Analysis of the Impact on Incumbent Business Models when Investing in Wearable Technology: a Case Study of Large Established Firms
Abstract: Internet of Things (IoT) and wearable technology are increasingly evolving trends that companies see great potential in, as it could enable them to automatize tasks and processes and ultimately change how they are doing business. Although the concept of IoT has been widely explored, wearable technology and its impact on large established firms business models is yet to be discovered. Therefore, this study was aimed at investigating areas withinincumbent business models that might be affected when large established firms invest in wearable technology. Through a qualitative study including one internal case, three external case companies and one expert consultant we explored this area. Our main findings from theconducted study of business model affects concerning how large established firms create, capture and deliver value to customers are: (I) they form new partnerships to capture technical, communication, and market capabilities, (II) they add new services to the coreproducts, and might create a new entity in order to fully invest in new areas that are not connected with their core business, (III) through the new products and services arising with the investment in wearable technology, additional or new value is delivered to both existing and potentially new customers, (IV) a more continuous flow of revenues will arise with the increased focus on services.For the internal case company to proceed with the trend of wearable technology, two phases are to be followed. Firstly, they should focus on the current ecosystem and strengthen the value provided to existing customers. Secondly, they can extend the area and reach out to customers outside their ecosystem in order to increase the revenues.
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