An Approach to Designing IoT-Based Business Models

Background

The market has become competitive for most products and services. As a result, the development of the business model is necessary to be constantly monitored and to invest resources in it based on the directions indicated by market analysis. Constant monitoring of the market and whether it is possible to promote a product or service at a given time is a prerequisite for continuous business growth. The same need for monitoring arises to the company as well, so that if there is a need for system changes it can be effectively adapted to the new situation. Monitoring the competition and find differentiation in relation to their offer is another step in the development of the business model.

Business model is a description of the value that company offers to customers including network partners and company architecture that generate sustainable revenue streams (Osterwalder, Pigneur, & Tucci, 2005). Business model can be described as the way in which the system creates, delivers and captures value. Developing a business model is a cyclic process, continuous in time. The term business model in literature interpreted differently. Various authors state that the business model is equal to the company strategy, while others see the business model as another name for sale. As today sales and marketing sectors go together, this leads to the conclusion that the development of the business model includes marketing as one of the segments that describes this term. The base of each approach is how the business system by providing value to customers creates a profit.