Mobile commerce IT Valley Fribourg 2001 Yves Pigneur University of Lausanne [email protected]...

Mobile commerceMobile commerce

IT ValleyFribourg 2001

Yves PigneurUniversity of Lausanne

[email protected](+41 21) 692.3416

© 2001 Pigneur, HEC Lausanne e-business 2

Université de Lausanne

SYLLABUS | AGENDA | FINSYLLABUS | AGENDA | FIN

Agenda

• Introduction– Wireless and internet penetration in Europe

• Mobile commerce & business DEMAND

– Value proposition

– Consumers

– Companies

• Business framework OFFER

– Product innovation

– Infrastructure management

– Customer relationship management

• Emerging scenarios– Operator (or manufacturer) integration

– Market chaos

– Portal syndication

• Conclusion




General context

technologytechnology

Electronic commerceElectronic commerce

StrategyStrategy

Business modelsBusiness models

IndustryIndustry

IP strategyIP strategy

allows

Levier to change

Allows

impact

impact

IntermediaryIntermediary

CommunityCommunity

standard

infrastructure

integration

Brand

Promotion

Customer service

Brand

Promotion

Customer service

Costs

Diffusion time

Learning

Costs

Diffusion time

Learning

New products

New channels

New businesses

New products

New channels

New businesses

... improve

reduce

create

CustomerRelationship


ProductInnovation

ProductInnovation

logisticsinfrastructures

logisticsinfrastructures

FinanceRevenue

FinanceRevenue

[Bloch, 1999]




Cellular & Internet penetration in Europe

[Durlacher, 2000]




1999 2000

0

1

2

3

4

5

Feb. Apr. Jun. Aug. Oct. Dec. Feb.

i-mode service

0

5

10

15

20

25

30

millionmillion

Launch22. Feb.

NTT DoCoMoi-mode

Growth of i-Mode services (Japan)

The i-mode service subscribers are now about 10 million.

By end of 2000, all the mobile phones of DoCoMo would be provide with the I-mode service

Source Nikkei Sangyo Shinbun & ADL




Value proposition - examples

• Facilitate research– and reduce transaction costs

• Speed up distribution– particularly digital goods (written, music, image, software)

• Improve the quality of service– by personalization, for example

• Improve facility and experience of buying– capitalizing on game aspects

• Improve the transparence of information– by opening up your information system

• Develop a sense of community– and improve the diffusion of knowledge and contacts

• Bind complementary products

Mobilecommerce

Mobilecommerce




Payment Illustrations

Yesterday Today

[McKinsey, 2000]

• Sonera offers wireless payment applications




Auction

• 12 Snap offers wireless online auctions through Cell Broadcast and SMS in Germany in cooperation with D2 and Nokia

Illustrations

Yesterday Today

[McKinsey, 2000]

15,000+ customers registering with the service in the 1st

month




Movie ticketing

• Ericsson and Telenor launched a service to buy cinema tickets using mobile phone

Illustrations

Yesterday Today

[McKinsey, 2000]




Trading

• W-Trade offers a complete solution for wireless stock trading

Illustrations

Yesterday Today

[McKinsey, 2000]




Purchasing

• CHL offers the first SMShop for ITC goods in ItalyAds for discounts on ICT goods on newspaper with promotion code and purchase via SMS

Illustrations

Yesterday Today

More than 10’000 SMSshop

subscribers in 2 weeks

[McKinsey, 2000]




Check-in

• Swissair introduced check-in via WAP

Illustrations

Yesterday Today




Advertizing

• MobileAttitude offers promotion, reminders, snow zones …

Illustrations

Yesterday Today




VoiceVoice InternetInternet WAPWAP

Portail

• Omnitel 2000 offers a wireless portal

Illustrations

Yesterday Today

[McKinsey, 2000]




• SkiRando early proposed a WAP connection and a GPS facility

Illustrations

Yesterday Today

Security




Logistics

• Frito Lay introduced checking stock with handheld computer• it’s now possible with a Palm Pilot with a bar code scanner

Illustrations

Yesterday Today




Tracking

• UPS introduced handheld computer for tracking and tracing • And now using PalmPilot

Illustrations

Yesterday Today




Mobile sales force

• AstraZeneca equiped each member of the sale force with a PDA or WAP phonedirectly connected with the ERP system

Illustrations

Yesterday Today




1991la révolution

1991la révolution

• Oticon adopted a paper-less organization and nomadism way-of-work

Illustrations

Yesterday Today

Nomadism and tele-working




M-applications

1998 1999 2000 2001 2002 2003 2004

SMS TOOLKIT GPRS EDGE

E-SalaryE-Bill

Telemetry

Information Provisioning

Banking

UMTSSMS WAP

Ticketing Reservation

Payment

Telematics

Broking

Shopping Health Care

Job Dispatch CRM

WASP

Auctions

Advertising Music

Supply chain integration Video

Games

SMS

E-mail PIM

Customer Care

I. messagingChat

U. messaging

M-Commerce Applications

M-Commerce Enabling

Applications

Security Information Management

[Durlacher, 2000]

