An Approach to Designing IoT-Based Business Models

An Approach to Designing IoT-Based Business Models

Iva Vojinović (University of Belgrade, Serbia), Dušan Barać (University of Belgrade, Serbia), Ivan Jezdović (University of Belgrade, Serbia), Milica Labus (University of Belgrade, Serbia) and Filip Jovanović (Project Management College, Serbia)
DOI: 10.4018/978-1-5225-9866-4.ch009
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This chapter will foster the understanding of the structure of business model elements in Internet of things field. Business model provides an efficient way to analyze, understand and manage strategically oriented goals for one or more stakeholders in order to create some value for end-users, but in the Internet of things there is not clear path for its development. An approach that will be used is the generally accepted principle of forming business model, Canvas template, which is a strategic template for understanding the relation between key partners, key activities, customers and clients, key resources, value proposition for customers in the form of products or services, relationships with customers, sales and distribution channels, cost structure, income flow. Presented is an integrated model with main aspects that should be covered when it comes to the Internet of things business model development, combining Canvas template, inside organizational structure and ecosystem restrictions.
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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.

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