Assalamualaikum,
Questions :
1. Do you view this technology as a potential threat to traditional telephone
companies? If so, what counter strategies could traditional telephone companies
adopt to prepare for this technology?
companies? If so, what counter strategies could traditional telephone companies
adopt to prepare for this technology?
2. Using Porter's Five Forces describe the barriers to entry for this new technology?
3. Which of Porter's three generic strategies is the new technology following?
4. Describe the value chain of the business of using cell phones as a payment
method.
method.
5. What types of regulatory issues might occur due to this type of technology?
Answer :
1. Absolutely yes. This modern technology is big threat towards the traditional
telephone companies. Since ages, our community had been using these
traditional telephones such as public phone or mobile home. Nevertheless,
people has shifted to the use of these modern telephones due to its technology
advances. Thus, it is a must for the traditional telephone companies to apply
counter strategies to prepare for this new technology such as :
telephone companies. Since ages, our community had been using these
traditional telephones such as public phone or mobile home. Nevertheless,
people has shifted to the use of these modern telephones due to its technology
advances. Thus, it is a must for the traditional telephone companies to apply
counter strategies to prepare for this new technology such as :
a) make traditional telephone more appealing to people and possibly
cheaper packages then what they already have
For example : Telekom Malaysia always make an attractive packages
offer to its customers such as Streamyx+Netbook packages as low as
RM38, SME Fax Plan 78, BizApp Store, TM Office In A Box 365,
TM SME Relocation Services and more.
cheaper packages then what they already have
For example : Telekom Malaysia always make an attractive packages
offer to its customers such as Streamyx+Netbook packages as low as
RM38, SME Fax Plan 78, BizApp Store, TM Office In A Box 365,
TM SME Relocation Services and more.
b) if possible, somehow tried to affiliated with these cell phone companies
to make out profits
to make out profits
For example : Telekom Malaysia merge with Celcom in year of 2003. Since
then, they have produced many products.
2. Barrier to Entry :
This new technology indeed do not have any problem to enter the market because
of its physical characteristic that are portable, light and user friendly. Thus, these
cell phone companies must offer customers an array of services that this new
technology will provide.
For example : a customer prefer to use prepaid card instead of telephone bills.
Threat of Substitutes :
In switching cost, cell phones companies can monitor what customers buy. After
many times of visiting sites they can tailor products to what the customer likes. If
they shop else where, there will be a switching cost since the new shopping site
does not have a profile of the past's purchases the customers made.
3. The new technology is is following focused strategy-target a niche market
and targeting the growing market of cell phone users and purchasing
products and services from the cell phones out from Porter's three generic
strategies. Target a niche market here means the subset of the market on which
a specific product is focusing. So the market niche defines the cell phones
features aimed at satisfying market needs, as well as the price range, production
quality and the demographics that is intended to impact.
For example : Nokia, Motorola, Samsung etc are a few market leaders who
make mobile phones ranging from basic handsets to fully featured camera, mp3,
internet and 3G enabled phones. But despite this there exists an extremely
premium market for mobile phones and this is where Vertu luxury mobile phones
are exclusive niche products due to their expensive finishing and latest features.
Vertu mobile phones are high end phones which have a gold and diamond
finishing which makes them expensive collector's items, and thus there is only a
niche market with premium customers.
4. Not so long ago, a mobile phone was for making calls, sending text and not much
more. However, the rise of the smartphone has changed all that, opening up many
new ways to make payments.
For example : Internet banking on your smartphone. Some banks have develop
'apps' for smartphones (like the iPhone, Android or Blackberry), while others have
created specially adapted versions of their websites that make them easier and
quicker to view on the small screen of a phone and makes payment efficiently. By
this way, more people will engage in this type of payment method.
5. Regulatory issues might occur due to this type of technology are :
a) people will be skeptical with putting personal information out there not knowing
what kind of security protection the company has.
For example : customers who want to buy electrical goods through online are
required to give in advance their bank account number information. Here lies the
problem where they would feel hesitate on what kind of security protection the
company has.
b) people/anonymous will find a way to hack into cell phones.
For example : some cell phone companies did not have a strong immune
system from being hacked. Opposed to iPhone because they have their own
defense system that will prevent them from being hacked.
then, they have produced many products.
2. Barrier to Entry :
This new technology indeed do not have any problem to enter the market because
of its physical characteristic that are portable, light and user friendly. Thus, these
cell phone companies must offer customers an array of services that this new
technology will provide.
For example : a customer prefer to use prepaid card instead of telephone bills.
Threat of Substitutes :
In switching cost, cell phones companies can monitor what customers buy. After
many times of visiting sites they can tailor products to what the customer likes. If
they shop else where, there will be a switching cost since the new shopping site
does not have a profile of the past's purchases the customers made.
3. The new technology is is following focused strategy-target a niche market
and targeting the growing market of cell phone users and purchasing
products and services from the cell phones out from Porter's three generic
strategies. Target a niche market here means the subset of the market on which
a specific product is focusing. So the market niche defines the cell phones
features aimed at satisfying market needs, as well as the price range, production
quality and the demographics that is intended to impact.
For example : Nokia, Motorola, Samsung etc are a few market leaders who
make mobile phones ranging from basic handsets to fully featured camera, mp3,
internet and 3G enabled phones. But despite this there exists an extremely
premium market for mobile phones and this is where Vertu luxury mobile phones
are exclusive niche products due to their expensive finishing and latest features.
Vertu mobile phones are high end phones which have a gold and diamond
finishing which makes them expensive collector's items, and thus there is only a
niche market with premium customers.
4. Not so long ago, a mobile phone was for making calls, sending text and not much
more. However, the rise of the smartphone has changed all that, opening up many
new ways to make payments.
For example : Internet banking on your smartphone. Some banks have develop
'apps' for smartphones (like the iPhone, Android or Blackberry), while others have
created specially adapted versions of their websites that make them easier and
quicker to view on the small screen of a phone and makes payment efficiently. By
this way, more people will engage in this type of payment method.
5. Regulatory issues might occur due to this type of technology are :
a) people will be skeptical with putting personal information out there not knowing
what kind of security protection the company has.
For example : customers who want to buy electrical goods through online are
required to give in advance their bank account number information. Here lies the
problem where they would feel hesitate on what kind of security protection the
company has.
b) people/anonymous will find a way to hack into cell phones.
For example : some cell phone companies did not have a strong immune
system from being hacked. Opposed to iPhone because they have their own
defense system that will prevent them from being hacked.
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