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Internet of Things (IoT) Strategic Models

Editor's Note: Take a look at our featured best practice, Internet of Things (IoT) Decision Framework (21-slide PowerPoint presentation). Internet of Things (IoT) products are more complex than typical products, since there a 5 layers of technology to consider, whereas other products may only have 2 or 3. With each additional layer, the complexity includes exponentially. The IoT Decision Framework provides a structured approach [read more]

Also, if you are interested in becoming an expert on Digital Transformation, take a look at Flevy's Digital Transformation Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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The Internet of Things (IoT) combines Innovation, outreach, and complexity.  Despite the uncertainties in IoT industry, the technology offers unlimited opportunities to corporations.  It encompasses an accumulation of network-based devices.  IoT involves extending internet connectivity beyond standard devices.  Embedded with technology, these devices can communicate and interact over the Internet. They can be remotely monitored and controlled.

IoT devices run on network connections like Bluetooth, Wi-Fi, and Near-Field Communication (NFC).  IoT devices include smart appliances, e.g. webcams, printers, routers, wearables such as Apple Watches and Fitbits, refrigerators, security systems, and speakers (including Amazon Echo and Google Home).

Organizations offering IoT products and services typically adopt one of the 3 Strategic IoT Models to capture sizable market share and succeed in the industry.  The Strategic Models include:

  1. Enablers
  2. Engagers
  3. Enhancers

Let’s talk about the IoT strategic models in detail.


Enablers are technology-centric organizations—e.g. Cisco, Google, HP, IBM, and Intel—that develop and uphold key IoT infrastructure essential for Engagers to develop and offer individualized connected services.

The IoT value propositions offered by Enablers entail Endpoints, Hubs, and Network and Cloud services (for example infrastructure, hardware, devices, computing, database systems, software platforms).  There is a huge market for such IoT offerings, which is growing at a steep pace.  Some Enablers concentrate on specific business streams and models, e.g. Endpoints only.

For instance, Estimote creates small “beacons” that can be affixed to objects to transmit signals via Bluetooth to smartphones.  These beacons can be used in settings such as retail stores by Engagers to gather data regarding items picked up by customers and time taken to make a purchase.  Likewise, Intel, the semiconductors manufacturer, creates all-inclusive IoT systems—including chips and platforms integral to manufacture IoT services.


Engagers use the IoT stack to provide innovative services.  This Strategic Model is employed by various appliance manufacturers, automakers, insurance companies, and retailers.  Engagers link the IoT with the market by employing endpoints, hubs, platforms, and other service offerings.  They create services both for consumers and businesses.

Organizations adopting this Strategic Model compete in human-centered markets—e.g. smart home, connected cars, digital retail, intelligent factories, next-generation hospitals, and futuristic cities.  Engagers present valuable location-based data to users in addition to gathering their browsing, movement, purchase history, and chat data.

Industry leading Engagers such as Apple and Google use their current capabilities to engage customers, deliver captivating customer experiences, and grab their attention towards their Integrating Hubs.  By doing this, Engagers build lasting connections with the customers.

For instance, in the past Haier and Whirlpool (multinational appliance manufacturers) used to gather only the basic data of their washing machine buyers to manage warranties and to push new product offers.  However, today their IoT enabled washing machines allow the manufacturers to collect useful insights regarding not only the machine usage—frequency, temperature gauge, detergent type, clothes type—but also offer personalized value-added services; reports on state of machine, need for repairs, water and energy conservation; and discount offers.


The Enhancers Strategic Model delivers enhanced, integrated, value-added IoT services by revamping and repackaging Engagers’ offerings.  They partner with other corporations to develop and offer personalized product and service offerings, or even come up with new Business Models that have the ability to displace existing ones.

Interested in learning more about the offerings that constitute the IoT Technology Stack?  You can download an editable PowerPoint presentation on Internet of Things (IoT) Strategic Models here on the Flevy documents marketplace.

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About Mark Bridges

Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.

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