Potential market

SECTION I: The product

1a The innovation potential of this product is related to:

  • Technology-driven innovation (under the influence of the development of science – the market is not ready for the product)
  • Market-driven innovation (as a result of market surveys, the market expects the product)
  • Replacement of existing product
  • Product related to cost reduction
  • Radical new product
  • Other, what…
Digital city is a combination of technology push and market pull and driven innovation. Broadband economy, making the internet available to as much of its population as possible is important not just for the people concerned but also for the local economy.  The innovation arena sees cities as the new space to build innovation ecosystems.  Cities are the crossroad for the development of future internet projects and innovative thinking. Digital city, in turn integrates the innovative characteristics pushed by broadband economy and the rise of market needs for community  and city applications.
1b What added value for end-users does the product hold?
• higher quality
• Better technical characteristics
• Other …
The existing market status is characterized as new product in new markets. International corporation mainly IBM, Sysco, Oracle and Accenture have been uninitiated platforms for smart cities.  These platforms complement fully operational smart city solution From interconnections to specific smart city applications, such energy or transport. They usually are high cost, implementation intensive applications that require elaborate investment plans and public private coalitions.

1c What is the Unique Sales Proposition of the potential product?
Digital city is ready made fully customized platform that could be adapted to the local characteristics of cities. The clients could decide to utilize and operate all five modules or some of the modules or alternatively could identify new modules that the technical team can implement. This modularity along with the low cost of the product makes digital city unique against the large scale smart city competitors. While the competition is approaching large metropolitan cities digital city could be adopted to the needs of small and medium size cities.

SECTION 2: The Market

2a What is the target market for the product?

National x¨

European ¨

Global ¨

Please describe the characteristics of your target market.

Digital city is a NICHE market product specialized application for global markets. The target market is small size cities in global context that they will like to be introduced into the broadband economy and offer digital services for their citizens and communities. According to OECD there are 2,469,501 cities in the world from large metropolitan areas to small communities. This large target must be further segmented and quantified in terms geographical segments and city size segments. For the area of small to mid size town and geographical proximity the target area is 8.000 cities.
2b How the product is characterized from the following options? Number of companies producing similar products in the field.

• Base – applied by all companies in the industry

• Leading – applied by a single or limited number of competitive companies

• Key –at a development stage, but has already proven its potential

The product is at the development stage since digital applications for cities are taking their shape in parallel with community requirements for digital applications. Broadband economy is pushing for new applications that rapidly develop new application areas in terms of social networking, future internet and open data. The product has already proven its potential but has to be monitored and updated in continuous basis with the state of the art developments driven from emerging  technologies.
2c What type of market demand will be satisfied?

• Existing demand – the market is already developed

• hidden (latent) demand – the market has yet to be developed

Digital city is satisfies a hidden demand for digital services in cities pushed by the broadband economy. City officials are overwhelmed with internet based services that they must deliver to citizens.  They are enriched their web sites with information and fragmented services. Most of the services are announced by the have low citizen or community participation. Digital city offers a comprehensive solution for cities that could be promoted appropriately as collective city services. Citizen interaction and feedback provide the opportunities to raise the interest and critical mass of users. It is definitely a compound solution that must be consciously updated  with new capabilities.

2d What is the current stage of the product’s market life cycle?

• Implementation, implementation in production (leading to a radically new product offers)

• Growth (rapid spread within the industry or outside it)

• maturity (parameters of the technical characteristics of manufactured products reached their maximum, higher-grade products can be manufactured on the basis of technological substitution)

Digital city is a new product in a new rapidly development market. All products in the market have reached the initial phase of development and they try to enforce their marketing potentials in the market stakeholders. For example IBM offers 1000 solutions for free to less development cities expanding its client base and gaining market leader position. Japan considers smart city know how as the next export force. The projection 1.3 trillion turnover for smart cities in the next decade initiates  large investments in technology, and research.

2e Strategic partnerships (existing or potential).
At the beta testing phase of the product there are only small size partnerships with local municipalities to introduce and test the product. The partnership with research networks and  living labs for smart cities is very important, especially in the area of future internet and smart cities for the strengthening of the research potential of digital city. Potential partnerships are planned with global consulting organizations that they could include digital city into their product portofolio, establishing a global promotional channel for digital city applications.

SECTION 3: The Competition

3a What is the competition within your target market?
Most of the IT companies involved with digital services for cities have been introduced specific components (e.g e-health, transport, security, e-government) based on city client requests. Digital city managed to commutative support five distinct areas of smart city application as a platform.  So in terms there is a potential hidden competition of providers that could or have produced similar platforms. The competition for large scale smart city providers like IBM, Sysco, Accenture, Oracle and SAP is not influencing the market potential since these companies aimed at large scale investment plans mainly for large metropolitan areas.

3b What competitive advantages will the introduction of the new product ensue?

• lower prices based on lower production costs

• product differentiation (uniqueness of the product proposal)

The competitive advantage that the digital city offers is lower price due to lower production cost combined with the potential to penetrate new markets.  City is reluctant to the risk of large investments plans in technology. They could probably see digital city, as low cot application and test bend to be introduced into the broadband economy.
3c Potential products relate to the following price range:

• High price range

• Average price range

• Low price range

Digital marine is low cost, high quality solution for cities with limited scope for cities that they would like to initiate into the digital era. Since it is specified for digital application with low end user interconnection it is mostly appropriate for small municipalities that could afford to experiment and enter into the broadband economy without large and risky investment plans.
3d Potential products will be marketed:

• To regulated markets (e.g. heat supply, water supply, universal telecommunication services, agricultural products, fishing industry, architectural services)

• To markets operating on the principle of free negotiation between agents on the market

The products are marketed on the principles of free negotiations on the market. Additionally negotiation items could be considered the effort for installation, customization or implementation of new modules.

SECTION 4: Indicators

Estimated cost of the new products 50.000
Expected market volume (potential / maximum number of users) 8..000
Expected sales volume 80
Expected market share of the company (proportion between sales and total company sales in the relevant market) 0,01%


Please encircle as appropriate.

Added-value potential 1 2 3 4 x5
Size of future market demand 1 2 3 4 x5
Competitive positioning of the product 1 2 3 4 x5

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