Data Strategy and IOT

Data strategy & technology information 

Question 1: Discuss the impact of Smart Connected products on changes in Business Environment, Strategy, Structures, and process.

First of all, we will define the Smart Connected products. Smart connected products have three principal components:

First, physical components, it’s the hardware of the product (mechanical and electrical parts).

Next, the « smart » components, it’s composed by software and hardware such as sensors, data storage or enhanced user interface, embedded OS. Some software are now able to take over hardware and accomplish several tasks.

Finally, the connectivity components, it is intangible and tangible infrastructure, such as ports, antenna and protocol, that enable connections with the product and its user or other devices. This element of the smart connected product can have three configurations; One-to-one, has his name implies, it’s a configuration where a smart connected products his affiliated to another product, a user or a manufacturer via a platform or a port; One-to-many, it’s when there is one central system connected to several other products via a platform; Many-to-many, it’s when multiples smart connected products are connected to several products, a users or a manufacturers and sometimes it’s also affiliated to an external data base.  the smart connected products can take one of these forms or several forms at the same time.

The different units amplify the capabilities and the performance of each one, and improve their efficiency and quality.  

Smart connected products are declined in four fields and competencies, monitoring, control, optimization and autonomy.                                                                                                                                              Smart connected products provide comprehensive monitoring of the status of a product, user or manufacturer with the help of software and hardware. Monitoring use data sources and also create its own data base while monitoring. Monitoring include tracking operating characteristics, observing the market segmentation, the after sales service, and also the warranty compliance.                                                                                                                                       Smart connected products enable their owner to controlled them through devices integrated to the product or in cloud.                                                                                                                                                                     Smart connected products are now able to optimize product capabilities thanks to the combination of the monitoring and control process. They are using the data from the monitoring competence to ameliorate the service they offer and they are applying algorithms to improve the efficiency and the utilization of the devices.                                                                                                                                                              The three qualifications above capacitate the Smart Connected products to have a high level of autonomy. There is different achievement of autonomy  such as enforce operations and actions, or higher level of autonomy when the Smart connected products can adapt, diagnose and acquire knowledge about its environment.

One Smart connected products can constitute at the same time monitoring, control, optimization and autonomy capabilities. They have different qualities and are all profitable. The companies producing Smart connected products are free to choose which competencies will be include to their devices to have the best competitive advantages and determinate itself in the business competition he’s in.

These companies evolve in an environment that can vary depending on the business but also with external or internal factors such as the customers needs and expectations, the innovation in technology, the social trend etc. The business environment is composed by four factors, the key trends (regulatory, technology, societal and cultural, social-economic), the market forces (market segments, needs and demands, market issues, switching costs, revenue attractiveness), the macro economic forces (economic infrastructure, competencies and other resources, capital markets, global market conditions) and the industry forces (threat of new entrants; bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, rivalry among competitors).

The composition and strength of these five forces of the industry structures collectively determine the nature of industry competition and the average profitability for incumbent competitors.

These factor affect the function of the company, directly or indirectly, they will determine the strategy the company will implement to sell and distribute its Smart connected products.

The industry structure is likely to mutate when new technologies, social trend or customer needs have an impact on the forces of the industry structure. In the case of smart connected products, they can be seen has a new technology or a new customer need. Indeed they have an impact on the business environment, particularly on the industry structure.

Certainly, smart connected products enable companies to know their customers better. Through the data base it create by capturing rich historical and product usage data. All this data can serve to segment the customers, know their tastes, customize the product and also extend the value-added service. The companies is able to create differentiated product that meet more efficiently the customers’ expectations. As the company understand the customers, they will feel more close to its. Moreover, thanks to data, the switching cost for a buyers to find a new supplier augment. These competencies make the firm more independent from service companies, that imply that they are saving cost. These factors reduce the bargaining power of the buyers.

Nevertheless, the buyers power can be increase with the smart connected products. The data base can enable the buyers to understand better the product completion and make them able to compare and compete several manufacturers. The knowledges that the buyers gain from the devices can put in danger the suppliers.

As seen, with the bargaining power of buyers, the smart connected products empower companies to adapt their products and strategy for customers needs, allowing the product to be sell at a fair price and be differentiate. Indeed they enable companies to disrupt the actual hierarchy among the competitors and change the rivalry. Nonetheless, the possibility of competition happening between rivals to develop the best capabilities, forgetting the improved product, can become a trouble for companies. Also the Smart connected product industry has high fixed cost, due to the development of qualitative software, that make the industry defenseless to price pressure.

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