dickson k.w. chiu phd, smieee, smacm, life mhkcs jelassi & enders : chapter 12

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Dickson K.W. ChiuPhD, SMIEEE, SMACM, Life MHKCS

Jelassi & Enders: Chapter 12

COMP7880: E-Business StrategiesMobile Commerce

Strategyoptions

Externalanalysis

Internalanalysis

Sustaining competitive advantage

Internal organisation

Implementation

Exploring new

market spaces

Interaction with suppliers

Interaction with

users/customers

Creating and

capturing value

Strategic analysis

Strategy implementation

3

4

5

6 7

8

9

10

11

13

E-business strategyMobile e-commerce strategy12

Opportunities/ threats

Strengths/weaknesses

Our Roadmap

Strategy formulation

COMP7880-IC-2

M-Commere Strategy 3

Defining m-commerce(Elliott, Phillips, 2004 )

Mobile commerce (M-commerce) is concerned with the use, application and integration of wireless telecommunication technology and wireless devices within the business systems domain.

Location independent connectivity Mobile Internet Mobile E-commerce Mobile phone, Mobile device (PDA, wireless vending

machines, wireless LAN,…) Ramifications for wireless design: ’E’ ‘M’

(Venkatesh, eds., 2003)


The M-commerce Systems Environment

WirelessVendingDevices

(M-Wallet capable)

Voice,Picture, SMS,

And Data

(Elliott, Phillips, 2004 )


1G: Analog Communication(Elliott, Phillips, 2004 )

Only in certain environments, particularly in government agencies and the military

1946 AT&T Bell introduced the first commercial mobile phone

1960s AT&T Bell developed the IMTS (Improved Mobile Telephone Services)

Late 1970s and early 1980s, microprocessor technology and improvements in cellular network infrastructure led to the birth of 1G, wireless telecommunications systems

1980s Nokia in Finland Ericsson in Sweden Motorola in USA Sweden, Japan, and USA developed their own standard Roaming was extremely difficult


2G: Based on Digital Technology(Elliott, Phillips, 2004 )

1G, lack of security and the proliferation of different wireless network standards

2G occurred in early 1990s GSM (Global System for Mobile Communication)

More global compatible telecommunication network European-Centric development Less costly Roaming was possible Fully specify the complete network structure

As well as voice communications, 2G mobile phone can send and receive message

SMS (Short Messaging Services) Mobile Internet Browsing, via the WAP (Wireless

Applications Protocol)


2G Phone connection to the Mobile Internet

Source: Kavassalis et al., 2003


2.5G: Digital With Package Switched


One significant drawback to 2G GSM network – primarily voice-centric with limited data transmission characteristics

GPRS (General Packet Radio Service) Developed in late 1990s and early 2000s Higher transmission rates and always-on

connectivity E-mail can be received on a mobile phone

handset without the need to dial-up WAP content can be accessed at a quicker

rate


3G: Third generation wireless communication(Elliott, Phillips, 2004 )

3G technology is aimed at providing a wide variety of services and capability in addition to voice communication, such as Multimedia data transfer, video streaming, video telephony, and full, unabridged Internet access

Providing Data Centric Services with enhanced voices and multimedia capabilities

UMTS (Universal Mobile Telephony Systems ) A new Network service replacement for the GSM

3G is to provide an economically viable and technology-enhanced PCS portal

First introduced to Japan in 2001, and spread to Europe and USA in 2002

Life Style Portal Location dependent information


3G: Third generation wireless communication

source form: 3GPP TS 23.228, 24.228, 23.102


from: http://www.medialab.sonera.fi

4G


Current Development

iB3G 4G Pervasive Computing


iB3G: Combining the best of bothdual-mode handset Source form: 余孝先 , 2004

Cellular Coverage Mobility Billing System Roaming Widespread 2G/2.5G, HS,3G,

B3G

WLAN Bandwidth Cost Multimedia

Services Always Connected Easy to Setup 802.11a,802.11b,

802.11g


4G: 4th Generation Wireless System

source from: BWN Lab, http://users.ece.gatech.edu/~jxie/4G

Reasons to Have 4G Support interactive

multimedia Wider bandwidth,

higher bit rates Global mobility and

service portability Low cost Scalability of mobile

networks

What’s New in 4G Entirely packet-

switched networks All network

elements are digital Higher bandwidth

and lower cost (up 100Mbps)

Tight network security


Pervasive Computingsource from: IBM Web Site

Pervasive Computing Enabling information access anywhere,

anytime, on demand Pervasive Computing delivers mobile access

to business information without limits- from any device, over any network, using any style of interaction. It give people control over the time and the place, on demand.


