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PowerGlass Case Study 

 
Introduction to International Business - IBPIBU120R1  
 
Company Information     
PowerGlass is a local Rotterdam company founded in 2016. It produces sustainable solar glass.  What
is unique and sustainable about this solar glass is that the glass not only has the highest insulation
standards, but also functions as a solar panel. For example, on a bright summer day it produces
enough energy per m2, to keep the refrigerator going and keep the room cool as well.  
    
The company started with two partners, both Engineers from Delft Technical University. The
partners, after investing their own savings and after receiving a sustainability grant from the
municipality of Rotterdam, started a small manufacturing unit of 7 employees.  The company grew
very fast in the last few years.  Currently the company has 10 employees in the main office in
Rotterdam and 25 employees in the manufacturing unit.  The main reason for the growth in the initial
stages was the generous grants the municipality provided not only to the company, but also to
consumers and companies to insulate their buildings with this type of glass as well as generate solar
energy.    
  
The organisational grew organically, and quickly transitioned from an introduction phase to a growth
phase. A CEO was hired: Herman Gelder, and new managers were made responsible for the most
important disciplines: Marketing – Vikas Verma, Finance – Bonvenja Mogunde, HRM Manager –
Nebojsa Jovanov and Operations – Amit Butani  
  
The Operations Manager is a Technical Engineer and oversees the production facility as well as
managing all the logistics aspects of PowerGlass’ Supply Chain. During the past year, not only has
demand grown in the Netherlands, but also in other neighbouring countries such as Belgium and
Germany. Finished products are sent to customers via trucks.   
  
PowerGlass works with freight forwarder DSV Panalpina for transporting their products from
upstream suppliers and to downstream customers in the supply chain.   
Production, packaging, warehousing, and inventory management is done entirely in-house by
PowerGlass themselves. PowerGlass have a small warehouse next to its manufacturing facility in
Rotterdam. The space in this warehouse is used to store not only finished products awaiting to be
picked up by DSV Panalpina, but also houses their semi-finished goods and raw materials inventory.   
With regards to its materials, the company sources most of its materials from within the EU, but two
materials/components, the EVA film and the Control Units are sourced from two separate suppliers
in Japan. These two components are the ‘secret’ of the PowerGlass product which makes it unique: the
film converts sunlight into electrical energy, the Control Units manage the output. PowerGlass relies
on these two suppliers for the technical development of the product. These companies spend a lot of
efforts on R&D, trying to improve the effectiveness and technical life span of the film. The materials
from Japan are packed in containers and transported to the Netherlands using Ocean freight. In the
Port of Rotterdam, they are picked up by DSV Panalpina, cleared through customs and delivered to
the PowerGlass production facility in Rotterdam. Power Glass maintains strong, long-term
relationships with their suppliers in the Netherlands, but even more so in Japan. All suppliers are
stretching themselves to keep up with Power Glass increasing demand.   

The upstream supply chain looks as follows:  

 1 supplier of coated polyester film in Japan.  This supplier has 3 (tier 2) suppliers for:  
o Polyester Film – Mitsubishi in Japan,  
o 1 commodity chemicals suppliers for the carrier (first layer of coating),  
o 1 specialty chemicals supplier for the active component of UV coating.  
 1 supplier of the control units in Japan. This supplier has 8 (tier 2) suppliers:  
o one for the aluminum casing and  

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o 7 for the various electronic components used on the unit.  

 1 supplier of packaging materials in the Netherlands  
 1 supplier of the flat glass sheets; St Gobain in France.
St Gobain has various suppliers for the 3 main ingredients of the glass.  
 1 Supplier of the adhesive & cleaning primer for the application of the film on the glass:
Ashland in the Netherlands.  
  
The Power Glass organizational structure is very flat: the managers meet each other at the
headquarters in Rotterdam or via Teams. The company is growing fast, and the management structure
needs to be revised. Besides new employees in the factories the company also needs a new factory
manager. Furthermore, company structure needs to be revised again (especially if the company will
expand with another production facility in Eastern Europe).  
  
