Business Models and Things Environment

Question: Discuss about the Business Models and Things Environment. Answer: Introduction For any organization to prosper in the fast racing world requires effective technology sources and smart way to deliver. The firm requires efficient, smart and feasible technologies and architectures. In addition it will also need real time decision making and analytical approach. Today it is very crucial for every company to adopt with growing technologies or it may face a failure or shortage in a long run (Amadeo, Marica, et al). For a critical survival a company needs to adapt every now then developing in accordance with the competitors. Internet of things (IOT) plays a great role in todays business. It is simply a network of products which has to be connected to internet (Al-Fuqaha, Ala, et. al.). This provides the product to connect to the other through their own IP addresses for implicating the tasks automatically. The present report addresses the critical challenges faced by a home appliance manufacturing company. The company deals in making mobile phones and other home appliances like blenders, washing machines and others. The company does not run a large scale business but is into developing it into a big giant like Samsung or L.G. It works for various application services, legacy system maintenance, new application development, offshore programming and staff augmentation. In order to take the company to new heights its essential to place the company the way other giants work with the Internet of Things. Statement of the problem Every growing organization faces certain issues in the way of development of the organization. The present company too faces several challenges and is lying back from the market advancements. The organization faces a strong competition in this market. With development in information system and the way business is marketed, this area has some tough competitors. With Internet of Things proliferating in the market at an implausible pace, soon it may become the dominant force in the technology-related market (Atzori). The company does not have proper predefined methodologies or IOT driven networks to make place for more efficient work methods. The organization provides integrated digital technology and mobile phone services for both the virtual and real world. The organization highlighted above is not being able to deliver much with efficiency. It does not have efficient set of networks. The company will surely require advanced integration and streaming analytics (Barrett and John). Neither the devices nor other things are attached to the network. The people connected to the company want to avoid the need for moving from one app to the other and want their work to progress with much fluidity. Analysis of the cause of the problem The organization requires analyzing the problem widely so that an efficient solution can be devised for better functioning of the company. For an in-depth analysis of the root cause of the problems, Porters five competitive forces can be used. Porters five forces is a framework which makes an analysis of the competition in the present market and the development of the business strategy (Da Xu et. al.). It helps in drawing out all the possible economics which can drive the company with intensified working and attractiveness. This tool is small but way too powerful. The analysis provides a clear idea of where the strength of the business situation lies. Porters tool can analyze the future scope of the business too. Once an organization can identify the strengths it can take clear and positive advantage in a way improving the weak situation. Earlier with advances in the IT technology the business operations saw automation of several but restricted processes. Porters model witnesses upsurge of internet of things in every aspect of the business operation seems to get connected with internet and getting automated (Drucker, Peter). Such automation will not only leverage the previous production, product design, sales or marketing rather it will offer more like product security and data analysis. Porters believe is that this may result in improvement of value-chain based productivity. The adoption of IOT in the organization will surely reshape its future productivity and will provide potential competitive landscape. Suppliers bargaining power The first force of Porters model is suppliers bargaining power. The IOT might smartly connect and revolutionize the present supplier system. The vendors often play important role and become immensely important for any organization (Fleisch). Nevertheless, with the IOT in the business operation the supplier may lose their demand as the connected and smart technology can provide more in comparison. Sooner or later the Conventional suppliers may even be commoditized and substituted by the software. The traditional suppliers may find it difficult while it forms the base of the emergence of the new and powerful suppliers who may bring to the market the commodities of the IOT like sensors, operating system, and data storage and software connectivity (Gao, Lingling, and Xuesong Bai). The organization here deals with the traditional suppliers and requires automation of its processes from the new market suppliers Amazon, Google just like other brands Samsung, LG or Panasonic. The suppliers wh o provide smart services can be connected to the end-users taking their responses and will be able to deliver new products. Porters model mentions in the second point the Buyers bargaining power. It is considered to change the future shape of the manufacturing industry. The products developed with the Internet of things would be smarter and connected (Meyer et. al.). The means that the market will have product differentiation and the measure for it will not be price only. The organization right now does not focus on the Internet of things for their product manufacturing and their infrastructure. This might degrade their buyer bargaining power. Understanding the need of the consumers and improving their product range in accordance to that and setting other factors like tailoring of product in such fashion, fixing the price and providing value added services may increase their bargaining power in the market (Gubbi, et al.). Engaging IOT reduces the need for relying on the distribution or certain associated services. The Buyer power includes various components like number of customers, competition in the mar ket, ability to substitute and size of the orders. Porters model here proves that the buyers force does not support the organization and might face issue in future. Rivalry or tough competition Rivalry or tough competition is the third force in the porters model. It plays an important role in any business rising and its downfall too (Mineraud, Julien, et al.). The product differentiation separates a business provider from the other which creates a shift in demand of that particular product. If a business enhances its services and provides other value added services then the consumers starts to engage more with them considering it more appealing than the other similar business provider (Glova). The products developed with IOT and implemented with help of software may add an extra advantage making the product different from the other manufacturers product luring more number of customers (Ng, Irene, and Susan). The organization presently has tough competition in the market and has the possibility to gain over them with the IOT incorporated in the product. The switching cost can be a glitch for the organization for changing the infrastructure and the product design. Nevertheles s the customer loyalty towards the organization may pack back as a competitive advantage to the company. The other companies like Samsung and Panasonic have adopted IOT in their system as well as their products which take them ahead of the company