© 2001 Pigneur, HEC Lausanne



10

3

14

16

44

5

4

7

8

8

9

6

6

4

16

20

23

22

26

25

14

11

152

2

7

3

0 10 20 30 40 50 60 70

Text information services

Local information services

Accessing Web sites

Cellphone banking

E-mail notification

Sending/receiving e-mail

Sending text messages

Downloading music

Buying goods or services

Interest in Mobile Phone Services: Germany

Percent of Adults

Already use

Very interested

Quite interested

Source Gartner Research 2000

[Gartner, 2000]

© 2001 Pigneur, HEC Lausanne



Level of Interest in New Services (Europe)

1.6

1.7

3.4

3.3

2.8

3.2

2.2

2.8

3.0

2.02.2

1 1.5 2 2.5 3 3.5 4 4.5 5

Horoscopes

Lottery results

Cinema booking

Event booking

Very interestedNot interested Mean interest rating

Sports results

News

Banking

Share dealing

Music downloads

Restaurant booking

Traffic information


[Gartner, 2000]




Willingness to Pay for New Services (Europe)

9

8

61

64

43

49

24

25

44

33

28

0% 10 20 30 40 50 60 70

Percent of Respondents

Horoscopes

Lottery results

Cinema booking

Event booking

Restaurant booking

Traffic information

Sports results

News

Banking

Share dealing

Music downloads


Preferred payment mechanism: Pay-per-use (Vs Subscription)

[Gartner, 2000]




Innovationproduit

Gestion desrelations-clients

Gestion desinfrastructures

Aspectsfinanciers

Business model

Financialaspects

Financialaspects

HOW MUCH?What is the revenue model? the profit model? designed to last?

WHO?How to manage relationships with customers, satisfy them and generate revenues to be on the winning side?



WHAT?What is the scope of products and services, its value (its benefits) for the customer, the attitudes to deliver them in an innovating way?

Productinnovation

Productinnovation

HOW?How to organize the infrastructure, its resources, the knowledge and the structure of resulting costs, manage the value chain and processes, build alliances to achieve performance?

Infrastructurelogistics

Infrastructurelogistics

Businessframework

Businessframework




FrameworkP

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Payment

Communication

Access

Platform

Network

Device

Marketing

Relation mgmt

Personalization

PRODUCT INNOVATION

• Conceive of attractive new services and contents, and figure out how best to bring them to market

INFRASTRUCTURE MANAGEMENT

• Build and manage facilities for high volume, repetitive, operational tasks

CUSTOMER RELATIONSHIP MANAGEMENT• Identify, attract, and build relationships with customers

Telecomoperator

Devicemanufacturer

Internetplayer

contentprovider




Product (payment) «a killer attitude, no killer application»P

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Communication

Platform

Network

Device

Marketing

Relation mgmt

Personalization

Payment

Access

Existing credit card

Nokia/VISA agreementFrance Telecom’s ItiAchat

using Motorola’s StarTAC-D phone

Phone operator provides credit

•Sonera Mobile Pay in Finland„Dial-a-Coke“

New virtual credit/debit card

Paybox.net in Germany




Low cash transaction value[McKinsey, 2000]

EUR 300 milliards (Europe) Vending machines, Parking, Movie ticketsPublic transportation, Tolls, Laundry, Fast foodSmart airport, Gambling

Smart card barriers:Smart card barriers:

• Need of recharge (ATM dependent)• Lack of information feedback (e.g., remaining

balance)• Dedicated & complex hardware (wire-lined

POS & confirmation machine)

• Need of recharge (ATM dependent)• Lack of information feedback (e.g., remaining

balance)• Dedicated & complex hardware (wire-lined

POS & confirmation machine)

Credit card barriers:Credit card barriers:VISA

Smart phone advantages:

• ATM independent• Visual real time feedback• Standard & common device (no wire line

connection required, no confirmation machines required)

• High penetration of mobile phones• Tailor-made solution for micro-payments• Multifunctional• Automatic identification control

• Relatively low penetration among users and merchants/ vendor machines

• Inefficient in transactions lower than $10• Mono-functional (payments only)• Difficulty for customers & merchants to verify each

other

• Relatively low penetration among users and merchants/ vendor machines

• Inefficient in transactions lower than $10• Mono-functional (payments only)• Difficulty for customers & merchants to verify each

other

Estimate




Product (communication) P

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Payment

Platform

Network

Device

Marketing

Relation mgmt

Personalization

Communication

Access

SMSE-mail

Instant messagingUnified messaging

nomad




Product (access) P

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Payment

Communication

Access

Platform

Network

Device

Marketing

Relation mgmt

Personalization

Information MultimediaTransaction

• News• Alerts• Sports• Financial• Entertainment• Program• Travel• Guide• Find me services• Yellow pages• Dictionary• Traffic

