Pv Tech: Were They Asleep at the Switch?

Company Background

PV Technologies (PVT) was a global specialist in renewable energy founded in 1993. The firm had a solid balance sheet as well as strong profitability and cash flow, and made substantial investments in R&D and technology over the years to achieve and maintain industry leading product innovativeness, quality and performance1.

The Problem

Following PVT’s request for proposal from Solenergy Development LLC, the firm has found through unconfirmed sources that PVT was trailing the other two competitors for the Barstow bid. As a result, Rubenstein, PVT’s Director of Sales and Marketing, presented four alternative responses that he and Salvatori, PVT’s best salesperson, had delineated as possible next steps. The Strategic Planning team has reviewed all alternatives and decided that PVT should initiate a dialogue with Morgan, the widely respected chief electrical engineer at Solenergy, to confirm the reported findings of the evaluation.

In the charts below we have listed the strengths, weaknesses, opportunities and threats surrounding PVT, as well as PVT’s and competition positioning map, which we will be elaborating on in our final recommendations.

PV Technologies SWOT Analysis

PV Technologies and Competition Positioning Map

[pic 1]        

Recommendation

Based on our analysis we have decided that the best alternative for PVT at the moment, is to initiate a dialogue with Morgan to confirm the reported findings of the evaluation. This could be a great initial step, as it would allow the company to confirm their standing in Solenergy’s RFP proposal review, and from there make any necessary adjustments. We believe that PVT is without a doubt a strong company who is worth the investment. However, with the increasing amount of competition, we agree that PVT should start looking at ways of reducing costs of the production/manufacturing. It is important that PVT starts creating these efficiencies, as competition will only continue to grow in the upcoming years. If PVT confirms that what they heard was true, we recommend that in addition to the company reducing their costs so that they can offer their clients lower prices, they also use a differentiated pricing strategy so that they can accommodate differences in clients, products/services, locations, etc. For example, PVT can include discounted maintenance rates to Solenergy based on the size of their business. This would help alleviate some of the strain Solenergy would be incurring by choosing to do business with PVT. Another option PVT could explore is providing Solenergy with future discounts and allowances, such as lower prices contingent of early payment and volume of product/services purchased.