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Mobile Business Models

Mobile Business Models. Critical Success Factors for the Management of Innovative Mobile Business Models. Reinhard Neudorfer. Overview. I want to give you the results of an examination of mobile business models in the Austrian market. Content Theoretical Classification

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Mobile Business Models

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  1. Mobile Business Models Critical Success Factors for the Management of Innovative Mobile Business Models Reinhard Neudorfer

  2. Overview. I want to give you the results of an examination of mobile business models in the Austrian market. • Content • Theoretical Classification • Approaches in Technology and Innovation Management • Risk-Benefit in the Adoption process (RBA-Model) • Empirical Examination of the RBA-Model • Recommendations for Action

  3. mBusiness eBusiness Cellular business models WAP RF-ID Video-phoning SMS wLAN Theoretical Classification. The examined Cellular business models are only a part of Mobile Business. Cellular business models (broader sense) are services, where the creation of benefit is directly connected to the use of the public cellular network (logos, background images...). Cellular business models (narrower sense) are services, where the benefit is created by the use of the public cellular network (Video-phoning, mPayment, SMS...).

  4. Approaches. Different approaches and models exist which try to explain the success of technological innovation. • The Adoption or Diffusion- TheoryTries to explain the speed of penetration of innovative technology through certain criteria (Roger‘s: relative advantage, compatibility complexity, trialability, observability) • Approaches to the Explanation of User AcceptanceTechnology Acceptance Model (Davis‘ TAM), Task-Technology-Fit-Model (Goodhue‘s TTFM) • The Theory of Perceived Risk (Cox, Cunningham, Bettman)The purchasing decision is affected by the factor of negative purchase consequence and its propability.

  5. Approaches. Regarding the theories of Innovation and Technology Management - no theory fits perfectly.

  6. Adoption progress Adoption probability Perceived risk Social benefit Service-specific benefit Economic benefit Service risk Cost risk Benefit dimension Theory of Perceived Risk The RBA-Model. In the RBA-Model, the dimension of expected benefits is compared to the perceived risk in order to analyse the adoption probability.

  7. Risk Risk-reduction effect Decreased risk Perceived part of the total risk Perceived risk Perceived residual risk Risk-recignition effect Non-perceived part of the total risk Non-perceived risk Non-perceived residual risk Time Awareness stage Opinion forming stage Decision stage The RBA-Model. The amount of perceived risk will usually decrease during the adoption process.

  8. Empirical Examination. In order to get highly sophisticated results I made a close empirical examination. Three different Cellular business model categories: - Information: SMS-Information Service, mobile Information Retrieval via WAP - Communication: Mobile-phoning, Video-phoning - Transaction: Mobile Ticketing, Mobile Parking Sample construction: quota plan, demographic data from the Austrian regulatory agency (RTR) Each category sample (n=610), 105 questions in a standardized questionnaire, Verification of the RBA model with a sample of n=1830 Time Periode for the empirical examination: September - December 2003 Analytical methods: multiple regression and a causal-analytic examination of the direct and indirect effects

  9. 0,94 Service risk Cost risk -0,28 Adoption probability 0,29 0,30 0,28 Service-specific benefit Economic benefit Social benefit 0,37 0,69 0,28 Empirical Examination. The empirical examination revealed some unexpected results. • The results of the Causal-analytic examinations showed us: • No direct impact of the cost risk (perceived costs) to the adoption probability • The service risk determines the cost risk • The price of a mobile Service does not influence the adoption probability.

  10. Benefit Influence of amount on adoption Probability Risk Communication Transaction Empirical Examination. The gap between the benefit and the risk curve illustrates the market penetration of the different categories in Austria. The user of a mobile Service does not think that he has to face any risk in the information category. The benefit in the communication category is obvious and mainly responsible for the adoption probability.

  11. Recommendations for Action. If the following measures are taken, a greater adoption probability of innovative cellular business models can be expected. • Mobile Network Operators (MNO) or Wireless Application Service Providers (WASP) should not stick to reducing the price for the Service, as verified in the empirical examination, as it will not influence the adoption much. • Information Class: The social- and the service-specific benefit should be given priority in order to raise the adoption probability (e.g. emphasis on entertainment possibilities). • Communication Class: Reduce the risk of not having service (e.g. improvement of the public cellular network, reach the critical mass of mobile devices/video-phones). • Transaction Class: Focus on communicating the advantages in comparison to the alternatives (e.g. time which will be saved by using the mobile service).

  12. Thank you for your attention!

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