dickson k.w. chiu phd, smieee, smacm, life mhkcs jelassi & enders : chapter 12
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COMP7880: E-Business Strategies Mobile Commerce. Dickson K.W. Chiu PhD, SMIEEE, SMACM, Life MHKCS Jelassi & Enders : Chapter 12. Our Roadmap. Mobile e-commerce strategy. 12. E-business strategy. Strategic analysis. Strategy formulation. Strategy implementation. 3. External analysis. - PowerPoint PPT PresentationTRANSCRIPT
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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
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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)
M-Commere Strategy 4
The M-commerce Systems Environment
WirelessVendingDevices
(M-Wallet capable)
Voice,Picture, SMS,
And Data
(Elliott, Phillips, 2004 )
M-Commere Strategy 5
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
M-Commere Strategy 6
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)
M-Commere Strategy 7
2G Phone connection to the Mobile Internet
Source: Kavassalis et al., 2003
M-Commere Strategy 8
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
M-Commere Strategy 9
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
M-Commere Strategy 10
3G: Third generation wireless communication
source form: 3GPP TS 23.228, 24.228, 23.102
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from: http://www.medialab.sonera.fi
4G
M-Commere Strategy 12
Current Development
iB3G 4G Pervasive Computing
M-Commere Strategy 13
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
M-Commere Strategy 14
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
M-Commere Strategy 15
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.
M-Commere Strategy 16
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?
M-Commere Strategy 17
Integrated multimedia nature of 3G domain- the PCS (Personal Communications Service)
(Elliott, Phillips, 2004 )
M-Commere Strategy 18
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
M-Commere Strategy 19
Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002
M-Commere Strategy 20
Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002
M-Commere Strategy 21
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
M-Commere Strategy 22
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
M-Commere Strategy 23
Locations Assets(Elliott, Phillips, 2004 )
Location-based services information
Location-based product Retailing
Location-based Products
Location-based Access
Location-based Maps (directions)
M-Commere Strategy 24
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
M-Commere Strategy 25
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-Commere Strategy 26
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
M-Commere Strategy 27
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
M-Commere Strategy 28
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-Commere Strategy 29
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-Commere Strategy 30
M-Commerce Value ChainEuropean Commission 1996 (Barnes, Stuart J. 2002)
M-Commere Strategy 31
European Mobile Portal & Media Value Chain
Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf
M-Commere Strategy 32
i-mode and Media Value Chain
Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf
M-Commere Strategy 33
MacDonald, 2003
M-Commere Strategy 34
M- Commerce Business Models MacDonald, 2003
Brand Building or Media Mix Customer Relationship Management Online Retail Premium Content Aggregation B2B Advertising
M-Commere Strategy 35
9%
MacDonald, 2003
M-Commere Strategy 36
Sources from: http://www.medialab.sonera.fi
M-Commere Strategy 37
Sources form: http://www.medialab.sonera.fi
M-Commere Strategy 38
Sources form: http://www.medialab.sonera.fi
M-Commere Strategy 39
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
M-Commere Strategy 40
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
M-Commere Strategy 41
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
M-Commere Strategy 42
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 ...
Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.
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
Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.
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.
Mobile CRMMobile SCM
Impact of wireless technologies on the value chain
Source: Adapted from Dan Steinbock (2005), p. 260.
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
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
Source: Adapted from Dan Steinbock (2005), p. 266.