COMP7880: E-Business Strategies
Mobile Commerce
Dickson K.W. Chiu
PhD, SMIEEE, SMACM, Life MHKCS
Jelassi & Enders: Chapter 12
1
Our Roadmap
Mobile e-commerce strategy
E-business strategy
Strategy
Strategy formulation
implementation
12
Strategic
analysis
3
External
analysis
9
5
Internal
organisation
Strategy
options
Opportunities/
threats
Strengths/
weaknesses
4
Internal
analysis
6
Sustaining
competitive
advantage
8
7
Exploring
new market
spaces
Creating and
capturing
value
10
13
Interaction with
suppliers
Implementation
11
Interaction with
users/customers
COMP7880-IC-2
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.
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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
3
The M-commerce Systems Environment
(Elliott, Phillips, 2004 )
Wireless
Vending
Devices
(M-Wallet
capable)
Voice,
Picture, SMS,
And Data
M-Commere Strategy
4
1G: Analog Communication
(Elliott, Phillips, 2004 )

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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
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Nokia in Finland
Ericsson in Sweden
Motorola in USA
Sweden, Japan, and USA developed their own standard
Roaming was extremely difficult
M-Commere Strategy
5
2G: Based on Digital Technology
(Elliott, Phillips, 2004 )


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1G, lack of security and the proliferation of different
wireless network standards
2G occurred in early 1990s
GSM (Global System for Mobile Communication)

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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
6
2G Phone connection to the Mobile Internet
Source: Kavassalis et al., 2003
M-Commere Strategy
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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)

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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
8
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 )


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A new Network service replacement for the GSM
3G is to provide an economically viable and technologyenhanced 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
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3G: Third generation wireless communication
source form: 3GPP TS 23.228, 24.228, 23.102
M-Commere Strategy
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from: http://www.medialab.sonera.fi
4G
M-Commere Strategy
11
Current Development

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iB3G
4G
Pervasive Computing
M-Commere Strategy
12
iB3G: Combining the best of both
dual-mode handset

Cellular

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Source form: 余孝先, 2004

Coverage
Mobility
Billing System
Roaming
Widespread
2G/2.5G, HS,3G, B3G
WLAN
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M-Commere Strategy
Bandwidth
Cost
Multimedia Services
Always Connected
Easy to Setup
802.11a,802.11b,
802.11g
13
4G: 4th Generation Wireless System
source from: BWN Lab, http://users.ece.gatech.edu/~jxie/4G

Reasons to Have 4G

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Support interactive
multimedia
Wider bandwidth, higher
bit rates
Global mobility and
service portability
Low cost
Scalability of mobile
networks

What’s New in 4G

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Entirely packetswitched networks
All network elements
are digital
Higher bandwidth and
lower cost (up
100Mbps)
Tight network security
M-Commere Strategy
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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.
M-Commere Strategy
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Pervasive Computing for a Nomadic Lifestyle
Lessons Learned from MIT’s Project Oxygen, Zue 2004.

Some System-Level Challenges
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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
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Integrated multimedia nature of 3G domainthe PCS (Personal Communications Service)
(Elliott, Phillips, 2004 )
M-Commere Strategy
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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:
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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
M-Commere Strategy
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Delineating the effects of M-commerce:
A space- time matrix Balasubramanian et al. 2002
M-Commere Strategy
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Taxonomy of M- Commerce Applications
Balasubramanian et al. 2002
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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
Dimension 2:
or by the Providers
Time Critical
M-Commere Strategy
Dimension 1:
Location
Sensitive
21
Mobile information assets: location
sensitive Rao, Minakakis, 2003 ;Balasubramanian et al. 2002

Deploy Mobile Internet services based on the
various benefits of mobility

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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

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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
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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)
M-Commere Strategy
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Time Critical

Applications vary along the dimension in terms of
the degree to which they are time critical
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Flight departure
Information that quickly depreciates in value

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Participation in a virtual auction (+)
Mobile access to digital libraries (–)
It will involve the exchange of information related
to a scheduled


Balasubramanian et al. 2002
A stock price
Information that is required to address some
emergence

A roadside assistance
M-Commere Strategy
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Controlled by the information receivers or
by the providers Balasubramanian et al. 2002

Applications controlled by an information receiver
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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

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Coupon announcement
Maintain on an ongoing basis by service providers or
coordinators