Since 2020 have been increasing due to a surge in demand of sustainable glass products. The
company’s average profit per window of Solar glass in 2022 was around €280. The prices charged in
the B2B sector are not as high as those in the B2C sector. B2B customers place larger orders and
therefore they are offered huge price discounts.  There is high demand of solar glass products within
the European market. The solar products suppliers are unable to meet the quantity ordered by both
B2B and B2C customers. Consequently, high demand for solar glass product has led to increase in the
average price per unit in B2B and B2C sectors.  
  
In 2022 the average production cost per solar glass window has been €100. It is expected that the
production and non-production costs will rise in 2023 and 2024. This is due to high inflation leading
to increase in prices of raw materials and labor costs. In the last few years,  PowerGlass’ balance sheet
has been good because total assets have significantly increased. Total equity has also improved due to
high profitability. However, in the next three years the expansion plan envisaged by PowerGlass’
management will depress profits.  
  
The Product & Market    
The main product of the company is sustainable glass used for house windows. During the first two
years PowerGlass was focused only on family homes, but word spread quickly and because of the
power generation characteristics, office building developers became interested in installing
PowerGlass in their projects as well. The B2C market is serviced via DIY & utility hardware retail
stores such as Gamma and Hornbach, and the B2B market via architects and construction contractors
such as Heijmans and BAM.  The Unique Selling Point (USP) of the product is that it is –currently –
the only product that generates electricity while at the same time functioning as a window. A current
market trend is care for the environment, which greatly contributed to the success of the product. The
Dutch government even subsidies installing these types of windows (instead of regular ones). The
technique itself is not protected by any legal rights (i.e., intellectual property). This creates a danger
for the company, as cheaper Chinese companies are on the verge of introducing a similar, though less
efficient, window at a lower price.   
  
Pricing differences in the B2B and B2C markets are not favorable, but due to the differences in
quantity sold it is seen as a fact of life. Branding decisions and introducing a ‘volume’ or a ‘value’
product focused on these two sectors could be an option.    
  
The Main Problem   
Because of this high and ever-expanding demand,  PowerGlass is experiencing the luxury problem of
being unable to keep up with producing enough glass to satisfy the current demand in their home-
market in the Netherlands/Belgium/Germany market. Furthermore, demand is growing in new
markets in the eastern countries of the EU especially Hungary, Romania and Bulgaria.  To deal with
this increasing demand, the company needs to decide whether to expand its production capacity and if
so, where? Expand in the Netherlands or create new capacity in a new market: one of the Eastern
European countries such as Romania. 
 

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Although the company has hired more employees to help them manage their growth, the number of
employees the company has hired created some organizational structure issues and growth has led to
various operational (logistics) problems, which is testing their relationships with both suppliers and
customers.  
 
Finally, Power Glass must keep a close eye on the changes in consumer behavior and adapt its
Marketing Mix accordingly. The Management is struggling in the face of an upcoming crisis in the
building sector (because of the nitrogen pollution), which will lead to a highly unpredictable market
for solar glass and threatens their market share in an increasingly growing and competitive industry.  
 
The main problem of PowerGlass is that the company needs to find a way to meet the increasing
demand of their customers.  
 
In the sections below the problem will be zoomed in on from the various subjects’ perspectives:  
  
Operations & Supply Chain Management:  
As described above, capacities of both the production facility and the warehouse in Rotterdam are
becoming limited due to the growth of the business. As a result, customer delivery lead-times are
increasing, and the sales department cannot live up to their promises to customers.
   
Expansion at the actual location is difficult due to lack of adjacent open space; they would have to
acquire the building of one of their neighbors to facilitate expansion. An added problem is the high
cost of locations available in the Rotterdam Industrial estates. A new location in their new market
(Romania) looks to be a tempting alternative, however, Butani, the Operations Manager, is not
necessarily keen on creating an operation at a large distance. He wants to review options closer to
home.  He might try to buy-out their neighbor in Rotterdam.  

Discussions are taking place whether the company should also use the warehousing services of a
third-party logistics provider (3PL), for example their actual transport partner DSV Panalpina, to
lessen the logistical burden. This will however not resolve the production problems.   

Overall, Butani has two dilemmas: whether to expand his production capacity in Rotterdam or move
to the East and whether to outsource logistics activities to a 3PL or continue to manage them
himself.  
  
