Class Project Bussiness Strategy


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Class Project Bussiness Strategy

  1. 1. Class Project Bussiness Strategy
  2. 2. DOCOMO’S VISION <ul><li>Creating a new communications culture </li></ul>
  3. 3. DOCOMO’S MISION <ul><li>Expanding its businesses while contributing to the realizing of a rich and dynamic society. </li></ul><ul><li>Emphasizing and strengthening Docomo’s existing core business of voice communication service. </li></ul><ul><li>Assertively promoting mobile multimedia services among the public. </li></ul>
  4. 4. DOCOMO’S OPPORTUNITIES <ul><li>Growth rate of voice service was gradually declining(1997). </li></ul><ul><li>Usage of internet was still in it’s infancy in Japan (1998) </li></ul><ul><li>Low penetration on PC and Japan’s commuter population creating untapped market for wireless technology (1998) </li></ul><ul><li>Growth rate of e-commerce transactions on I-mode (1999) </li></ul>
  5. 5. DOCOMO’S THREATS <ul><li>Local competitor’s penetration (KDDI (1987), J-Phone) </li></ul><ul><li>Foreign player entries (Motorola, 1993) </li></ul><ul><li>Still under threat from KDDI and J-Phone (1997) </li></ul><ul><li>Japan Market was overpowered by Docomo’s (2000) </li></ul><ul><li>Declining of subscribers base (2000) </li></ul><ul><li>Facing fierce competition from existing player and new entrants in the japans market (2001) </li></ul><ul><li>Docomo’s ARPU continued declining (2002) </li></ul><ul><li>Docomo’s shareholder wrath (2002) </li></ul><ul><li>KDDI launching CDMA2002 1x (2002) </li></ul><ul><li>Local Taxes Amendment Law by Japanese Government (2003) </li></ul><ul><li>Docomo’s investment partners request for fresh capital (2003) </li></ul><ul><li>Competitors were increasing their market share rapidly (2003) </li></ul>
  6. 6. DOCOMO’S STRENGHTS <ul><li>They having inherited the wireless business of NTT (1992) </li></ul><ul><li>launch their owns handsets (1994) </li></ul><ul><li>Launching Do-Pa Project (1997) </li></ul><ul><li>Launching I-mode (1999) </li></ul><ul><li>Launching FOMA services (2001) </li></ul><ul><li>Launching 2G photo handsets (2002) </li></ul><ul><li>Launching FOMA handsets with rotating liquid crystal screen and good </li></ul>
  7. 7. DOCOMO’S WEAKNESS <ul><li>Taking rental security deposit of their handsets (1992) </li></ul><ul><li>Suffered 16 disruption in I-mode service (2000) </li></ul><ul><li>I-mode couldn’t succeed on global market due it’s incompatibility with other digital transmission standard used worldwide (2000) </li></ul><ul><li>Over confident with their 3G concept and aggressively gain overseas investment drive (2001) </li></ul><ul><li>Didn’t complete testing to ensure 100% network quality for their 3G services (2001) </li></ul><ul><li>FOMA Handsets problem: high prices, variety limited, very short battery life, insufficient network coverage, crash easily, hacker manipulation (2001) </li></ul><ul><li>I-mode difficulty adaptation by European market (2001) </li></ul><ul><li>High cost of FOMA services, lack of affordability and difficult to use (2001) </li></ul>
  8. 8. DOCOMO’S LONG TERM OBJECTIVES <ul><li>Emerging as the market leader in Japan (1992) </li></ul><ul><li>The need to shift to a higher-level technology, to differentiate its services from those of its competitor and to sustain its growth in the market (1997) </li></ul><ul><li>Announcing global strategy to be a global player giant (early 2000) </li></ul><ul><li>Get over 150,000 subscribers by the end of 2001 (2001) </li></ul><ul><li>Positioning 3G as an affordable service (2002) </li></ul><ul><li>Improving customers content base (2002) </li></ul>
  9. 9. DOCOMO’S GENERATING OF STRETAGIES <ul><li>Focusing heavily on R&D to develop advanced 2G wireless product (1997) </li></ul><ul><li>Gave reign to Keiji Enoki to develop I-mode(1998) </li></ul><ul><li>Focusing on its customer needs. </li></ul><ul><li>Improving the technology used to avoid disruptions and accommodating the increasing of subscriber base (2000) </li></ul><ul><li>Stop overseas investment (2001) </li></ul>
