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GENERAL RESEARCH

An evaluation framework for viable business modelsfor m-commerce in the information technology sector

Sulabh Sharma & Jairo Alberto Gutiérrez

Received: 24 July 2009 /Accepted: 11 January 2010 /Published online: 27 February 2010# Institute of Information Management, University of St. Gallen 2010

Abstract This paper presents a study of the characteristicsof viable business models in the field of Mobile Commerce(m-commerce). Mobility has given new dimensions to theway commerce works. All over the world various stake-holder organisations are consistently probing into the areaswhere m-commerce can be exploited and can generaterevenue or value for them, even though some of thoseimplementations are making the business environmentmore complex and uncertain. This paper proposes a viablebusiness model evaluation framework, based on the VISORmodel, which helps in determining the sustainabilitycapabilities of a business model. Four individual caseswere conducted with diverse organisations in the Informa-tion Technology sector. The four cases discussed dealt withmobile business models and the primary data was collectedvia semi structured interviews, supplemented by an exten-sive range of secondary data. A cross-case comparative dataanalysis was used to review the patterns of different viablebusiness components across the four cases and, finally, thefindings and conclusions of the study are presented.

Keywords Business models . M-commerce .

Evaluation framework

JEL L14 . L22 . L80

Introduction

The fast pace of development in the field of wireless andmobile technologies is leading to a significant numberof mobile applications deployed over faster and cheapermobile broadband services. As a result of that, the trend ofusing mobile applications is increasing rapidly (withpopular mobile services in the areas of m-shopping andm-payment among others). Because of this trend, there arehuge market opportunities and high commercial expect-ations for mobile commerce. Thus, more and moreorganizations have been implementing or intend to imple-ment m-commerce as another distribution channel into theirday to day operations in order to fulfil high users’expectations and to benefit from the hardware and softwareinfrastructure provided by telecommunications providersand companies such as Yahoo, IBM, Google and Amazon.However, m-commerce is a young field and m-commercebusiness models are different from traditional businessmodels. The issue of how to build viable business modelsfor m-commerce is becoming very important for bothorganizations and researchers. Organizations need to un-derstand the key components of viable business model form-commerce; they need to know how those componentshelp organizations make money. As a result of theseconcerns, there is a strong motivation for researchers tofocus on this field and to work out these important issuesfor the benefit of successful future m-commerce develop-ment and implementations.

The term “business model” at first glance brings animpression of highly sophisticated arcane set ups, mathe-matical calculations, projection sheets and much more;

Responsible editor: Hans-Dieter Zimmermann

S. SharmaAuckland Regional Council,Auckland, New Zealande-mail: [email protected]

J. A. Gutiérrez (*)ISOM Department, University of Auckland,Private Bag 92019,1142 Auckland, New Zealande-mail: [email protected]

Electron Markets (2010) 20:33–52DOI 10.1007/s12525-010-0028-9

however fundamentally a good business model can bedescribed by answering a few simple questions such as:Who is the customer? What does s/he value? And how canmoney be made out of a business? With the underlyingeconomic logic that explains how we can deliver value tocustomers at an appropriate cost (Magretta 2002).

The global business environment is very dynamic andforces organisations to consistently improve their businessmodels in order to match the competition. These changesare triggered by many factors such as changes in customerneeds and market requirements, labour and resourcesglobalisation, regulatory emphasis, strong rivalry andtechnology innovations (Kamoun 2008). A good workingbusiness model remains crucial to every organisation,whether it’s a new venture or an established player(Magretta 2002).

To achieve m-commerce success, people tend to look forinnovative ‘killer applications’ or modifications of existinge-commerce applications in a mobile environment (Xu andGutiérrez 2006). It is not, though, the application but thebusiness model behind the application that really deter-mines its success (Yuan and Zhang 2003). A viablebusiness model, where all the players, including consumers,operators, content providers, device and equipment manu-facturers, portal providers, content producers, distributorsor other cooperating in the value chain run a profitablebusiness and extract sufficient incentives to sustain thevalue network, is one of the dominant factors for thesuccess of m-commerce initiatives (Feng et al. 2006).

Background

The recent steep growth in mobile innovations has createdcomplex global business systems. Moulding these innova-tions and services into a sustainable business model is anintricate task. It is assumed that unlike traditional and staticvalue chains, multiple organisations will be co-operating ata high degree and will tend to create a value network,where each player controls different capabilities andresources (Bouwman et al. 2005). However companies facedifficulties in framing that type of cooperation andachieving the anticipated benefits. Business models aroundM-commerce are much more complex than mere strategicalliances in the telecommunications domain. There needs tobe more efficient strategies around building businessmodels, which could achieve synergy of services andresponsibilities among various stakeholders (Bouwman etal. 2005) thus generating business propositions out of thevalue network for each participant, and thus sustaining therelationships.

Wireless technologies present an attractive medium forconducting e-commerce for two very strong reasons:

ubiquity and localization, these factors should be stronglyemphasised in m-commerce applications (Clayton et al.2004). There is certainly a need to think beyond existinginternet based e-commerce business models and search formodels more appropriate to m-commerce.

As such, a business model is a blueprint of the way abusiness creates and captures value from its services,products, or innovations (Kamoun 2008). The concept alsodefines how a firm interacts and transacts with customers,partners, and suppliers. A business model converts techno-logical characteristics and potentials to economic outputs,thus directing technology investments towards profitableand sustainable economic value creation (Chesbrough andRosenbloom 2002).

Purpose of the study

The purpose of this study is to determine and propose anevaluation framework for viable business models for m-commerce in the IT sector. It first looks at variouscomponents of a business model in general and theninvestigates the success factors which may sustain itsexistence. This study then probes into the relevance ofidentified business model concepts to m-commerce andpresents a framework for a viable m-commerce businessmodel.

Research questions/objectives

The study addresses the following research questions:

▪ How does m-commerce impact traditional e-commercebusiness models?

The first research question explores how m-commercecan be used in accordance with the existing e-businessmodels or how to create new ones.

▪ What are the success factors that support a viable andsustainable business model for m-commerce in the ITsector?

After gaining a basic understanding about the m-commerce business environment and the key differencesas compared to e-commerce, the second research questionlooks into the critical success factors of a sustainablebusiness model with relevance to m-commerce.

▪ What are the potential characteristics of an evaluationframework for a viable mobile commerce businessmodel in the IT sector?

This study also probes into the arrangements in whichthe participants in a given business model share value andearn sufficient incentives to further make their relationshipmore sustainable, ultimately achieving a stable and suc-

34 S. Sharma, J.A. Gutiérrez

cessful business model. Evaluation frameworks are essen-tial in identifying criteria for either assessing the feasibilityand profitability of business models or evaluating abusiness model against alternative or best practice cases(Pateli and Giaglis 2003).

