Docomo Class Project

Docomo Class ProjectDocomo Class Project

• Docomo, Identify of• 4 Questions Answer

Docomo, Identify ofDocomo, Identify ofVISION

Creating a new communications culture

Docomo, Identify ofDocomo, Identify ofMISSIONExpanding its businesses while

contributing to the realizing of a rich and dynamic society.

Emphasizing and strengthening Docomo’s existing core business of voice communication service.

Assertively promoting mobile multimedia services among the public

Docomo, Identify ofDocomo, Identify ofOPPORTUNITIES Growth rate of voice service was gradually

declining(1997). Usage of internet was still in it’s infancy in

Japan (1998) Low penetration on PC and Japan’s

commuter population creating untapped market for wireless technology (1998)

Growth rate of e-commerce transactions on I-mode (1999)

Docomo, Identify ofDocomo, Identify ofTHREATS Local competitor’s penetration (KDDI (1987), J-

Phone) Foreign player entries (Motorola, 1993) Still under threat from KDDI and J-Phone

(1997) Japan Market was overpowered by Docomo’s

(2000) Declining of subscribers base (2000) Facing fierce competition from existing player

and new entrants in the japans market (2001)

Docomo, Identify ofDocomo, Identify ofTHREATS (cont.) Docomo’s ARPU continued declining (2002) Docomo’s shareholder wrath (2002) KDDI launching CDMA2002 1x (2002) Local Taxes Amendment Law by Japanese

Government (2003) Docomo’s investment partners request for

fresh capital (2003) Competitors were increasing their market

share rapidly (2003)

Docomo, Identify ofDocomo, Identify ofSTRENGTHSo Having inherited the wireless business of

NTT (1992)o Launch their owns handsets (1994)o Launching Do-Pa Project (1997)o Launching I-mode (1999)o Launching FOMA services (2001)o Launching 2G photo handsets (2002)o Launching FOMA handsets with rotating

liquid crystal screen and good battery life, and GPS handset (2003)

Docomo, Identify ofDocomo, Identify ofWEAKNESSES Taking rental security deposit of their handsets

(1992) Suffered 16 disruption in I-mode service (2000) I-mode couldn’t succeed on global market due

it’s incompatibility with other digital transmission standard used worldwide (2000)

Over confident with their 3G concept and aggressively gain overseas investment drive (2001)

Didn’t complete testing to ensure 100% network quality for their 3G services (2001)

Docomo, Identify ofDocomo, Identify ofWEAKNESSES (cont.) FOMA Handsets problem: high prices, variety

limited, very short battery life, insufficient network coverage, crash easily, hacker manipulation (2001)

I-mode difficulty adaptation by European market (2001)

High cost of FOMA services, lack of affordability and difficult to use (2001)

Docomo, Identify ofDocomo, Identify ofLONG TERM OBJECTIVES Emerging as the market leader in Japan (1992) 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)

Announcing global strategy to be a global player giant (early 2000)

Get over 150,000 subscribers by the end of 2001 (2001)

Positioning 3G as an affordable service (2002) Improving customers content base (2002)

Docomo, Identify ofDocomo, Identify ofGENERATING OF STRATEGIESo Focusing heavily on R&D to develop

advanced 2G wireless product (1997)o Gave reign to Keiji Enoki to develop I-

mode(1998)o Focusing on its customer needs. o Improving the technology used to avoid

disruptions and accommodating the increasing of subscriber base (2000)

o Stop overseas investment (2001)

Docomo, Identify ofDocomo, Identify ofSELECTION OF STRATEGY Launch their owns handsets (1994) Reducing initial subscription fees (1994) Eliminating initial subscription fees (1996) Launching “10 Yen Mail Services” (1997) Choose not to rever to I-mode with

Internet/Web in its promotional campaign (1999)

Docomo’s business model adopted from AOL’s packet billing model (1999)

Adding the value of its customer’s online purchases to their monthly bill (1999)

Docomo, Identify ofDocomo, Identify ofSELECTION OF STRATEGY (cont.) I-mode services that benefiting

Docomo,content providers and customers (1999).

Had multiple points of contact with their customers for understanding customer needs and to provide the solution (1999).

Being minority stakeholder of Hutchison, KPN Mobile and 3G UK Holding Company (2000).

Banking W-CDMA transmission protocol(2001). Acquisitioning 16% of AT&T stakes (2001). Offering FOMA handsets subsidies and reduce

its profit margin (2001).

Docomo, Identify ofDocomo, Identify ofSELECTION OF STRATEGY (cont.) Write-off the value of its various other

investment (2002) Cut-off its executive salaries by 10%-20% for

a year (2002) FOMA aggressive marketing initiatives

(2003) Refusing partner request for fresh capital

(2003)

4 Questions Answer4 Questions Answer1st Question Answer

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: stop taking rental security on their handsets and Launching their

owns handsets (April, 1994), Encourage their customers to purchase these handset, rather than

renting them. Docomo also reducing their initial subscription fees, so their

customers accept its new strategy.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.

4 Questions Answer4 Questions Answer2nd Question Answer

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: Choose not to rever to I-mode with Internet/Web in its

promotional campaign to keep its services simple Adopting AOL Packet Billing model for their business model Adding the value of its customer’s online purchases to their

monthly bill I-mode services that benefiting Docomo,content providers and

customers Constant focus on identifying the changing need of customer and

providing for them well in advance than Docomo’s competitor. Had multiple points of contact with their customers for

understanding customer needs and to provide the solutionThat 5 point above was become Docomo’s major factor that led to the success of I-mode.

4 Questions Answer4 Questions Answer3rd Question Answer

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:

Greedy on power that could not supplied by handset battery power at that time.

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.

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.

Need big space on handset, so the handset is not fit on hand (is not a hand-set anymore, customer didn’t like this)

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.

4 Questions Answer4 Questions Answer4th Question Answer

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 like: GPS + photo + wheaterproof phone for adventurer TV photo phone for traveler

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