An analysis of the case study given by Deloitte on Air filter market.

1. The Maverick
2013
Submitted by:
Team Iguanas, IIM Ranchi
Pulkit Bohra M106/12 pulkit.bohra12@iimranchi.ac.in 8986733521
Pulkit Mathur M107/12 pulkit.mathur12@iimranchi.ac.in 8051173946
Tarun Gupta M044/12 tarun.gupta12@iimranchi.ac.in 9000015915
Team Members

2. Recommen-
dation
Go-To-Market
Framework
Regional Analysis
Opportunity
Assessment
Value
Proposition
To assess global markets and
gauge market attractiveness
Analysed the global gas power
generation market
North America, Middle East &
Asia are the most attractive
regions
Compared E10 grade filters
with E9 and E12
Performed a Cost-Benefit
analysis for different types of
filters using case data and
team estimates
E10 has cost savings of
~1% & 10% over E9 & E12
due to lower downtime
GTM strategy is focused on
product life cycle and
target market
Competitor response may
vary from maintaining status
quo to JVs and hostile
takeover depending upon
their own competencies
To analyse the health of
individual regions and their
business prospects
Strategic
objectives
Analysis
Insights
It is an appropriate time for ABC to enter into gas-turbine air filter market. However, all regions do not provide equal
opportunities. It should target replacement market in North America; Growth market in Middle East and Rest of Asia in the
same order of priority; Restrain from entering into rest of the markets for now.
To determine the Value
Proposition for Client
Offerings
To determine the Go-To-
Market strategy
Used equivalents to estimate
global filter market size by
value and volume
Performed macro-economic
analysis and used market size
to identify most attractive
markets
Developed a GTM
framework based on
existing GTM frameworks
and case specifications
Analysed each of the
shortlisted region in detail
to identify favourable and
unfavourable factors
Applied GTM: Analysed
prospects for JVs/
acquisitions
Identified entry and exit
barriers
Analysed the potential
response from existing
competitors
Middle East & Rest of Asia
reaches US$122m and US$75
m by 2022
North America is the biggest
annual replacement market of
~ US$333 m
Cartridge (synth) filters are
more cost efficient than
cartridge (cell) filters
NA has the biggest
replacement market, hence
ABC should focus on
customer centric
marketing
Middle east & Rest of Asia
has the highest growth
numbers, hence GTM should
be channel focused
ABC has expertise in air
filter servicing
Executive Summary: ABC should target N America, Middle East & Asia

3. Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
$0
$50
$100
$150
$200
$250
$300
$350
Synth-Catridge
Cell-Catridge
Europe Middle
East
Rest Of
Asia
Africa North
America
Latin
America
Europe Middle
East
Rest Of
Asia
Africa North
America
Latin
America
Europe Middle
East
Rest Of
Asia
Africa North
America
Latin
America
2012 2017 2022
North America
Rest Of Asia
Value :
Volume:
0
200
400
600
800
1,000
1,200
Cell-Catridge
Synth-Catridge
Volume(in'000units)
Value(inmillion$)
• There is a tremendous growth in air filter market by volume and value in Middle East and Rest of Asia regions.
• North America has the largest market in the initial years, but has almost stagnant growth.
• Europe, Africa & Latin America have either very small markets or have shown negligible growth in market.
Inlet Air Filter For Gas Turbines-Market Sizing (>= 150 MW)
Source: Team analysis based on data accessed from Global Gas Observatory and case data

4. Gas Turbine Industry Drivers
• Increasing global power demand
• Environmental concerns & regulations
opposing coal and oil fired power plants
• Mature technology
• Nature of Gas Turbines: Efficient and
Flexible
• Availability & Price
North America, Middle East & Rest of Asia seem to be most attractive regions
Gas Turbine Industry Constraints
• Global economic slowdown
• Fluctuation and availability of natural gas
supplies
• Volatile fuel prices
• Emphasis on renewable energy
Trends & Issues in
Global Gas
Turbine Industry
• Biggest gas-fired
power market
• Shale gas boom
• Slow growth
• Growing, but
still a small
market for gas
power
• Growing on a
very small base
• Leveraging its
hydro-electric
sources
• Moderate base
• Low growth
• Decommission-
ing of old
plants
• Large natural gas
reserve
• Rise in power
demand
• Limited regional
pipeline cooperation
• High growth markets
• Rising power demand
• Increased government
spending
• Stalled pipeline
projects





