Lee and Lee (2015) state that the Internet of Things (IoT) is a new form of computing which has the potential to be disruptive and influence business processes in a variety of industries (Krotov, 2017). Similarly, according to Selby (2012) this market is still in its early stages of growing and developing. Therefore, this research shows that IoT is relevant to Phillips as they are involved in a variety of industries. Adding to this, Yuan (2012) stated that IoT is becoming increasingly popular for healthcare and logistics as well as undoubtedly having an influence directly and indirectly on consumer electronics.
As identified in the context analysis, Phillips are focusing on healthcare and electronics therefore IoT is relevant for Phillips as in the future it will have greater influences on their products and be a requirement for consumer needs.
As the IoT moves into different industries such as healthcare, this provides Philips an opportunity to increase their market shares, especially in developing countries where healthcare and IoT is constantly improving (Benghozi et al.
, 2011, P.19). Furthermore, the IoT provides Phillips with opportunities to implement data integration into their consumer products. For example, by collecting data and integrating smart devices with electronics such as Phillips fridges, customers will feel more connected to the brand, Philips will understand the customer’s needs better and ultimately improve their customers experiences (Ganz et al., 2015). Therefore, by using IoT development in this manner, this could help build Phillips reputation with consumers by having continually improved products.
As Philips is a leader in the lighting industry, there’s an opportunity for Phillips to work with city councils to introduce and improve public space smart lighting which could provide Phillips with insightful data for their R&D (Harsh Chitale, 2018).
Likewise, the Economist Intelligence Unit (2017) state that IoT would provide Phillips an opportunity to analyse data collected from contact points with the consumers, allowing the company to have better detailed and accurate user profiles. This would be advantageous for Philips because it could help Phillips to understand the buying behaviours of consumers and at what stage of the buying process they are. This would allow the company to offer the right products and services at the right time (Obrien, 2017).
The development of IoT by Phillips could also help sustain their energy efficiency reputation. This is because Angelova, Kiryakova and Yordanova (2017) stated that smart devices help increase efficiency and productivity thus many smart appliances help businesses and consumers to save electricity, resources and time. Therefore, by implementing IoT technologies, it can help Phillips’ buildings and resources to have a more efficient energy usage and for their products to decrease their consumers energy usage. Adding to this, it could be argued that IoT is congruent with the two other megatrends highlighted as important for Phillips. This is because Ghani (2018) highlights that IoT is becoming increasingly relevant in healthcare through the integration of medical devices. However, they also argue that currently despite the reduction in the prices of these sensors used, they are not feasible because they are not yet low power or compact enough (Ghani, 2018). On the other hand, this could be seen as an opportunity for Phillips, where they could take the lead in the innovation and development of this technology.
The main constraint that IoT can have on Philips is the issue of corporate social responsibility and security of customers when handling IoT data. The scepticism from the public opinion of the smart objects in the house can be a disadvantage on Phillips sales, so the anonymization of data is an ongoing issue (Mediavilla, 2018).
To conclude, the most important megatrend for Phillips is energy efficiency because it has a larger number of drivers influencing the megatrend and Phillips reputation in comparison to the other megatrends highlighted. However, it must be said that energy efficiency provides more opportunities for Phillips’ reputation than it does constraints. One of the most important opportunities for Phillips is environmental product differentiation because this would gain competitive advantage in the electronics market and assist in building their reputation with stakeholders (Khojastehpour and Johns, 2014). The second most important opportunity is the opportunity for risk management because by investing in the energy efficiency side of the electronics market, the business is more adaptable to changes which helps the business’ performance and stakeholder relationships through reassurance (Hay, Stavins and Vietor, 2010). The second most important megatrend for Phillips is the IoT because IoT can be utilised to assist their reputation improvement in relation to the other two megatrends identified. This is supported by Ghani (2018) who emphasise the importance of IoT for medical integration.