Cogeneracion

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

“Business and marketing strategies” strategies
Krakow, Poland November 23, 2004 Carl Bro Group
Bo Engle Persson
Coordinator Europe Carl Bro International AB EC-ASEAN Cogeneration Programme

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & EfficientBiomass, Coal, Gas Cogeneration

Financial Macroeconomics Market segments Political Product/system

Price Transparency

STRATEGY

Services Competition

Market approach Financing

Legal & Regulatory

Socio-cultural

Input factor markets (fuels, labour ..

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, GasCogeneration

THEMES

• • • • •

QUITE A DIFFERENT WORLD SHAPING STRATEGIES BUYER BEHAVIOUR DETERMINANTS MARKET SEGMENTS & COMPETITION CONCLUSIONS

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

QUITE A DIFFERENT WORLD • Europe – Southeast Asia •Within Southeast Asia

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The EC-ASEAN BusinessFacilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

EXTERNAL FACTORS
• Transparency • Political • Macroeconomics • Legal & regulatory • Financial (currency and capital) • Market segments & Competition • Input factor markets (fuel, labour …) • Socio-cultural traits

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme PhaseIII
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

SHAPING STRATEGIES

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

STRATEGY COMPONENTS

• Product/system • Price • Services • Financing • Market approach

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase IIIProven, Clean & Efficient Biomass, Coal, Gas Cogeneration

PRODUCT/SYSTEM
European equipment/system perceived characteristics: • High overall efficiency (energy savings) • Highly automated (low labour costs) • High availability and reliability (safe security of supply) • High durability (long life) • Low service demand (low maintenance costs) • High flexibility in application (fit individualdemands) • Environmentally friendly
8 The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

PRODUCT/SYSTEM (cont.) (cont.)
European equipment/system perceived characteristics:

• Not superior to Japanese & US • Complicated to operate • Adapted to local situation & robust (fuels, climate, standards ...)? • ”WhyMercedes, not Toyota”? (”too sophisticated”)

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The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

PRICE
European equipment/system perceived characteristics: • purchase price is too high SE Asians often • prioritise deal price over life cycle cost
• apply payback instead of IRR/NPV • play down alternative costs(impact of breakdowns) • underestimate function to price tag • regard environmental care as minimum obligation
10 The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

PRICE (cont.) (cont.)
Actions to consider:
• Argue for use of IRR/NPV instead of pay back • Don’t add market entry cost to first bid in country • Assistin handling of currency exchange risk • Add ”extras” (training, financing …) • Increase locally produced contents buy local local manufacturing • Manage corruption
11 The EC-ASEAN Business Facilitator

EC-ASEAN COGEN Programme Phase III
Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration

MARKET APPROACH
BUYER RISK ATTITUDE BIDDING BEHAVIOUR LOCAL PRESENCE ”DO’S AND DON’TS COMPANY...