Gas Turbine Industry: Regional & Global Trends

Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
Source: Frost & Sullivan; International Energy Agency; MarketWire company website; TurbineTech company website; US Energy Information Administration

5. E9 E10 E12 E12
Market status Available Testing Available Available
Probable Type Cart/Synth Cart/Synth Cart/Cell Panel/Synth
No. of filters per
MW of power
generated 10 10 12 15
Filter price $300 $330 $100 $100
Filter replace-
ment rate
(months) 24 24 12 12
Filter Cost/yr $1,500 $1,650 $1,200 $1,500
Turbine wash time
(hrs/yr) 90 120 180 180
Downtime for
filter cleaning
(hrs/yr) 60 20 300 300
Avg turbine
Capacity (MW) 160-180 150-190 160-180 160-180
Avg Turbine
Uptime 98% 99% 96% 96%
Net Turbine
Operation 8610 8620 8280 8280
Net Uptime
(hours) 8437.8 8533.8 7948.8 7948.8
Potential Elec
Production (MW) 8437.8 8533.8 7948.8 7948.8
Arid (Middle East)
Avg Power Gen
Losses 2% 2% 4% 5%
Net Production 8269 8363 7631 7551
Price of Elec (per
MWh) $60
Revenue $496,143 $501,787 $457,851 $453,082
Revnue Net Filter $494,643 $500,137 $456,651 $451,582
Cost Savings $5,495 $43,487 $48,556
Mixed (Asia, North America)
Avg Power Gen
Losses 3.7% 3.7% 6.0% 3.7%
Net Production 8128 8221 7472 7657
Price of Elec (per
MWh) $60
Revenue $487,705 $493,254 $448,312 $459,441
Revnue Net Filter $479,267 $484,720 $440,364 $451,492
Cost Savings $5,453 $44,356 $33,228
High efficiency filter consideration set (Calculation per MW/12 months)
ABC: Providing unmatched
value to the customers
Huge Cost
Savings
Lower
Turbine
Downtimes
Filter
Servicing
Expertise
ABC ‘E10’ Filters
To provide the best customer
experience in filter industry
with the technologically most
advanced filters and expert
after sales services
Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
Source: Team analysis based on data accessed from Global Gas Observatory and case data

6. Marketing
ChannelProduct
Customer
Based on the product life cycle and the target market in a specific geography ,
one or more of the three pillars has been chosen as focus to meet our clients
business needs.
Customer
Product Channel
New Product Entry
Customer
Product Channel
Entry of Competition Mature Markets
Customer
Product Channel
Primary focus Secondary focus
Post analyzing the primary and secondary focus for ‘E10’ in a region, we have studied the market entry strategy from various
perspectives and suggested the most preferred route.
From
Product
To
customers
JVs/
Acquisitions
Distributors
/ Agents
Channel
Partners
Marketing
Strategies
Maintenance
& Service
Providers
Source: From-To Approach, BCG; Redefining GTM, AT Kearney
GTM Framework
Competitors’ Potential Response
Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation

