MBM Case-1

PV
Technologie
s
JULY 6

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Q1. What could be the reasons for the unfavorable evaluation of PV technologies by Greg Morgan?

Answer-

PVT product was superior to all in terms of performance and reliability. There was no doubt about the
superiority of the PVT product in the mind of Greg Morgan. Following are the reasons he was still not
considering the PVT central inverter for the project -

a) The bid price of PV Technologies was significantly higher compared to competitors.

b) High upfront cost for PVT product was going against the Commitment to a renewed focus on expense
control by Solenergy.
c) Morgan has taken decision based on Total cost of ownership that argued in favour of selecting lower
cost product.
d) The product by PVT may not be customised as per requirement of Solenergy and related cost may be
the impact of Over-designing.
Q2. Evaluate alternative course of actions available to PVT to gain favourable evaluation by Solenergy for the
Barstow Project?
Answer-

Rubenstein presented four alternative options before senior executives of PVT as follows –

a. Offer extended warranty from 10 to 20 years at internal cost

This alternative will definitely boost the confidence in the product. Also, the sales executives were
confident about the economic value of the product.
And there is no impact on the project gross profit. However, this offer may impact the profitability in
further deals.
Also, upfront cost for customer increases and the 10 more years of warranty from company may not be
a requirement of the customer.
b. Offer 99% uptime at no cost
With this option, the gross project profit of the company will be drastically reduced. Hence, it is not
wise to consider this option.
Also, this option is already available on customarily on a fee basis.
c. Accelerate new product introduction
This could be a good offer to the customer as the new product will reduce the total cost of ownership as
well as the upfront cost.
But we have to consider the concerns of R&D department regarding potential failure. It is not wise to
offer a new product to a key customer without having done a thorough testing.
Any failure will lead to negative publicity and loss of confidence in the market.
d. Initiate dialogue with Morgan to confirm on the findings of evaluation.

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 This can be considered as the best immediate corrective action. Having a dialogue with Morgan will
help company understand the exact requirements of Solenergy. PVT can discuss customised offerings
and related benefits with the customer.
Q3. What short term and long-term policies and processes should PVT develop and implement to effectively
improve its marketing programs?
Answer-

Short Term –
a) They should increase their engagement with customers and have a comprehensive idea of their
requirement.
b) They should work on their pricing strategy for the market becoming more price sensitive.

Long Term -
a) They should offer some customisations to their customers to meet their intended requirements at an
optimum cost.
b) They should keep investing in R&D in order to reduce total cost of ownership with more efficient,
reliable and durable products.