a methodology for identifying best practices

1 Market Intelligence & Consulting© Z E N e S Y S w w w . z e n e s y s . o r g

COMPETITIVE LANDSCAPE ANALYSISFOR ACME WIND ENERGY INC.

Following report is an abridged example of ZENeSYS Competitive Landscape Analysis consulting service. Acme is a fictitious client but the work done in this report is real. We looked at 5 competitors for Acme in the small size wind turbine product arena to determine three important answers for Acme:1) Acme's position vis-à-vis, their competitors2) Best practices in the industry as demonstrated by competitors3) What Acme needs to do to get ahead May 30th, 2010

Market Intelligence & Consulting


Our approach to competitive landscape analysis

ZENeSYS has refined this methodology through several competitive analysis engagements.

References are available.

Total time = 2 weeksEffort from client = Just 3 to 4 hoursFixed fee = Between $5,000 to $7,500


ACME Wind Energy – Product description, goals and customer profile

Client Stuation

Makes wind turbines in 100 KW range to offer reliable, low maintenance, high efficiency, competitive price, reduced noise, innovative designs, compliant with US standards (NEC), matching safety standards and an average life of 50 years

Goals

1. Invest in R&D and develop technologically innovative products

2. Help the customer by providing utmost customer support

3. Become a major exporter and gain market share overseas

Commercial segment and Residential segment

Major competitors for Acme

1. Southwest Windpower2. Northern Power Systems3. Bergey Windpower co. 4. Windspire Energy 5. Urban Green Energy

Target customers

We can build consensus on such starting point data in just two short one hour meetings


Small Wind Turbine Industry, U.S.A.Market Potential

95% of all small wind systems sold in the U.S. in 2009 were made by U.S. manufacturers. 2/3rd of all small wind systems sold in the world in 2009 were made by U.S. manufacturers

2009 U.S. 2009 Global

Capacity Added (MW) 20.3 42.5

Capacity growth over 2008 15% 10%

Units sold 9,800 units 21,000 units

Sales $83 million $189 million

Source: American Wind Energy Association (AWEA) 2010 Report : Small Wind Turbine Global Market Study 2010


Competitive position of ACME based on business model analysis

Excellent

Very Good

Good

Average

Below Average

DOC File

An extensive amount of research and analytics goes in to creating a competitive ranking chart like this.Actual facts and Industry trends are collected from competitor websites, reports, news, discussion forums, blogs, public filings, sector indices, survey data and Internet metrics such as search trends and social media indicators.


Customer Preferences and Industry Goals as seen today becomes the framework for our analysis

KEY CUSTOMER PREFERENCES

P1: Education and technical assistanceP2: National Electric Code complianceP3: Lower service incidents on the productP4: Lower cost of equipment, installation, and maintenance P5: Insurance empowers buying behaviourP6: Availability of financing optionsP7: Smaller Pay-back period P8: ‘Best Fit’ for requirements

PreferenceDrivers

Knowledge

Availability

Reliability

Affordability

Utility

Understanding of product AdvertisementsTechnical Assistance

Choice of brandsContact pointsEase to OrderDelivery/Shipping Time

QualityService demands of productCompliance with Industry StandardsBrand AssuranceInsuranceProduct Life

Financing optionsCost of equipmentCost of installationMaintenance cost

TechnologyRange of productsPay-back periodEase of integration,‘Best Fit’ to the needs

INDUSTRY FEATURES / GOALS

G1: Invest in R&D and develop technologically innovative productsG2: Provide utmost customer supportG3: Become a major exporter and gain market share overseasG4: Provide customers with range of products G5: Brand ManagementG6 :Distribution networkG7: Partner with Financial institutions to provide financing/loans to customersG8: IEC certifications

Source data: American Wind Energy Association (AWEA) 2010 Report : Small Wind Turbine Global Market Study 2010


Our performance assessment using our Goal-Preference Matrix (see next slide for results)

In this step we perform a qualitative and quantitative Porterian analysis of the data we have collected on the competitors from websites, news, surveys, forums, blogs, social networks, databases, Internet traffic metrics and fill in the cells according to the method described below:

Each goal is analyzed to find out the importance it plays to help achieve success in the industry and accordingly a weightage isassigned

1] Ranking Goals:

Similarly, a weightage is assigned to a preference based on the importance it plays in the customer’s buying decision.

2] Ranking Customer Preferences

For each cell i,j in our matrix, the company that has goal Gi and is able to fulfil the customer preference Pi aligned with that goal is entered in that cell. The product of weightage assigned to Gi and Pj depicts the relative importance of that cell.

3] Eligibility Assessment

All competitors have G1 - constant innovation as a goal, they are meeting the requirements for educating customers about new products (preference P1). Hence they all appear in cell (G1,P1)

Example: 4] Criteria for Capability

Cells are marked Green if most of the companies are adequaltely fulfilling Gi and Pj indicating a Best Practice. Cells are marked Blue if none or few players are fulfilling the goals indicating an Oportunity Area.

