Back Bay Ba'ery Simula/on Reflec/on Report

BACKGROUND:

Back Bay Ba'ery started out as specialist for AGM lead-type ba'eries which had its own set of advantages and disadvantages
against the Li-ion Ba'eries and conven>onal lead-acid ba'eries. Back Bay Ba'ery primarily operates in three market segments,
namely, Automobiles, Warehouse Equipment and Uninterrup>ble Power Systems (UPS) with Automobiles being the largest
consump>on segment. Approximately, 2-3% of the revenue is spent on Research & Development yearly.

The simula>on gives us visibility into which product should be focused upon in a prevalent year along with focused strategic
planning and research for pricing and forecast.

INDIVIDUAL FINDINGS:

1. From the two products, AGM held the maximum market share while Supercapacitors held the maximum profit
potential due to ticket size & disruption.
2. Process improvement was integral to optimize costs & efficiency for both the products.
3. Profit margins have to be constantly worked upon for product improvement in accordance with the forecast to
optimize.
4. Year-on-year planning has to be done in a sustainable fashion which yields results in the latter half of the tenure than
sudden fluctuations. This gives business stability.
5. Feature accentuation has to be carefully planned since not all factions can be addressed. So the ones with maximum
profitability have to be pushed.

HIGHLIGHTS OF GROUP OBSERVATIONS:

Our group observations were recorded through the lens of these following questions.

Q: Include your collective strategy on how Back Bay Battery should invest in R&D and in which areas it would benefit the most

A: Our collective strategy focussed on the following points:

1. Invest time & effort in R&D by breaking down the consumer demand and market trends in order to understand the
required product and process upliftment. This will be critical to optimize cost & forecast sales.
2. R&D will be pivotal in optimizing manufacturing cost for Supercapacitors which will help reach a break-even point. This
will help in capitalizing profits from the product in the long run.
3. Make steady progress in uplifting product features. Focussed approach through R&D will help make investments and
returns lucrative for Back Bay Battery year-on-year.
4. Lastly, continuous evaluation of product performance in sync with growing market share, units sold and product
desirability will help create an ongoing product enhancement process.

Q: Include formative decisions that indicate how the company should place its new technologies, keeping in mind the demands of
the product, its existing space in the market, the external environment, the internal competitors and the brand’s proposition

A: A few formative decisions that serve as a founding base for the creation & promotion of its new technology are as below:
1. Market Segmentation: It is important to understand which section of the market is focused upon for maximum returns.
While a product can serve various benefits, it’s important to focus on a few features that cater to a specific market with
maximum ROI.
2. Pricing: A product in its ecosystem can thrive and fail due to its pricing practices. It is extremely important to
understand the market’s demand and create best possible solution in or around the desired numbers in order to be a
success.
3. Competitive Edge: It is important to understand the competitive universe in which the product will be released. In our
case, the presence of various kind of batteries could only be broken with a disruptive USP as in case of SC. It is pivotal to
establish and drive the product through its edge and enhancements.

Q: Include the data that defines the company’s strategy to meet its financial objectives, describing the aspects that would need
more investment versus those that need to be brought in

A: Data that elaborates on what should be the company’s objective while deciding their next steps is as below,
1. 80% of the business is grown from AGM while 20% business is driven by SC.
2. The market share for across segments grew from 4M-27M to 125M-130M in a span of 10 years.
 3. Back Bay Battery’s revenue share rose from 30% & -25% to approximately 50% respectively for AGM & SC with constant
improvements in product & processes in a decade.
4. In the same tenure, market share for SC grew from $120M approximately to over $1500M.

The change in numbers are a result of the robust strategies supporting product enhancement, pricing flexibility and research.
Aspects such as improvement in product, technological upliftment, changing customer trends, potential business markets and
pricing sensitivity will be crucial for further market penetration.

A: Include recommendations on how Back Bay Battery can respond to evolving market dynamics and forecasts for the
subsequent year’s sales

A: Back Bay Battery can strengthen its hold on the evolving market dynamics and forecast through the following practices,
1. Continue to invest in R&D for product & process enhancement
2. Expand into new markets to expand business footprint
3. Customer segmentation and targeting to have focused marketing & product development.
4. Focus on customer satisfaction through rigorous R&D practices.
5. Market research & analysis to equip team with better product knowledge, trends and product response.

CONCLUSION:

Our group observations were segregated in four pivotal strategies. The same can be defined and understood as mentioned
below:

1. Product Strategy: A thorough understanding helps us break the market potential and demand for each product. While
AGM has the largest market share, SC has the greatest potential due to its disruptive technology. Hence, identifying at
each step which product to enhances and creating those combinations which accelerates product enhancement
through sustainable means is important.

2. Pricing Strategy: For the first few years, price flexibility can only be witnessed for AGM. However, since market
potential is huge for SC, it is important to optimize processes for Supercapacitor in the early half to equalise costs
making it profitable eventually from its negative share. In the latter half of the year, it was important to capture a
bigger share in the market with slight variations and dips in the price. This led to deeper penetration with massive sales
for both SC & AGM.

3. R&D Strategy: A thorough R&D elaborates on the number of product enhancements which SC requires in its initial
years. Product superiority eventually prevails and commands price which had to be the core criteria for SC. After
identifying Energy Density to be the key criteria, it was important to focus on Self Discharge & Recharge Time in
isolation for the respective products to increase market share & sales.

4. Comprehensive Business Plan: A bottom line strategy was to focus on making decisions that last for a longer tenure.
Since each investment technically yielded results post a number of years and months, it was important to work towards
a long-term plan which fields and fuels the present but the core benefits and profits are sought only post 6th or 7th year
of investment. This approach gives the products a competitive and sustainable edge.

Submission by Group 4
[Gaganpreet Kaur, Nilesh Angre, Shivani Gullapalli, Arbaaz Toheed, and Ratan Pandey]