Literature review

During the last decade technological developments inwireless communications and mobile computing have ledto a new and promising field of mobile commerce aka (M-commerce). There is much talk about the benefits,applications, critical success factors and adoption of mobiledevices and commerce via mobile communication, butthere is no in-depth discussion on viable business modelsfor m-commerce (Ulhøi and Jørgensen 2008). Understand-ing the potential effects of mobility on business andidentifying various business partners in the m-commercevalue chain is the first step towards innovative and adaptivebusiness modelling. Such an attempt can help organisationsmake the best use of mobility in order to achieve enhancedvalue creation and sustainable business models.

‘Business model’ defined

With the evolution of dotcom businesses in the late 90s,the concept of business models became significant andsince then there has been a consistent production ofliterature on this area (Pateli and Giaglis 2003). However,the topic of business models is often discussed on thesurface and repeatedly without any real understanding ofits role and its potential (Osterwalder et al. 2005). In thepast, there has been great uncertainty around businessmodels mainly because terms like business model,strategy, business process models, revenue structures andcost models have often been used interchangeably. Aviable business model is one that delivers the maximumvalue proposition and enhances the willingness amongtarget customers to pay given the ability of a provider tooptimise the real cost of the provision of services; thisgenerates profits to keep the business sustainable (Fife andPereira 2008).

A viable business model is a blueprint for the extensionof a full business strategy and plan, and it providesdirection for business processes. Business models are usedby organizations to help them create value in the industry inorder to achieve business strategies (Ulhøi and Jørgensen2008; Moen 2006). A business strategy sits on top of thebusiness model; it provides direction for the business modelto help the organization make money (Pateli and Giaglis2003). The relationship between strategy and businessmodels is shown below in Fig. 1.

A viable business model will explain the relationshipbetween technical inputs (goods and services) and econom-ic outputs (business value, profit and price). The mostimportant thing for a viable business model is to transformthese technical inputs to economic outputs in order to makemoney for the organizations. Therefore, the question: “howto make money for the business?” is the key question thatmust be answered by a viable business model (Seppanenand Makinen 2009).

Over a period of time, researchers have proposed variousdefinitions to explain the significance of business models.On one hand, a business model is presented as anorganisation’s core logic for creating value (Linder andCantrell 2000), on the other hand it is defined as a story thatmakes sense and elucidates how a business works(Magretta 2002). Timmers (1998) also indicated that abusiness model is an outline of the products and services,along with the business actors and their roles, the potentialbenefits for the various actors and a description of the flowof revenues for each of them. Similarly, a business modelcan also be described as a narration of roles and relation-ships among the stakeholders of an organisation: consum-ers, customers, alliances and it maps the major flows ofinformation and money, and the key benefits to theparticipants (Pateli and Giaglis 2003; Weill and Vitale2001). A Business Model’s greatest advantage as aplanning tool is that it provides an abstract of how all theelements of a business system fit into a working whole(Magretta 2002).

Another view point in the literature emphasises that abusiness model can be conceptualised as one that serves asa blueprint of the techniques a specific business follow, andcaptures value from emerging services, products, or

Fig. 1 Business model definition framework

An evaluation framework for viable business models for m-commerce in the information technology sector 35

innovations; also it defines the relationships between aspecific firm and its customers, partners, and suppliers(Kamoun 2008). Having an apt business model has nowbecome a key factor in determining how organizations cancompete in the business world (Nagle and Golden 2007;Seddon and Lewis 2004).

In reality, business models are dynamic in nature and donot last forever (Reuver et al. 2007a). Given the externalchanges in their business environment, organizations needto reinvent their business model frequently in order to keepit sustainable. Choices made during the establishment of theinitial services, processes and underlying technology,normally change during consecutive stages of the marketrollout and commercial exploitation (Bouwman et al.2008). Therefore, a sustainable business model is one thatliberates the concealed potential of a technology, butconsistently searches for new alternative models andemerging innovations which are usually brought about bynew technologies. The search for a viable business modelcreates a continuous learning framework and a foundationfor economic success in the venture (Chesbrough andRosenbloom 2002).

The evolution of business models—a historical perspective

Over the last few years, the concept of business models hasevolved from definition, via exploring fundamental compo-nents and classifying business models into categories todeveloping descriptive models (Bouwman and MacInnes2006). The dot.com boom compelled researchers andauthors to suggest several definitions and classificationsfor business models. Eventually this made the termbusiness model more prominent and this period of time isusually considered the first phase of the evolution of theconcept (Rappa 2001; Timmers 1998). In the followingphases, authors started to complete the definitions ofbusiness models by proposing the potential elementsidentified in a specific business model. Initially proposi-tions were very simple. In the next (third) phase, authorswent one level down in detail and started preparing detaileddescriptions of the components of business models (Afuahand Tucci 2003; Alt and Zimmerman 2001; Hamel 2000;Weill and Vitale 2001). In the fourth phase researchersstarted modelling the individual components which ulti-mately led to the suggestion of business model meta-models in the form of reference models and theory (Gordijnand Akkermans 2001; Osterwalder et al. 2005). Finally,business models started to be tested and applied inmanagement and information systems applications. Thusthere is a trend from researchers to move forward thebusiness model concept from initial definitional levels tofurther levels such as business model change methodolo-gies, business model viability studies, taxonomies and work

that involve higher integration of the associated concepts.The latest stage of the development of the field has seen workdone in the areas of change methodologies and evaluationframeworks (Pateli and Giaglis 2003; Bouwman et al. 2008).

Where do business models fit in an organisation?

Business models should be clearly distinguished frombusiness process models. Strictly speaking business processmodels are a collection of activities or a snapshot of theprocesses which focus on how the work is done in anorganisation, whereas business model concepts deal withthe core logic from which an organisation creates ormarkets value. As shown in Fig. 2, the business modelworks as a building plan that allows conceptualising thebusiness structure and systems, including the operationaland physical plan of the company and bridges the gapbetween organisation and strategy that is constantly beingaffected by external pressures such as social change, newinnovations, and market trends (Osterwalder et al. 2005).

Use of business models

A key contribution to the literature is the VISOR BusinessModel Framework which defines the following fivecategories that companies must consider to assess theviability of a business initiative (El Sawy 2005):

▪ Value proposition—The model should explain why theniche customer segment would value a company’sproducts or services and be willing to pay for them.

▪ Interface—The user interface plays an essential rolein the successful delivery of products or services. Theuser interface refers to the ways customers interactwith the company and the respective value deliverymethods. VISOR suggests that the interface for valuedelivery between customer and company should beaccessible, easy to use, simple, and convenient.

▪ Service platforms—The platform must facilitate andshape the business processes and relationshipsneeded to create value and deliver the products and

Fig. 2 The business model’s place in an organisation


services. Also it should support and improve thevalue proposition.

▪ Organizing model—This explains how a set ofpartners will create a value chain and align businessprocesses and relationships to effectively and effi-ciently deliver value to end users. Also this shouldcover the inter organisation infrastructure and capa-bilities required to generate value.

▪ Revenue/cost sharing—In a viable business model,the interaction between all the categories specified inthe VISOR framework should be such that therevenues exceed the investments and all the partnersdraw reasonable Return on Investment (ROI) to stayinvolved in the value chain.

