Professional Documents
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Team Enigmaniacs
Kushagra Gupta Tarun Bansal Vineet Tyagi Indian School of Business
Executive Summary
!! Market for Synthetic Cartridge Air filter is a factor of gas turbine capacity generation. !! ABC is seeking growth opportunities in the synthetic air filter market with the aim of entering the most promising segments with a revolutionary new product. !! Regulatory, economic and technological factors influence the key decisions of the go-to-market strategy. !! E10 unique features create both economic and efficiency related savings for customers and hence hold a competitive edge over competitors and can command a premium price. !! The industry structure and nature of sales distribution allows us to create value by bundling service contracts with unit sales. !! Location based B2B strategy allows us to target different geographies. The demand fluctuations in one region can be compensated with high growth in other regions providing a stable cash flow pattern for the E10 filter sales. !! Total worldwide market potential is 5.01 Million units and estimated to grow to 5.8 Million units in next 5 years and to 6.2 million units in next 10 years. !! Primary recommendation based on product suitability features and combined market growth rate of 6%, the Latin America , Middle east and Europe provide relatively higher long term revenue potential. !! Alternate recommendation is to seek out short term growth by targeting North America and Rest of Asia geography and leverage the huge installed base capacity.
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! Oil and air filters for automobiles ! To launch air filter for Gas turbines
Regulatory
Economic
! Increase in Coal Prices - Positive GT Market and GT Filter Market forecast. ! Increase in Gas Prices Lower GT Market and GT Filter Market forecast. ! Higher GDP growths (BRICS) - Increase in demand of power - Increase in GT power plants.
Technological
! Growth in Oil & Gas sector such as viability of Shale gas extraction - Increase in demand of Gas Power Plants ! Enhanced extraction and exploration techniques increase in supply of gas and hence demand of GT Filters.
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GT filter
GT Filter Capacity !
GT filter by type
GT Filter- Type !
Synthetic GT filters
Synth GT filter current - 5.01 Million units
Synthetic GT !
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!First in segment self-cleaning capability. !Extreme conditions of operation. !Low replacement frequency. !Low downtime due to filter. !High turbine efficiency & uptime. !Supports higher turbine capacity per filter.
Product Positioning Revolutionary self cleaning mechanism reducing cleaning downtime. Ability to operate in harsh operating conditions with increased filtering resulting in higher uptimes.
!Annual savings of 23.1% compared to E9 and 68.2% compared to E12. !Low maintenance and replacement. !Improved turbine efficiency due to low wash downtimes and higher turbine uptime. !Can bundle service contracts with filter sales.
Customer Value
E10 ! ! 24 20 190MW
E9 $300 $3,782,160
$8,74,020 23.1%
$62,40,180 68.2%
99%
98%
96%
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Disadvantages
!Additional costs for creating servicing ecosystem. !Compromise on margins per filter. !Develop a bigger sales network in underserved markets of Middle East and Latin America.
Advantages
!One-Stop-Shop for filter installation and servicing needs. !Continuous revenue stream through service contract. !Differentiation strategy unique selfcleaning solution. !Capture market share from competitors.
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!Sell via direct channels (OEM) as well as existing dealership and agent networks.
Disadvantages
!Outside dependency for servicing may deter customers from adopting E-10. !Large portion of sales still to competitors chances of imitation by competitors.
Advantages
!Premium pricing and high margins !Leverage existing sales network in the largest markets. !Capture market share from competitors. !No need to develop new service networks.
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!!
!! Secondary recommendation for short term growth (5 Year CAGR) is to target markets with mixed environmental conditions such as North America and Rest of Asia.
!! Sell filter as a standalone product. !! Biggest market of North America will facilitate short Pay Back Periods. !! Lower growth potential but higher installed base facilitates focus on direct selling to Original equipment manufacturers (OEM's).
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Appendix
Exhibit 1: Global Gas Turbine Capacity (in MW)
!"#$%&!'%(&)*+&,-#.'/(&0*1*2'34& !"#$%&'()* ./%01&* 78%#'"* <&=>*.?"%01&* A0BB-"*7&C,* D#%,(*.?"%01&* F"C,*#/*.C0&* )#*/%&,"3*$& +#,&-* 23456* 925:3;* ;4@45* 4453;* 23E;24* 9:4@55* 567859:& Source: http://globalenergyobservatory.org/
Source: http://en.wikipedia.org/wiki/File:ClimateMapWorld.png