7. North
America
• Among all regions, North America currently has the highest air filters penetration
and about 75 % of which are either Panel filters or Cartridge (cell) filters.
• Considering the advantages of Cartridge (Synthetic) filters over other filters , all of
which have a filter lifetime value of <=12 months, North America potentially has a
huge Annual Replacement market.
• The opportunity can be tapped by pitching in the new filters at the time of
replacement of the old filters.
• The annual growth for North American market is low @ 0.4%, making the
opportunity for new market growth sales limited.
Opportunity Assessment
Market Sizing
Go-To-Market Strategy
Since the majority opportunity lies in the replacement market , hence the primary focus should be the existing
Customers and secondary focus should be on Channel & Product. Key to-dos are:
• Develop a sales force which will target the turbine operators directly pitching the Value Proposition of the
new product.
• Turbine maintenance providers, OEM’s, Agents etc. who are in touch with the clients directly can be used
for pitching the product.
• The existing channel of the competitors can be used to reach new customers. The competitors can be given
margin per sale.
• Providing additional services like maintenance & Filter service with the new product will help increase
the reach.
Risks/Concerns
• The Shale Gas boom in North America is on the decline. The Gas Turbine Market
has reached stagnation and is hence affecting the air filter market too.
• The long & rigorous compliance needs for companies in North America makes the
operations in North America restricted.
• Strong competition from imports by Middle-east & China.
• North America is a mature market and should have a strong competitor presence.
They may attempt for a hostile takeover in pursuit of new technology.
Tapping the
Replacement Market
Customer
Product Channel
0
1,000
2,000
3,000
4,000
5,000
2012 2017 2022
Volume ('000 Units)
Existing Total No.
of Filters
Annual
Replacement
Market
New growth
Market
Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

8. • Middle east shows the highest growth among all the regions, making it an
attractive market for new product sales.
• The replacement market is also growing at a steady rate , which can be harnessed
by using customer centric marketing.
• 22 % of the market in middle east for air filters is captured by Cartridge
(cellulose) filters. Given our value proposition, this is a prime market to target
replacements.
• The majority of energy requirements of Middle east is fulfilled by gas powered
power plants, further the dependence on oil fired power plants is set to reduce.
Opportunity Assessment
Market Sizing
Go-To-Market Strategy
• Significant Annual Replacement market can be targeted by targeting the “Customer” pillar of the
GTM model.
 Tie ups with Turbine operators, Maintenance providers, OEM’s .
 Focus Agents, sales representatives in matured markets like UAE, Egypt , Qatar etc.
• Opportunities in New Growth market can be harnessed by focusing on building the Channel pillar
 Collaboration with Distributors in the region to enhance the reach.
 Tie-up with other companies operating in this region, on share of margin basis.
Risks/Concerns
• Burgeoning gas demand in the region combined with concern over security of long
term gas supply
• Increased domestic gas demand, delayed supply response, limited regional pipeline
cooperation, and below-market pricing pose long term threats
• Growing investments by countries over alternative sources of energy (Solar &
Nuclear).
• Non-Homogenous distribution of gas reserves.
Middle
East
Customer
Product Channel
Tapping the
New Growth market
0
200
400
600
800
1,000
1,200
1,400
1,600
2012 2017 2022
Volume ('000 units)
Existing Total No.
of Filters
Annual
Replacement
Market
New growth
Market
Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

9. Rest
of Asia
• ASEAN countries along with Japan, South Korea, Australia and New Zealand have
more than 35% of their energy requirements met by Gas Power plants.
• The share of gas in the overall fuel mix is expected to rise strongly in the above
countries in the current decade.
• ASEAN is promoting the development of a trans-ASEAN gas pipeline system
(TAGP) by 2020, aimed at improved cross-national links.
• The Fukushima nuclear accident has marked a fundamental shift in Japanese
energy policy, turning away from nuclear energy towards other sources. This
implies strong growth for gas-fired power generation as a substitute.
Opportunity Assessment
Customer
Product Channel
Tapping the
New Growth market
Go-To-Market Strategy
To tap the opportunity in the Replacement and New Growth Market
• India & China (Growing Market)
 Salesmen to take brochures to new plant owners, explaining the cost benefits of their air
filter.
 Joint venture with similar companies operating & maintenance providers in the region.
• ASEAN Countries & OPAC (Mature Market)
 Tie ups with Turbine operators, Maintenance providers, OEM’s .
 Existing filter distributors should be approached.
 Tie-up with other companies operating in this region, on margin share basis.
Market Sizing
Risks/Concerns
• India and China have a high dependence on coal making the role of natural gas in
fuel mix extremely limited.
• Unstable regulatory environment in some of the Asian countries.
• Lack of gas resources, Japan and South Korea are highly dependent on foreign
supplies.
• Capacity expansion has been significant till now, however, countries like China and
India are also investing heavily in Solar & Wind Energy
0
200
400
600
800
1,000
1,200
1,400
2012 2017 2022
Volume ('000 Units)
Existing Total
No. of Filters
Annual
Replacement
Market
New growth
Market
Opportunity
Assessment
Value Proposition Go-To-Market
Competitors
Response
Regional Analysis Recommendation
Source: Team analysis based on data accessed from Global Gas Observatory and case data; Frost & Sullivan; Redefining GTM, AT Kearney; International Energy Agency

