Technical Feasibility

Based on this information please complete the two question below

Introduction

We are currently in the age of information- knowledge is power. Everything

around us is driven by data, so why aren’t our homes? Our cellular phones know where

we are and provide information, recommendation and directions for us but why aren’t our

homes? Technology has been growing and consumer are feeding off of new innovations

such as artificial intelligence and vehicle automation but yet smart home automation has

remained stagnate for years. While there are some companies that provide smart home

automation services, no one provides a true smart automated house that informs you on

your energy consumption or provides feedback on how to save on your energy

consumption. Net Zero homes has been the closest to providing energy efficient homes,

no house on the market is truly “smart” in regards to being able to control your individual

light switches, individual baseboard heaters or heat pumps, ovens, etc. This would be

done by installing an innovated electrical panel that would be similar to the hard drive of

a computer and all of the elements of the house could be controlled separately through a

software or on your smart phone. Our company, Smart Home Systems will provide

consumers the ability to control their homes and reduce energy consumption by the tip of

your fingertips, at home or on the other side of the world.

Market Research

Due to unpredictable climatic consequences of floods, Canadians have diverted their

interest towards adopting smart and secure home automation systems, seeking innovative

solutions. The revenue generated from the Canadian smart home market presently sums

up to US$ 944MM. This revenue is anticipated to reach a growth rate of 19.9% and is

expected to rise to US$ 1952MM by the year 2022. The penetration in the household

market is estimated to be of 13.9% in the current year. This household penetration rate is

anticipated to rise about 31.5% by the year 2022 (Statistica, 2018). The Canadian

companies, Aartech Canada and Canadian Smart Systems offer home automation

services to the natives of Canada.

Aartech Canada

It offers the most useful smart technologies that are provided by means of products

manufactures such as Zwave and Insteon, which are affordable to the middle-class

consumers. The devices manufactured by Insteon provide mesh interconnection among

the electrical appliances in order to control the smart devices utilizing an alternate current

power line and also through wireless means (Aartech Canada, 2018). The products like

Zwave provide completely wireless device controlling capability to the consumers

together with the alarming system. These products have a wide scope in the industrial, as

well as residential market. The devices can fulfill the requirement related to secure

residences and can attract families and house owners of Canada (Aartech Canada,

2018).

Canadian SmartSystems

The KEYFOB smart home innovation offered by Canadian SmartSystems allows the

consumers to control their electronic appliances by means of programmed systems, which

can follow the commands of the consumers, such as turning the lights on or off through a

single controlling key on the KEYFOB module. This innovation can assist in

computerization of the house as it limits the usage of smartphones. The automation

system can be programmed for different appliances ranging from garden sprinklers to

home theatres (Canadian SmartSystems, 2018). This technology is also affordable to

high income groups of Canada and is observed to have a good scope in setting up smart

homes and controlling smart devices for energy saving and optimized performance.

Who is our Customer?

Audience

The individuals of Canada have increased their connectivity by increasing the use of

smartphones. The consumers at industrial and residential sites are observed to be more

inclined towards completely unified, affordable, as well as wireless security and alarming

systems. The individuals in Canada of the age groups of 20-65 years, who are home

owners and aspire to reduce their power expenditures, are demanding more mobile,

supple, and portable means of home security and power consumption regulating devices.

The middle and high earning or professional members of Canada can also implement

home automation systems as they have minimal installation costs (Pattinson, 2014).

Business to Consumers

Rogers, a multinational communication company is also recognized to provide

monitoring services and solutions related to home automation to the consumers of

Canada. Rogers provides certified home automation solutions to the consumers.

Underwriters Laboratories (UL) provides certification to smart solutions and involves the

application of continuous broadband and telecommunication interconnections that are

focused on providing wireless controlling capabilities to home appliances. Consumers

who are observed to live alone can get real-time updates by video monitoring facilities

through a smartphone or computer (Pattinson, 2014).

The updates regarding the activities of home appliances are also provided through a text

message or mail system. It also provides automation services that can be controlled by a

remote-control mechanism. Automation of thermostats, water supply, and switching

on/off of electric appliances is also provided as home automation services by the

company (Rogers, 2018).

