1. 1 Dickson K.W. Chiu PhD, SMIEEE, SMACM, Life MHKCS Jelassi & EndersJelassi & Enders: Chapter 12 COMP7880: E-Business Strategies Mobile Commerce

2. Strategy options External analysis Internal analysis 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 strategy Mobile e-commerce strategy 12 Opportunities/ threats Strengths/ weaknesses Our Roadmap Strategy formulation COMP7880-IC-2

3. M-Commere Strategy3 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)

4. M-Commere Strategy4 The M-commerce Systems Environment Wireless Vending Devices (M-Wallet capable) Voice, Picture, SMS, And Data (Elliott, Phillips, 2004 )

5. M-Commere Strategy5 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

6. M-Commere Strategy6 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)

7. M-Commere Strategy7 2G Phone connection to the Mobile Internet Source: Kavassalis et al., 2003

8. M-Commere Strategy8 2.5G: Digital With Package Switched (Elliott, Phillips, 2004 ) 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

9. M-Commere Strategy9 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

10. M-Commere Strategy10 3G: Third generation wireless communication source form: 3GPP TS 23.228, 24.228, 23.102

11. M-Commere Strategy11 from: http://www.medialab.sonera.fi http://www.medialab.sonera.fi 4G

12. M-Commere Strategy12 Current Development iB3G 4G Pervasive Computing

13. M-Commere Strategy13 iB3G: Combining the best of both dual-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

14. M-Commere Strategy14 4G: 4th Generation Wireless System source from: BWN Lab, http://users.ece.gatech.edu/~jxie/4G 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

15. M-Commere Strategy15 Pervasive Computing source 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.

16. M-Commere Strategy16 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?

17. M-Commere Strategy17 Integrated multimedia nature of 3G domain- the PCS (Personal Communications Service) (Elliott, Phillips, 2004 )

18. M-Commere Strategy18 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

19. M-Commere Strategy19 Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002

20. M-Commere Strategy20 Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002

21. M-Commere Strategy21 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

22. M-Commere Strategy22 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

23. M-Commere Strategy23 Locations Assets (Elliott, Phillips, 2004 ) Location-based services informationLocation-based product Retailing Location-based Products Location-based Access Location-based Maps (directions)

24. M-Commere Strategy24 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

25. M-Commere Strategy25 Controlled by the information receivers or by 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

26. M-Commere Strategy26 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

27. M-Commere Strategy27 Comparison between E-commerce and M- commerce (Elliott, Phillips, 2004 ) FactorE-CommerceM-Commerce Product or service focus Product focusService focus Product or service provision Wired Global accessWireless 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

28. M-Commere Strategy28 Comparison between E-commerce and M- commerce Barnes And Huff, 2003; Elliott, Phillips, 2004 FactorE-CommerceM-Commerce Personal DevicesPC: MediumMobile phone : High Network Operators can determine the services NoYes, 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 LocationHard to findNetwork Operator know who you are, where you are, can direct you to the portal of choice, and can charge you money Reverse BillingNoYes, in which services are charged directly to the user ’ s phone bill Display Screen Size and Memory MediumSmall Click through rates for banner AD and e-Mail (i-mode) PC Less than 0.5%3.6%; 24%

29. M-Commere Strategy29 M-Commerce Value Chain Emerging Industry Structure (Bane, Bradley, and Collis (1998)) Shopping Entertainment Shop at home Transactions Pornography Education Publications Gambling Facilitating Technologies Hardware Fileservers CPU Software Computing Algorithms Digital Signal Processing General Magic ATM Digital Wormhole Terminal Transmission Manipulation Packaging Content Phone Voice Television Video Computer Data = Industry size (relative)

30. M-Commere Strategy30 M-Commerce Value Chain European Commission 1996 (Barnes, Stuart J. 2002)

31. M-Commere Strategy31 European Mobile Portal & Media Value Chain Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf

32. M-Commere Strategy32 i-mode and Media Value Chain Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf

33. M-Commere Strategy33 MacDonald, 2003

34. M-Commere Strategy34 M- Commerce Business Models MacDonald, 2003 Brand Building or Media Mix Customer Relationship Management Online Retail Premium Content Aggregation B2B Advertising

35. M-Commere Strategy35 9% MacDonald, 2003

36. M-Commere Strategy36 Sources from: http://www.medialab.sonera.fi http://www.medialab.sonera.fi

37. M-Commere Strategy37 Sources form: http://www.medialab.sonera.fi http://www.medialab.sonera.fi

38. M-Commere Strategy38 Sources form: http://www.medialab.sonera.fi http://www.medialab.sonera.fi

39. M-Commere Strategy39 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

40. M-Commere Strategy40 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

41. M-Commere Strategy41 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

42. M-Commere Strategy42 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

43. Application developer/provider Infrastructure equipment vendor Provider of enabling technologies Portal provider Mobile device manufacturer Content provider Mobile network operator Service area Application area Technology area End Consumers Source: Adapted from F. Müller-Veerse et al. (2001), p. 23. Mobile e-commerce value network outlines the key players

44. 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... Source: Adapted from F. Müller-Veerse et al. (2001), p. 80. m-Commerce consumer services and applications

45. M-SCM m-Inventory m-Tracking... M-CRM m-Services m-Sales... m-Workforce m-Office m-Fleet tracking... Internal External Source: Adapted from F. Müller-Veerse et al. (2001), p. 80. m-Commerce business services and applications

46. 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.

47. Mobile CRM Mobile 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.

48. Mobile CRM Mobile SCM Impact of wireless technologies on the value chain Source: Adapted from Dan Steinbock (2005), p. 260. Inbound Logistics Mobile 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 Operations Mobile 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 Logistics Mobile 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 sales Mobile 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 service Mobile 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

49. Rivalry among existing competitors Bargaining power of suppliers Bargaining power of channels and end users Threat of substitute products or services Barriers to entry (+) 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 Source: Adapted from Dan Steinbock (2005), p. 266.