Example:

Now consider row P3, in spite of the innovation by all companies, only Northern power systems is taking care that the service demands of the product are minimized, hence it alone scores and appears on cell (G1,P3)


Small Wind Turbine Industry, U.S.A. Porterian Assessment by Goal-Preference-Matrix

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30

P1 0.10 U,N,S,A,W U,N,S,A,B,W U,N,S,A,W,B U,N,S,B U,N X

P2 0.10 U,N,S,A,W X X U,N,S,B U,N,S,B,W X

P3 0.10 N U,N,S,A,B,W N N N U,N,S,B,W

P4 0.20 U,N,S,A,W U,N S,N,B X U,N,S,B,W

P5 0.10 X U,N,S,A,B,W U,N,S,A,B,W U,N,S,B U,N,S,B,W

P6 0.10 X U,S U,S U,S U,S

P7 0.20 U,N,S,A,W X X X X U,N,S,B,W

P8 0.10 U,N,S,A,W U,N,S,A,B,W U,N,S,A,B U,N.S,B U,N,S,W X

X

Industry Best Practice

Opportunity Area

No Correlation

Insufficient Information

Pi x Gj Relative Cell importance

Southwest Windpower Northern Power Systems Bergey Windpower co. Windspire Energy Urban Green Energy Acme Wind Energy

**G7 and G8 not included because of relatively low weightage


Investment in R&D seems to be well addressed by the competitors.One place ACME can play catch-up is (P3) for reducing service incidents

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30









X


Opportunity Area

No Correlation




Across the industry, investment in R&D & innovation is being applied to education/technical assistance, NEC compliance of new products, reducing cost of equipment (installation, maintenance included), smaller pay-back period, and ensuring a ‘Best Fit Product’ to customer needs. There is a very narrow window for ACME to be exceptional in this goal.

However, investing in R&D for customer preference on lower service incidents can be beneficial as in the case of Northern Power Systems.


Competitors too are emphasizing on Customer Support but ACME can achieve advantage through lower prices(P4) and easy-finance(P6)

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30









X


Opportunity Area

No Correlation




Customer Support is a key activity for the industry and the players (including ACME) are facilitating this by Education and Technical assistance to customers, ensuring lower service incidents of the product, providing insurance and ‘Best Fit Product’ to the customer needs.

For Urban Green Energy, the lower product cost to customers is because of technological edge and financing options. ACME should strive to achieve the same.


The fast-growth of market overseas has made exports very competitive but ACME can have an advantage by providing easy-finance(P6) and low-service demanding products(P3)

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30









X


Opportunity Area

No Correlation




Competitors are establishing themselves overseas through high quality technical assistance, insurance options and ‘best-fit’ products. But there are still a few factors which aren’t fully addressed.

A significant advantage for ACME overseas can be achieved through products with low service incidents and by providing easy financing. Northern Power Systems and Southwest Energy have utilized these to gain market share.


A wide product range and excellent brand promotion can outclass the competitors. ACME must target this specially by educating customers, advertising (P1) and exceptional products (P3)

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30









X


Opportunity Area

No Correlation




A ‘wide product range’, ‘strong brand promotion’, NEC compliance, product insurance, and supplying ‘Best Fit Products’ to the customes is what some of the competitors are offering.

Providing a full range of products with the lowesest possible service demands, financing options and publicizing it to the maximum can prove beneficial for ACME’s brand image.


A quality distribution network will help address customer needs and improve market share. ACME needs to rapidly identify underserved markets through new distribution channels.

G1 G2 G3 G4 G5 G6

Weightage 0.10 0.10 0.20 0.20 0.10 0.30









X


Opportunity Area

No Correlation




Creation of a good distribution network has been successfully achieved by industry players (except ACME Inc.)resulting in better management of service demands, lower product prices (cost of equipment, installation, maintenance to customers) and smaller pay-back period for their products. This has led these players to offer quality products at competitive prices, locally and overseas.

This is an area of catch-up for ACME. They need to identify new and underserved markets and setup distribution channels with creative incentives.


Summary

Industry Goals

1. Invest in R&D and develop technologically innovative

products

2. Provide the best customer support

3. Become a major exporter and gain market share

overseas

4. Provide customers with range of products

5. Invest in Brand Management

6. Enhance distribution network

Market Size

1. The US Market registered $83m for small wind turbines in 2009

2. US market growing at 15%

3. Global market growing at 10% suggesting huge export potential


Summary

1. Investment in R&D should be such that the enhanced products have lower service incidents and costs of equipment, installation and maintenance are lowered

2. More partnerships with financial institutions to give customers financing options

3. Wider range of products should be offered

4. Brand image improvement by advertising the range of products, the financing options and the services offered

5. Distribution network must be improved and newer distribution channels explored for underserved areas

Suggested Improvements

1. ACME is currently lagging behind the competitors – Southwest windpowers, Northern Power Systems, Urban Green Energy, Bergey Windpower company and Windspire energy in terms of overall ranking.

2. It is doing well in terms of innovation and customer service.

3. ACME has been found wanting when it comes to marketing methods, product range, distribution partners and its export business.

Competition

Recommendations

a methodology for identifying best practices

Documents