Relationship Building in IoT Platform Models - the Case of the Danfoss Group

Dr. Svend Hollensen, Dr. Pernille Eskerod and Dr. Anna Marie Dyhr Ulrich

Keywords

IoT, IoT platform model, platform stickiness, manufacturer, relationship building, business models


Abstract

Purpose: This paper investigates the implications for a manufacturer’s relationship building towards B2B customers and suppliers as a consequence of Internet-of-Things (IoT) platform models.

Design/Methodology/Approach: Explorative single case study with embedded sub-cases. Qualitative research approach. Semi-structured interviews.

Findings: The paper identifies two ways of doing relationship building when it comes to IoT platform models. Relationship building can take place through a Classic Relationship IoT platform model (characterized by low complexity) or a New Relationship IoT platform model (characterized by high complexity). In both models, the manufacturer aims for high stickiness towards the customers. In the New Relationship model, however, low stickiness towards suppliers is aimed for in order to enable the manufacturer to orchestrate the stakeholder constellation dynamically. In addition, a driver for the low stickiness aim towards suppliers can be found in a motive to outsource risks to suppliers in IoT markets characterized by high degrees of turbulence and growth.

Research limitations/implications: The study points to the fact that a manufacturer should consider how the new technology IoT gives opportunities for different ways of relating to stakeholders, e.g. customers and suppliers, in the business model.

Originality/Value: Based on primary data collection the research shows how strategic relationship building can help a manufacturer create value with customers and suppliers within IoT platform models. The paper expands the business model literature by investigating consequences of a new technology, i.e. IoT.


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