Chapter 12 moving from wired e commerce to mobile e commerce
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Chapter 12: Moving from wired e-commerce to mobile e-commerce. After this session you should be able to:. Define mobile e-commerce and outline the key components of the mobile value network Recognise mobile e-commerce applications and be able to categorise them

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Chapter 12: Moving from wired e-commerce to mobile e-commerce

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Chapter 12: Moving from wired e-commerce to mobile e-commerce

After this session you should be able to:

  • Define mobile e-commerce and outline the key components of the mobile value network

  • Recognise mobile e-commerce applications and be able to categorise them

  • Depict the advantages of mobile e-commerce over wired e-commerce

  • Understand how wireless technologies affect the value chain and influence the industry’s five forces.

Exhibit 12.1 The mobile e-commerce value network outlines the key players

Provider of













End Consumers






Service area Application area Technology area

Source: Adapted from F. Müller-Veerse et al. (2001), p. 23.

Exhibit 12.2 m-Commerce consumer services and applications


  • News

  • Weather

  • Catalogues

  • ...


  • m-Advertising

  • m-Health



  • m-Banking

  • m-Tailing

  • m-Payment

  • ...


  • m-Games

  • m-Gambling

  • m-Music

  • ...

Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.

Exhibit 12.3 m-Commerce business services and applications


  • m-Inventory

  • m-Tracking

  • ...


  • m-Services

  • m-Sales

  • ...



  • m-Office

  • m-Fleet tracking

  • ...


Source: Adapted from F. Müller-Veerse et al. (2001), p. 80.

Characteristics of mobile e-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.


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 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.


Personalisation 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.

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).

Exhibit 12.4 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


  • 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 supply chain management

Mobile customer relationship management

Source: Adapted from Dan Steinbock (2005), p. 260.

Exhibit 12.4 Impact of wireless technologies on the value chain (Continued)

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 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

Mobile supply chain management

Mobile customer relationship management

Source: Adapted from Dan Steinbock (2005), p. 260.

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


Bargaining power

of suppliers

Bargaining power of

channels and end users

Rivalry among

existing competitors

(+) Complements (–) Shifts

powerful bargaining

channels and power to

can improve end consumers

bargaining (+/–) Increases/decreases

power over switching

traditional costs


(–/+) 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


(+/–) 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

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.

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