Pervasive Computing for a Nomadic Lifestyle

Lessons Learned from MIT’s Project Oxygen, Zue 2004.

Some System-Level Challenges Pervasive: Be available everywhere, at anytime, for anybody Nomadic: Allow people and devices to move around freely Embedded: Live in our world, sensing and affecting it Human-centered: Understand and respond to human intent; solve

real problems Non-intrusive: Preserve privacy while ensure security Adaptable: Provide flexibility in response to change Eternal: Must never shut down or reboot Organic: Allow applications and services to be added easily …

Question: What are the opportunities?


Integrated multimedia nature of 3G domain- the PCS (Personal Communications Service)



M- Commerce Applications

Delineating the effects of M-commerce: A space-time matrix

M-Commerce applications are categorized along three dimensions: Location sensitive Time critical Controlled by information receiver or

provider EC vs. MC


Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002


Taxonomy of M- Commerce Applications

Balasubramanian et al. 2002

The extent to which the applications is location sensitive

The extent to which the applications is time critical

The extent to which the applications is controlled by the information receivers or by the providers

Dimension 1:

Location Sensitive

Dimension 2:

Time Critical

Dimension 3:

Controlled by the

Information Receivers

or by the Providers


Mobile information assets: location sensitive Rao, Minakakis, 2003 ;Balasubramanian et al. 2002

Deploy Mobile Internet services based on the various benefits of mobility Information that is provided on a

geographical locations Information that tracks an individual user

(via their mobile phone) to determine their specific geographical location anywhere in the world

GPS (Geographical Positioning Systems) Support location-based services (LBS)

Location-tracking services are encouraged by both business and national government

e911 in USA: 999 in UK; 119 in Taiwan


Locations Assets(Elliott, Phillips, 2004 )

Location-based services information

Location-based product Retailing

Location-based Products

Location-based Access

Location-based Maps (directions)


Time Critical Balasubramanian et al. 2002

Applications vary along the dimension in terms of the degree to which they are time critical Participation in a virtual auction (+) Mobile access to digital libraries (–)

It will involve the exchange of information related to a scheduled Flight departure

Information that quickly depreciates in value A stock price

Information that is required to address some emergence A roadside assistance


Controlled by the information receivers orby the providers Balasubramanian et al. 2002

Applications controlled by an information receiver Relates to more random, unforeseen needs A call for service after an automobile breakdown

Applications controlled by an information provider Tend to be marketing “broadcast” activities

Coupon announcement Maintain on an ongoing basis by service providers or

coordinators Monitoring of truck fleets using on board sensors


M-commerce vs. E-commerce (Elliott, Phillips, 2004 )

E-Commerce is concerned with data and information transfer, and with Internet access, via wired technology

M-Commerce is concerned with data and information transmission, and Internet access, via wireless technologies and various portable devices


Comparison between E-commerce and M-commerce (Elliott, Phillips, 2004 )

Factor E-Commerce M-Commerce

Product or service focus

Product focus Service focus

Product or service provision

Wired Global access Wireless Global access

Product or service assets

Static information and data

Dynamic location-based data

Product or service attraction

Fixed non-time-constrained access

Mobility and Portability of access


Comparison between E-commerce and M-commerce Barnes And Huff, 2003; Elliott, Phillips, 2004

Factor E-Commerce M-Commerce

Personal Devices PC: Medium Mobile phone : High

Network Operators can determine the services

No Yes, like a gatekeeper

Usage and Applications will charge

No standard way to charge; PC is essentially free

Users seem prepared to pay a ‘mobility premium’

User’s Location Hard to find Network Operator know who you are, where you are, can direct you to the portal of choice, and can charge you money

Reverse Billing No Yes, in which services are charged directly to the user’s phone bill

Display Screen Size and Memory

Medium Small

Click through rates for banner AD and e-Mail (i-mode)

PC Less than 0.5%

3.6%; 24%


M-Commerce Value ChainEmerging Industry Structure (Bane, Bradley, and Collis (1998))

Shopping

Entertainment

Shop at home

Transactions

Pornography

Education

Publications

Gambling

Facilitating Technologies

HardwareFileservers

CPU

SoftwareComputing Algorithms

Digital Signal ProcessingGeneral Magic

ATM

Digital Wormhole Terminal

Transmission

Manipulation

Packaging

Content

Phone

Voice

Television

Video

Computer

Data

= Industry size (relative)


