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.
Comments