Vetas's World of Wind Case

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Customers
Vestas’ target customers are identified as developers, independent power producers (IPPs) and utilities. Big clients seem to play a relatively large role, with 80% of the revenue coming from 15% of the customers. What is less clear is who the decision makers and relevant stakeholders at these companies are. The fact that direct mailing and even targeted company-wise advertising on traditional media is employed suggests that salespeople have difficulties reaching them directly with cold calls and sales pitches. Also, the data of the direct mailing list shows there are multiple decision makers at each company, 7-8 on average, and likely more at larger target customers.

Analysis of Market
The market has been slowing down in recent years. This in combination with the increased competition made it difficult for Vestas to sustain its margins and its market share. The competitive panorama can be subdivided into three categories:

1. Large corporations, such as Siemens and GE, that have a strong financial base and broad networks. These companies have an advantage in finance allowing more resources for R&D. However, big corporations tend to move slower compared with smaller companies and tend to be less flexible to customer requirements. 2. Smaller companies which have a strong local presence, especially in Europe. These companies compete directly against Vestas in local areas, although they lack the premium quality that Vestas is known for. 3. Chinese companies who make cheap turbines. These companies are only active in the regional market and are not direct competitors to Vestas.

Planning Horizon
Since turbine technology needs considerably long term R&D investments, 5 years is an appropriate planning horizon for Vestas, since this will be the minimum timeframe required to react to technological, economical, and political changes.

Long Term Market Developments
It is reasonable to expect that, despite the short term industry wide...
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