M-Commerce Value ChainEuropean Commission 1996 (Barnes, Stuart J. 2002)


European Mobile Portal & Media Value Chain

Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf


i-mode and Media Value Chain

Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf


MacDonald, 2003


M- Commerce Business Models MacDonald, 2003

Brand Building or Media Mix Customer Relationship Management Online Retail Premium Content Aggregation B2B Advertising


9%

MacDonald, 2003


Sources from: http://www.medialab.sonera.fi


Sources form: http://www.medialab.sonera.fi


Obstacles to M-commerce (Elliott, Phillips, 2004 )

Efficient and fast wireless telecommunications services are often focused within specific area

West Europe,the USA, Japan Not available in low population area Many developing countries has led these countries to

adopt wireless telecommunications Wireless Mobile Internet access more costly than wired

Internet access 3G technologies and devices often deliver data content

that are indistinguishable form those available on the wired Internet

Mobile Internet users are accustomed to paying for Internet and correspondingly expect to pay for certain levels service and reliability


Obstacles to M-commerce (2)(Elliott, Phillips, 2004 )

Concerns over privacy and security still pervade the wireless data transmission world 3G technology is inherently more secure than 2G Many government and business organizations

banned the use of 2G mobile phone for private or secure conversations

Many individuals and organizations still harbor concerns over the health issues of wireless technology With regard to microwave radiation emission levels Up to the year 2000 the studies remain inconclusive Many government are requiring mobile phone

devices manufacturer to publish health evidence


The development of M-commerce

In Europe and Japan Focus on delivering to the customer technology,

such as internet –enable mobile phones, and the provision of Mobile Internet services

Europe view: Lifestyle consideration In USA

Focus on the use of palm computers, other mobile devices (e.g. the BlackBerry mobile E-mail devices), and other wireless technology to improve the effectiveness of business systems process

USA view: Support mobile working


The growth of spread of M-commerce (Elliott, Phillips, 2004 )

Innovations: Developments in mobile wireless application

and technologies Adoption:

Proliferation and use wireless technologies by (potential) customers

Increased competition: Desired by organizations to expand markets

and added value to products and services

Application developer/provider

Infrastructureequipment

vendorProvider of enabling

technologies

Portal provider

Mobiledevice

manufacturerContent provider

Mobile networkoperator

Service area Application area Technology area

End C

onsumers

Source: Adapted from F. Müller-Veerse et al. (2001), p. 23.

Mobile e-commerce value network outlines the key players

Information News Weather Catalogues ...

Communication m-Advertising m-Health SMS/MMS …

Entertainment m-Games m-Gambling m-Music ...

Transaction m-Banking m-Tailing m-Payment ...


m-Commerce consumer services and applications

M-SCM

m-Inventory m-Tracking ...

M-CRM

m-Services m-Sales ...

m-Workforce m-Office m-Fleet tracking ...In

tern

alE

xter

nal


m-Commerce business services and applications

Characteristics of m-commerce

Ubiquity

Convenience

Localisation

Personalization

Mobile content is inferior to other media in terms of screen size and downloading speed. However, it is superior to other media in terms of convenience and ease of use.

Personalization in mobile is higher than in wired e-commerce. When calling a mobile phone, users call the number of a person and not the number of a location as in the case of a fixed-line phone.

Localisation of devices and their users is based on the portability of wireless devices and the knowledge about a person’s location. It enables location-based services.

This characteristic means that users are able to use their device at any time and in any location. Ubiquity increases the immediacy of communication and is equally valued in consumer and business markets.

Source: See also D. Steinbock (2005).

Privacy and security

Device and network limitations

Privacy and security are decisive prerequisites for all wireless transactions. Users need to be in control of their data, especially if it comprises information about their geographical location.Due to slow transfer rates, limited connectivity, small screens and tiny keyboards of the handset, a user’s wireless Internet experience can be very restricted.

