Strategy Essentials
The IoT domain provides enormous opportunity for differentiation. Broad categories of competition – hardware, connectivity, cloud, security, external data sources, enterprise integration – are an open canvas for making strategic trade-offs and gaining competitive advantage. Some IoT firms choose to focus in one area to compete while others choose building blocks from two or more and specialize around a single industry vertical. Regardless of the categories identified and the building blocks marked for inclusion in a business plan, failure to choose is a prescription for failure.
Firms need to be explicit about what they are not doing and will not focus on, as much as on what they are actually going to do with their limited resources. At the firm level, making trade-offs is at the core of creating a unique and defensible set of strategic positions. Choosing means organizing equally important assets – human capital, financial capital, technology, data – while remaining true to the firm’s values and stakeholder commitments.
And that human effort needs to be aligned with the firms strategic initiatives, with behaviors shaped by a set of meaningful values, vision, and direction. A firm’s culture is not a list of technical accomplishments or the sum total of its rational decisions. It is not fluff either. Recognize that emotional motivations and needs are part of the invisible glue that builds connection and commitment.
Ultimately, superior business strategies only works when a firm and its leadership understand industry structure. It is the bedrock for successful competition and competitive advantage. Think of it as the foundation of a house. Everything else is built on top of it. So take the time to understand its strengths, the composition of its structure, the opportunities for expansion over time, how others in the neighborhood might benefit, and ultimately how these considerations will increase its value over time. Strengthening an industry’s structure by reshaping its composition and broadening its profitability always brings great benefits to the firm leading the charge. Be that company.