  10. 10. DOCOMO’S SELECTION STRETAGIES <ul><li>launch their owns handsets (1994) </li></ul><ul><li>Reducing initial subscription fees (1994) </li></ul><ul><li>Eliminating initial subscription fees (1996) </li></ul><ul><li>Launching “10 Yen Mail Services” (1997) </li></ul><ul><li>Choose not to rever to I-mode with Internet/Web in its promotional campaign (1999) </li></ul><ul><li>Docomo’s business model adopted from AOL’s packet billing model (1999) </li></ul><ul><li>Adding the value of its customer’s online purchases to their monthly bill (1999) </li></ul><ul><li>I-mode services that benefiting Docomo,content providers and customers (1999) </li></ul><ul><li>Had multiple points of contact with their customers for understanding customer needs and to provide the solution (1999) </li></ul><ul><li>Being minority stakeholder of Hutchison, KPN Mobile and 3G UK Holding Company (2000) </li></ul><ul><li>Banking W-CDMA transmission protocol(2001) </li></ul><ul><li>Acquisitioning 16% of AT&T stakes (2001) </li></ul><ul><li>Offering FOMA handsets subsidies and reduce its profit margin (2001) </li></ul><ul><li>Write-off the value of its various other investment (2002) </li></ul><ul><li>Cut-off its executive salaries by 10%-20% for a year (2002) </li></ul><ul><li>FOMA aggressive marketing initiatives (2003) </li></ul><ul><li>Refusing partner request for fresh capital (2003) </li></ul>
  11. 11. ANSWERING QUESTION <ul><li>By using its strength as a company that inherit the wireless business of NTT, Docomo start to renting their handset as mobile phones, car phones, maritime phones, in-flight phones and pagers. As local competitors like KDDI and J-Phone, and new foreign player like Motorola tried harder to get the japans market share, Docomo decided to: </li></ul><ul><ul><ul><li>stop taking rental security on their handsets and Launching their owns handsets (April, 1994), </li></ul></ul></ul><ul><ul><ul><li>encourage their customers to purchase these handset, rather than renting them. </li></ul></ul></ul><ul><ul><ul><li>Docomo also reducing their initial subscription fees, so their customers accept its new strategy. </li></ul></ul></ul><ul><li>In December 1996 Docomo decided to eliminate its initial subscription fees which triggered the subscriber base growth. Because of Docomo’s focused initiatives and the growing demand of mobile telecom service in japan that time, Docomo could emerge as the market leader by 1997. </li></ul>
  12. 12. ANSWERING QUESTION <ul><li>Docomo, by Keiji Enoki, launch I-mode as the next hope of Docomo after Do-Pa Project success story. I-mode was an unique value-adding wireless product that become Docomo’s biggest success story. I-mode is the first instantly accessible mobile internet service in the world. As Docomo intended to focus on its customer need an their solution, Docomo decided to: </li></ul><ul><li>- Choose not to rever to I-mode with Internet/Web in its promotional campaign to keep its services simple </li></ul><ul><li>- Adopting AOL Packet Billing model for their business model </li></ul><ul><li>- Adding the value of its customer’s online purchases to their monthly bill </li></ul><ul><li>- I-mode services that benefiting Docomo,content providers and customers </li></ul><ul><li>- Constant focus on identifying the changing need of customer and providing for them well in advance than Docomo’s competitor. </li></ul><ul><li>- Had multiple points of contact with their customers for understanding customer needs and to provide the solution </li></ul><ul><li>That 5 point above was become Docomo’s major factor that led to the success of I-mode. </li></ul>
  13. 13. ANSWERING QUESTION <ul><li>I’m agree with their global strategies, it’s was right decision to made that time, but I’m disagree because the technology was not support for their advanced 3G service and Docomo too rush to consider this, because 3G technology is: </li></ul><ul><ul><ul><li>Greedy on power that could not supplied by handset battery power at that time. </li></ul></ul></ul><ul><ul><ul><li>Need a very good network coverage, because 3G bring a lot of data packet transmit at the same time, bad network causing a lot of data packet must be re-transmit to get thr right data. </li></ul></ul></ul><ul><ul><ul><li>Need more computation power on handset. 3G data packet consist of complex algorithm that need big computation power to handle it compression and decompression data packet. Slow computation power is bring handset to crash easily. </li></ul></ul></ul><ul><ul><ul><li>Need big space on handset, so the handset is not fit on hand (is not a hand-set anymore, customer didn’t like this) </li></ul></ul></ul><ul><li>Docomo should be more patient to build these equipment fit for 3G technology rather than launch it with old equipment that bring disaster when developed. </li></ul>
  14. 14. ANSWERING QUESTION <ul><li>Docomo was survived because cut-off its executive salaries and aggressive marketing initiatives. It could retain its market share because it was successfully developing new segment market for 2G photo phone and GPS phone. I think Docomo should continue to research new segment market, especially for focused customer (GPS + photo + wheaterproof phone for adventurer or TV photo phone for traveler) </li></ul>