LOCATION-BASED SERVICESINDUSTRIAL AND BUSINESS ANALYSIS

Group 6Huanhuan WANG Bo WANG Xinwei YANG Han LIU

Telecommunication Management F2011

OBJECTIVES

What is Location-based services (LBS)?

What is the impact of Location-based services?

What is the most viable business model in LBS?

Ultimate QuestionHow should we create our own LBS Business?

OUTLINE

I. Introduction

II. Industrial Analysis

III. Business Evaluation Model

IV. Implementation of Model

V. Comparison & EvaluationC o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

INTRODUCTION OF LBSDefinition: Information services provided to mobile devices through mobile networks, which may utilize the location information to various value-adding services.

Core Components:

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Hardware & Infrastructure:

• Mobile Devices• Positioning

Component

Software & Services

• Service & Application Providers

• Data & Content Providers

Networking Environment

• Communication Network

INDUSTRIAL ANALYSIS

Type of LBSBusiness

Model

Information

UsedExamples

Authorities and corporate applications B2B

Location data, Aggregated data

Surveillance, Network control,

Asset management

Location information B2CClient location

dataMaps, Navigation,

Traffic

Personalization B2CClient location

data and profiles data

Promotions, Coupons, Social

contact

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Application of Location-Based Services

INDUSTRIAL ANALYSIS

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Timeline of Location-Based Services in US

INDUSTRIAL ANALYSIS

Impact to the Industry

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Social Networking

• Real-time Social Networking

• Physical Participation

• New Channel for Profit Making

MobileCustomer Demand

Eg, Location sharing

Software DesignEg, Data Mining

Hardware Capabilitie

sEg, iPhone

INDUSTRIAL ANALYSIS

Concerns & Challenges

Technical• No single standard• Lack of hardware & software support

Social• User privacy• No specific legal policies

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

BUSINESS EVALUATION MODEL

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation ModelIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Value Proposition: Value generation► Opportunity Size: User bases,

Social/behavioral impacts of services,

► Revenue Generation ► Cost Structure► Sustainability & Growth

► Technical, Financial

► Internal, External (Partners)

► Competition ► Substitutes► New entrants

► IPR, Privacy, Regulations, Industry Trend

= Business Models + LBS Features + Investment Evaluations

YELP

C o m p a r is o n

Comparison

Im p le m e n t a t io n

ImplementationIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Values: Visitors & Reviewers (Yelpers) , Business Owners, Paying Advertisers

► 61 Million Visitors/1 Million Reviews Per Month

► Revenue: Local Subscription, Advertisements, Daily Deals (30% Charge)

► Cost Structure: R&D, Operating Expenses, Sales & Marketing

► Growth: Filed IPO in Nov 2011

► GPS, Wifi, Transmitter positioning

► Competitors: Google Places, CitySearch, etc► Differentiation: Well-established Social Networking + Diversified Platform Support

► Legal Risks: Manipulating Results► Security Risks: Mobiles► Partnership: Half of Flow from Google

E v a lu a t io n M o d e l

Evaluation Model

YELP

C o m p a r is o n

Comparison

Im p le m e n t a t io n

ImplementationIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Values: Visitors & Reviewers (Yelpers) , Business Owners, Paying Advertisers

► 61 Million Visitors/1 Million Reviews Per Month

► Revenue: Location Subscription, Advertisements, Daily Deals (30% Charge)

► Cost Structure: R&D, Operating Expenses, Sales & Marketing

► Growth: Filed IPO in Nov 2011

► GPS, Wifi, Transmitter positioning

► Competitors: Google Places, CitySearch, etc► Differentiation: Well-established Social Networking + Diversified Platform Support

► Legal Risks: Manipulating Results► Security Risks: Mobiles► Partnership: Half of Flow from Google

E v a lu a t io n M o d e l

Evaluation Model

YELP

C o m p a r is o n

Comparison

Im p le m e n t a t io n

ImplementationIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Values: Visitors & Reviewers (Yelpers) , Business Owners, Paying Advertisers

