenance providers, OEMs .
Existing filter distributors should be approached.
Tie-up with other companies operating in this region, on margin share basis.

Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

Appendix

Gas Turbines Installation Over The World Breakup by Plant Capacity

MW
<30
30-60
60-120
120-180
>180

North America

Latin America

Total Installed
No of
Capacity
Powerplants (MW)
429
4763.88
198
8710.3
181
2367
117
1241
565
28192.5

Total Installed
No of
Capacity
Powerplants (MW)
1
17.94
7
272
2
153
8
1140
65
37833.8

MW
<30
30-60
60-120
120-180
>180

Africa

MW
<30
30-60
60-120
120-180
>180

Total Installed
No of
Capacity
Powerplants (MW)
3
78
4
216
12
1130
8
1169
56
33229

Middle East

MW
<30
30-60
60-120
120-180
>180

Rest of Asia

MW
<30
30-60
60-120
120-180
>180

Total Installed
No of Power Capacity
Plants
(MW)
8
169.7
18
741.7
38
3741.6
35
5426.7
299
255485.48

Total Installed
No of Power Capacity
Plants
(MW)
2
53
10
475
26
2607.4
16
2322
148
123515.5
Europe

MW
<30
30-60
60-120
120-180
>180

Total Installed
No of Power Capacity
Plants
(MW)
2
22
7
326.4
27
2703.5
26
4030
225
154671.5

Global Gas-powered Electricity Generation, by Region


capacity in '000 MW
Year
5year CAGR
Europe
Middle East
Rest Of Asia
Africa
North America
Latin America

2.40%
8.10%
5.20%
7.30%
0.40%
4.30%

10 year
CAGR
1.10%
4.70%
4.50%
5.00%
0.40%
3.80%

10

71.52
83.55
73.15
0.42
369.36
41.84

73.24
90.32
76.95
0.45
370.84
43.63

75.00
97.64
80.96
0.49
372.32
45.51

76.80
105.54
85.16
0.52
373.81
47.47

78.64
114.09
89.59
0.56
375.31
49.51

80.53
123.33
94.25
0.60
376.81
51.64

76.37
110.06
95.26
0.57
378.31
52.33

77.21
115.23
99.55
0.60
379.83
54.32

78.06
120.65
104.03
0.63
381.35
56.38

78.92
126.32
108.71
0.66
382.87
58.52

79.79
132.26
113.60
0.69
384.40
60.75

Latin America, 60.75

North American Market Biggest by


Volume but Stagnant in Growth

Europe, 79.79

Year 10
Latin America,
51.64 Europe, 80.53
Year 5

Middle East Strong Growth &


Market presence by 2022

41.8471.52

Year 0

Rest Of Asia Strong Growth till


2022
North America,
384.40

Gas Turbine Market


With capacity >150 MW

North
America,
376.81

369.3
6

83.55

Middle East, 132.26

Middle East,
123.33

73.15
0.42
Rest Of Asia,
94.25
Africa, 0.60
Rest Of Asia, 113.60

Africa, 0.69

Inlet Air Filter Market for capacity >150MW Gas Turbines


Year 0
Panel
Europe
Middle East
Rest Of Asia
Africa
North America
Latin America

71.52
83.55
73.15
0.42
369.36
41.84

Cell
214.57
83.55
219.45
1.06
554.04
104.59

Cartridge

Synth
429.14
125.33
219.45
1.59
1,385.10
156.88

Cell
85.83
200.52
175.56
1.02
443.23
150.61

Synth
143.05
501.31
219.45
1.27
1,846.80
83.67

Year 4
Panel
Europe
Middle East
Rest Of Asia
Africa
North America
Latin America

78.64
114.09
89.59
0.56
375.31
49.51

Cell
235.92
114.09
268.78
1.40
562.96
123.77

Year 5
Cartridge

Synth
Cell
471.84
94.37
171.14
273.82
268.78
215.02
2.10
1.35
1,407.39
450.37
185.66
178.23

