Every third day until Christmas, we will reveal three evaluation markers to improve your company’s odds for success in offshore wind. As a special Christmas reflection, each release will also contain a strategic observation from the global offshore wind scene.
The Christmas Calendar structure reflects the Green Ducklings framework that we use to map any company’s “Offshore Wind DNA” through our 24 DNA Markers.
#10 GO-TO-MARKET STRATEGY
Go-to-Market-Strategy is a measure for the investments, risks and action-taking that are applied as part of a growth strategy within offshore wind. Companies that have an aggressive approach to these elements typically fast-track their market entry or market expansion, as compared to companies that are less aggressive. Some companies “buy” their way into business through acquisitions. Other companies “buy” contracts with aggressive bidding strategies or by accepting higher contractual risk. Established companies can balance their market position to enter new market segments.
#11 CLIENT REACH
Client Reach is a measure for a company’s access to clients. A number of elements together form the basis for this evaluation. Geographical reach to relevant clients in different sectors is an advantage, due to the globalized market. But, the ability to engage with clients at strategic and technical level outside procurement processes is also of great importance. Such strategic or technical client contact can help to position a company’s offerings, and it can also be of importance to resolve contractual issues before they escalate.
#12 PRICING STRATEGY
Pricing Strategy is a measure for the extent to which value-based selling can be used to distinguish a company’s offerings from its competitors. Offshore Wind is a revenue-driven business for developers and risks are significant. By reflecting and quantifying the value for the client rather than the cost of the offering, an increased profit can sometimes be achieved. However, most companies in Offshore Wind would say that the industry is very competitive and tending toward commodity offerings where cost/price determines the successful suppliers.
CHRISTMAS REFLECTIONS FROM THE MARKET
Floating wind is currently attracting a lot of attention in the market. The planned investments in offshore wind farms, and the opening of many new markets outside Northern Europe, attract new companies to the supply chain. They tend to focus on floating wind, since many of their skills from other offshore industries can be used for floating wind farm Balance of Plant. They have valuable knowhow of floating marine structures that the existing supply chain is lacking. They meet on ”even ground” with the established supply chain when competing for floating offshore wind. Although it will be hard to reach Levelized Cost of Energy (LCoE) that is comparable to bottom-fixed offshore wind, it is a different application and market. It’s often stated that floating wind will be cheaper than bottom-fixed wind. A better statement could be that with the right level of cost-out, the industry will soon see commercial business cases in support of floating wind but not due to cost as a stand-alone element. Many established players in the bottom-fixed market are less aggressive in floating wind and continue to mainly focus on supporting growth in the bottom-fixed segment.