NTT Docomo Case Study - Susan Presentation Transcript

1. by Susan Anggraeni 2. DoCoMos 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 3. 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". 4. 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. 5. 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. 6. 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) 7. DoCoMos Mission Statement World Domination on the Cheap 8. 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. 9. Strength & Weakness Docomos 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. 10. Opportunity & Threat DoCoMo has the opportunity to expand its business worldwide. Since its very successful in Japan, theres a chance that itll be successful outside Japan as well. But, there are threats from the foreign telecom company that entered Japan in the late 80s. 11. 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 publics. 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. 12. 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. Its followed by the 10Yen Mail Service, which allowed custs to send an email up to 1000 words from the mobile phone just for Y10. 13. 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 AOLs 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 ecommerce 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 imode. 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. 14. 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 15. 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. 16. Questions for discussion (4) The initiatives to increase the revenue stream: Focus on 3G technology products Allow the entry of foreign players into Japans telecom market In March 97 it launched 2G(wireless products) DoPa (Docomo Packet transmission). 17. 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. 18. 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?

NTT DoCoMo, one true story Presentation Transcript

1. NTT DoCoMo one true story a MBA2-2 class project by Erwin 2. Identification on DoCoMo Vision and mission Opportunities & Threat. Strengths & Weaknesses. Long Terms Objectives. The generating of strategies. The selection of strategy. 3. Vision & Mission Vision Challenging the Mobile Frontier Mission (1) We will refine our brand and strengthen ties with our customers (2) We will solicit and incorporate feedback from customers so that we continue to exceed their expectations (3) We will continue to innovate so that we can earn the respect and admiration of people worldwide (4) We will become an organization whose energetic staff is capable of overcoming all challenges in pursuit of our corporate vision 4. Opportunities & Threat Opportunity By the year 2010, the mobile communications market is projected to grow to three times its current size. Threat While the mobile communications market in Japan has grown remarkably, it has started to show signs of slowing down. 5. Strength & Weaknesses Strength 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. Imode boasts 70% of Japan's local wireless Web market. Weakness 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. 6. Long Terms Objectives World Domination on the Cheap 7. The generating & selection of strategies at DoCoMo 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. 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. Economies of scale. The cost of supporting new content providers, users, and new technology diminished and the size of the network grew. 8. The 4Q on the DoCoMo Case 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. 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? Examine DoCoMos global strategies and 3G initiatives. Do you support DoCoMos 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. Critically examine DoCoMos initiatives to increase its revenues. In the light of the saturation of Japans 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?

9. Docomo Strategies on 90s that making it as the market leader As an old player, NTT inherit DoCoMo with its wireless communication business The entry of foreign player make DoCoMo to stop taking FEES (security deposits, initial fee, etc.) The Japanesse patriotisms aimed by DoComo in order to survive foreign players attack 10. Major Factor that making the i-Mode success The 1 st mobile Internet service in the world Ease of use, just press the I button, and youre connected The technology growth (from 1G, 2G, till now the 3.5G, and soon will be 4G) BILLING MODE, based on the volumes of data received & sent, not time-based Growing e-commerce transaction that become a lifestyle for the japanesse 11. Major Factor that making the i-Mode success (contd.) Marketing campaign was keep as simple as it is, they dont rever anything into Internet, Web, or even WAP Profit sharing between content provider & DoCoMo, while the customer get the information they want, make the whole process as a WIN-WIN-WIN solution Since PC penetration in Japan is very low, there come the companion for the Japanesse, the iMode I-mode came at the right time, in the right place, with the right content. It just dazzled everybody 12. Global Strategies for 3G Expanding abroad by investment or joint services Retain customer by making cost of switching is higher than the value gained by operator switching Economics of scale; the bigger the volume, the bigger the profits, multiplication is the solution 13. Docomos revenue stream Mobile / Wireless service (i-Mode, FOMA, CDMA 20021x) Global investment in various foreign country Network partnership (applications, contents, operators, & technical)