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? The unfavorable
evaluation of PV technologies
by Greg Morgan can be
attributed to the following 3
major reasons: The significant
difference between the price of
PVT and that of the
competitor: 1 MW100 MW
SOMA
Energy$170,0001,700,000 BJ
Solar$160,0001,600,000 PV
Technologies$180,0001,800,00
0 The entire project would
cost them $200,000 more if
they chose PVT over BJ Solar,
as the PVT is
priced12.5%higher than the
product of BJ Solar
and5.8%higher than the SOMA
energy. PVT's products
remained superior in terms of
efficiency, reliability, and
productivity, the renewed
focus on expense control by
Solenergy made price of the
product a significant factor in
decision making and the higher
pricing resulted in the
unfavorable evaluation.
Additionally, it was assumed
that any shortcomings in the
competitor's products could be
taken care of by enhanced
maintenance schedule, pro-
active quality control program
designed to identify potential
performance issues before they
occurred. 2.Evaluate
alternative course of action
available to PVT to gain
favorable evaluation by
Solenergy for the Barstow
Project?
AlternativesAdvantagesDrawb
acks 1. Extend warranty at
internalcost from 10 to 20 years1.
Economic value of this
wouldcompensate for any
product costrelated
shortcomings.1. The existing
period offered is 5 years more
than the competitor, further
addition would mean
exposure to additional and
unknown expense. 2. Future
complications and potential
impact on profitability. 2. 99%
uptime guarantee at nocost1. The
guarantee reinforced thequality,
durability, and reliability ofPVT's
products and reinforce
theleadership status.1. The cost in
lost warranty revenues would
negate most of the profit. 2. Could
negatively impact on future
equipment purchase negotiations.
3. Accelerate intro of
newproductwith1.25MWcapacity
and 98.5% efficiency1.
Preferable way to gain the
topspot in the competition.2.
Avoid compromising the
currentstrategy and pricing
approach.3. Possible to match the
timings of the requirement. 4. The
overall cost of the Solenergy
would go down thus eliminating
the price concerns. 5. Would
allow Solenergy to deploy the
latest technology and most
robust management system. 1.
Potential operation malfunctions
may not have been identified
and worked out due to the
compressed testing timeframe. 4.
Confirm tactfully thefinding
of evaluation fromMorgan1. If
Morgan confirmed
thefindings, they could
persuade toshare or re-evaluate
the criteria.1. If Morgan was
convinced with his interpretation,
it would be difficult to
approachhimdirectlyand
challenging his findings would
only result in worse things.
Basis the information
available, PVT should engage
in the tactful conversation
with Morgan to confirm the
finding so of the evaluation
report, share their numbers and
try to persuade on the grounds
of efficiency, reliability,
productivity and in terms of
cost, the additional warranty
over competitors, of 5 years
should be enough to
compensate for the additional
initial charges. Followed by
Alternative 3, if the dialogue
fails. This way, they wouldn't
be exposed to additional costs,
would not deviate from the
current strategy and pricing
approach, at the same time
ensuring it retains its market
leadership position. 3.What
short term and long-term
policies and processes
should PVT develop and
implement to effectively
improve its marketing
programs? Short Term:
1.Engage with its key
customers to understand their
requirements and customize
the product to meet the
requirements. 2.Identify the
evaluation criteria and ensure
they do not loose out on the
leadership position in the
market. Long Term: 1.Review
the current policy of testing
equipment performance and
specifications against the
competitor's offerings. 2.Re-
evaluate the needs of its
business segments and key
customers on a more frequent
and regularly scheduled basis.
3.Work with the customers to
make tailored products to meet
the ever-changing demand in
the competitive environment.
4.Identify the ways to ensure
competitive pricing, specially
keeping in mind the
introduction of Chinese firms
in the market