10. Appendix

11. North America Latin America
MW
No of
Powerplants
Total Installed
Capacity
(MW) MW
No of
Powerplants
Total Installed
Capacity
(MW)
<30 429 4763.88 <30 1 17.94
30-60 198 8710.3 30-60 7 272
60-120 181 2367 60-120 2 153
120-180 117 1241 120-180 8 1140
>180 565 28192.5 >180 65 37833.8
Africa Middle East
MW
No of
Powerplants
Total Installed
Capacity
(MW) MW
No of Power
Plants
Total Installed
Capacity
(MW)
<30 3 78 <30 2 53
30-60 4 216 30-60 10 475
60-120 12 1130 60-120 26 2607.4
120-180 8 1169 120-180 16 2322
>180 56 33229 >180 148 123515.5
Rest of Asia Europe
MW
No of Power
Plants
Total Installed
Capacity
(MW) MW
No of Power
Plants
Total Installed
Capacity
(MW)
<30 8 169.7 <30 2 22
30-60 18 741.7 30-60 7 326.4
60-120 38 3741.6 60-120 27 2703.5
120-180 35 5426.7 120-180 26 4030
>180 299 255485.48 >180 225 154671.5
Gas Turbines Installation Over The World – Breakup by Plant Capacity

12. capacity in '000 MW
Year
5year CAGR
10 year
CAGR
0 1 2 3 4 5 6 7 8 9 10
Europe 2.40% 1.10% 71.52 73.24 75.00 76.80 78.64 80.53 76.37 77.21 78.06 78.92 79.79
Middle East 8.10% 4.70% 83.55 90.32 97.64 105.54 114.09 123.33 110.06 115.23 120.65 126.32 132.26
Rest Of Asia 5.20% 4.50% 73.15 76.95 80.96 85.16 89.59 94.25 95.26 99.55 104.03 108.71 113.60
Africa 7.30% 5.00% 0.42 0.45 0.49 0.52 0.56 0.60 0.57 0.60 0.63 0.66 0.69
North America 0.40% 0.40% 369.36 370.84 372.32 373.81 375.31 376.81 378.31 379.83 381.35 382.87 384.40
Latin America 4.30% 3.80% 41.84 43.63 45.51 47.47 49.51 51.64 52.33 54.32 56.38 58.52 60.75
Europe, 79.79
Middle East, 132.26
Rest Of Asia, 113.60
Africa, 0.69
North America,
384.40
Latin America, 60.75
Europe, 80.53
Middle East,
123.33
Rest Of Asia,
94.25
Africa, 0.60
North
America,
376.81
Latin America,
51.64
71.52
83.55
73.15
0.42
369.3
6
41.84
Year 10
Year 5
Year 0
Gas Turbine Market
With capacity >150 MW
• North American Market – Biggest by
Volume but Stagnant in Growth
• Middle East – Strong Growth &
Market presence by 2022
• Rest Of Asia – Strong Growth till
2022
Global Gas-powered Electricity Generation, by Region