FINANCIAL

• Banking• Broking SHOPPING

• Retailing• Ticketing• Auctions• Reservations• Travel• Betting

MEMBERSHIP

• Loyalty programs• Medical records

ENTERTAINMENT

• Gaming• Music• TV• Characters

IN-CAR ELECTRONICS

• Music• Traffic• GPS

AnytimeAnywhere

Time/location-sensitive services

WAP




InfrastructureP

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Payment

Communication

Access

Platform

Network

Device

Marketing

Relation mgmt

Personalization

WAP middleware aggregator

UMTS PKI GPS

Operating system Speech recognition Bluetooth

battle for standards




CustomerP

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Payment

Communication

Access

Platform

Network

Device

Marketing

Personalization

– to identify and attract customers

– to generate economies of scope

– to build customer loyalty and trust

– to understand their attitudes and needs

– to customize usage of services and content

– to provide the customer with the right content • PUSH information has to be relevant and timely to avoid being rejected• PULL information has to be easily accessed and relevant to generate usage

Relation mgmt

battle for customer ownership




1

2

3

A B

C D?

Clear-enough future

forecast

Traditional toolkit

Alternate futures

Discrete options

Game theoryDecision analysis

True ambiguity

No basis for forecast

analogiesPattern recognition

Range of futures

No natural option

Scenarioplanning

Levels of uncertainty:

[Courtney, 1997]

Scenario planning

SIMULATE

Emergingscenarios

Emergingscenarios




Three scenarios

Marketchaos

Operatorintegration

competition

cooperation

Portalsyndication

product

Infrastructure

customer

[c-qential, 2000]




Operator integration BUNDLED

The operator leverages its control of the network and its ownership of the customers to extend its role

Pro

du

ctC

ust

om

erIn

fras

tru

ctu

re

Payment

Communication

Access

PlatformPlatform

NetworkNetwork

DeviceDevice

Marketing

Relation mgmt

Personalization

– subscription, airtime charges and pay-per-use from customers– commission fee (for processing, billing …) from content providers

– derived from sale of devices through operators

– margins from selling content

traffic

could be a device-centric in place of an oprator-centric scenario …




“Unbundling the corporation”P

rod

uct

Cu

sto

mer

Infr

astr

uct

ure

Economy Culture Competition

Speed is the keyto be the firston the market

Employee centered Battle for talents,low barriers to entry, many small players thrive

Economies of scope are keyto acquire a large numberof customers

Highly service orientedcustomer comes first

Battle for scope,rapid consolidation,big players dominate

Economies of scale are keyfor reducing cost inmanaging large volumes

Cost focusedstress on standardizationefficiency

Battle for scalerapid consolidation,a few big players dominate

[Hagel, 1999]




Market chaos UN-BUNDLED

A marketplace where customers have distinct relationship with device makers, operators and content providers

Pro

du

ctC

ust

om

erIn

fras

tru

ctu

re

PaymentPayment

CommunicationCommunication

AccessAccess

Platform

Network

Device

Marketing

Relation mgmt

Personalization

– subscription and airtime charges from customers

– sales of content and services: pay-per-use & subscription

– sales of devices

– sales of profiling information

content




Portal syndication RE-BUNDLED

Aggregators (infomediaries) syndicate content providers to create portals that deliver customized offerings

Pro

du

ctC

ust

om

erIn

fras

tru

ctu

re

Payment

Communication

Access

Platform

Network

Device

MarketingMarketing

Relation mgmtRelation mgmt

PersonalizationPersonalization

– subscription and airtime charges from customers

– margins from selling content and services through wortals

– subscription and pay-per-use– advertising fee– charges for personalized bundled services and content

customers




Evaluation of scenarios

Scenarios Pros Cons

Operator

• Operators control customer experience• Intense price competition among operators

will keep service affordable• Ability to provide unified billing for services

and content

• Breadth and quality of content and commerce are limited

• Users will ultimately choose services based on content brand names

Market

• Capitalizes on strengths of individual players• Customer has direct contact with content

provider• No big brother: protection of private life

• Risk of anarchy• Difficulty to reach the customer and maintain

the distribution channels

Portal

• Allows users a virtually seamless transition from the desktop to mobile world

• Core competency is a provision of highly customized content and services

• Portal may just serve as a launch pad to the Internet for users

• Rules for sharing third-party content with mobile users are complex and uncertain

Pro

du

ct

Cu

sto

me

rIn

fra

str

uc

ture

Mobile commerce IT Valley Fribourg 2001 Yves Pigneur University of Lausanne [email protected]...

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Transcript of Mobile commerce IT Valley Fribourg 2001 Yves Pigneur University of Lausanne [email protected]...