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Published: May 21, 2003

 
 

Rational Exuberance: The Wireless Industry’s Killer “B”

Analyzing Investments
Strategy involves choices — the choice of what to do, and the choice of what not to do. The Internet increased both the opportunity and the complexity in strategic decision making; mobility promises — and threatens — to intensify both, particularly as industry and application boundaries become more permeable. Companies can use the analytical framework outlined above to develop a strategically coherent rationale for investment in mobile solutions.

Although the emphasis by companies today is on mobile B2E applications designed to boost productivity, our study indicates that B2C and B2B applications, aimed at changing customer relationships and transforming the way companies do business, will not lag for long, particularly as 802.11 wireless technology — the so-called Wi-Fi standard — continues to emerge as a major force in the acceleration of wireless Internet adoption. Indeed, Wi-Fi hot spots in restaurants, retail outlets, malls, and other public places could become the single greatest catalyst for widespread mobile Internet use from all devices in the future.

Our suggested strategic approach — and the examples of firms currently using m-business — can provide executives an understanding of how this and other mobile technologies might affect their own company’s business and organization models. An understanding of where m-business investments are being made in an industry — and in complementary and competitive industries — will also prove valuable, since mobile technology’s “anything, anywhere, anytime” value proposition is eroding barriers separating many industry segments. Future opportunities probably lie in a cross-industry context rather than within a single industry. The capability to recognize and act upon cross-industry value networks aimed at constantly enhancing customer value may be the hallmark of successful firms in the wireless world.

Reprint No. 03207

Investing in M-Business: Nine Strategic Questions

  1. Have the firm’s competitors invested in m-business technology? If so, where and how?
  2. Have companies in complementary industries invested in m-business technology? If so, where and how?
  3. How large or significant are m-business opportunities and threats in the firm’s arena?
  4. To what extent does mobile technology support or threaten the firm’s existing business model?
  5. What degree of business transformation is required to implement a wireless solution within the firm?
  6. What should be the strategic thrust in mobile technology for the given opportunity or threat (operational efficiency, range and reach, or new business model)?
  7. Who is the primary audience for each wireless application (partners, employees, or customers)?
  8. Will the investments in m-business solutions (people, processes, and technology) pay off in a reasonable time frame?
  9. Are there profitable opportunities to forge cross-industry alliances to create new value for customers?

About the Research

The sample was drawn primarily from the IBM Global Services client database in the U.S. and Europe. Other studies analyzed include:

  • The Dawn of Mobile e-Commerce, Forrester, Oct. 1999
  • Europe’s UMTS Meltdown, Forrester, Dec. 2000
  • Global Next-Generation Mobile Communications, Frost &
    Sullivan, April 2002
  • Mobile Commerce Report, Durlacher, Nov. 1999
  • Mobile Communications Market Opportunity, Strategy
    Analytics, Dec. 1999
  • Mobile e-Commerce: Time for a Reality Check, Forrester,
    April 2000
  • Mobile Internet Realities, Forrester, May 2000
  • Mobile’s High-Speed Hurdles, Forrester, March 2000
  • Moving in Mobile Media, Lehman Brothers, Dec. 1999


Authors
Venkatesh Shankar, venky@venkyshankar.com
Venkatesh Shankar is the Ralph J. Tyser Fellow and an associate professor of marketing and entrepreneurship at the University of Maryland’s Robert H. Smith School of Business in College Park.

Tony O’Driscoll, odriscol@us.ibm.com
Tony O’Driscoll is an executive consultant with IBM’s e-Business Strategy and Change Practice and an adjunct professor at North Carolina State University’s College of Management.

David Reibstein, reibstein@wharton.upenn.edu 
David Reibstein is the William S. Woodside Professor of Marketing at the University of Pennsylvania’s Wharton School of Business.
 
 
 
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Resources

  1. Caroline Junqueira, Sajai Krishnan, and Gregor Harter, “Capturing Value in the Wireless Enterprise Market,” s+b enews, 12/19/01; Click here.
  2. Raul L. Katz, Maximilian E. Weise, and Daniel H. Yang, “Consolidation: The Wireless Way,” s+b, Fourth Quarter 2002; Click here.
  3. Venkatesh Shankar and Tony O’Driscoll, “How Wireless Networks are Reshaping the Supply Chain,” Supply Chain Management Review, July/August 2002; Click here.
  4. Venkatesh Shankar, “Wireless Internet: Growing Pains vs. Gains,” working paper, University of Maryland, 2001; Click here.
  5. Pooneh Fooladi, Ned May, and Euan Davis, Understanding Client Needs: Succeeding at Wireless Professional Services, IDC (2001); Click here.
  6. Ravi Kalakota and Marcia Robinson, M-Business: The Race to Mobility (McGraw-Hill, 2001)
  7. Falk Müller-Veerse, Mobile Commerce Report, Durlacher (November 1999); Click here.