Figure 3, adapted from (El Sawy 2005; Sharma et al.2008) shows the various components of the VISORbusiness model framework which will be used in this paperto test the viability of business models for m-commerceinitiatives in four information technology organisations.

M-commerce defined

Some of the obvious benefits of mobile computing areconvenience, portability and immediate accessibility. Oneof the promising features of mobility is Mobile Commerce.Undoubtedly, m-commerce has inherited unique character-istics of mobility and differentiates itself from other formsof business processes by providing the users a range ofservices anytime and anywhere, overlooking geographicalboundaries and time constraints (Ulhøi & Jørgensen). Theadvent of m-commerce and the wireless Internet are thoughtto be the new wave in the communications industry(Swatman et al. 2006).

Broadly m-commerce can be defined as a setup thatallows transactions, conducted with a commercial potentialvia mobile devices and using wireless networks (Ulhøi andJørgensen 2008). Similarly, “m-commerce can be definedas any transaction with a monetary value—either direct orindirect—that is conducted over a wireless telecommunica-tion network” (Ngai and Gunasekaran 2007). Manyresearchers claim that m-commerce is an extension to e-commerce; in fact they describe m-commerce as a conceptthat enables e-commerce at any time and location usingwireless networks, whereas many others oppose thisterminology and refer to m-commerce as a completelydifferent phenomenon with immense potential and uniquecapabilities (Wang 2007). “Due to the unique characteristicspossessed by mobile commerce, business models whichhave proved viable for e-commerce, not necessarily fit formobile commerce (Wong and Hiew 2005). Moreover,compared to the traditional technology user, the m-commerce user plays a threefold role i.e. of a technologyuser, a network member, as well as a consumer, therefore tofully understand the user adoption of mobile commerce allthe three perspectives have to be integrated (AlHinai et al.2007).

Some examples of m-commerce applications that couldbe seen to have a market potential included mobileauctions, video on demand, mobile payments (ability topay small amounts using mobile phones), m-banking(managing bank accounts, balances; making transfers onthe move), m-entertainment (games, content, music, appli-cations etc.) and other information-oriented services.

M-commerce business models

With wireless networks getting more and more capable ofproviding high speed internet, the capabilities of absorbingconventional web based services within mobile commerceare extending. As more companies adapt to mobility, newbusiness models are defined and implemented to meet thepace of the market. Over a period of time the wired web hasenabled businesses to broadcast their information globally,build a close relationship with their customers, providevalue added services and customised information, stream-line transactional processes and enable collaborations.However, it is important to note that m-commerce is notalways, classical e-commerce. Even if each of the twoterms share aspects of the other, each possesses someunique characteristics that defines their independent stateand functionality (Thomas and Mark 2003). SupportingThomas and Mark several researchers insist that mixingboth concepts is misleading because the business modelsand the value chains for m-commerce are totally differentfrom those used with e-commerce and there is support forthe idea that m-commerce is not derived from e-commerceFig. 3 The VISOR business model framework


whereas it’s a whole innovative way of conducting time-critical transactions on a real time basis regardless of thelocation (Feng et al. 2006). M-commerce should not beconsidered as a new channel for e-commerce or a substitutefor purchasing goods and services using desktop com-puters. The applications which have shown substantialbenefits on an e-commerce architecture may not necessarilymatch up with the same standards in m-commerce due tomajor fundamental technology differences between both(Yuan and Zhang 2003). Although wireless technologiespresents an attractive medium for conducting e-commercefor two very strong reasons: ubiquity and localization, thesefactors should be strongly emphasised in m-commerceapplications (Clayton et al. 2004). There is certainly a needto think beyond existing internet based e-commercebusiness models and search for models more appropriateto m-commerce.

Understanding the potential effects of mobility onbusiness and identifying various business partners in them-commerce value chain is the first step towards innovativeand adaptive business modelling. Such an attempt can helporganisations make the best use of mobility in order toachieve enhanced value creation and sustainable businessmodels. History shows how some organisations developeddisruptive technologies, yet failed to capitalise on them dueto inefficient business models (Kamoun 2008). Thus to besuccessful, enabling technologies require as much businessmodel innovation and adoption as innovation in technologyand related products or services. M-commerce cannot betaken as an exception to this.

The success of mobile commerce initiatives depends ona company’s ability to identify and absorb the latentpotential of technology (Clayton et al. 2004). “Is m-commerce just more hype?” The answer to this questionis determined by assessing the viability of the underlyingbusiness model with regards to a specific m-commerceapplication and further calculating its appropriateness ofgenerating enough ROI to keep the partners involved andthe business sustainable. The failure of dot.com teaches usthat an innovative idea by itself is not sufficient to sustain atechnology innovation. What’s more important is theviability of a niche business logic and a surroundingbusiness model, which could make real profits out of theinnovation and sustain the initiatives (Varshney and Vetter2001; Yuan and Zhang 2003).

The literature states that the concept of business model isstill in at an experimental development phase, and thecurrent vision and lifespan of mobile commerce servicesand business models are very short. According to someauthors, little or no value is created from a substantialproportion of mobile commerce initiatives and the primereason for that is the use of shallow business models (Esslerand Andersson 2008). “The term business model is perhaps

the most discussed and least understood term in electroniccommerce—and thus in mobile commerce as well”(Pousttchi et al. 2007).

Today, telecommunications companies can’t solely relyon voice-driven revenues and data communication is muchmore widespread and presents massive opportunities forthem. Consumer expectations are continually increasing withadvances in speeds and the capabilities of both wirelessdevices and networks and a wide range of industries arespeculating on the benefits from mobile commerce andconvergence in order to generate more revenue. There existsan obvious requirement for developing mobile commercemodels—to incorporate network dimension and relation-ships, which may sustain new opportunities for contributingactors (Ulhøi and Jørgensen 2008).

Companies need to analyse the feasibility of theirbusiness models using tools like “what if scenarios”,considering important parameters such as financial input,customer behaviour etc. Three levels for measuring andenhancing the performance of a business model outlined by(Afuah and Tucci 2003; Bouwman et al. 2005) are: 1)comparison measure between a firm’s profitability and itspotential competitor’s profitability using heuristics, such asearnings and cash flows; 2) profitability prediction, com-paring a firm’s profit margins and revenue market sharewith its competitors; and 3) using benchmarking techniquesto compare and appraise the business model components ascompared to industry competitors (Pateli and Giaglis 2003).

Companies need to understand the potential opportuni-ties around building relationships with co-partners (Sharmaet al.). There is an urgent need to understand how theserelationships will be profitable or how companies candevelop business models around various value chainpartners to make business sustainable and profitable(Morris et al. 2005). This research thus aims to proposean evaluation framework that can help companies, in the ITsector, determine the viability of business models aroundmobile commerce initiatives.

