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Strategies for an Evolving IoT Market – Hyperscale, Build Value, or Exit?

The IoT connectivity market is at a key point of evolution. TecFutures sees two main strategies emerging. The first is to build a high volume /hyperscale business through organic growth, and acquisition and the second is to focus on value differentiation as a competitive advantage. The third option is to leave the market altogether.



We analyse these strategies further depending on how a provider is addressing the market. Our analysis summarizes competitive positioning based on a supplier’s market focus and competitive advantage.


There are challenges and opportunities associated with each of these four headline strategies.


Wide market focus / High value proposition:

o   High value but limited shelf life as competitors will seek to move in

o   Rapid need to build ‘hard to copy’ features, re-invent the solution and create new high value markets

o   Options to create niche solutions to leverage

o   Option to create lower price version

 

Narrow market focus / High value proposition: 

o   Hard to easily compete against / copy

o   But not so easy to broaden the market focus (Not so easy to broaden market focus)

o   Constant need to invest to maintain niche advantage

o   Temptation to offer lower price version / reduce prices to stay in the game

 

Wide market focus / Cost advantage proposition:

o   Hard to add value by specializing to a narrow market focus without significant investment

o   The much talked about ‘race to the bottom’ on price means that strategic options are more likely cost reductions, or market exit

o   Not all organizations are able to achieve the volume of customers to truly hyperscale and enjoy true cost advantages

 

Narrow market focus / Cost advantage proposition:

o   Limited options to add value without significant investment

o   Strategic options are more likely to target wider market on cost

o   Market position that is hard to defend in the medium to longer term

o   Become a takeover target from larger low cost players

o   Inability to achieve economies of scale

 

Read more in our latest report at www.tecfutures.com/unlocking-value-in-enterprise-iot. It is free to download and explores how to build lasting competitive advantage.


To find out more about TecFutures- reach out to Phil Todd and Andrew Parkin-White.


And follow TecFutures for more content and views on successful market strategies to drive revenue and growth.

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