Panel

Synth
157.28
684.55
268.78
1.68
1,876.53
99.02

80.53
123.33
94.25
0.60
376.81
51.64

Cell
241.58
123.33
282.76
1.50
565.21
129.09

Year 9
Panel
Europe
Middle East
Rest Of Asia
Africa
North America
Latin America

78.92
126.32
108.71
0.66
382.87
58.52

Cell
236.77
126.32
326.12
1.64
574.31
146.30

Cartridge

Synth
Cell
483.16
96.63
185.00
296.00
282.76
226.21
2.26
1.44
1,413.02
452.17
193.64
185.89

Synth
161.05
740.00
282.76
1.81
1,884.03
103.27

Year 10
Cartridge

Synth
Cell
473.54
94.71
189.48
303.17
326.12
260.90
2.46
1.58
1,435.77
459.45
219.46
210.68

Panel

Synth
157.85
757.92
326.12
1.97
1,914.36
117.04

79.79
132.26
113.60
0.69
384.40
60.75

Cell
239.37
132.26
340.80
1.72
576.60
151.86

Cartridge

Synth
Cell
478.75
95.75
198.39
317.42
340.80
272.64
2.58
1.65
1,441.51
461.28
227.80
218.68

Synth
159.58
793.55
340.80
2.07
1,922.02
121.49

annual replacement market


Panel

2012

Cell
321.85
125.33
329.17
1.59
831.06
156.88

Cartridge

Synth
429.14
125.33
219.45
1.59
1,385.10
156.88

Cell
85.83
200.52
175.56
1.02
443.23
150.61

Synth
71.52
250.65
109.72
0.63
923.40
41.84

annual replacement market


Panel

2017

Cell
353.88
171.14
403.17
2.10
844.44
185.66

market growth
Cartridge

Synth
471.84
171.14
268.78
2.10
1,407.39
185.66

Cell
94.37
273.82
215.02
1.35
450.37
178.23

Panel

Synth
78.64
342.28
134.39
0.84
938.26
49.51

annual replacement market


Panel

2022

Cell
355.15
189.48
489.18
2.46
861.46
219.46

Inlet Air Filter Market:


Annual Replacement Market
Market Growth

Cell
5.66
9.24
13.98
0.10
2.25
5.32

Synth
11.32
13.86
13.98
0.15
5.63
7.98

Cell
2.26
22.18
11.18
0.10
1.80
7.66

Synth
3.77
55.45
13.98
0.12
7.51
4.26

market growth
Cartridge

Synth
473.54
189.48
326.12
2.46
1,435.77
219.46

Cartridge

Cell
94.71
303.17
260.90
1.58
459.45
210.68

Panel

Synth
78.92
378.96
163.06
0.98
957.18
58.52

Cell
2.60
5.94
14.68
0.08
2.30
5.56

Cartridge

Synth
5.21
8.91
14.68
0.12
5.74
8.34

Cell
1.04
14.25
11.74
0.08
1.84
8.01

Synth
1.74
35.62
14.68
0.10
7.66
4.45

Cost effectiveness of Cartridge (synth) filters


Panel
Cell

Cartridge

Synth

Cell

Synth

No. of filters per MW of


power generated

30

30

24

10

Filter lifetime (months)

24

24

24

24

$80

$100

$100

$300

2400

3000

Avg. Price
Total Price

2400
3000
Average retention in power generation (%) post subtracting losses.

Marine

0.92

0.98

0.92

0.95

Arid

0.94

0.95

0.96

0.98

Humid sub-tropical

0.96

0.96

0.94

0.96

Price of Usable Generation (60$ /MW)


Marine

55.2

58.8

55.2

57

Arid

56.4

57

57.6

58.8

Humid sub-tropical

57.6

57.6

56.4

57.6

Revenue advantage of Cartridge (Syn) filters


Marine

1.8

-1.8

1.8

Arid

2.4

1.8

1.2

1.2

Humid sub-tropical

Cartridge (Syn) filters become cost effective for plant capacities greater than below mentioned
Marine

333

333

Arid

250

333

500

500

Humid sub-tropical