There are a very wide range of pumps available and therefore a range of prices, but for the purpose of this piece of work you should assume that a "standard" product is available. The costs involved in an installation can be broken down as follows:

Equipment Cost: 10,400

Installation Cost: 5,500

Both equipment and installation costs are expected to rise by 2% per year for the foreseeable future.

Throughout the industry, overhead absorption rates are used in order to recover the indirect costs. (These include all overheads, tools, travel etc). The rate is based upon equipment costs and is currently an average of 20% of direct equipment costs.

You should assume that no on-going costs are incurred other than direct costs and those which are met by overhead recovery. Taxation, both direct and indirect, should be ignored and you should assume that all receipts and payments are in sterling.

Undertake a scanning exercise of the UK market for Ground Source Heat Pumps. In particular, explore:

• The macro environmental factors: to attempt to indicate how this sector might develop. (Both in the short and long term)

• The micro environment, with a particular focus upon understanding the nature and basis of competition within the market and in attempting to identify viable market segments. In constructing segments, consideration may be given to a mix of factors including house type, ownership status, geographical location etc.

Note: whilst you may draw upon worldwide insights for the macro analysis, the micro analysis needs to concentrate upon the UK environment.

• Then, taking one of the segments identified, undertake a viability analysis to gauge its future attractiveness / potential (or otherwise) over the next 5 years. The key financial data needed to do calculations against is supplied above, but ensure that you use this in line with the indicators gathered, e.g. market size, growth, etc, from the market data you gather.

Taking the data gathered for the group task, write this up as a report for companies interested in exploring this opportunity. You need to present both data and arguments/reasoning for the recommendations put forward. Be they to engage with or keep away from this market. Ensure that this is fully referenced / underpinned.

As a part of this paper you need to demonstrate the degree to which the data you rely on to reach your conclusions is reliable. Thus you need to include, as appropriate, any notes of caution or further research investigation that may be appropriate before any company acts upon your conclusion