► 61 Million Visitors/1 Million Reviews Per Month

► Revenue: Location Subscription, Advertisements, Daily Deals (30% Charge)

► Cost Structure: R&D, Operating Expenses, Sales & Marketing

► Growth: Filed IPO in Nov 2011

► GPS, Wifi, Transmitter positioning

► Competitors: Google Places, CitySearch, etc► Differentiation: Well-established Social Networking + Diversified Platform Support

► Legal Risks: Manipulating Results► Security Risks: Mobiles► Partnership: Half of Flow from Google

E v a lu a t io n M o d e l

Evaluation Model

FOURSQUARE

C o m p a r is o n

Comparison

Im p le m e n t a t io n

ImplementationIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Value: “Check In” Promote Business Development► 1 Million Registered Users / 3 Million Check-ins

per day for the 2-Year-Old

► Revenue: No Solid Model (Exploration & Accumulation Phase)

► Competitors: LBS, Social Networking Providers► Differentiation: LBS + Social Networking

► Privacy: Automatic posts / Position displays► Regulation: IRP issues

E v a lu a t io n M o d e l

Evaluation Model

GOOGLE LATITUDE

C o m p a r is o n

Comparison

Im p le m e n t a t io n

ImplementationIntroduction

In d u s t r ia l

A n a ly s is

Industrial Analysis

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

► Value: Location Sharing, Supplementary Product► 3 Million Users / > 50% Inactive

► Revenue: No Direct Source, Funded by Google ► Growth: “Succeeded” by Google Place

► Previous incompatibility with iphone

► Competitors: Foursquare, Facebook Deals (Gowalla)

► Privacy: Many procedures to protect privacy Optional Check-in + False Display + History Management

E v a lu a t io n M o d e l

Evaluation Model

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

Users + Business + AdvertisersYelp• Information facilitation• Less value-adding from Yelp

Users + BusinessFoursquare• Entertaining social network• Value-adding through data mining

Users Latitude• Location sharing among users• Limited value adding

Customer Base

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

Advertising + Subscription + DealsYelp• Location specific selling• Subscriptions: Value adding for Business• Deals: Location-based + Daily

Advertising + Location-based DealsFoursquare• Immature profit model

Advertising (Google)Latitude• Indirect revenue generation

Revenue Generation

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

OE + Sales & MarketingYelp

Operating ExpenseFoursquare

Operating ExpenseLatitude• Utilized by Google package

Cost Structure

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

To-be-listed Dominator in the FieldYelp

New Growing OrganizationFoursquare

Comprehensive Services from GoogleLatitude• Google Place• Google +

Organizational Capabilities

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

Giants entering new domainsYelp• Google Offers, Facebook Places

Both LBS & Social Network ProvidersFoursquare• Leading position in the field• Unique differentiation

Supported by GoogleLatitude• No financial pressure• Comprehensive packages by Google

Competition

COMPARISON & EVALUATION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents

Profit Model

Ease of implementation

Organizational Capabilities

Positioning

Risk Evaluation

Biased Services + Privacy ConcernsYelp• Sued by subscribers

IRP + Privacy ConcernsFoursquare• Lack of specific regulations in LBS privacy protection

Privacy ConcernsLatitude• Privacy vs. Quality of Services

Legal Concerns

CONCLUSION

C o m p a r is o n

Comparison

Im p le m e n t a t io n

Implementation

E v a lu a t io n M o d e l

Evaluation Model

In d u s t r ia l

A n a ly s is

Industrial Analysis

Introduction

Service Contents: Integration of LBS with other services + Utilize the data

Profit Model: Comprehensive revenue generation + Economies of Scale

Ease of Implementation: Multi-platform support

Organizational Capabilities: Package selling + Partnership

Positioning: Leading position + Network externality + Unique positioning

Risk Evaluation: Preparation for regulation changes + Privacy Protection

Results

LOCATION-BASED SERVICESINDUSTRIAL AND BUSINESS ANALYSIS

Telecommunication Management F2011

THANK YOU!Q&A