Mobile CRMMobile SCM

Firm Infrastructure• Mobile financial and ERP systems, incl. legal and government information• Mobile investor relations (e.g. information dissemination, broadcast conference calls, alerts)• Voice-to-data conversions: mobile forms-based applications, multimedia cellular and wireless broadcast• Mobile services: rich voice (image, video), Internet (intra/extranet), messaging (SMS, MMS, LBS) and content• Mobile access to e-mails, personal information management

Human resource management• Mobile activities in recruiting, hiring, training, development and compensation • Mobile self-service personnel and benefits administration, incl. mobile time and expense reporting• Mobile sharing and dissemination of company information• Mobile services via HRM: voice guidance, messaging (SMS, MMS, LBS push or pull), internet and infotainment

Technology development• Mobile teams, distributed collaborative product design across locations and among multiple value-system

participants• Knowledge directories accessible from any location• Real-time access by R&D to mobile sales and service information

Procurement• Mobile demand planning and fulfilment• Other mobile linkage of purchase, inventory, and forecasting systems with suppliers and/or buyers• Mobile direct and indirect procurement via marketplaces, exchanges, auctions, and buyer/seller matching

Impact of wireless technologies on the value chain

Source: Adapted from Dan Steinbock (2005), p. 260.

AQ

Ex. 12.4: The last column stops with ….account review in PPWs although there is additional text following in the Main Book. Please clarify.

Mobile CRMMobile SCM

Impact of wireless technologies on the value chain


Inbound LogisticsMobile activities in receiving, storing and disseminating inputs to products/services

• Mobile scheduling, shipping, warehouse/demand management and planning and scheduling across the company and its suppliers

• Mobile distribution across the company of real-time inbound and in-progress inventory data

OperationsMobile activities associated with transforming inputs into final products/services

• Mobile information exchange, scheduling and decision making in in-house plants, contract assemblers, and components suppliers

• Mobile available-to-promise information to sales force and channels

Outbound LogisticsMobile activities associated with collecting, storing and distributing products/services to buyers

• Mobile order processing and scheduling

• Mobile delivery vehicle operation

• Mobile customer/channel access to product development and distribution status

• Mobile channel management, incl. information exchange, warranty claims, contract management (versioning, process control)

Marketing and salesMobile activities with means for buyers to purchase products/ services and inducing them to do so, incl. advertising, promotion, sales force, channels, pricing

• Mobile sales channels, e.g. websites, marketplaces

• Mobile access to customer information, product catalogues, order entry

• Mobile product/service configurators

• Mobile push/pull advertising

• Mobile surveys, opt-in/opt-out marketing, and promotion response tracking

After-sales serviceMobile activities associated with providing service to enhance or maintain the value of product/services

• Mobile support of customer service reps (incl. voice guidance, SMS, MMS, LBS, e-mail, billing, co-browse, chat, VoIP, video streaming)

• Mobile customer self-service via portals and mobile service request processing, billing, shipping etc.

• Mobile field service access to customer account review

AQ

Ex. 12.4: The last column stops with ….account review in PPWs although there is additional text following in the Main Book. Please clarify.

Rivalry among existing competitors

Bargaining power of suppliers

Bargaining power of channels and end users

Threat of substitute products or services

Barriers toentry

(+) Increases barriers to entry by eliminating waste and contributing to efficiencies(+/–) Mobile applications are difficult to keep proprietary from new entrants, but consolidation favours incumbents(–) A flood of new entrants has come into many new industries

(+) Complements (–) Shifts powerful bargaining channels and power to can improve end consumers bargaining (+/–) Increases/decreases power over switching traditional costs channels

(–/+) Reduces differences among competitors as offerings are difficult to keep proprietary, but increases the potential for efficiencies(–/+) Migrates competition to price, but can increase potential for differentiation(–) Widens the geographic market, increasing the number of competitors(–) Lowers variable cost relative to fixed cost, increasing pressure for price discounting

(+/–) Procurement using mobility tends to raise bargaining power over suppliers (e.g. Wal-mart and RFID), though it can also give suppliers access to more customers(+/–) Mobility provides a channel for suppliers to reach end users, reducing the leverage of intervening companies, but it may also provide a direct channel to industry rivals and thus dis- intermediate channels(+/–) Mobile procurement and mobile markets tend to give all companies equal access to suppliers, but they can also be used to create privileged access to some firms(+/–) Mobility can gravitate procurement to standardised products that reduce differentiation, but it can also be deployed to diversify products/services, which increases differentiation

(+) By making the overall industry more efficient, Mobility can expand the size of the market(+) The proliferation of mobility approaches creates complementary opportunities, rather than substitution threats

Impact of wireless technologies on the industry’s five forces


dickson k.w. chiu phd, smieee, smacm, life mhkcs jelassi & enders : chapter 12

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