The Ecology of Mobile Commerce: Charting a Course for Success Using Value Chain Analysis

Abstract

The convergence of the Internet with wireless telecommunications has profound and pressing implications for enterprises ranging from long-distance carriers to record labels to automakers. The fast-growing ability of wireless devices to handle a wealth of data content as well as voice transmission is opening the door to the creation of new products, services, markets, and revenue streams. But in what prevailing form will mobile commerce—the still-nascent effort to assemble and monetize the wireless Internet—emerge? How will the vast potential variety of data-based content be created, aggregated, and profitably delivered to both individual and business customers? The essential tool for approaching these still-open questions is value chain analysis. A value chain is a map of the entire set of competencies, investments, and activities required to produce, deliver, maintain, and reap the proceeds from a product or service. The profits and competitive advantages of participation in a given value chain reside dynamically within the chain, pooling at the positions of greatest value. (The returns to the different forms of participation in a value chain, particularly one as complex as mobile commerce, are anything but equal.) This chapter presents and analyzes an extended model of the unfolding m-commerce value chain. The goal is to provide an effective tool for planning and executing relevant business decisions in the face of such complicating factors as technology migration, the absence of market data, and inescapable constraints on organizational resources. The analysis and recommendations are supported by data from a survey with wide participation conducted by the authors.