Research methodology

This research is based on the assumptions of interpretivism.“The world is best characterized by an interpretivist view”i.e. reality is socially constructed, multiple interpretationsand realities exist, and scientific research is time andcontext dependent (Fitzgerald and Howcroft 1998). Con-sidering the purpose of the research and the paradigmaticassumptions made, qualitative research methods appears tobe more relevant for this study. Case studies are recom-mended when the actual behaviours and events cannot bemanipulated. Quite clearly, this research has no control overthe actual events related to viable business models for


mobile commerce, which is intrinsic in nature andconsiderably close to a “real time” business setting thussuggesting a case study research method as the mostappropriate method for this work. Additionally, multiplecase designs tend to generate more evidence and thus thework becomes more robust.

The unit of analysis has been defined as the businessmodel of a given m-commerce initiative deployed by theorganisations studied. The focus of the study is a thoroughunderstanding, using the VISOR model as a lens, of the“business model” of those applications which provideresearchers an insight into “what has happened” and“what’s happening” in the organisation due to the intro-duction of a new m-commerce offering.

Case selection

The selection of cases to be used in this research and theunderlying unit of analysis selected emerged from the researchproblem and the selected research method. The target sampleincluded companies with mobile commerce presence andbelonging to the Information Technology sector. The nomi-nated organisations were approached and invited to participatein this research and four organisations were ultimatelyselected to be included in the study.

Data collection

Two different methods of data collection used in thisresearch are: interviews (face-to-face and e-mail interviews)and interviewees were nominated based on their current jobtitle and the recommendations from their senior manager.The second form of data, documentation, is largely in theform of printed and published documents, and website-based information gathered to support the interview data.

Face to face interviews

Face to face interviews were selected as the prime source ofdata collection in this research study because of its potentialin retrieving insightful information regarding the researchtopic. Due to the exploratory nature of this research, semi-structured interviews were deemed to be the best the datacollection tool for this research. Interviews, with theirfocused, conversational and two-way communication stylehelp in achieving a smooth flow of information and inreaching an elaborated description of the subject. Theinterviews conducted were recorded in field notes.

E-mail interviews

All the interviewees were initially interviewed usingface-to-face meetings, however some subsequent sessions

were conducted using email messages, due to, amongother reasons, the availability and comfort of theinterviewees, geographic limitations etc. Emails mes-sages proved to be an effective mode of communicationfor gathering additional information post face to faceinterviews.

The data analysis approach

The data analysis strategy employed in this researchattempts to identify the common patterns/themes amongthe cases. Such logic compares an empirically based patternwith a predicted one. The with-in analysis, involvesdetailed case study write ups for each case (Eisenhardt1989). There are three known dimensions for informationsystems: organisational, technical and managerial (Alter1996). In this study, these three dimensions were identifiedas: the organisational or value chain dimension, thetechnology dimension and the sustainability/viability di-mension. The three dimensions were effectively utilised inthe classification of case data, which facilitated a reducedset of case data for each dimension. Cross-case comparativeanalysis was conducted along the three nominated dimen-sions, in order to identify the patterns, relevant to the issuespicked up in research questions. The cross-case patternswere ultimately used to provide the answers to the researchquestions. Table 1 summarises the key events which tookplace while conducting this research.

Case studies

The focus and layout of the case studies are kept consistentthroughout for comparability reasons. The primary source ofdata was semi-structured, face to face interviews with businessprofessionals (analysts, business developers, product manageretc.). However, a substantial portion of information wasretrieved from a number of secondary sources, includingarticles, books, online material; company’s published infor-mation such as annual reports, company strategy documentsand business case reports.

Company A

Company A is the largest telecommunications serviceprovider in New Zealand and offers a comprehensive rangeof products and services to consumer and businesscustomers. Established in late 1980s, Company A’s capa-bilities extended to the IT service sector, it operates its ownnational voice and data network and provides a full range ofinternet, data, voice, mobile and fixed line calling servicesto its customers.


Business case: Txt-a-park

Background: New Zealanders living in a few major citiescan pay for parking tickets using their mobile phones.Anyone can use the pay by phone facility using a simple touse text based interface to pay for parking. TXT-a-Park hasachieved considerable uptake primarily because it does notrequire pre-registration or the establishment of a pre-paidaccount, what it does require is a mobile device and anactive mobile account. The service started in 2004.However, Company A adopted this service in 2006. Theprime responsibilities of Company A in the current businessservice is to apply the payments to the respective mobilephone accounts (prepay or post-pay) and reconcile thefunds to the respective government bodies which own therights of parking, mainly city councils, at the end of eachmonth.

Figure 4 illustrates the value chain in this particularbusiness model. As shown company A is the centre ofrevenue. Customers trigger the service by sending anenquiry message, which communicates with companyA2’s (system developer) systems, which in turns sends anenquiry to company A to ask whether the customer hasenough credit or not. According to responses fromcompany A, company A2 then completes or stops thedelivery of the parking ticket to the end customer. Once thepayment is successful, Company A passes the appropriaterevenue to company A2 (a portion of the transaction fee)and a reconciled amount to company A1 (governing bodywhich owns the parking space) at end of each month.Company A3 (vending machine providers) gets its revenuedirectly from company A1.

Company B

Company B is a state-owned enterprise based in NewZealand and operates a national telecommunications net-work and provides broadcast services for the majortelevision and radio networks in the country. CompanyB’s network is primarily based on digital microwave

technology; however the company also operates a fibrenetwork running between major cities in the country.Company B also owns usage rights for a variety ofbroadcast radio spectra and owns and operates a point-to-multipoint CDMA network for lower speed wirelessbroadband access. Company B had its origins 60 yearsago with the establishment and operation of the radio andtelevision network across the country. Today Company B isan experienced Australia-New Zealand based business witha new name and new organisational structure and it’sbecoming one of the region’s leading providers of custom-ised broadcast and telecommunications networks, networksrelated services, converged solutions and specialised net-works. The developed cross-technology expertise enablesits customers to take advantage of convergence acrossmultiple service segments.

Business case: Metro Wi-Fi

Background: Company B’s new Metro Wi-Fi provides ‘hot-zone’ coverage to CBD locations, hotels, universitycampuses, event centres, transport terminals, eating outlets,business centres, shopping premises and more, in selectedNew Zealand towns and cities. Business travellers, con-struction workers, event organisers or even parking war-dens can have access to the wireless internet via WiFi-enabled devices. There is no set up cost and users pay on ausage basis, more precisely using a “pay as you go” model.Company B’s Metro WiFi configuration consists of smartnetwork nodes with multiple 802.11 radios linked in amesh-like network. Company B owns and operates theradio and network infrastructure.

The essence of their network design is that each networkcustomer can manage their own Service Set Identifier(SSID) and therefore may become the ‘internet serviceprovider’ for the hot spot’s coverage area. Starting withmajor cities, company B is now rolling out the solution to anationwide network of smart radio nodes that will facilitatewireless broadband access in selected target areas. Theadvantage of Metro Wi-Fi over hot-spots is that the userlog-on is portable and continues as long as the users are incompany B’s metro Wi-Fi coverage area.

