ANP Driven Qualitative Simulation on Value-Added Strategy Alignment and Optimization

In the 21 th century,the use of mobile voice communications grows rapidly and becomes a major revenue source for mobile service providers.However,due to the growth saturation of subscribers and voice tariff competition,the average revenue per user( ARPU) of mobile service providers has been steadily declining in the past few years.Higher Broadband bandwidth and faster transmission speed will enable mobile service providers to provide better mobile value-added services.These external factors are driving the growth for mobile service providers.However,only 20% of the revenue of mobile service providers in China originates from mobile value-added services before the end of 2011.In contrast,the mobile value-added services ARPU of the top three Japanese mobile service providers is as high as about 40%.For instance,mobile value-added services of People's Daily Online in China only account for 11.86% of its total revenue.Thus,it is believed that there is still room for growth in the mobile value-added services.The main reason for the slow development of mobile value-added services in China is the misalignment between value-added strategy and business strategy.Value-added strategy alignment has thus become a critical issue for mobile service industry.Mobile value-added strategy alignment refers to developing a value-added strategy in harmony with business strategies.Mobile value chain enterprises would refer value-added strategy as a signal,which could enable their business strategies to be aligned.In recent years,scholars have stressed the importance of mobile value-added strategy alignment in the context of a mobile value chain.However,the information in the management field is always ambiguous,incomplete or qualitative.The conventional quantitative method is not applied to dealing with the optimal problem,especially the strategy problem.Thus,it is important to develop a new paradigm for optimal problem with incomplete information.In this paper,we use Henderson and Venkatraman'ss Strategic Alignment Model( SAM) as our theoretical base,and develop an optimization model for value-added strategy alignment with incomplete information.A combination of qualitative simulation and empirical study can serve as a solution to the optimization problem.Firstly,we use value-added strategy alignment as an example and design questionnaire to obtain data from managers and scholars in the mobile value-added industry.The data was statistically analyzed using ANP to examine the interactions between alternative drivers.Secondly,a qualitative simulation method is introduced to drive the evolution of the interactions between drivers.For a high degree of accuracy,the relations obtained from empirical study are utilized to represent the casualty graph in traditional qualitative simulation models,where the casualty weights are denoted as the path coefficients between strategic factors.Thirdly,according to the empirical relations an optimization model is established to examine the degree of value-added strategy alignment in the mobile value chain.The combination of empirical relationships and qualitative simulation provides a solution to the optimization problem.To examine the feasibility of the framework,a prototype system based on MATLAB 7.0 is implemented.It is found that the result is consistent with common sense in real management scenery,and the framework is able to contribute to real-time optimization decision for mobile banking marketing.In practice,the identification of optimal combination of change directions can serve as the development of priorities for strategic factors,and is likely to influence resource allocation in value-added strategy alignment.