Marketing & Sales  
In the last two years, PowerGlass has had a very successful time in the Netherlands with their
sustainable solar glass windows. Word spread quickly and there was more demand than they could
meet. The marketing manager, Verma is more than satisfied with their performance so far, but he is
also concerned about the forthcoming expansion to Hungary, Romania and Bulgaria. There are
several factors which will make this a challenging market entry for PowerGlass.  
  
For one, the market situation now is very different from last 2 years. There is high inflation across
most of Europe given the international energy crisis and supply chain challenges being faced by many
industries especially relating to goods from Asia. Verma believes that this unprecedented inflation has
led to change in consumer behavior as they have begun to re-prioritize their consumption of products.
He is concerned that the demand for PowerGlass windows might be affected by inflation, as
consumers may postpone purchase of non-essential items.  
  
Moreover, though the marketing team is well versed in behavior of Dutch customers, they do not have
enough knowledge and experience in the Eastern European markets. Will the Eastern European
customers behave in a similar fashion as the Dutch customers? It will be challenging for the team to
understand the needs of both business to business (B2B) and business to consumer (B2C) and create a
value proposition tailored to their needs.   
  

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Finally, given the different market conditions and consumer behavior in these markets, the Marketing
team needs to understand what expectations the Eastern European customers have regarding the
product, how much would they be willing to pay for it, and how should PowerGlass reach their
customers. The big decision that the team needs to make is whether they should change their value
proposition and marketing mix (4Ps) for the new market and if so, what are the changes required.  
  
Organization and People  
At the very beginning a decision needs to be made on the type and role of the new manager that needs
to be hired to help the CEO.   
Another issue that needs to be decided by the management of PowerGlass is on what kind of new
organizational structure should be designed. This is needed to better reflect the reality on the ground.   
  
Furthermore, the company needs to decide whether to expand their production with a new factory and
if so, is Rotterdam a better option (as preferred by the Operations manager) or should they look into
Romania (preferred by the HRM Manager). The driving factors to make this consideration for Eastern
Europe would be to save labor costs and the lack of availability of workers in the Netherlands.
Demand for the solar glass products is increasing in several Eastern European countries as well.  On
the other hand, having a new production facility in or close to Rotterdam assures short delivery times
and lower transportation costs.  
The outcome of this decision also has consequences for to the new organizational structure.   
 
The new structure design will be especially needed if the company is to expand with a production
facility in Eastern Europe as this expansion would also have consequences for the decision-making
processes in the company and its personnel throughout Europe.  
  
Financial considerations:   
Increased production and non-production costs might decrease net profits in the next three years.  
Building a factory in Eastern Europe would require a large amount of cash. PowerGlass needs funding
in form of a bank loan (an amount ranging between € 15 million to € 20 million) which can be fully
repaid within 5 to 10 years.  
  
Order of issues:  
The demand for the PowerGlass product is growing and currently higher than supply.  
 Week 1/2: pricing is up, availability of labor poor and market demand is increasing strongly.
What could we do?  
 Week 3/4: we need to decide if we will expand in or close to the actual production location or
build a plant in the Eastern part of the EU.   
 Week 5/6: how would the new situation look & how do we implement?   
  
___________________________________________________________________________ 

Assignment Questions: 
The questions to be answered after watching the videos of different subjects.  
To be able to answer these questions, students should read and be familiar with the related
material from theory lectures. 
Lesson 1

Marketing & Sales

1. What are the specific steps that the marketing team must take to get an in-depth understanding of
the 3 new East European markets? Of the needs and of other competitive offerings in the
market?  

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2. How should they approach the B2C (business to consumer) and the B2B (business to business)
part of the understanding? How will it be different?  
3. What are the steps they must take to develop a distinct value proposition for these markets?  
Finance
1. According to the PowerGlass CFO above, every decision a company makes has to be based on
financial numbers. State two qualities the financial numbers need to have to ensure that
PowerGlass company makes good decisions? Explain the meaning of each quality you have
stated.
2. According to the PowerGlass CFO, the company keeps records of all business transactions, and
the analysis of these transactions leads to the making of reports that are used to make business
decisions. What kind of information is found in these reports?
O&P
1. What kind of skills should the new manager have?  
2. Write up a list with job requirements for this position 
3. Create a job advertisement that reflects these requirements 

To be able to answer these questions, students should read the 11th chapter of Mulllins, Page 265
Managers and You.  

