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

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

2. Our Roadmap Mobile e-commerce strategy 12 E-business strategy Strategic analysis Strategy formulation Strategy implementation 3 Externalanalysis 9 5 Strategyoptions Internal organisation Opportunities/ threats 6 10 7 13 Interaction with suppliers Implementation Sustaining competitive advantage Exploring new market spaces Strengths/ weaknesses 4 Internalanalysis 11 8 Creating and capturing value Interaction with users/customers

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 (Elliott, Phillips, 2004 ) Wireless Vending Devices (M-Wallet capable) Voice, Picture, SMS, And Data 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 M-Commere Strategy Source: Kavassalis et al., 2003

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 communicationsource form: 3GPP TS 23.228, 24.228, 23.102 M-Commere Strategy

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

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

13. 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 iB3G: Combining the best of bothdual-mode handset Source form: 余孝先, 2004 M-Commere Strategy

14. 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 4G: 4th Generation Wireless Systemsource from: BWN Lab, http://users.ece.gatech.edu/~jxie/4G 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 LifestyleLessons 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 ApplicationsBalasubramanian 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 M-Commere Strategy

22. Mobile information assets: location sensitiveRao, 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 technologiesand various portable devices M-Commere Strategy

27. Comparison between E-commerce and M-commerce(Elliott, Phillips, 2004 ) M-Commere Strategy

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

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

43. Mobile e-commerce value network outlines the key players Provider of enabling technologies Infrastructure equipment vendor 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.

44. m-Commerce consumer services and applications Communication • m-Advertising • m-Health • SMS/MMS • … Information • News • Weather • Catalogues • ... Transaction • m-Banking • m-Tailing • m-Payment • ... Entertainment • m-Games • m-Gambling • m-Music • ... Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.

45. 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.

46. 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 person’s 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 user’s wireless Internet experience can be very restricted. Source: See also D. Steinbock (2005).

47. 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 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 Mobile SCM Mobile CRM Source: Adapted from Dan Steinbock (2005), p. 260.

48. 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.

49. Impact of wireless technologies on the industry’s 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.