Question

How is the Internet of Things changing business and how does it impact the value chain? Does it create a sustainable competitive advantage? Justify your answer.

Answer 1

`Hey,

Note: Brother if you have any queries related the answer please do comment. I would be very happy to resolve all your queries.

The term Internet of Things doesn’t actually communicate much. It’s a catchy phrase and we all like it, but it’s not clear what it means. But when we say “smart, connected products,” then I think it becomes a little bit more tangible, and people really understand that much of the excitement here isn’t about the Internet—it’s about the things.

I think the idea of smart, connected products will have a dramatic impact on value chains because we’ve always thought of the value chain as being around the product and that the product was just a dumb stone, if you will, moving through some smart value chain. But now, the product’s actually a first-class participant in its own value chain. It’s talking to its creators in engineering and manufacturing. It’s talking to the people who are supposed to service it. It’s talking to its operators. It’s even talking to the sales and marketing department about what the customer is thinking.

The product becomes, for example, a sensor in the relationship with the customer. And this challenges the conventional concept of CRM. The idea of customer-relationship management is that customers will talk to you about their feelings about your product. And now, in this new world, we’re going to have products that are early-warning devices that tell us about what value the customer is getting or not getting. What’s the degree of utilization? What kind of problems are customers having? What are the opportunities for upsell? When are customers going to need a replacement product, a consumable? You name it. The product becomes a sensor in the relationship with your customer. That will change a lot in terms of how things are created, sold, serviced, operated, and so forth.

Kindly revert for any queries

Thanks.