Case Analysis Aniket Bothare MBM PVT

Case Analysis
By Aniket Bothare
04 August 2016
Course: Managing Business Markets
Case: PV Technologies Inc. Were They Asleep at the Switch?
1. What could be the reasons for the unfavorable evaluation of PV technologies by

Greg Morgan?
a. Though PVTs products were far superior in all the aspects, the bid prices
from their competitor BJ Solar was significantly low. Though historically,
PVTs products were more expensive, Morgan perceived the bid from PVT
exorbitant.
b. Soleenergy was committed to renewed focus on expense control and cost
cutting. Hence, upfront cost quoted by PVT was bound to be differential.
c. Morgan envisaged enhanced maintenance schedule (which involved
preventive maintenance as well) with proactive QC program would
foresee potential performance issues and hence they could be prevented
before they occur. This would compensate for inferior performance
characteristics of less costly inverters.
2. Evaluate alternative course of action available to PVT to gain favorable

evaluation by Solenergy for the Barstow Project?
There were 4 options laid out by Rubenstein and Salvatori which they took to
senior executives.
a) Offer to extend the original warranty at internal cost from 10 to 20 years
First option was to extend the product warranty to 20 years, Solenergy would
contractually prepay the warranty premium annually at the rate of 18% of the
purchase price of each inverter. PVT would perform warranty services as necessary
throughout the year and submit an invoice monthly of actual internal costs for
parts, labor and service calls to Solenergy for its recordkeeping purposes. At the
end, PVT would true up the prepayment and issue either a refund in the event of an
overpayment or an invoice in the event of an underpayment. PVT offered a
standard 10 year unlimited hour usage warranty. PVT also offered an extended
warranty. Written in 5 year increments at an additional cost, a condition of this
Confidential Information
Case Analysis
By Aniket Bothare
04 August 2016
extension option was that it must be exercised prior to the expiration of the
standard warranty.
PVTs Sales & Marketing who were inclined to accept Solenergys high acquisition
cost evaluation were in support for this alternative because they believed the
economic value of its alternative would clearly offset any product cost related
shortcoming Morgan may have identified.
Finance, production and engineering executives, on the other, argued that PVT
already had a significant competitive advantage with its 10 year warranty as
compared to 5 year warranty offered by competitors.
b) Offer a 99% uptime guarantee at no cost.
Second potential option was to offer its 99% uptime guarantee for each inverters
in service life at no cost, believing it was unlikely that the competition would match
the offer. In an uptime guarantee program, if the inverter is not fully functional due
to a mechanical failure for any portion of productive daylight hours, the system
owner would be compensated for the value of the energy that would have been
delivered to customers during the period the inverter was offline. The program
incorporated a deductible, whereby the first 44 hours of downtime were treated
as a negative adjustment in the reimbursement calculation. Since PVT intended to
offer this coverage at no cost to Solenergy , PVT would also attach a maintenance
contract to the offer to ensure the inverters were maintained as necessary and to
provide the opportunity for the regular onsite visual observations. Sales and
marketing executives, moreover, believed the guarantee reinforced the quality,
durability, and reliability of PVTs products and would reinforce its leadership
status.
Salvotri believed that this proposition is a key differentiator as competitors would
be foolish to risk matching it, as their product quality was not such high enough.
c) Accelerate the introduction of a new product , scheduled to release shortly ,
with higher capacity at 1.25MW and 98.5% efficiency
In the third scenario, PVT would accelerate the introduction of the 1.25MW model
that was in the final stages of testing. This new product utilized the next generation
of power management and PVT engineers believed that, with its 98.5% efficiency
rate and a service life that marched that of the 1.0MW product, it would be the
most efficient and reliable inverter on the market.
For:
Case Analysis
By Aniket Bothare
04 August 2016
Strategic planning felt that this was the preferable way to gain the top spot
in the competition. It would avoid compromising the current strategy and
pricing approach. And the timing was fortunate which would then meet
Solenergys product availability requirements for the Barstow project.
The sales force believed the next generation inverter, while potentially
inviting a new set of objectives, could be successfully sold to large users at
the suggested net price of $187500 because utility projects were becoming
larger.
Marketing and Public Relations also supported this approach. The new
technology was what the market wanted for large scale projects and would
reinforce PVTs leadership position by being first to market.
R&D believed that, given the new inverters superiority, Morgan would value
Solenergys having the opportunity to the first to employ the latest
technology and the most robust management system
Against:
Finance & Production echoed their concern with malfunctions and werent
convinced the offer would impress Sole energy
d) Tactfully initiate a dialogue with Morgan to confirm the reported findings of

the evaluation.
Rubenstein and Salvatori suggested that before any changes were made to product
and market strategies, PVT should approach Morgan directly, sharing the
information PVT had obtained about the reported evaluation. If Morgan confirmed
what theyd heard, they could attempt to persuade him and Solenergy executives
to share or even re-evaluate the criteria from which they drew their conclusions.
Some PVT executives thought Morgan might be receptive to a conversation,
particularly given his employers relationship with PVT and his relationship with
Salvatori
3. What short term and long term policies and processes should PVT develop and
implement to effectively improve its marketing programs?
Short Term:
Case Analysis
By Aniket Bothare
04 August 2016
Most PVT executives suggested that a press release need to be published but they
were uncertain about the effect on the central inverter sales or the reputation of
PVT at least in the short term.
Long Term:
Given that Solenergy is PVTs topmost customer, they should have known the
evaluation about PVT much earlier. Instead of hearing this evaluation indirectly or
through subtle sources, direct Marketing Account mining plan should have been in
place.
As a long term and continuous practice, PVT should develop and run
Account mining plan for Soleenegy.

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Case Analysis

1. What could be the reasons for the unfavorable evaluation of PV technologies by

2. Evaluate alternative course of action available to PVT to gain favorable

d) Tactfully initiate a dialogue with Morgan to confirm the reported findings of

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