Monitoring of truck fleets using on board sensors
M-Commere Strategy
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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
M-Commere Strategy
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Comparison between E-commerce and Mcommerce (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 locationbased data
Product or service
attraction
Fixed non-timeconstrained access
Mobility and
Portability of access
M-Commere Strategy
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Comparison between E-commerce and Mcommerce 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 Medium
Memory
Small
Click through rates for
banner AD and e-Mail
(i-mode)
3.6%; 24%
PC Less than 0.5%
M-Commere Strategy
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M-Commerce Value Chain
Emerging Industry Structure
(Bane, Bradley, and Collis (1998))
Phone Television Computer
Shopping
Voice
Video
Digital Wormhole
Data
Terminal
Shop at home
Facilitating
Technologies
Entertainment
Transactions
Education
Pornography
Gambling
Hardware
Fileservers
CPU
Software
Computing Algorithms
Digital Signal Processing
General Magic
ATM
Publications
Transmission
Manipulation
Packaging
Content
= Industry size (relative)
M-Commere Strategy
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M-Commerce Value Chain
European Commission 1996 (Barnes, Stuart J. 2002)
M-Commere Strategy
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European Mobile Portal & Media Value Chain
Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf
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i-mode and Media Value Chain
Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf
M-Commere Strategy
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MacDonald, 2003
M-Commere Strategy
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M- Commerce Business Models
MacDonald, 2003
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Brand Building or Media Mix
Customer Relationship Management
Online Retail
Premium Content
Aggregation
B2B
Advertising
M-Commere Strategy
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MacDonald, 2003
9%
M-Commere Strategy
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Sources from: http://www.medialab.sonera.fi
M-Commere Strategy
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Sources form: http://www.medialab.sonera.fi
M-Commere Strategy
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Sources form: http://www.medialab.sonera.fi
M-Commere Strategy
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Obstacles to M-commerce
(Elliott, Phillips, 2004 )

Efficient and fast wireless telecommunications services
are often focused within specific area

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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
39
Obstacles to M-commerce (2)
(Elliott, Phillips, 2004 )

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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
40
The development of M-commerce

In Europe and Japan
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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

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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
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The growth of spread of M-commerce
(Elliott, Phillips, 2004 )

Innovations:


Adoption:

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Developments in mobile wireless application and
technologies
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
42
Mobile e-commerce value network
outlines the key players
Provider of
enabling
technologies
Infrastructure
equipment
vendor
Content
provider
Service area
Source: Adapted from F. Müller-Veerse et al. (2001), p. 23.
Portal
provider
Mobile
device
manufacturer
Application area
Technology area
End Consumers
Mobile
network
operator
Application
developer/provider
m-Commerce consumer services and applications
Information
Communication

News

m-Advertising

Weather

m-Health

Catalogues

SMS/MMS

...

…
Transaction
Entertainment

m-Banking

m-Games

m-Tailing

m-Gambling

m-Payment

m-Music

...

...
Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.
M-SCM
M-CRM
m-Inventory
m-Tracking
 ...
m-Services
m-Sales
 ...




Internal
External
m-Commerce business services
and applications
Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.
m-Workforce
m-Office
 m-Fleet tracking
...

Characteristics of m-commerce
Ubiquity
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.
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 ecommerce. 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
Device and
network
limitations
Source: See also D. Steinbock (2005).
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.
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
Source: Adapted from Dan Steinbock (2005), p. 260.
Mobile CRM
Impact of wireless technologies on the
value chain
Operations
Inbound Logistics
Mobile activities
Mobile activities in
associated with
receiving, storing and transforming inputs
disseminating inputs to into final
products/services
products/services
Outbound Logistics
Marketing and sales
Mobile activities
Mobile activities with
associated with collecting,means for buyers to
storing and distributing purchase products/
products/services to
services and inducing
buyers
them to do so, incl.
advertising, promotion,
• Mobile scheduling, • Mobile
• Mobile order
sales force, channels,
shipping,
information
processing and
pricing
warehouse/demand exchange,
scheduling
management and
scheduling and
• Mobile delivery vehicle • Mobile sales channels,
planning and
decision making
operation
e.g. websites,
scheduling across
in in-house
• Mobile
marketplaces
the company and
plants, contract
customer/channel
• Mobile access to
its suppliers
assemblers, and
access to product
customer information,
• Mobile distribution
components
development and
product catalogues,
across the
suppliers
distribution status
order entry
company of real• Mobile
• Mobile channel
• Mobile product/service
time inbound and
available-tomanagement, incl.
configurators
in-progress
promise
information exchange, • Mobile push/pull
inventory data
information to
warranty claims,
advertising
sales force and
contract management • Mobile surveys, optchannels
(versioning, process
in/opt-out marketing,
control)
and promotion
response tracking
Mobile SCM
Source: Adapted from Dan Steinbock (2005), p. 260.
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
Mobile CRM
Impact of wireless technologies on
the industry’s five forces
Barriers to
entry
Bargaining power
of suppliers
(+/–) 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 disintermediate 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
Source: Adapted from Dan Steinbock (2005), p. 266.
Rivalry among
existing competitors
(+) 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
Bargaining power of
channels and end users
(–/+) Reduces differences among
competitors as offerings are
(+) Complements
(–) Shifts
powerful
bargaining
difficult to keep proprietary, but increases
channels
and
power
to
the potential for efficiencies
can
improve
end
consumers
(–/+) Migrates competition to price, but can
bargaining (+/–)
increase potential for differentiation
Increases/decreases
(–) Widens the geographic market,
power over
switching
increasing the number of competitors
traditional
costs
channels
(–) Lowers variable cost relative to fixed
cost, increasing pressure for price
discounting
(+) By making the overall industry
more efficient, Mobility can
expand the size of the market
Threat of substitute
(+) The proliferation of mobility approaches
products or services
creates complementary opportunities,
rather than substitution threats