Product Development Assignment: Business Proposal for AI Solar Microinverter
Task: Develop a report on product development assignment addressing the business proposal for a new product“AI solar microinverter by First Solar.
The business proposal report aims to reflect on the value proposition development, business model, business operations, supply chain, financial value, competitive advantage, identification of uncertainties, and selection of innovation tool for the business. The business proposal is based on the new product that the company, AI solar microinverter, will launch. The company selected in assessment 1 is First Solar; the current report will discussusiness proposal of launching the product by the selected company. First Solar is a manufacturer and provider of solar panels, PV power plants, and supporting services, and cadmium telluride-based PV modules are one of its specialties. The AI solar microinverter will bring a competitive advantage for the company and an innovative solution for the target market.
Business model description
The product that First Solar will launch is an AI-based solar microinverter that is specially designed for low and middle-income people. The key reason behind the demand efficiency of the product is the sustainability factor that the product will provide to the customers. Solar power is mainly led by the urge to reduce electricity bills and use more sustainable energy sources. The product is based on high efficient conversion motors that will reduce the cost/ watt. The maximum power point tracking and artificial neural networks are the key things that ensure its unique selling proposition of the product (Pereira & K, 2016). The channels through which the product will be marketed are social media platform and adwords campaign.
Social media marketing is most efficient and least costly way to market the product to large number of audience. On the other hand, the ad words campaign is selected because it works more efficiently than SEO (search engine optimization) and it generates more traffic and leads, which will ensure for the proposed product to get first spot in search.The two key revenue streams of the product are revenue from long-term customers and fixed monthly fees from lease customers. The long term customers mean the loyal customers who will a good portion of revenue for the company. Along with that, the monthly fees that will be gained from the lease customers will contribute a major portion to the revenue. The key resources that ensure the efficiency of the proposed product are AI technology, IoT Hub, energy conversion motor. The technology involved in the product is the maximum power point tracking and artificial neural networks. The company has recently acquired Azure IoT hub which is a beneficial factor for the product efficiency. The AI based technology that will be used in the proposed product, which help to covert the energy more efficiently.
Key activities of the business are communication and marketing, which will be ensured by social media platform and ad words campaign. Apart from that, the installation of the microinverter will be ensured by providing supportive services to the customers and the in-time maintenance of the system will be ensured with communication through phone and contact with website. Key partners for the proposed product are IC boards’ supplier and inverter parts supplier. The cost structure of the proposed product depends on two areas- development of energy solution and management of microinverter. The cost of development of the proposed product will be considered as different from the end solution that will be provided to the customers.
Value proposition development
The value proposition of the company depends on primary and support activities. Porter's value chain analysis is considered in the context to reflect on the key values of the product and the primary and support activities required for the product (Jurevicius, 2013). The inbound and outbound logistics involve the outsourcing of raw materials such as IC boards, inverter parts, and other related raw materials, along with that, the supply of the final products to the end customers through various channels. The key operations include installation of the microinverter, maintenance system. The marketing activities will be done through social media marketing, add words campaign. Social media marketing is selected as it is one of the most effective and less costly ways to reach out to a large target audience. The service that the company will provide is the installation of the microinverter that is required at the initial time of the product purchase (Meier, 2014). Along with that, maintenance service will be provided to the customers while required. The technology involved in the product is the maximum power point tracking and artificial neural networks, and cadmium telluride-based PV modules (First solar, 2016). The key procurement requirements are assessment of need and opportunities, analysis of compliance issues, financing and contracting, and enhanced lease. The human resource includes the workforces who are involved in the regular activities starting from design, manufacturing of the product till end consumption. Effective training is considered a key strength for human resource management.
Business operations development
Key business operations related to the product development and launch are R&D activities, product development activities, contracts with the suppliers, selection of communication channels through which will aware the target market about the launch of the product. Relationship with the suppliers is another key operation that will be ensured by regular communication and timely payment to the suppliers (Meier, 2014). The marketing communication will be ensured by the effective implementation of marketing strategies and data records of the customer details for future communication. The target customers of the product are mainly eco-friendly customers and people with low and medium incomes. Hence, the marketing communication will reflect two key things to make the customers assured about the product and services.
Supply chain development
The supply chain activities include supply planning, product design, demand management, and sales and operations planning. The supply of raw materials is based on two key partners IC boards supplier and the inverter parts supplier. Demand management is required to provide an adequate supply of products that can fulfill the existing market demand. The sales and operations planning of the product ensurebetter achievement of sales goals. Marketing communication needs to be more focused to ensure that the target customers get a detailed idea about the product. While selecting a marketing communication channel such as social media sites, the pricing, and features of the product will be effectively communicated with the target market to provide them a more detailed idea about the product, which will help the customers to know more about the product (Fernandes & Brandão, 2016). The acquisition of First Solar of Azure IoT Hub is the key benefit for the business as it will ensure the effective development of AI solar microinverter.
Finance value capture
Investment is key while developing new products, and in the case of the current product, the company needs a secure source of funding that can ensure the availability of funding. In the present case, we are going to target the end consumers of the product, so the involvement of the power purchase agreement is not possible (Kumar. J & Majid, 2020). The investment from the banks and private investors are the best two financing sources for the product. Crowdfunding is another suitable option for the company while developing and launching the product (Kumar. J & Majid, 2020). In the case of crowdfunding, the company does not have to rely on a specific source of funding. Crowdfunding allows raising a small amount of investment from a large number of people, which is adequate for the business proposal as it aims to develop one product.
