Impact of IOT on competitive strategy

Abstract

Internet of Things refers to network of products, which are equipped with computation power, sensors and connectivity. These products can sense their environment, can relay back the information to centralised server and can even take action upon it, as they are now not only smart but connected as well. This technology trend has been in making for some time now. It is now coming in forefront enabled by lower cost of sensors, and computations at miniaturised levels. It has already been realized how these smart connected products are changing the industry boundaries as these products are able to take decisions on their own without any external intervention. As seen in the past with the evolvement of Internet big giants like Google, Amazon etc. came into picture that changed the complete industry dynamics. Similarly, it can be seen in the various articles and studies done by the various industry players i ii that IOT is going to change the dynamics of the businesses. As mentioned by Porter as well in his article on Managing the Internet of Things how the industry moved from self-standing individual products to smart products previously and now to smart connected products referred to as the third wave of IT Driven Competition. iii These products enables new sources of delivering customer value, thereby changing how companies compete. As a part of this project, we are trying to understand this change with the tools of Strategy (Industry Forces, Competitive Advantage, Value Chain, Value Curve, Resource Based View of Firm etc.) about how IOT affects strategy and what are the strategic implications of it.