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CH07-EX02. Groundwater Level Sensor Case — How Budget and Institutions Create Constraints in a B2G Effective Market

  • Related Chapter: CH07 (Validating Business Feasibility and the Effective Market)
  • Related MN: MN07 Business Feasibility, Effective Market, and Projected Financials
  • Related KM: KM062-p-times-qty-by-transaction-type.md

What This Case Illustrates

This case shows that the basis for quantity sold (Qty) in a B2G (government/public-institution) transaction is fundamentally different from B2C or B2B — namely, the principle that institutions and budget become an additional constraint that governs market size.

Case Details

In the groundwater level sensor case, the buying entity is a public institution, and the scale of procurement is affected by government budget and legal obligations. Even if you calculate a value by multiplying equipment price by the number of potential installation sites, that figure cannot exceed the budget range actually executable in the public market.

The key point this case demonstrates is that Qty in B2G is not simply the number of institutions (or potential installation sites). The actual Effective Market varies depending on the following four conditions.

  • Whether there is a legal obligation for installation or management
  • Which budget line item the spending comes from
  • How large the budget is
  • Whether the approach to the public institution is through direct sales or a partner channel

Implications of This Case

The B2G Effective Market cannot be calculated by the simple multiplication of “equipment price × number of potential installation sites.” No matter how large the potential demand, quantities exceeding the legal obligation and budget range do not convert into actual revenue, so Qty for a B2G business must be recalculated within the ceiling set by institutions and budget. This is a different basis structure from B2C’s number of consumers × purchase frequency, or B2B’s order scale × production method.

Source

Doctoral dissertation (2022), B2G case, 9-Step “Effective Market Size Estimation” and the B2G case’s analysis of price, channel, budget, and legal basis. (Reconstructed in KM062)