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Vinay Kumar

EPGP-10-078

PVT case analysis

PVT was founded in 1993 as specialist in renewable energy. It had solid balance sheet and
healthy cash flow. It has made substantial investment in research and development which
has made it to scale greater heights in terms of doubling their revenue and profit. Their five
specific products were industry leading products in that Industrial automation being on the
top.

PVT has come to top on back of superior R&D, reliable product and efficiency.

Solenergy floated RFP for their plant to increase the capacity to 100MW, for which it has
received proposals from BJ Solar and SOMA energy.

Nathan, director of sales and marketing of PVT was anticipating that the contract would
come to PVT, they had good connect with their senior leaders and they were already one of
the largest customer for PVT. Jim was the one who got the earlier contract of Solenergy to
PVT and this time too he was aligned for the RFP process.

Jim learnt through this contacts that they were lagging in the proposal based on pricing and
may loose the contract, he informed to Nathan about same,Nathan was confused and bit
disappointed that the information came from Jim’s contract and not from the Morgan
himself as Morgan was instrumental in getting the contract and has good relationship with
Jim. There were ethical concerns which were ignored by Nathan.

Nathan had meeting with senior leadership in the team were in process of taking decision
on what to do, whether to go ahead with the information received from unknown source
and change their strategy to be back in the winning game.

There were 4 scenarios presented to senior leadership which are as follows:

1. Extend the original warranty at internal cost from 10 to 20 years, but this proposal
had resistance from finance and product team as it exposes to unknown expense
and potential impact on profitability.
2. Offer 99% uptime for inverter’s service life at no cost, this too was opposed by
finance and production executives due to cost in lost warranty revenues would be
negate most of the profit made in the deal.
3. Accelerate the introduction of new product which has higher capacity of 1.25MW
and 98.5% efficiency, this option was preferable to strategic planning as it was not
compromising the pricing and current strategy.
4. Speak directly to Morgan who was evaluating the proposal and discuss with him
about the information which they have received and if it is true then persuade him
to share or even re-evaluate the criteria from which the drew their conclusion