IoT Platform Stickiness and Positioning in the Value Chain - Considerations for a Sub-Supplier

Abstract

This article aimed to investigate strategic options for a sub-suppliers' position in the value chain regarding stickiness on IoT platforms. Findings from a qualitative explorative case study of two embedded cases reveal that IoT platform-based digital servitisation allows business model adaptations in the form of sub-suppliers moving forward in the value chain and getting closer to end customers -a more profitable position as sub-suppliers can add more services to their offerings. Our study describes how a digital servitisation process can involve IoT platforms. It highlights that a subsupplier is in a trade-off decision, as the aim of getting closer (high stickiness) to end customers and consequently higher profit margins is connected to higher complexity and risks. In this context, selecting an IoT platform is a less risky 'in-between' option than selecting the traditional original equipment manufacturer business model regarding positioning further down the value chain.