PV Technologies, Inc.

:
Were they Asleep at the
Switch?
By- APO 6
190103151- Sumedh Harsh Bhagwat
190103179 - Akhilesh Uniyal
190103126 - Satyam Agarwal
190103152- Suraj Kedia
190103227 - Surbhi Mittal
l190103144 - Simran Chhabra
Background

 Gloabal leader in PV(photovoltaic) inverter industry

 PVT was a dominant supplier to different segments of the solar energy
technology industry
 PVT got/received a RFP from a long-time client Solenergy
 RFP seeking inverters for their new 100 MW plant
 Greg Morgan , Chief electrical engineer at Solenergy began evaluation of
vendors
 Unofficially revealed that PVT was most likely to lose the contract
Situation Analysis

 Morgan’s judgment was influential across the industry

 PVT needs a good evaluation of their bid in order to get contract & maintain
flagship status in industry
 PVT’s prices significantly higher than competitors
 Morgan’s opinion was that performance of alternatives could be compensated
by an enhanced maintenance schedule
 Solenergy was committed to cut costs
 Bid evaluation was to be based mostly on the price aspect
PVT’s Options

Alternative 1 Alternative 2 Alternative 3 Alternative 4

• Extend • Offer 99% • Fast-track • Initiate
original uptime new discussion
warranty guarantee product with
period at no cost launch Morgan
from 10 to with higher
20 years capacity &
efficiency
Alternative 1 : Warranty Extension

Pros
• Competitors offered 5 year guarantee , PVT currently offered 10
year guarantee
• Economic value of offer would offset product related cost for buyer
• Overall no impact on profitability

Cons
• PVT already had significant competitive advantage with 10 year
warranty vs 5 of competition
• Unknown expense , future complication due to warranty extension
Alternative 2 : Offer 99% Up-time
guarantee at no Cost

Pros
• Competitors would most likely not be able to match the offer

Cons
• Cost in lost warranty revenues would negate most of the profit in the
deal
• Probability of much higher costs in case of high frequency of product
failure
• Could negatively impact future equipment purchase negotiations with
Solenergy & other customers
Alternative 3 : Fast-track new product launch with
higher capacity & efficiency

Pros
• It would be the most efficient & reliable inverter on the market
• PVT would be able to price new model much closer to predecessor using leading-edge
manufacturing techniques
• This approach would avoid compromising the current strategy & pricing approach
• Production could be easily moved up to meet deadlines
• Using new technology, PVT would be able to reinforce their leadership position by
being first to market
Cons
• Would miss the opportunity to price the product higher by targeting bigger utility
projects
• Possible operating malfunctions may not be identified in the compressed testing
timeframe
Alternative 4 : Initiate discussion with Morgan

Pros
• No unnecessary changes would be have to made to product & market
strategies
• A confirmation of reported evaluation would enable PVT to try to persuade
Morgan to evaluate his options
• Cost & time for reviewing current policy of testing equipment performance
could be avoided

Cons
• The situation could worsen & would result in hindering of PVT’s image in the
industry
Suggested Solution
 Opt for alternative 4 and initiate a discussion with Morgan by leveraging Salvatori’s good
relations with Solenergy
 Tactfully initiating a dialogue with Morgan to confirm the reported findings of the evaluation
would be the best course of action, as there is a possibility that this could negatively impact
PVT's revenue, reputation, and customer base.
 Talking to Morgan would allow them to, at the very least, get accurate feedback and prevent
the report from leaking.
 While PVT's products remained superior in terms of efficiency, reliability, and productivity, the
bid prices of the competitors' products were significantly lower than PVT’s.
 Due to the onset of new competitors, PVT may have to react, to competitors’ extremely low
prices, by slightly lowering theirs. Although PVT has been a market leader for some time now,
the market dynamics have changed and other competitors are now able to lower their costs.
 If PVT does not want to undercut their profit margin, they should start producing a value
segment with lower quality standards to compete.
 They suggested that they "offer[ed] to extend the original warranty at internal cost from 10 to
20 years." This course of action would be the best for solving the "net ownership cost" problem
that seems to be Solenergy’s main concern .