Operations & Supply Chain Management:

Create a schematic overview of the PowerGlass Supply Chain to discuss & potentially share later in
the lesson and answer the following questions:
1. Which one of the four performance dimensions should PowerGlass focus on? Explain your
answer.
2. How would you describe the PowerGlass Supply Chain in terms of the variations indicated in
one of the slides (Local vs Global, Simple vs Complex products, Linear vs Circular)
3. Do you feel the PowerGlass supply chain is agile? Can they easily switch products or
technology?
4. Which functions in the supply chain does PowerGlass manage themselves? Which are
outsourced?
5. Does PowerGlass manage their Ultimate Supply Chain themselves? Would it be feasible for
Amit to do so?

Lesson 2

Marketing & Sales

1. How can the augmented level of the product be reinforced to align with customers’
behavior? Would you also recommend any changes in the other 2 levels?  
2. Choose the right pricing strategy for the company. Justify your choice using theory learnt in this
block. 
3. What can the company change in its offering to address the financial burden being an obstacle in
the customer’s purchase decision? 
Finance

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1. PowerGlass CFO has said that the bank needs a business plan in order to assess whether a bank
loan can be given to PowerGlass or not. Explain what a business plan is?
2. According to the CEO and CFO, a business plan has to be presented to the bank before a loan is
given. Name three types of forecasts PowerGlass’ business plan needs to show?

O&P
1. What is the problem you are trying to solve?
2. What decision needs to be made? State it clearly.
3. What kind of information is needed to quantify potential benefits in building a new factory?
4. Research the availability of workers and salaries of qualified technicians and factory workers in
Rotterdam and Romania. Also look at the labor productivity in both locations and take that into
consideration when choosing the best location.
5. State clearly your answer to the question whether PowerGlass should build a new production
facility in Rotterdam or Romania.

Operations & Supply Chain Management: 

Evaluate the two potential locations Amit is considering – Rotterdam and Romania - using a decision
matrix with Supply Chain related criteria. Answer the following questions:
1. What S/C related criteria are relevant for Amit to decide on the location?
2. How important are these compared to each other?
3. Analyze the two potential locations on the important criteria.
4. How do the locations score on the criteria?
5. So, what is your advice to Amit?
Lesson 3

Marketing & Sales

1. Evaluate the CEO suggestion to invest in a personal selling technical team. Do you think it’s a
good idea? Explain the reasons for your choice. 
2. How can PowerGlass use digital marketing to reach its B2B and its B2C customers? How do the
2 approaches differ? 
3. Is Direct2Customer as one of the elements of the place element an option for PowerGlass? Please
clarify the reasons behind your answer using the theory learnt in this block so far. 

Finance
From the video, the CFO says that PowerGlass’ “financial situation in terms of liquidity and debt is
quite healthy.”

1. 1. What does liquidity mean in that conversation?

2. What does debt mean in that conversation?
3. Is PowerGlass’ debt increasing or decreasing? Why do you think taking more debt (a bank loan)
by PowerGlass company is an important decision to consider?

O&P
1. Suggest an organizational structure for how you think PowerGlass is set up currently. Make sure
you include all the departments, functions, locations, and names of all the people responsible. 

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2. Also, when you are finished with drawing the current structure, set up an organizational structure
that will include a production facility in Romania.
3. Having both the current and future organizational structure visualized helps Power Glass to see
the consequences of expanding to Romania, from an organizational perspective.

Operations & Supply Chain Management:

Final Assignment: you are requested to draw up the new supply chain that includes the Rotterdam and
the Romanian production locations.
The Diagram should include the transport modes. You need to analyze which types of transportation
are to be used for which transport legs based on a judgment on the attributes discussed.
You also need to convince Amit whether to outsource logistics activities or continue to manage them
himself.
1. Where would you source the main (raw) materials? Would you use the same suppliers / locations
as for Rotterdam?
2. What materials and products are transported from where to where?
3. Are the characteristics of the products relevant for the choice of transport mode?
4. What transport modes can PowerGlass best choose for the various transport links?
5. Will Amit be able to manage the new supply chain by himself?
6. What options does he have to help him if needed?

END OF DOCUMENT