The Lannisters

Tanmay Sharma

Visinigiri Sowmya

Jayesh Ruchandani

Executive Summary
ABC Company Ltd should target Middle East (Arid Region) as first priority followed by North America(Mixed Region) in 120-180 MW capacity category.

In >180 MW category, company should target North America as first priority followed by Middle East as second priority.
Hence, Middle East and North America should be the top target markets.

Middle East has high growth opportunities, so ABC can expand its market share. North America has low growth but market for Cartridge Synthetic Filters is big so more marketing cost is required to capture market in North America.
Europe contributes 48% to filter sales but has little market for Cartridge Synthetic Filters. SO these filters should not be marketed in Europe. Rest of Asia should be taken as next target market. To compete, ABC Comp. should provide its filter servicing expertise and collaborate with Turbine OEMs to sell filters to turbine manufacturers which then they sell to customers. This would help ABC to reduce its dependence on competitors for sales. Also, sales through distributors, Turbine Maintenance Provider should increase to compete with services and capabilities of competitors

Expected Market contribution of GT of capacity 120-180 MW in regions

Priority 1 Region Middle East Comments Cumulative Market share after 10 years is highest at 45.22%. Also the growth rate from base year is high at 58.29%. Hence this market should be captured at 1st priority in 120-180 MW turbine capacity.

2
3 4 4 6

Rest of Asia
North America Africa Latin America Europe

It has the second highest market share contribution of 17.25 after 10 years and growth rate from base year is also high at 55.30%.
The market share steadily declines from 16.1% to 11.56% after 10 years but has 3rd highest market contribution. Growth rate is very less. Growth rate is high at 62.89% but market share is low at 10.34% Growth rate is high at 45.20% but market share is low at 10.32% Has least market share

Expected Market contribution of GT of capacity >180 MW in regions

Priority 1 2 2 4 4 6 Region North America Rest of Asia Middle East Europe Latin America Africa Comments Growth rate is very low but has the highest market contribution at the end of 10 years of 50.23% Growth rate is less high at 58.29% and market share of 16.96% after 10 years Growth rate is less high at 55.30% and market share of 14.58% after 10 years. Low growth of 11.56% and market share of 10.38% High growth of 45.2% but low market share of 7.84% No scope for gas turbine installtation. 0% Market Share

Expected Market Contribution of Cartridge Synthetic Filters (CSF) after 5 years and 10 years
120-180 MW
5 Years Europe (Marine) 1.18 27.81 4.72 2.98 6.23 1.93 10 Years 1.06 27.13 5.18 3.10 5.78 2.06 5 years 2.22 10.07 3.85 0.00 26.11 1.41

>180 MW
10 years 2.08 10.18 4.37 0.00 25.12 1.57

Middle East (Arid)

Rest of Asia (Mixed) Africa (Arid) North America (Mixed)

Latin America (humid)

As can be seen from above table, in category 120-180 MW, Middle East has highest market share of 27.13% followed by North America. In > 180 MW category, North America has highest market contribution followed by Middle East at 10.18%

Macro/Micro trends that could affect sales

As chorus against nuclear power plants rises, a shift towards using alternate sources of energy will occur.

The major contributing factor for the growth will be the growing environmental concerns. At present, countries in Rest of Asian nations are heavily dependent on coal for fulfilling their power needs. But gradually, focus is shifting towards gas-based power generation due to its clean nature. Around 22% of the worlds electricity is consumed in China alone.

Economic Recession can lead to reduce in demand of energy.

Value Proposition for E10

Revenues earned/year from use of 1000 filters/ uptime taking turbine uptime, downtime, wash hours and losses in arid regions into considerations is calculated below.
Filter Price Replacement Rate Capacity (Avg)MW Down Time Turbine Wash Hours Price per MW Turbine Uptime Total Hours/year Operationg hours of turbine/ year E9 300$ 24 170 60 90 60 0.98 8760 8437.8 E10 330$ 24 170 20 12 60 0.99 8760 8640.72 E12 100$ 12 170 300 180 60 0.96 8760 7948.8

Energy Generated (Operating hours* Capacity) in MW/year Losses (in arid region) Energy after losses (in arid region) Cost at end of one years/filter Cost for 1000 filters (in million)/ year Revenues(Energy*Price/MW)/year (in million)

1434426 0.02 1405737.48 150$ 0.15$ 84.34 $

1468922.4 1351296 0.02 1324270.0 1439543.952 8 115$ 0.165$ 86.37 $ 100$ 0.10$ 79.45 $ 0.02

Value Proposition for E10

As is evident from above, though the price of E10 is 330 $, revenues earned/ year per 1000 filters is 2 million $ more than E9 and 7 million $ more than E12

E10 can work in very harsh conditions.

Cartridge Synthetic filter has very low losses, 2% in arid regions and comparable losses in other regions.

Less downtime and wash hours.

Market Entering Strategy

The company sales to competitors stands at 48% of the total sales. Now that company wishes to enter the market in head to head this number needs to be reduced. The two strategic positions to enter the market are Middle East and North America. The next in priority comes the rest of Asia. Client 2012 sales shows 24% market in North America while only 8% market in Middle East and hence the supply chain in Middle East needs to be expanded substantially. This would consequently increase the share of distributors in client sales. Key action to advent a sizeable market for E10 is to get in collaboration with Turbine OEM manufacturers which is presently as low as 5%. To distinguish itself from the competitors, ABC filters should use their expertise in filter servicing. To start with they should offer a limited time free servicing for their customers.

Assumptions
The number of turbine installations for each generating capacity is calculated on a basis of 100. That is, the basis for number of turbine installations for each generating capacity 120-180 MW and >180 MW is assumed to be 100. Since the E10 product is designed for turbine capacity 150-190 MW, analysis only for turbine capacity category of 120-180 MW and >180 MW is done.

Distribution of Turbine Installations by generation capacity (measured on a basis of 100 for each generating capacity) 120-180 MW Distribution of GT Installations Base Year Country Europe 6.9 % contribution of regions in gas Percentage growth from base year turbine After 5 years After 10 Years 7.70 65.53 25.00 12.59 47.61 28.85 11.56 58.29 55.30 After 5 In base year years 6.90 5.89 46.35 15.73 After 10 years 5.31 45.22 17.25

After 5 Year
7.77

After 10 Years

Middle East
Rest of Asia Africa North America Latin America

41.4
16.1 9.2 16.1 10.3

61.11
20.74 13.09 16.42 12.71

41.40
16.10 9.20 16.10 10.30

14.99
16.76

42.23
2.02

62.89
4.07

9.92
12.46

10.34
11.56

14.96

23.43
>180 MW

45.20

9.64

10.32

Country

Distribution of GT Installations

Percentage growth from base year % contribution of region in Gas turbine

Base Year
Europe 11.2

After 5 Year
12.61

After 10 Years
12.49 20.42 17.55

After 5 years
After 10 Years 12.59 47.61 28.85 11.56 58.29 55.30

After 5 In base year years 11.20 11.11 16.78 12.83

After 10 years 10.38 16.96 14.58

Middle East
Rest of Asia Africa

12.9
11.3 0 58.1 6.5

19.04
14.56 0.00 59.27 8.02

12.90
11.30 0.00 58.10 6.50

0.00
60.47

0.00
2.02

0.00
4.07

0.00
52.22

0.00
50.23

North America
Latin America

9.44

23.43

45.20

7.07

7.84