Competitive advantage cites to aspects that enable a business to manufacture merchandise or services enhanced or more reasonable than its competitors. These aspects facilitate the helpful entity to produce more sales or superior margins in comparison to its market rivals. Hence, the main competitors of AI solar microinverter will be SunPower Corporation, Tindo Solar, Trina Solar, and Risen Australia. Though these rivals are operating in the Australian market for a long but AI, solar microinverter will give customers valuable products and services, which helps in saving the cost. However, AI solar micro-inverter can make cost reductions by reliable energy without fluctuations in price, and the services that operate at an efficiency of high energy will often see an effective turnaround on their spending and considerable long-term economic benefits (Mappangara & Kartini, 2019). Additionally, it can be said that the facilities that are provided by AI solar microinverter will be helpful for the customer as well as the environment as it operates on renewable energy can be leveraged to boost a public perspective. Furthermore, the products and services of the business generally believe in becoming sustainable that have a reasonable perspective to consumers. Thus, this effective standing could be practiced to market the sustainable nature of the business and attract clients.
Strategic fit generally analyses the current performance of the industry that the product is about to be launched. This is essential to assess how the firm is competent to meet its external demands. Hence, Australia acquires more than 57 million PJ of solar radiation annually, roughly 10000 times bigger than its overall consumption of energy. Hence, the current utilization of solar energy is low with accounting for only about 1% of Australia’s overall main energy consumption. However, at its present rate, Australia is on its way to 50 percent renewable electricity in 2025. The Australian solar energy will set up new solar and wind power that is more than 10 gigawatts throughout 2018 and 2019, and in case the rate is maintained, the nations would meet 50 percent renewable in 2025 (Robertson, 2017). As per the study, it has been found that the statistics of Australian energy have published that Australian renewable acquired more than 20% share of Australia's overall generation of electricity last year. Thus, it can be said that AI solar microinverter has a full-on opportunity to flourish in the Australian market as the demand for the renewable energy's product and service seems to be huge.
Identification and assessment of assumptions and uncertainties
The key uncertainties that are related to the product are intense competition, limitation of the experience of teams, the emergence of disruptive technology, a new product introduced by competitors, more cost on product development. The competitors who are providing similar kinds of products are the major risk for the business as it allows the customers to select between the options (Mansor, Siti Yahaya, & Okazaki, 2016). Hence, the customers can select a suitable product based on pricing, product features, and quality. There is a chance of comparability with the other similar products. The product development team needs efficient knowledge and expertise to ensure the ultimate success of the product (Mansor, Siti Yahaya, & Okazaki, 2016). If the team members are not capable enough to carry out the allocated tasks, then it will affect the ultimate product results. Costs management is one of the biggest factors that are required to be considered while a product is in the developmental stage. At this stage, enough financing is required to ensure the product is developed as per the estimated product criteria. Hence, the developmental phase requires more cost, and controlling is cost became a major challenge for the business.
Phased development plan to address uncertainties
The selecting of adequate team members is required to develop an effective team. In this case, the team members need to be selected based on their experience, knowledge, and skills. The pricing strategy is one of the key factors that can increase the competitive advance. If the price of the product is fixed, then the other areas, such as installation and maintenance services, can be considered as a strategic way to manipulate the pricing. Value-based pricing is the best way to provide the products at a competitive price. The product development stage requires more cost, so the implementation of prototyping is the best way to reduce the developmental cost (Ankarbranth & Mårtenson, 2013). It is an experimental process that ensures the development of the product as per the requirement, and it can be successfully introduced to the market with minimum chances of failure.
Selection of innovation tools and techniques
The five innovation tools and techniques selected for the product are Porter's five forces model, Porter value chain analysis, swot analysis, innovation model, and pricing framework. Each of the innovation tools ensures a better profitable outcome for the proposed business. Porter's five forces model indicates an industry-based analysis; value chain analysis illustrates the importance of managing the primary and support activities of the business. The simultaneous management of the two types of activities ensures better profitability. SWOT analysis indicates both the internal and external environment of the business that will influence the business most. The pricing framework includes the key pricing strategy for the product.
Porter’s five forces model
Porter value chain analysis
Candid and critical self-analysis
During the work on the business proposal, I learn about many things related to the implementation of strategies that can ensure the success of a product. Along with the pricing and product features, the newness in the product is also important that ensures the acceptability of the product by the target customers. The importance of analytical skills and rationality are two key factors that helped me to come up with the best solutions for the proposed business. The criteria that are followed to come up with the product solutions match the need of the target market, which is a crucial thing for new product development.
Conclusion and recommendation
The business proposal reflects on significant ideas about the strategies and their implementation while planning on the development and launch of a new product. However, First Solar already has a good presence in the market, which will help the company to attract the attention of customers at a fast pace. The existing presence of the company is a benefit for the new product launch. However, there are competitors who are providing similar kinds of products in the market, so the USP of the product is needed to be communicated through marketing communication channels.
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