Dickson K.W. Chiu

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COMP7880 E-Business Strategies Mobile Commerce

• Dickson K.W. Chiu
• PhD, SMIEEE, SMACM, Life MHKCS
• Jelassi Enders Chapter 12

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Our Roadmap
Mobile e-commerce strategy
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E-business strategy
Strategic analysis
Strategy implementation
Strategy formulation
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Externalanalysis
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Strategyoptions
Internal organisation
Opportunities/ threats
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7
10
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Sustaining competitive advantage
Implementation
Exploring new market spaces
Interaction with suppliers
Strengths/ weaknesses
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Internalanalysis
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Creating and capturing value
Interaction with users/customers
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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)

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The M-commerce Systems Environment
(Elliott, Phillips, 2004 )
Wireless Vending Devices (M-Wallet capable)
Voice, Picture, SMS, And Data
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1G Analog Communication(Elliott, Phillips,
2004 )

• Only in certain environments, particularly in
  government agencies and the military
• 1946 ATT Bell introduced the first commercial
  mobile phone
• 1960s ATT 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

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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)

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2G Phone connection to the Mobile Internet
Source Kavassalis et al., 2003
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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

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3G Third generation wireless communication(Ellio
tt, 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

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3G Third generation wireless communicationsource
form 3GPP TS 23.228, 24.228, 23.102
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from http//www.medialab.sonera.fi
4G
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Current Development

• iB3G
• 4G
• Pervasive Computing

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iB3G Combining the best of bothdual-mode
handset Source form ???, 2004

• WLAN
• Bandwidth
• Cost
• Multimedia Services
• Always Connected
• Easy to Setup
• 802.11a,802.11b, 802.11g

• Cellular
• Coverage
• Mobility
• Billing System
• Roaming
• Widespread
• 2G/2.5G, HS,3G, B3G

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4G 4th Generation Wireless Systemsource 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

• Whats New in 4G
• Entirely packet-switched networks
• All network elements are digital
• Higher bandwidth and lower cost (up 100Mbps)
• Tight network security

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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.

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Pervasive Computing for a Nomadic
LifestyleLessons Learned from MITs 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?

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Integrated multimedia nature of 3G domain- the
PCS (Personal Communications Service)
(Elliott, Phillips, 2004 )
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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

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Delineating the effects of M-commerce A space-
time matrix Balasubramanian et al. 2002
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Delineating the effects of M-commerce A space-
time matrix Balasubramanian et al. 2002
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Taxonomy of M- Commerce ApplicationsBalasubramani
an 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 3 Controlled by the Information
Receivers or by the Providers
Dimension 2 Time Critical
Dimension 1 Location Sensitive
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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

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Locations Assets(Elliott, Phillips, 2004 )
Location-based services information
Location-based product Retailing
Location-based Products
Location-based Access
Location-based Maps (directions)
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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

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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

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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

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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
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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
Users 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 users 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
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M-Commerce Value ChainEmerging Industry
Structure (Bane, Bradley, and Collis (1998))
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M-Commerce Value ChainEuropean Commission 1996
(Barnes, Stuart J. 2002)
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European Mobile Portal Media Value Chain
Source http//www.medialab.sonera.fi/workspace/Ju
kkaHelin3GinJapanOct2002.pdf
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i-mode and Media Value Chain
Source http//www.medialab.sonera.fi/workspace/Ju
kkaHelin3GinJapanOct2002.pdf
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MacDonald, 2003
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M- Commerce Business Models MacDonald, 2003

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

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MacDonald, 2003
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Sources from http//www.medialab.sonera.fi
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Sources form http//www.medialab.sonera.fi
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Sources form http//www.medialab.sonera.fi
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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

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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

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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

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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

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

• Communication
• m-Advertising
• m-Health
• SMS/MMS

• Information
• News
• Weather
• Catalogues
• ...

• 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.
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m-Commerce business services and applications

• M-SCM
• m-Inventory
• m-Tracking
• ...

• M-CRM
• m-Services
• m-Sales
• ...

External

• m-Workforce
• m-Office
• m-Fleet tracking
• ...

Internal
Source Adapted from F. Müller-Veerse et al.
(2001), p. 80.
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Characteristics of m-commerce
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.
Ubiquity
Convenience
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.
Localisation
Localisation of devices and their users is based
on the portability of wireless devices and the
knowledge about a persons location. It enables
location-based services.
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.
Personalization
Privacy and security
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.
Device and network limitations
Due to slow transfer rates, limited connectivity,
small screens and tiny keyboards of the handset,
a users wireless Internet experience can be very
restricted.
Source See also D. Steinbock (2005).
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Impact of wireless technologies on the value
chain

• 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 RD 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

Mobile SCM
Mobile CRM
Source Adapted from Dan Steinbock (2005), p. 260.
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Impact of wireless technologies on the value
chain

• 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)

• 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

• 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

• 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

Mobile SCM
Mobile CRM
Source Adapted from Dan Steinbock (2005), p. 260.
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Impact of wireless technologies on the industrys
five forces
() 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
Barriers to entry
Bargaining power of suppliers
Bargaining power of channels and end users
Rivalry among existing competitors
(/) 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
(/) 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
() Complements () Shifts
powerful bargaining
channels and power to can
improve end consumers
bargaining (/) Increases/decreases
power over switching
traditional costs
channels
Threat of substitute products or services
() 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
Source Adapted from Dan Steinbock (2005), p. 266.