Market Size, Segment or Niche, Trends

The Canadian population is concerned about secure housing facilities, and they are

ready to invest in implementation of automated, affordable, and smart services in their

residences. This has resulted in the emergence of a trend for Net Zero Homes. The

builders are focused on making Net Zero houses more affordable and economically

feasible to the buyers. In the initial stages of constructing a house, Net Zero Homes are

preferred in the Canadian market as they are highly energy efficient in comparison to the

normal residents. Net Zero Homes are observed to utilize renewable energy systems, such

as solar energy, which is collected from photovoltaic cells for the production of required

energy demands of the residence (Hernandez & Kenny, 2010).

These homes are designed in a manner that they are able to maintain end-to-end

constant and comfortable temperature in residence. Net Zero Homes are also capable of

providing filtered indoor air for reducing the inflow of harmful dust and allergens. By

establishing a Net Zero Home, the annual power consumption and energy utilization bills

are observed to reduce safeguarding consumers from the upcoming rise in the housing

prices. Canada is known as the world’s second most socially capable region on the basis

of fulfilling human needs and providing growth opportunities (Frisk, 2016).

On the basis of demographic aspects, the implementation of Net Zero Homes would

be beneficial for the population in the age range of 20 to 65 years. The working members

of the family would be benefited from economic feasibility of Net Zero Homes. The need

to implement Net Zero Homes is identified by the educated groups. On the basis of

psychographic aspects, the living status of Canadians is suitable in order to invest in the

Zero Homes. According to Social Progress Index 2016, Canada is identified to lack

affordable housing (Frisk, 2016). Net Zero Homes will help to improve affordable

housing demands of people. Therefore, the target market comprising of residents of

Canada, involving people from diverse age groups are inclined towards Net Zero Homes

due to their affordability and energy efficiency (Canadian Home Builders’ Association,

2018). The adverse weather conditions in Canada have also directed the consumers

towards Net Zero Homes, as they involve low investment and higher future returns.

These homes are capable of fulfilling the required energy demands that can be controlled

and minimized as per residential power consumption (Doiron et al., 2011).

Top Down

Bottom Up

Bottom Up

New

Home/Renovation

$34B market

Smart Home

$944MM

market

Net Zero Units

8,023 unit Expected to grow by

33%

5% Market

Share

$4MM Sales $10,000 per house

Bottom Up

As we previously stated in our market research, the revenue generated from the

Canadian smart home market presently sums up to US$ 944MM. Additionally, the home

building and renovation market is a US$ 34B (IBIS World, 2017) market however, our

target market would be the niche consumer market of Net Zero housing. While this

market only consisted of 8,023 units in 2016 (Sisson, 2017), it is believed that the Net

Zero industry will continue to grow year over year. The results of the Canadian Home

Builders Association Nationwide Home Preference Survey, consumers are demanding

energy efficiency in their home with top-10 listed (CHBA Net Zero Home Labelling

Program):

1. Walk-in closets

2. Energy efficient appliances

3. High-efficiency windows

4. Linen closets

5. Overall energy efficient home

6. Kitchen islands

Unit & Sales Forecast

•5% of Net Zero Homes •$10,000 selling cost •$4MM Sales

Sales and Distribution

•Canadian Home Builders Association (training) •Electrical supply stores (training for electricians) •Home improvement stores

Competitive Advantage

•Trade Shows, Home Shows, Social Media (education) •1st of its kind in a growing and market •Consumers are spending close to $100,000 more for more energy efficient homes

7. Open concept kitchens

8. Large windows

9. 2-car garage

10. HRV/ERV air exchange

Penetration and Market Share

Penetration into the marketplace will rely heavily upon education and training by

targeting the Canadian Home Builders Association (CHBA), Governments and Power

Companies. The CHBA is an association that lobbies the government for code

regulations, are “the voice of Canada’s residential construction industry” and represents

one of the largest industries in the country (Canadian Home Builders Association). Our

product will be a costly investment initially; however consumers would see their return

on investment in 8-12 years, on par with the ROI for a Net Zero home. Consumers ROI

would be generated from utility saving as their home would not be generating as much

energy if the consumer decided to use the product effectively. Due to the initial

investments, it is imperative for our success that we partner with the professionals of the

industry.

Sales Forecast

Sales forecast is slightly difficult to predict for a new product in the market.