13. Year 4 Year 5
Panel Cartridge Panel Cartridge
Cell Synth Cell Synth Cell Synth Cell Synth
Europe 78.64 235.92 471.84 94.37 157.28 80.53 241.58 483.16 96.63 161.05
Middle East 114.09 114.09 171.14 273.82 684.55 123.33 123.33 185.00 296.00 740.00
Rest Of Asia 89.59 268.78 268.78 215.02 268.78 94.25 282.76 282.76 226.21 282.76
Africa 0.56 1.40 2.10 1.35 1.68 0.60 1.50 2.26 1.44 1.81
North America 375.31 562.96 1,407.39 450.37 1,876.53 376.81 565.21 1,413.02 452.17 1,884.03
Latin America 49.51 123.77 185.66 178.23 99.02 51.64 129.09 193.64 185.89 103.27
Year 9 Year 10
Panel Cartridge Panel Cartridge
Cell Synth Cell Synth Cell Synth Cell Synth
Europe 78.92 236.77 473.54 94.71 157.85 79.79 239.37 478.75 95.75 159.58
Middle East 126.32 126.32 189.48 303.17 757.92 132.26 132.26 198.39 317.42 793.55
Rest Of Asia 108.71 326.12 326.12 260.90 326.12 113.60 340.80 340.80 272.64 340.80
Africa 0.66 1.64 2.46 1.58 1.97 0.69 1.72 2.58 1.65 2.07
North America 382.87 574.31 1,435.77 459.45 1,914.36 384.40 576.60 1,441.51 461.28 1,922.02
Latin America 58.52 146.30 219.46 210.68 117.04 60.75 151.86 227.80 218.68 121.49
Inlet Air Filter Market for capacity >150MW Gas Turbines
Year 0
Panel Cartridge
Cell Synth Cell Synth
Europe 71.52 214.57 429.14 85.83 143.05
Middle East 83.55 83.55 125.33 200.52 501.31
Rest Of Asia 73.15 219.45 219.45 175.56 219.45
Africa 0.42 1.06 1.59 1.02 1.27
North America 369.36 554.04 1,385.10 443.23 1,846.80
Latin America 41.84 104.59 156.88 150.61 83.67

14. annual replacement market
Panel Cartridge
Cell Synth Cell Synth
321.85 429.14 85.83 71.52
125.33 125.33 200.52 250.65
329.17 219.45 175.56 109.72
1.59 1.59 1.02 0.63
831.06 1,385.10 443.23 923.40
156.88 156.88 150.61 41.84
annual replacement market market growth
Panel Cartridge Panel Cartridge
Cell Synth Cell Synth Cell Synth Cell Synth
353.88 471.84 94.37 78.64 5.66 11.32 2.26 3.77
171.14 171.14 273.82 342.28 9.24 13.86 22.18 55.45
403.17 268.78 215.02 134.39 13.98 13.98 11.18 13.98
2.10 2.10 1.35 0.84 0.10 0.15 0.10 0.12
844.44 1,407.39 450.37 938.26 2.25 5.63 1.80 7.51
185.66 185.66 178.23 49.51 5.32 7.98 7.66 4.26
annual replacement market market growth
Panel Cartridge Panel Cartridge
Cell Synth Cell Synth Cell Synth Cell Synth
355.15 473.54 94.71 78.92 2.60 5.21 1.04 1.74
189.48 189.48 303.17 378.96 5.94 8.91 14.25 35.62
489.18 326.12 260.90 163.06 14.68 14.68 11.74 14.68
2.46 2.46 1.58 0.98 0.08 0.12 0.08 0.10
861.46 1,435.77 459.45 957.18 2.30 5.74 1.84 7.66
219.46 219.46 210.68 58.52 5.56 8.34 8.01 4.45
2012
2017
2022
Inlet Air Filter Market:
• Annual Replacement Market
• Market Growth

15. Panel Cartridge
Cell Synth Cell Synth
No. of filters per MW of
power generated 30 30 24 10
Filter lifetime (months) 24 24 24 24
Avg. Price $80 $100 $100 $300
Total Price 2400 3000 2400 3000
Average retention in power generation (%) post subtracting losses.
Marine 0.92 0.98 0.92 0.95
Arid 0.94 0.95 0.96 0.98
Humid sub-tropical 0.96 0.96 0.94 0.96
Price of Usable Generation (60$ /MW)
Marine 55.2 58.8 55.2 57
Arid 56.4 57 57.6 58.8
Humid sub-tropical 57.6 57.6 56.4 57.6
Revenue advantage of Cartridge (Syn) filters
Marine 1.8 -1.8 1.8 0
Arid 2.4 1.8 1.2 0
Humid sub-tropical 0 0 1.2 0
Cartridge (Syn) filters become cost effective for plant capacities greater than below mentioned
Marine 333 0 333
Arid 250 333 500
Humid sub-tropical 0 0 500
Cost effectiveness of Cartridge (synth) filters