NTT DoCoMo, one true story


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NTT DoCoMo, one true story

  1. 1. NTT DoCoMo one true story a MBA2-2 class project by Erwin
  2. 2. Identification on DoCoMo <ul><li>Vision and mission </li></ul><ul><li>Opportunities & Threat. </li></ul><ul><li>Strengths & Weaknesses. </li></ul><ul><li>Long Terms Objectives. </li></ul><ul><li>The generating of strategies. </li></ul><ul><li>The selection of strategy. </li></ul>
  3. 3. Vision & Mission <ul><li>Vision </li></ul><ul><li>Challenging the Mobile Frontier </li></ul><ul><li>Mission </li></ul><ul><li>(1) We will refine our brand and strengthen ties with our customers </li></ul><ul><li>(2) We will solicit and incorporate feedback from customers so that we continue to exceed their expectations </li></ul><ul><li>(3) We will continue to innovate so that we can earn the respect and admiration of people worldwide </li></ul><ul><li>(4) We will become an organization whose energetic staff is capable of overcoming all challenges in pursuit of our corporate vision </li></ul>
  4. 4. Opportunities & Threat <ul><li>Opportunity </li></ul><ul><li>By the year 2010, the mobile communications market is projected to grow to three times its current size. </li></ul><ul><li>Threat </li></ul><ul><li>While the mobile communications market in Japan has grown remarkably, it has started to show signs of slowing down. </li></ul>
  5. 5. Strength & Weaknesses <ul><li>Strength </li></ul><ul><li>Since its inception in 1992, NTT DoCoMo has been hell-bent on one goal: to dominate Japan's cell-phone market. With nearly 60% of the local digital-cellular universe--or 32 million Japanese--DoCoMo handily accomplished that goal. Then, 18 months ago, it set out on a new mission: to lead Japan in the world's first instantly accessible mobile Internet service, called i-mode, which offers users an online connection without the need to dial up. DoCoMo has accomplished that, too. I-mode boasts 70% of Japan's local wireless Web market. </li></ul><ul><li>Weakness </li></ul><ul><li>DoCoMo wants to become a leader in both cellular and wireless Web services worldwide. But since it's coming late to an overcrowded game, DoCoMo is embarking on a low-key strategy that involves sprinkling small investments into several companies in Europe and Asia rather than making outright acquisitions. With little room left in Japan to grow, global outreach is the only option. </li></ul>
  6. 6. Long Terms Objectives <ul><li>World Domination </li></ul><ul><li>on the Cheap </li></ul>
  7. 7. The generating & selection of strategies at DoCoMo <ul><li>Network externality effects that generate more users. When a new user joined the network, it created incremental benefits for all users in the network. After a critical mass was reached, there were added incentives for new consumers to come in, thus helping the network to grow. </li></ul><ul><li>High customer-retention rates. DoCoMo had a massive up-front investment and customer acquisition cost. To prevent its customers from switching DoCoMo created a sticky business model. Under this model, the customers found the cost of switching to other service providers higher than the value gained by switching. </li></ul><ul><li>Economies of scale. The cost of supporting new content providers, users, and new technology diminished and the size of the network grew. </li></ul>
  8. 8. The 4Q on the DoCoMo Case <ul><li>Analyze in detail, the strategies adopted by DoCoMo during the early and mid 1990s in detail and comment on the factors that helped it establish itself as a market leader. </li></ul><ul><li>Critically examine the role played by the I-Mode service in making DoCoMo the largest company in Japan. What were the major factors that led to the success of I-mode? </li></ul><ul><li>Examine DoCoMo’s global strategies and 3G initiatives. Do you support DoCoMo’s global strategies? Why/Why not? Do you think DoCoMo was correct in advancing to 3G technology during the early 2000s? Justify your answer with reasons. </li></ul><ul><li>Critically examine DoCoMo’s initiatives to increase its revenues. In the light of the saturation of Japan’s cellular market, intensified competition and decreasing ARPUs, do you think DoCoMo would succeed in retaining its market share? What measures would you recommend for DoCoMo to increase revenues and retain is leadership? </li></ul>
  9. 9. Docomo Strategies on ’90s that making it as the market leader <ul><li>As an ‘old’ player, NTT inherit DoCoMo with its wireless communication business </li></ul><ul><li>The entry of foreign player make DoCoMo to stop taking FEES (security deposits, initial fee, etc.) </li></ul><ul><li>The Japanesse patriotism’s aimed by DoComo in order to survive foreign players ‘attack’ </li></ul>
  10. 10. Major Factor that making the i-Mode success <ul><li>The 1 st mobile Internet service in the world </li></ul><ul><li>Ease of use, just press the ‘I’ button, and you’re connected… </li></ul><ul><li>The technology growth (from 1G, 2G, till now – the 3.5G, and soon will be 4G) </li></ul><ul><li>BILLING MODE, based on the volumes of data received & sent, not time-based </li></ul><ul><li>Growing e-commerce transaction that become a lifestyle for the japanesse </li></ul>
  11. 11. Major Factor that making the i-Mode success (contd.) <ul><li>Marketing campaign was keep as simple as it is, they don’t rever anything into ‘Internet’, ‘Web’, or even ‘WAP’ </li></ul><ul><li>Profit sharing between content provider & DoCoMo, while the customer get the information they want, make the whole process as a WIN-WIN-WIN solution </li></ul><ul><li>Since PC penetration in Japan is very low, there come the companion for the Japanesse, the i-Mode </li></ul><ul><li>I-mode came at the right time, in the right place, with the right content. It just dazzled everybody </li></ul>
  12. 12. Global Strategies for 3G <ul><li>Expanding abroad by investment or joint services </li></ul><ul><li>Retain customer by making cost of switching is higher than the value gained by operator switching </li></ul><ul><li>Economics of scale; the bigger the volume, the bigger the profits, multiplication is the solution </li></ul>
  13. 13. Docomo’s revenue stream <ul><li>Mobile / Wireless service (i-Mode, FOMA, CDMA 2002-1x) </li></ul><ul><li>Global investment in various foreign country </li></ul><ul><li>Network partnership (applications, contents, operators, & technical) </li></ul>