Figure 5 depicts the various value chain partnersinvolved in the Metro Wi-Fi business model. As showncompany B is the centre of the business model andfacilitates the operational platform, which is a metropolitanWi-Fi network, for the entire business case. Company Bcollaborates with hardware vendors to get the requiredradio transmitters and other required hardware and partnerswith the city council to set up the sites. Hardware vendorsget direct revenue from Company B in the form of the costof equipment and the city council gets a leased SSIDagainst its services to deploy its portal. Third party

Table 1 Research activity summary

Cases No. of face-to-faceinterviews

Totalduration(hours)

No. ofemailinterviews

Interviewtranscripts

Company A 1 1 2 10

Company B 1 1.5 1 15

Company C 1 1 2 12

Company D 1 2 3 11


providers lease the SSID from Company B and use theirown business plan and strategies to generate revenue. Amobile device vendor has the possibility to sign up acontract for wireless service to its potential customers for,usually, a flat service charge. In return the mobile devicecompany generates more revenue and provides a betterexperience for its customers.

Company C

Company C is a vibrant and dynamic global mobiletelecommunications company active in 40 countries across5 continents with more than 450 million customers aroundthe world. In New Zealand, company C made its entry intothe mobile market in 1998 by acquiring a New Zealandbased business with around 138,000 customers. As of June2008, company C had a customer base of 2.4 millionmobile users with over 50% of the country’s mobile market.In 2006 company C acquired a fixed line ISP to extend itsmarket presence to the adjacent markets. Company C’smobile centric approach towards delivering satisfying totalcommunication needs gives it a competitive advantage inthe marketplace. It focuses on two prime preferences—mobility and personalisation. Company C’s motto is tothink globally but act locally, i.e. having global strategic

guidelines set but provide more localised and personalisedservices to different demographic areas.

Business case: Mobile internet portal

Background: Company C has been in a constant lookout for innovative data services as part of its businessstrategy. Today it offers multimedia data services inmore than 20 countries via the company’s mobile phoneportal. This mobile portal also enables company C’scustomers to access the Internet as well as enrichedcontent on their mobile phones. The mobile portal needssome customisation of the mobile devices by thehandset manufacturers; however company C has collab-orations in place with several mobile device vendors toproduce portal enabled handsets. Having an interactiveand highly usable portal is company C’s complementarystrategy on provision of mobile data services to itscustomers. It is one of New Zealand’s leading mobilebased portals and it gets around 400,000 uniquebrowses each month. The Mobile web give consumersaccess to the Internet on their phones while on themove. Consumers have instant access to news, sportsscorecards, events, weather news, movie or theatreshows listings, email, social community websites, onlineauctions, shopping websites and much more.

Fig. 4 Value chain for the txt-a-park business model


As the mobile market matures, mobile operators allover the world are evolving their business models toincorporate enhanced data services. They are extendingthe conventional walled garden controlled mobile portal toa more open access mobile gateway to the Internet. Thischange also enables a range of different billing andcharging models for the purchase of music, videos, gamesand other content with simple downloads for either onetime use or unlimited access. During the past few yearscompany C has been optimising its portal and the latestversion allows customers to access the sites on theirhandsets in almost the same way they can do on theircomputers.

In order to cope with market pressures company Cannounced partnership agreements with some major internetbrands such as eBay, Google, Yahoo! and YouTube. CompanyC has underlying technology integrated in its network thatrenders websites down so that customers can have betterviewable websites even on devices with small screen sizes.

Figure 6 illustrates the value chain of company C’smobile Internet portal. Company C only performs func-tional activities such as nominate parties which developservices and media, customer profile creation/editing andrelationship management, service brokerage mechanismsand charging and billing operations. As shown there canbe multiple service providers, providing single or multipleservices. Company C passes on the revenue to these

service providers for the services they deliver keeping itsown share. Company C also benefits through extra trafficrevenue generated by more customer visits and browses.The prime aim of Company C is to increase the averagecost per user by inducing customers to do more than justplace voice calls and send TXT messages. In returnpartner companies get more traffic and members and havetheir own business models lined up for generating extrarevenue.

Company D

Company D was founded in early 2001. The early focusof the company was on providing a unique andspecialised web publishing service to the visual artscommunity through one of their websites using acataloguing and web publishing application. Over aperiod of 8 years, the company has emerged as one ofthe leading web design and web development compa-nies in New Zealand. The company has expanded toprovide a full range of web design, web publishing,application development and support services. Lookingat the pace of the IT industry, and to keep up withmarket trends, company D recently stepped into inno-vative activities such as text marketing and iPhoneapplication development.

Fig. 5 Value chain of the Metro Wi-Fi business model


Business case: Language phrasebook and learning tool

Background: The language phrasebook and learning tool is anApple’s iPhone based application. It allows language trans-lations within more than ten prime languages includingEnglish, Italian, French, Chinese, and Japanese. Anyone havingeither an apple iPhone or iPod touch can download thisapplication from Apple’s online app store for as low as a fewNZ dollars. This application allows users to learn a language,translate key sentences or words from one language to another,and find the cultural relevance of phrases depending on specificlanguages and regions. The application also has self testfeatures using an interactive language testing questionnaire.

Figure 7 sows the various value chain partners and therevenue and service stream flow among them.

Summary of results

The key summary of the results, classified according to theresearch questions of this study, are discussed in thefollowing sections. The findings for research questions 2and 3 are also grouped in relation to their impact on theservice itself or on the organisation studied.

Research question 1: How does m-commerce impacttraditional e-commerce business models?

The findings from this research confirm that e-commerce differs highly from m-commerce and thus

e-commerce business models are not obvious solutionsfor m-commerce. The literature review and the interviewdata shows that m-commerce value chains are morecomplex than e-commerce value chains and thus it’s notrecommended to directly copy over an e-commercebusiness model to a m-commerce initiative. Fundamen-tal differences were identified in the literature reviewand data collected, between m-commerce and e-commerce business environments. Some of the keydifferences are:

▪ The mobile market is a carrier-dominated marketrather than an open market as in the case of theInternet.

▪ The devices used (mobile phones) are more personaland private in nature.

▪ M-commerce observes more stringent partnershipswithin joint ventures rather than relatively loose cooperations.

▪ Reach of service is extended from fixed placedestination to an individual person.

▪ Huge shift from information abundance on theInternet to highly specific and contextual informa-tion available on mobile phones.

▪ Focus more on productivity rather than reducedtransaction costs.

▪ Innovative ways of doing commerce e.g. locationbased services, context based services.

Fig. 6 Value chain of the mobile Internet portal business model


▪ Deviation from flat rate internet access charges in thecase of e-commerce to traffic oriented communica-tion charges in m-commerce.

These differences are linked to the shift from a freeservice dominated environment (Internet) to a mobileoperator-owned mobile commerce environment. Heavytraffic in the case of e-commerce does not necessarilygenerate more revenue or attract additional profits,unlike m-commerce, where customers pay for mobiletelecommunication and data services on a usage basisand extra traffic implies extra revenue for the serviceproviders. Content distribution costs over the internetare negligible due to the low cost of storage andbandwidth and due to the availability of alternateadvertisement-based revenue sources, but in the caseof m-commerce the cost of service delivery is dictatedmostly by the mobile service provider. Mobile devicesare highly private in nature as compared to computers,and thus create huge potential for mobile operators inmaintaining profile-based customers’ information data-bases and thus designing context and profile basedservices. Mobile devices and users can be geospatiallylocated, opening opportunities for designing LocationBased Services. Therefore it’s evident that mobile valuechains are more complex as compared to conventionale-commerce value chains, and it’s not the best practice

to straight forward apply the conventional e-commercemodels to m-commerce.

