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Medium Cost Reduction Technology Implementation Merger & Acquisition

Electric Walk

#Non-profit #Energy #Clean Technology #Smart City Infrastructure
ProHub Comment

This case tests the candidate's ability to conduct a comprehensive cost-benefit analysis while managing ambiguous data and multiple evaluation criteria. It requires synthesizing quantitative financial modeling (energy costs, installation costs, ROI over 3 years) with operational feasibility analysis (footstep volume required) and strategic considerations (smart city rankings, risks). The case rewards candidates who recognize that profitability can exist without meeting Year 1 savings targets and who proactively identify information gaps (daily energy generation capacity).

Estimated Time 26 minutes
Difficulty Medium
Source Darden
10 / 100
Cities have been vying for the top spot in the world’s smart city rankings for years. The NYPA (New York Power Authority) is under immense pressure to manage its expanding energy demand using sustainable technology, following the launch of the world’s first “smart street” in London. NYPA has expressed an interest in working with Electric Walk, a UK-based technology firm, to install kinetic pavements that convert pedestrian footprints into electricity. NYPA hired us as part of this campaign to determine if the contract with Electric Walk is worthwhile.

Clarifying Information

  1. What is NYPA’s goal? To be the no.1 smart city worldwide. However, with shrinking budgets post Covid-19, NYPA’s interim goal is to generate electricity through clean technology while achieving cost savings from first year itself.
  2. How does kinetic pavement generate electricity? Electric Walk’s patented tiles produce around 5 WH (watt hours) of power per footstep. As people step on the electro-magnetic tiles, their weight causes electric-magnetic induction generators to vertically displace, which results in a rotatory motion that generates off-grid electricity.
  3. Was the same tech installed in London or is this completely new? Electric Walk was involved in the “smart street” initiative in London, which is why NYPA is interested in them.
  4. Is there any time constraint? NYPA would prefer immediate decision as it wants to catch up on the trend before it turns obsolete and believes it will help them stay competitive with other smart cities.
  5. How does NYPA define worthwhile? Electric Walk has quoted a rate of $3000 per 1 square feet tile. NYPA wants to know if it would be a financially viable contract to say the least – in other words, they just don’t want to lose money.
Mock Interview
Interviewer

Cities have been vying for the top spot in the world's smart city rankings for years. The NYPA (New York Power Authority) is under immense pressure to manage its expanding energy demand using sustainable technology, following the launch of the world's first "smart street" in London. NYPA has expressed an interest in working with Electric Walk, a UK-based technology firm, to install kinetic pavements that convert pedestrian footprints into electricity. NYPA hired us as part of this campaign to determine if the contract with Electric Walk is worthwhile.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

NYPA must decide whether to contract with Electric Walk to install kinetic pavements in Zone C of New York City. The analysis requires comparing current energy costs ($56M annually) against installation costs ($72M) and evaluating whether the expected 400,000 daily pedestrians can generate sufficient energy (requiring 400 steps per person) to justify the investment. While Year 1 cost savings goals are not met, the 3-year payback ($96M cumulative savings) makes the project financially viable, though operationally risky.

Key Insights:

  1. The contract generates positive ROI over 3 years ($96M) despite not meeting Year 1savings targets, requiring candidates to evaluate investments beyond single-year horizons
  2. Energy generation feasibility depends on user behavior assumptions (400 steps/person/day); candidates must recognize this requires pilot testing and identify it as a critical risk
  3. The case integrates financial analysis with strategic considerations (smart city ranking, competitive positioning) to test whether candidates can balance quantitative rigor with qualitative business judgment
  4. Candidates must proactively identify data gaps (daily energy generation rate) and seek clarification rather than proceeding with assumptions