Advantech: Evolution of Its IoT Ecosystem Strategy

The rise of IoT (Internet of Things) technologies is exerting a strong transformational force on a variety of traditional industries. This case is one of the first to elaborate such a transformational process in China. Advantech, a leading company in industrial computers, has gradually oriented its business towards the IoT industry in the recent years. This case follows Advantech's exploration during this transformation, and observes how it gradually positioned itself as an “IoT platform provider” and an “enabler of IoT service providers,” and how it changed its mission to “Enabling an Intelligent Planet.” Recognizing the IoT industry as an ecosystem, Advantech made a series of strategic moves and choices based on its “altruism” principle. Advantech achieved its “evolution” in multiple aspects by exploring innovative internal organizational structures, effective external cooperation, and sustainable business development model. At the end of 2016, Advantech created a new growth strategy – “co-creation”. Since then, Advantech has attracted dozens of leading companies in traditional industries to partner with it in co-developing IoT solutions in specific application domains. Looking into the future, K.C. Liu, Founder and Chairman of Advantech, wonders what challenges and difficulties the “co-creation model” might bring, and how the “evolution” should continue… The case discussion follows the “Three-Step” model for ecosystem strategy analysis (“Seeing the Ecosystem” – “Choosing Your Position” – “Winning the Game”) proposed by Ron Adner. The discussion will focus on the key strategic choices and explorations of Advantech during its evolution in the IoT ecosystem. Through the case discussion, students will develop a good knowledge of the IoT industry, which greatly influencing the business world, from an ecosystem perspective. Moreover, students can systematically learn the key concepts of “ecosystem strategy” and “co-creation” as an innovative approach to growth strategy.