Narrowing down of target consumers to the Net Zero homes of 8,023 units gives us the

most feasible metrics to forecast against. 5% of the 8,023 units are approximately 400

units, which we believe is a good number to start with. In our first year, our sales forecast

is $4MM. This number will continue to grow to $7.5MM in 5 years and with the growing

trend of minimizing energy consumption and smart homes, sales incline at a healthy rate

of 5% yearly, while our costs should decrease with improved technologies.

Competitive Landscape

The competitive landscape is a business analysis identifying the competitors of

business. Both direct and indirect competitors are identified at the same time in the

competitive landscape which permits the mission, vision, globalization of industry and

cost factor's comprehension. Our company security in Canada provides the home

automation services. The company is one of the best home automation companies. There

are many competitors in the market. Top competitions are Rogers, Vivant, and ADT etc.

Our competitors compete really well, they also know the competition. They know that

what we are offering and they know the company’s unique selling points. They identify

the area where they need to compete with us and always trying to differentiate them.

They keep them update with the economic conditions and customer expectation.

Price competition is always there between our company and its competitions. They try to

make their services more premium and flexible than our services. They make effort to tell

Our customers that they serve better than us and try to attract company’s best employees

as well by offering them high package salary secretly. They are always trying to adapt

company’s marketing strategies like social media and overseas services (Krell, 2015).

We try our best to get information about our competition so that we could compete. We

are setting the team who is always assessing what competitors are offering by visiting

their websites and analyzing their advertisements. Team gets flyers and list of prices of

our competitors. The team does desk and field research on company’s competitors and

our team uses social media as a source and checks all the social mentions of company’s

competitors (Stark, 2016).

SWOT

Strengths: There are distinct advantages we are offer low prices to customers and

company compensate that price from the cost of raw materials. Environment-friendly

services. Company’s products do not harm the environment or create pollution. The

lower prices with high quality are the major strength. The team is well aware of the

market demands; company's previous experiences in the market are adding the values in

company decisions as the team knows what will be the reaction of people towards

company’s new strategies.

Weaknesses: There is always a room for improvement for marketing and cost reduction

strategies by maintaining the quality of service. Smart Home Systems does

not compromise on the quality so sometimes company face high cost, the company need

to adjust prices and quality with the cost for which company need latest technology and

marketing strategy (McKEOUGH, 2012). All these factors can affect the business;

therefore, we are considering these factors as weaknesses.

Opportunities: There are many interesting opportunities in company’s marketplace. We

provide a wearable security system in the form of smart watches and smart glass that

record the daily activity and routine and keep the homeowner alert with security signals.

The company provides security insurance to clients as the company has a contract with

the insurance companies. The concept of Smart Home Systems is new in the market.

Because of this company can cover a vast market to earn more profit and expand

its business.

Threats: As a home automation service providers there are many current obstacles that

we are facing. The major obstacle is vulnerability to hackers. No doubt that Smart Home

Systems provides effective and latest security tools but hackers are very smart, they are

always working on how to break security. The high cost is also an obstacle because it

reduces the demand for company clients if the company raises the price due to the

expensive raw material. Disloyalty of employees can be a major obstacle as home

automation is a sensitive job and employees are familiar to break the security (Fix,

2016). Company competitors are trying to copy features of the products that can be a

threat for the company in the future.

Marketing Strategy

Marketing strategy is a very important tool for every kind of business. It is

important to focus on a marketing campaign to make business successful and efforts for

marketing should be highly coordinating with clients. Our company provides proper

technical education and training to company employees. We need to attract consumers,

for that, the company has to identify its consumers first. Many clients can be home

builders association and power companies or even individual households. There are

different platforms that utilize to market the company services and attract customers such

as trade shows, social media and home shows. The company runs an advertisement of

our services at the prime time and during high rating programs. We pay to the

newspaper and magazine companies to put advertisement on their backside pages in front

and the last page of the magazines gain more attention. We are hiring a team for

marketing to send door to door of house builders association and power companies to

inform and offer company services. (Wolf, 2015). The marketing strategy is to build

strong relationships with the customer to increase company’s customer

equity. Therefore main focus of our company is on the customer satisfaction

and retention.

Assignment – Technical Feasibility (typical contents) • Is it patentable? Or is it a service? • Point Solution - Flexibility to work within a

system?