Pv Technologies, Inc Case Analysis

PV TECHNOLOGIES, INC CASE ANALYSIS

PROBLEM/CHALLENGE

From the case, it is known that PVT is the leading supplier of the photovoltaic inverters, and they have received a RFP from Solenergy, which is an important long-time client. PVT is very optimistic and confident in winning the contract due to their strong relationship with Solenergy. However, rumors are told that an evaluation performed by Solenergy shows that PVT is trailing the other two competitors due to its higher price. The rumors are not solid, but if true, PVT will not only be weeded out in this competition, but also lose its leading position. Therefore, Nathan Rubenstein, PVT’s Director of Sales and Marketing and Jim Salvatori, PVT’s best salesperson, call a meeting with senior executives to discuss coping strategies, but they can not reach an agreement.

STRENGTHS

PVT has solid balance sheet, strong profitability, high cash flow and high investments in R&D and Technology. The product groups are superior in terms of efficiency, reliability and productivity, and PVT has a stronger relationship with Solenergy than other competitors.

WEAKNESSES

PVT’s sales channel is mainly based on the strong and solid relationship with the clients, and the senior management team is too optimistic and confident about their situation. In other words, PVT really rests on its laurels. That leads to their insensitivity about the trend and the change of the customers’ needs. In addition, the senior management team still could not reach an agreement even though they know the crisis is so close to them.

OPPORTUNITIES

According to the government’s plan, 80% of the country’s electricity demand will depend on clean energy instead of fossil fuels by 2035. Shrinking supply sources, rising costs of traditional energy sources, unstable oil market and increasing environmental awareness give PVT good external conditions to expand its market. The public policies for the renewable resources are very valid. The federal government offers subsidies, tax incentives, tax credit and Treasury program to support the development of the renewable resources. These legislative measures give PVT good internal conditions to expand its market. According to the government’s plan, 80% of the country’s electricity demand will depend on clean energy instead of fossil fuels by 2035.

THREADS

There are no solid international standards for the quality and efficiency of the photovoltaic products, which could block the other competitors’ unqualified products from entering the market. Due to the tight budget, customers tend to favor lower price which new competitors could offer. So PVT is losing its leading position in the market.

ALTERNATIVES 1: EXTENDING THE WARRANTY TO 20 YEARS

PROS

The 20-year warranty is really a better guarantee of the good quality and higher standard of the products, and it has high value for Solenery.