Research question 2: What are the success factors thatsupport a viable and sustainable business model for M-Commerce in the IT sector?Research question 3: What are the potential character-istics of an evaluation framework for a viable mobilecommerce business model in the IT sector?

Question three is the principal theme of thisresearch. The findings from the literature review andthe comparative analysis were taken as the foundationfor extracting the themes to conduct the cross caseanalysis. The first five characteristics listed are consis-tent with the VISOR reference model adopted by thestudy. The last five listed characteristics thus enhancethe reference model and it is part of the contribution ofthis paper.

The major findings came out to be seven criticalsuccess factors and ten characteristics of viable mobilecommerce business models. It is useful to classify thosefactors and characteristics according to their impact onthe service offered, or alternatively, on the organisationoffering the service. The Critical Success Factors arepre-fixed by “CSF” while the characteristics are pre-

Fig. 7 Value chain for the language phrasebook and learning tool


fixed by “CH” and those closely related are groupedtogether.

Service-related issues:

▪ CSF3—Ultimate customer experience and CH2—Interface (Ease of use, accessibility): An interfacepresents the layer of interaction between a specificbusinessmodel and its end customers. The relative easeof use, convenience, and accessibility results in a bettercustomerexperienceandthuscoresuccessfor themodel.

▪ CH3—Service offerings: service offerings include ITor non-IT based services that provide end to endconnectivity to various functional blocks of a businessmodel’s value chain. If a business model is a story thatmakes sense, service offerings are the components thatmake that sense complete and relevant.

▪ CH4—Value proposition: According to the literaturereview and the data collection the precise definitionof value proposition is the description of productsand services offered by a specific business to itscustomers and answers why a customer should investin a company’s products or services. A valueproposition defines the comprehensive logic andproduct offerings that provide value to the customer,better than other competitors, and answers a coupleof simple questions: “What products or services areoffered to the customers?” and “How do theseofferings provide value to the customers?”

▪ CSF6: Easy payment options▪ CSF4: Ability of the business model to change andevolve with time and CH6—Dynamicity: It is clearthat viable business models are not static and have tobe revised over time. Ongoing changes in the globalbusiness environment forces companies to regularlyreview and adapt their business models to sustaintheir market presence.

▪ CSF7: Scalable to distinct market parameters (e.g.location, service platforms etc.) and CH7—Scalabil-ity (flexibility and welcoming): Scalability is a keyproperty of viable business models. It indicates itspotential to either handle growing amounts ofrevenue with ease, or to be readily enlarged. It ishighlighted in the literature review, that welcomingor flexible value networks will be more successfulover time and replace traditional and linear valuechains.

▪ CH8—User centric architecture: Current mobileapplications are often inspired by new devices orby new technologies. However, the findings of thisstudy suggest that it is necessary to exploit thesynergies of mobile technologies and produce moreuser-centric business models, which place potentialcustomers in the first place.

Organisation-related issues:

▪ CSF2: Sharp interest towards extending value-basedcollaborations and partnerships to the other players inthe industry.

▪ CSF5: Appropriate and standard costing structures▪ CH1—Organising model: An organising model

defines how a set of service providers, or internaldepartments of a single service provider, organisebusiness processes, value chains, organisational orbusiness strategies, partnerships and collaborationswith other value partners to deliver products andservices to the end customer.

▪ CSF1: Good Return on Investment (ROI) to each ofthe participating partners and CH5—ROI (Return onInvestment) arrangements: The description of theinvestment needed in the organisation and theassociated cost models explain the costing structurefor variable products and services. Both componentshelp in explaining one of the very important driversof any business case: ROI. It describes the risks,investments and the revenue streams fragmentedacross various participating actors in the value chain.The entire business model and value chain should bedefined in such a way that it generates adequate ROIfor all the partners involved and keep them engagedin the value chain. Adequate ROI arrangementsemerged as the most crucial component in sustaininga business model.

▪ CH9—Collaborations and partnerships: The capac-ity to enable m-commerce success substantiallydepends on external collaborations and partnerships,which also extends the consideration of the rolesand responsibilities of various actors and value theirparticipation. It is clear that, at least at the moment,the mobile market is a carrier-dominated one ratherthan an open market and it requires more stringentpartnerships with tightly coupled arrangementsrather than loose co-operations.

▪ CH10—Responsiveness to market trends: Looking atthe critical success factors for a mobile commerceinitiative, the key factor consistently highlighted, byboth the literature and the cases, is market needs andthis has taken precedence over technological issues.An organisation’s responsiveness towards changes inmarket trends gives it an edge in a highly competitiveenvironment. Market trends bring new challenges forspecific organisations and direct them towards ini-tiatives uptake.

The summarised case descriptions are presented in the“Appendix”. The identified factors are briefly described forall the organisations studied.


M-commerce business model evaluation framework

The ultimate aim of this research is to develop an evaluationframework for viable mobile commerce business models inthe IT sector. Ten characteristic components were initiallyidentified. Afterwards these components were used as themesto conduct the cross case analysis. The presence of thesecomponents leads a businessmodel towards viability, and thusassessing a business model on the basis of discoveredconstructs (illustrated in Fig. 8) can help in estimating theviability of a mobile commerce business model.

The constructs selected for the evaluation framework are:

▪ User-centric architecture: There are strong indica-tions from the literature review and case data that auser-centric approach towards developing servicesleads to enhanced user participation and engagement.User centricity is implied by understanding thebehaviour of expected end-users and using feedbackin designing the service. The construct identified forthis specific characteristic component is:

C1: The objectives of the business are meeting customerrequirements; streamlining the services and productsaccording to what the customer thinks, meeting customerexpectations and improving the overall quality of thecustomer’s experience.

▪ Value propositions: The central concept in the servicedomain is value, and is considered as the compre-hensive logic behind creating value that the businessdelivers. To deliver the value proposition to differentcustomers, the firm should ensure that it containsdistinct capabilities to use available resources andoffer services to the market.

C2: A value proposition is asking a few key questionssuch as:

– What is the value customers should expect from thebusiness?

– Why a specific company?– What is the underlying cost for the end product/service?– What is the appropriateness of the cost?

Answering these questions and determining the appro-priateness of solutions with respect to each other helps indetermining the value proposition in a business model. Thebetter the value proposition the more value is achieved andthus more viability is recognised in the business model.

▪ Organising model: An organising model describes thearrangement of participating entities aiming to deliverdistinct services across the value chain in an efficientmanner. In any business model roles and responsibil-ities are distributed among various participants. In aviable business model the organising model is com-plete, which means there exists appropriate actors who

perform tasks specific to their core responsibilities.The construct for this characteristic component is:

C3: Analysis of the actors, roles and responsibilities in avalue chain, and identification of the proper match betweenan appropriate actor for a specific role or responsibility.

