Manufacturing Megacities copy

8/11/2019 Manufacturing Megacities copy

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Megacities

discovering potentialHow to approach this new market

Emergence of a new market/channel

huge untapped potential for Nordic companies

25 megacities: 470 million inhabitants a market larger

than the European and US marketsInvesting in urbanisation the example of China

New G2M approach needed from "micro-thinking" to"macro approach"

Reaching an attractive position four elements to address


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Quartz+Co is setting a new agenda concerning megacities as a potential

new market/channel for many Nordic companies

Quartz+Co works withseveral customers forwhom the megacities ofthe world are becominga very attractivesegment however, the

key issues are How to structure the

go-to-market model?

What product/solutionto offer to whom?

Whom to partner within order to be part ofthe "game"?

Source: Quartz+Co feature in Berlingske Tidende, October 2011


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Today, there are 25 megacities in the world with a combined population

of 470 million inhabitants a market that is greater than both theEuropean market and the US markets

470

Top-25megacitiesin the world

399

EU15

313

USA

Tokyo

(34.3 million)

Top-25 megacities in the world with estimated populationsInhabitants

Comparison of population sizeMillion inhabitants

Note: Population figures are from July 2011. Figures include urban areasSource: CIA World Fact Book

Jakarta(18.9 million)

Seoul(25.1 million)

New York City(22 million)

Mexico City(22.9 million)

London

(12.5 million)

Moscow

(14.8 million)

Kolkata(16.6 million)

Mumbai(23 million)

Osaka(16.7 million)

Manila(20.3 million)

Rio de Janeiro(12.5 million)

So Paolo(20.9 million)

Buenos Aires(14.4 million)

Istanbul

(13 million)

Tehran

(13.1 million)

Lagos(12.1 million)

Karachi(17 million)

Cairo(15.3 million)

Dhaka(14 million)

Guangzhou

(25.2 million)

Beijing

(13.9 million)

Shanghai(24.8 million)

Los Angeles(18.1 million)

Delhi(23.3 million)


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The pace of the world's urbanisation rate will continue, and future

investments are expected to be significant

2010 2015 2020

Rural

areas 50%

(6.84)

48%

(7.22)

46%

(7.57)

2025 2030

43%

(7.91)

41%

(8.22)

50%Urbanareas

52% 54% 57%

59%

Share of the world's population living in urban areasPer cent (billion people)

Example of Chinese investments in megacitydevelopments

China is planningto invest DKK1,800 billionacross 160infrastructureprojects over thenext years to

merge nine citiesin South China,creating a citywith 42 millioninhabitants

Total investment in urban infrastructure in Chinaover the next five years is expected to hit GBP 685billion, with an additional GBP 300 billion spend onhigh speed rail and GBP 70 billion on urbantransport

British Chamber of Commerce

Source: World Economic Forum; The Economist; British Chamber of Commerce


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The traditional go-to-market approaches will not be suitable when

addressing this new market as demand is moving from "micro-thinking"to "macro approach", introducing new decision models in the market

Traditional go-to-market approach Market approach towards megacities

From a micro-thinking approach with multiple customertouchpoints across sectors

to a macro approach where purchasing decisionsare co-ordinated and made on an aggregated levelacross sectors

ILLUSTRATIVE

Suppliers Suppliers Suppliers Suppliers

Energy Transport Water Buildings

Energy Transport Water Buildings

Master-planning

uppliers


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The change in market logic will drive a shift in demand from single

components to integrated infrastructural solutions consisting of multiplecomponents, advising and services

Energy production

and distribution

Component

Component 2

Component 3

Component 4

d

s

o

y

n

a

a

o

S

v

c

n

Megacities are demanding integrated solutions in whichpreviously independent components and services are bundled

ILLUSTRATIVE


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Megacities is one of four key strategic focus areas for Siemens and an

opportunity for the company to leverage its diversified portfolio to onedefined customer segment

The new Infrastructure & Cities

Sector will manage the company'sglobal business with cities andinfrastructures. The new Sector, witharound 87,000 employees, willcontain the Mobility and BuildingTechnology Divisions from the

Industry Sector, as well as the PowerDistribution Division and Smart Gridbusiness from the Energy Sector.

Siemens September 2011

CASE


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In order to obtain an attractive position within the megacity

market/channel, a potential player needs to address four elementsUnderlying issues

Product

offering

To what extent is your stand-alone offering unique and innovative in the market in termsof other solutions from competitors and substitutes?

Organisationalcapabilities

What are the organisational requirements needed to be able to address this newchannel/market?

To what extent do your current competences match the needs?

How can your company best succeed in the market with the new channel needs andmarket logic?

As a stand-alone company only offering own products and services Through partnerships with other players offering more integrated solutions

Go-to-marketmodel

Business

strategy

How, and in what order, should you address the different subsegments in the market(cities/geographies)?

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