NTT Docomo Case Study - SusanPresentation Transcript
by Susan Anggraeni
DoCoMo’s Vision Statements
We will refine our brand and strengthen ties with our customers
We will solicit and incorporate feedback from customers so that we continue to exceed their expectations
We will continue to innovate so that we can earn the respect and admiration of people worldwide
We will become an organization whose energetic staff is capable of overcoming all challenges in pursuit of our corporate vision
Vision Statement explanation (1)
First, we will redefine our concept of the DOCOMO brand and its image, developing a brand statement and corporate logo to embody this new vision. Among the concepts to be promoted through our business activities is "Loyalty".
Vision Statement explanation (2)
Next, we will solicit and implement feedback from customers so that we can continue to be a company that both understands customer needs and exceeds their expectations. For this purpose, we will reinforce all points of contact with customers; will reflect the opinions of front-line staff in our business activities; and will create deep relationships with users of our services.
Vision Statement explanation (3)
We are also driven to remain a company valued for its contributions around the globe. We will achieve this by creating an environment that delivers convenience to customers worldwide; that fosters both technological and operational innovation; and that reinforces our environment-related initiatives, such as reduction of CO2 emissions.
Finally, we will continue to recruit a diversity of talent so that together we can effectively respond to the increasingly more diversified needs of customers while adapting to changes in market conditions and trends. We will also simplify our organizational structure, becoming a more nimble operation able to respond flexibly to customer and market demands. Furthermore, we will energize our organization so that all employees can work in unison toward a shared vision; to achieve this goal, we will strengthen communication at all levels.
Vision Statement explanation (4)
DoCoMo’s Mission Statement
“ World Domination—
on the Cheap”
Long Term Objective Statement
Looking ahead, we would like DOCOMO to continue to evolve as a company that consistently earns the trust and loyalty of its customers.
Strength & Weakness
Docomo’s strength is its i-Mode. Its success in i-mode has brought DoCoMo as the market leader in telecom business in Japan.
Its weakness is the investments outside Japan brought a great loss to DoCoMo.
Opportunity & Threat
DoCoMo has the opportunity to expand its business worldwide. Since it’s very successful in Japan, there’s a chance that it’ll be successful outside Japan as well.
But, there are threats from the foreign telecom company that entered Japan in the late 80s.
Questions for discussion (1)
NTT was spun-off into Docomo to reduce its monopoly in telecom sector. NTT had 67% of the stake, the rest was public’s.
The initial product of Docomo includes mobile phones, car phones, maritime phones, in-flight phones and pagers. The corporate philosophy is creating a new communications culture.
With Motorola entering Japan, the number of subscribers increase from 2.13 million in 93 to 31.4 million in 97. But as the competition intensified, DoCoMo registered a drastic decline in sales during 92-94. In Oct 93 it decided to stop taking rental security deposit on handsets. And launched its own handsets (and encourage the customers to purchase these handsets rather than renting them) in April 94.
In Dec 96, it eliminated the initial subscription fees for its services, which triggered the subscribers growth. Due to its focused initiatives and growing demand for mobile telecom services, Docomo emerged as the market leader by 97.
Questions for discussion (1) cont.
During the same period, feedback from the customers showed that the growth of 1G (voice service) was declining. So it realized the need to shift to a higher level to compete with KDDI and J-Phone.
In March 97 it launched 2G(wireless products) ‘DoPa’ (Docomo Packet transmission). It enables customers to receive and transmit data in packets. It’s followed by the ‘10Yen Mail Service’, which allowed custs to send an email up to 1000 words from the mobile phone just for Y10.
Questions for discussion (2)
I-mode made internet available on the phone without dial-up. I-mode then generated 30% higher revenues per subscribers.
I-mode network was based on Personal Digital Cellular Technology – a technology that allowed the data to be sent to its destination in parts called packets.
The business model Docomo adopted from AOL’s packet billing model – billing was based on the volumes of data received and sent by subscribers, not on the amount of time spent on the net.
Growing e-commerce transactions on i-mode.
Docomo chose not to be a gatekeeper between content companies and their customer base. It also made it easy for individual Web Devs to make their sites I-mode friendly. Then Docomo offered more websites on i-mode. Those strategies made Docomo reached far ahead of its competitors.
“ I-Mode came at the right time, in the right place, with the right content.”, said Kirk Boodry.
Questions for discussion (3)
Global Strategies :
Investing in telecom companies abroad.
Always try being creative in the products and services
Take up minority stakes in less evolved cellular companies worldwide to establish itself as the 1st global cellular telecommunication giant
Questions for discussion (3) cont.
3G initiatives :
Launch Freedom of Mobile Multimedia Access (FOMA) 3G service In May 2001
Make i-mode compatible with the wireless standards in US.
Looking on a transmission protocol – Wideband-Code Division Multiple Access (W CDMA) to help the company diversify into 3G services.
Questions for discussion (4)
The initiatives to increase the revenue stream:
Focus on 3G technology products
Allow the entry of foreign players into Japan’s telecom market
In March 97 it launched 2G(wireless products) ‘DoPa’ (Docomo Packet transmission).
Questions for discussion (4) cont.
Gathered Keiji Enoki (electrical engineer in NTT) to develop a unique value adding wireless product, Matsunage Mari (a former editor for a classified magazine) and Natsuno Takeshi (an Internet expert) to create a new wireless product. The result is I-mode in Feb 99.
By Nov 2000, invested up to $16 billion in Hutchinson Telecom (Hong Kong), KPN Mobile (Netherlands) and 3G UK Holdings.
Planned to launch Freedom of Mobile Multimedia Access (FOMA) 3G service in May 2001.
Questions for discussion (4) cont.
In Jan 2001, completed the acquisition of a 16% stake in AT&T for $9.8 billion.
Measures to increase revenue streams and retain the leadership:
How far have you expanded?
How satisfied are you customers?
Does the number of subscribers increases or decreases?