▪ Service offerings: In any business model there are anumber of key services required for its properfunctioning. Service offerings refer to a set ofservices that allow a business model to create amarket and capture value. The construct for theservice offerings characteristics is:

C4: Analyse all the key processes required by thebusiness model to function effectively and determinewhether there is an incorporating service component foreach of the functions required.

▪ ROI arrangements: The literature and case datahighlight that ROI is an important factor for anybusiness and its partners. Thus it is very important toanalyse that each participant in the business model isreceiving enough ROI to stay involved. Hence theconstruct for this component is:

C5: Investigate whether every participant is getting suffi-cient ROI to stay engaged in the value chain by developing acomplete revenue-cost map for the business model.

▪ Interface: A good, easy to use, accessible interface isa deciding factor for the success of a business model.The interface is the face of any business model anddetermines the perceived usability of the businessmodel. The more usable an interface is, the moreviable the business model gets. The literature showsthat in many cases value propositions are increasedseveral times due to a good interface. The keyconstruct for this component is:

C6: Easy to use, convenient, and accessible interface tothe service; clear, complete, consistent and user-centricinterface design.

▪ Scalability: Scalability refers to the capability of abusiness model to extend its services or resources toincrease throughput. Thus the construct for scalabil-ity as per patterns seen in the cross-case analysis is:

C7: Welcoming, modular and flexible nature of thebusiness model in order to facilitate the addition of servicesand resources.

▪ Responsiveness to market trends: No business modelcan work in isolation and it is prone to externalmarket forces. Market trends are dynamic in natureand are controlled by many factors such as technol-ogy innovations, increases in customer’s expectationsand so forth. These further force organisations tochange their business models and evolve accordingly.The construct for this specific characteristic is:

C8: Analyse the tendencies of a business model and adjust itaccording to changing market trends. Investigate how likely or


how capable is a businessmodel to change in response tomarkettrends. More responsiveness implies more sustainability.

▪ Dynamicity: From the cross case analysis all the fourcompanies were found to be dynamic due to theirwillingness to change their business model to suit thepresent needs of the market. The literature and thecase data support the idea that static business modelsare not viable and thus reluctance to change to marketneeds makes them even less viable. Thus theconstruct for dynamicity is:

C9: Willingness and ability to change in response to adynamic external environment (market needs, customerexpectations, technology innovations, and changing busi-ness environment)

▪ Collaborations and partnerships: In the highlycompetitive mobile business domain, different actorsneed to collaborate with each other to complementtheir shortcomings and create valuable propositions fortheir customers. The construct for this characteristic is:

C10: Existence of value based collaborations andpartnerships which ultimately brings additional revenue tothe entire value chain.

Conclusions

The findings and the proposed framework presented in thispaper provide value to both theory and practice. Theevaluation framework for viable m-commerce businessmodels in the IT sector provide new insights into a numberof areas that have largely been ignored while setting upmobile commerce initiatives and defining an incorporatingtheir associated business models.

The findings from this study may also provide value tothe relevant practitioners, particularly for organisationsaspiring to roll over mobile commerce initiatives in thenear future, including mobile operators, software devel-opers, wireless harware vendors, and other IT industrymembers. It is expected that the value of the study willapply in the near future as long as the following assumptionshold:

▪ M-commerce will continue to influence the conven-tional methods of doing business.

▪ M-commerce will continue to be deployed by distinctvalue chain partners in a number of innovative ways.

▪ Telecommunication and mobile technologies willkeep emerging to handle more and enhancedfeatures and services.

▪ The demand for accessing the Internet on ananywhere, anytime basis using mobile devices willkeep increasing.

▪ More and more enhanced devices will kep floodingthe market with high computing powers and displayprovisions leading to increased business capabilitiesthrough mobile phones.

At the time of this writing all the assumptions above arevery realistic and as the global economy slowly emergesfrom the 2008/9 recession organisations will return to thesearch for innovative business models, many of thempossibly based on mobile commerce approaches, to helpthem increase their market share and improve the quality oftheir earnings. Our paper provides a comprehensiveevaluation framework that can be used to assess m-commerce plans.

Fig. 8 M-commerce businessmodel evaluation framework


Appendix—cross-case analysis: A summary of the datacollected

Identifiedviable businessmodel keyfactors

Company A Company B Company C Company D

Dynamicity - Dynamic in nature - Dynamic in nature - Highly dynamic company - Business model isdynamic in nature asevolved from conventionallanguage learning andtraining mechanisms.

- Has evolved over timewith roll out of differentpayment options

- Company has clearstrategies to consistentlyevolve from coreinfrastructure owner andproduct vendor to a solutionoriented company.

- Known for its vision tostay ahead in the mobilecommunication industryand set examples forcompany branches in therest of the world.

- Eventually recognised thepotential of mobile basedmicro payments andbusiness model was revisedaccordingly.

-Formulated a whole newbusiness model aroundconventional technology: Wi-Fi hotspots

- Changed the existingbusiness model behind theirmobile portal to make itmore adaptable andappropriate to increasingcustomer’s expectations andmarket needs.

- Whole new value chainwas created andpartnerships were made torealize the new AppleiPhone based languagelearning tool.

Scalability - Low scalability. -High scalability - High scalability - Moderate scalability

- Source of revenue is limitedto the parking costs only.

- Enough scope ofintroducing value added andinnovative capabilities togenerate more revenue out oflaid Wi-Fi framework.

- Offers scalability tocontent service providers

- Software based scalability

- Little scope for newpartners to engage.

- Ideal for organisationswanting to rapidly deploytheir own Wi-Fi network (canleverage company B’s metroWi-Fi)

- Enhance the scalability ofmobile data services

- Scope for enhancements tothe application

- Only driver for engagingnew partners is significantcost reductions; however it’s alow profile service so alreadyworks on low margins.

- Higher scalable platformthat can adapt to a largergroup of users.

- Scalable internet access - Scalable to other platforms

- Only scalable in terms ofgeographic extension.

- Room for morecollaboration with Internetbased partners.

- Scalable to otherlanguages

- Little scope for newpartners to engage

User centricarchitecture

- User centric - User centric - User centric - User centric

- Enhances customerexperience

- More freedom to accessconverged data services onthe move

- Only motive to change thebusiness model is to meetthe customer’s expectationsaround access to internet viatheir mobile devices.

- Easy to use and portablelanguage learning tool

- Well formulated lesscomplicated businessprocess

- Better customer (travellers,civilians) experience throughcouncil operated publicinformation portal.

- Company C entered intopartnerships with Internetbranded websites andenabled access customers totheir favourite internetwebsites using their mobiledevice at anytime, anywherebasis.

- One time downloadmodel, thus less complexbusiness process and highusability

- User oriented applicationdesign appropriate fordiverse demographics andage groups

-easy to engage customersto pay for the service andencourages them over otherparking spots not havingmobile paymentfunctionality, thus increasesrevenue.

