To develop a method with which the propositions can be compared with respect to financial potential, analyse the proposition’s content, and test its market potential using the knowledge and experience gained by JBR both in the market and through comprehensive desk research.
Our client is the company’s Business Development department. The department’s objective is to market new propositions for sustainable energy and other energy-related services. Ideas for new products, services and concepts come from both internal and external sources. The business plans that were submitted per proposition did not include any fixed method for calculating the financial added value of those propositions. The client was also uncertain about the estimated market potential. This means that the propositions could not be compared objectively, whereby the management team did not know which propositions qualified and which did not.
How to review new propositions for sustainable energy for a Dutch energy company.
Several propositions were reviewed and a financial model developed for each one so that the EBIT for each proposition could be calculated in the same way and the four propositions then compared financially. In addition to the EBIT calculation, we also conducted a thorough risk and sensitivity analysis. Insight was also provided for each proposition into the total market potential, the ‘accessible market’ for our clients, and the corresponding turnover and EBIT potential. The model was handed over to the client so that the financial analysis could be performed without external support in the future. The content of the propositions was analysed using knowledge, experience and desk research. The propositions we analysed concerned products and services in the field of sustainable energy.
A comprehensive financial and market analysis was made for each proposition so that the Board of Directors would be able to decide which propositions to introduce and which not to. JBR also developed a model for the client, who can now use this model to perform financial analyses independently in the future.