under consideration. Porter defines it essential for any organization to offer more and more competitive advantage for the business health and enhanced productivity and profit (Perera et. al.). The analysis conducted shows a drawback for the organization or it can be said that the porters third force does not favors the organization. Porters fourth model advocates threats of new entrants into the market. The new entrants may face the issues of high fixed costs, embedded technology, complex product design and well developed IT infrastructure (Porter, Michael and James). Here the present organization faces an advantage as the company is already an established one. This provides it with the opportunity of being the first-mover capturing the market at early instances. The companies entering with a new product or are new to the market faces lots of barrier which results in decreasing the product profit line or results in loss of product sale. The new entrants in the market require taking extra care about the product that they are designing or about to launch along with the pricing. The entrants designing a similar product which already exists in the market or marking a product with some skyrocketing costs may make the product suffer along with the productivity and profitability important for the company (Riggins, Fred erick and Samuel). The company has already established a secure position in the market and does not faces any challenge under such circumstances. Nevertheless the pressure from the other advanced company who has already affectively applied the IOT in their infrastructure and the product may become a possible threat which is further discussed in the next force of the Porter model. A threat for a substitute in the market is described by porter as the fifth force in his model. He defines it as an important threat because it may damage the popularity of a present product. The two of the essential point which are substitutes performance and the cost of change need to look after. The organization presently can think of substituting their product in the market which may incur high cost to the company (Wortmann, Felix, and Kristina). The company can only be successful in substituting its product when it incorporates the IOT in their products. This way if the company gives an unmatched performance to the other product present in the market it may secure a strong position in the market (Gerpott, Torsten and Sebastian). They can present their smart connected product with great customer values and enhanced customization. On the other hand if the products of other company like Samsung are already ruling the market for being a smart connected product then it may get diffic ult for the company to capture the market like the other organization has done. The broader range of capabilities that the IOT products have makes it easier to replace the traditional products to take its place (Westerlund et.al.). The company has to look into making their products more smartly connected so that they can replace the existing product in the market. Samsung IOT solutions If an analysis is made in reference to a big organization like Samsung then it would be seen that the organization under evaluation is facing several challenges. Samsungs one of the efficient product IOT Gateway is being implanted very soon. It is an IOT based products which will prove efficient for communication in short range. Not only this, the product is being said to provide WiFi, Bluetooth Low energy and Zigbee all in a single product (www.samsung.com). Such kind of products leverages the companys image and productivity. The product is being stated to be used in school or offices for automatic light management depending upon the number of occupants present in the room so that an efficient management can be done and more energy can be saved. It can even track the occupants presence and thus can acts as an attendance tracker. The present company does not serve with any such devices and lags in the market thus. The company like Panasonic, Samsung and others are moving into the mar ket with such IOT making the smart and tough competitors to deal with. To give a competition or even enter the market it needs to renovate their whole manufacturing and product production methodologies. Recommendations The organization right now is facing severe or critical challenges which have to be addressed soon for developing the organization and reform it into the internet of things. The IT systems need to be prepared for dealing with the changes that shall be brought. Some of the prime changes recommended are: Retooling the organization for IOT: Retooling the technology facet may be a complex process and tedious too. Yet, the organization being consumer electronic has to withstand such change being in the market in the long run. Technology Standards: It should participate in the ongoing technological trends. Some examples like intelligent lightning system, safety management system and automatic attendance tracker system should be followed and matched. Strong connectivity: Every Internet of Things requires connecting to a strong network so that it can work faster and much efficiently. The organization should focus into manufacturing products implying the usage of good connection. Best and continuous- model for services and software: The organization should focus into upgrading their product so as to deliver software updates in continuous fashion. Conclusion The organization seems to be backed out specifically in innovation and implementation of IOT in their products. The important reason for it staying behind is the lack of sense of implementing new opportunities. This has made the organization suffer and might be a big reason for its failure in the long term. The organization is having a fair productivity but it may lower down somewhere in the near future. The organization should now focus on entering the market with some great substitutes so that it can re-establish itself in the market. The top priorities of the company should be to innovate and grow their productivity. Improving quality can be done by developing and providing the customers a reliable infrastructure which could ease their work more than just simply working. Intel helps in moving forward with IOT and building blocks towards success with related software and hardware. Such devices makes connectivity available all the time everywhere, it provides security management fea tures along with Wi-Fi making it more compelling for any other organization or consumers to opt. Creating flexible solution and deploying IOT solution will drive the adoption in market. Conclusively, it can be said that the organization is not innovating up to the mark and requires developing their course of work and manufacturing smart products based on Internet of Things. It is true that the Information and technology is in to transforming products for public benefit and enhanced efficiency. Execution of such technology is said to make the mechanical and electrical structure far more complex consisting of hardware, software, data storage, microcontrollers and sensors. Like the establishment of smart cities and grids the organization in the context also requires connecting its devices and all things to internet for better market advantage. These suppliers are becoming powerful as the business operations are being automated and this may lead to increase in their demand in the market. This would provide them a position in the competitive market. The products at organization in comparison to other competitors like LG, Samsung or Panasonic have made the consumers drive down the price as they prefer those brands over it. Along with all these development it is a companys responsibility to make sure that all its data are secure in the ecosystem of Internet of Things. References Al-Fuqaha, Ala, et al. 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