- Easy registration andpayment process encouraginguser to pay and use theservices impulsively


Collaborationsandpartnerships

- Explicit recognition ofimportance ofcollaborations

- Explicit recognition ofimportance of collaborations



- Supported collaboration aswell as partnership

- Collaboration with the radiotransmitter hardware vendor(cost of the equipment)

- Collaboration with serviceprovider for content andapplications against share ofrevenue been passed over tothe service providers.

- Collaboration withessential service provides i.e. data translation servicesand software and IT basedservices.

- Collaboration betweencomplementors i.e. thirdparty software vender andthird party vending machineproviders

- Collaboration with the citycouncil, lease the SSIDagainst allocation andprovision of the installationsites by council.

- Value based collaborationwith branded internetwebsites. Primarily againstmore traffic and increase innumber of members.

- Partnership between startup company (Languagetraining software company)and potential investors forstart up investments againstshare in the company profit

- Joint venture partnershipwith competitor (othermobile operator) to makethe investments moreappropriate

- Joint partnership withmobile device vendor to giveits phone buyers access to thecompany B‘s internet servicesagainst fixed cost contract.

- Collaboration with onlineapplication store operatorfor online profile anddevelopment kit againstbrokerage taken from thetotal revenue.- Collaboration with the

core supplier of the servicei.e. city council supplyingcompany A access to sellparking space to thecustomer via mobile phone.

- Collaboration with variousservice providers with abusiness idea and in search ofwireless network partners.

ROIarrangements

- There exists an effectiveand rewarding revenuestructure for all theparticipating actors in valuechain.

- There exists an effective andrewarding revenue structurefor all the participating actorsin value chain.



- Each participant hasenough source of revenue tostay engaged in the valuechain

-Each participant has enoughsource of revenue to stayengaged in the value chain

-Each participant hasenough source of revenue tostay engaged in the valuechain

-Each participant hasenough source of revenue tostay engaged in the valuechain

- Company A is getting itsrevenue from servicetransaction costs and servicecharges from the councils.

- Each participant has theirdistinct revenue generationlogics.

- Company C sells thecontent from serviceprovider; keep thebrokerage and passes overto the service providers.

- Service providers(Language translation andsoftware development) getrevenue from languagesoftware owner againstservices they provide.

- Software vendor get theirshare of revenue partiallyfrom the service transactioncost and partially softwareinstallation and maintenancecost.

- City council getting ROI inform of better customerexperience, city marketing,easy access to information fortourists and an imagemakeover.

- Internet branded websitesgets their ROI fromunderlined business modelin form of more traffic andincreased number ofregistered members, whilecompany B gets revenue bycharging customer on fixedcharge usage basis.

- Apple keeps the brokerageout of total revenueaccumulated by sellingapplication and pass on therest to the software owner.

- Vending machine vendorsget their revenue directlyfrom responsible councilsand councils from the endproducts i.e. parking cost.

- Alternative serviceproviders having leased SSIDthrough company B havetheir own underlined revenuemodels to generate enoughrevenue to stay involved inthe value chain.

- Investors get their revenuevia dividends.

Organisingmodel

- Appropriate value chainpartner with distinguishedroles and responsibilities.




- Complete andcomprehensive organisingmodel




- Clear business processesformulated across key valuechain partners

- Evolving business processesacross key value chainpartner.

- Clear business processesformulated across key valuechain partner.

- Clear business processesformulated across key valuechain partner.


Responsivenessto the markettrends

- Mobile phone capabilitiesto pay small amountseffectively

- Recognises the significanceof convergence betweenmobility andtelecommunication networks.

- World emerging in web2.0 era and customersexpect to stay connected tointernet.

- Customers want theirmobile phones to be multitasking, and provide distinctservices.

- Increase in customer’sexpectations around usingtheir cell phones for payingsmall amounts.

-Customer’s highexpectations aroundavailability of connectivity,content and information onanytime, anywhere basis.

- Opportunities beyondvoice and basic dataservices.

- Market is moving very fasttowards handy, efficient,easy to use mobile basedapplications which they canuse in their day to day life.

- Worldwide pilots around - Response to business needsfor seamless communication.

-Customer expects to beconnected to Internet onanywhere, anytime basis

- Prime aim being to reducethe number of differentdevices and have oneultimate package of all.

use of mobile phones to paysmall amounts

- High penetration of mobiledevices into masspopulation.

- Access to high end contentand converged voice, videoand data services

- Need to provide servicesbeyond voice and textmessaging services, moreconverged data services.

- Support integration toattract as well as retain morecustomers to use the portalbased internet services.

-mPayment service isperceived as convenient anduseful by the potentialcustomers

Interface (Easeof use,accessibility)

- Easy to use - Easy to use portal basedaccess to Wi-Fi internet.

- Next generation mobileportal, highly usable andattractive interface(Company C recently hadenhanced version of theironline mobile portal).

- Highly renowned forusability standards: AppleiPhone based interface.

- Transparent costs - Services accessible in primelocations like cafe,restaurants, CBD.’s in majorcities, however not accessibleeverywhere.

- Access to Internet on thebasis of anywhere, anytime.

- Highly usable softwaredesign, appropriate fordiverse population acrossvarious countries as well asage groups.

- Easily accessible servicevending machines

- Enhanced Wi-Fi capablemobile devices used to accessinternet.

- Good, user friendlyinterface leads to majorinternet based websites,quickly using the personalportfolio on the portal.

- Easily accessible to externalcustomers via Apple basedapplication store.- A simple to use txt based

transaction model, usableby mass population.

-Highly optimised easy tfollow process

- Encourages customers topay through their mobilephones.

Serviceofferings(completenessof value chainactivities)

- Presence of all enablingservices




- Complete value chain - Complete value chain - Complete value chain - Complete value chain

- No gaps were found interms of services offered.

- No gaps were found interms of services offered.

- No gaps were found - No gaps were found.

- Value chain partners haveclearly defined servicedomains.




ValueProposition

- Good secure proposition - Next generation convergedservice provision forintegrated video, voice anddata.

- Anytime, Anywheremobile internet services,

- Easy to use, low cost,language learning,translation and self testingapplication made on highlyrenowned usable appleiPhone interface librariesand components


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- Easy to use low profilecosting service

- Access to high speedbroadband on the move.

- Next generation mobileportal to access enormouslibraries of content and appsoffered by company C.

-Language support for morethan 10 languages

- Enhanced/additional modeof payment for thecustomer.

- Huge potential from thecontext of communityservices.

-High value proposition fortravellers, tourists orstudents studying abroad.

- Easily accessible and don’trequire any special mobiledevice to function.

- Easy to use an pay options,profile based login

- No ongoing operational ordata usages cost.

-Simple to use Txt basedinterface.

- No connectivity isrequired so, extremelyportable


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http://dx.doi.org/https://doc.telin.nl/dsweb/Get/Document-70490/

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http://dx.doi.org/http://www.im.tut.fi/cmc/pdf/SeppanenMakinen-ConceptsOfBusinessModelAReviewAndConsequences.pdf



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