Ntt Docomo ™: Value Innovation at Docomo
1. How would you assess the attractiveness of the telephone industry in Japan at the time of the launch of i-mode services? What would you conclude from a five forces industry analysis?
• The attractiveness of the telephone industry at the time of the launch of the i-mode services was very high because of the deregulation of the telephone industry by the Japanese government. While DoCoMo currently controls 57% of the Japanese market, many other companies world wide were very interested in the Japanese market and entered the market to compete and gain more market share. By analyzing the industry five forces at that time we can see why the company had to create a new market to sustain the market share. First, the telephone industry is experiencing fast growth and the consumers were very interested in the new technology, so telephone companies were trying compete for attracting these new customers. All the big players in the industry were paying more and more to attract new customers and develop more technology to lead their efforts to have more market share than the others. Second, DoCoMo were developing a new 3G network that will give them a competitive advantage over the other companies and offer a substitute product that will have a big impact on their market share. Third, customers had a lot of buyer power because they can change to any other network if they are not satisfied with their current provider, which made the companies cut their prices and offer more products and try to be different than the other companies. Fourth, the suppliers had less bargaining power because they were many phone manufacturing and telephone companies can choose which one they want and suit their needs. Finally, the threat of new competitors entering the market in this industry is low to moderate because of the high cost of entry and acquiring the government final approval will take more time. In my opinion, the best way to enter the market is through an acquisition of a
• The attractiveness of the telephone industry at the time of the launch of the i-mode services was very high because of the deregulation of the telephone industry by the Japanese government. While DoCoMo currently controls 57% of the Japanese market, many other companies world wide were very interested in the Japanese market and entered the market to compete and gain more market share. By analyzing the industry five forces at that time we can see why the company had to create a new market to sustain the market share. First, the telephone industry is experiencing fast growth and the consumers were very interested in the new technology, so telephone companies were trying compete for attracting these new customers. All the big players in the industry were paying more and more to attract new customers and develop more technology to lead their efforts to have more market share than the others. Second, DoCoMo were developing a new 3G network that will give them a competitive advantage over the other companies and offer a substitute product that will have a big impact on their market share. Third, customers had a lot of buyer power because they can change to any other network if they are not satisfied with their current provider, which made the companies cut their prices and offer more products and try to be different than the other companies. Fourth, the suppliers had less bargaining power because they were many phone manufacturing and telephone companies can choose which one they want and suit their needs. Finally, the threat of new competitors entering the market in this industry is low to moderate because of the high cost of entry and acquiring the government final approval will take more time. In my opinion, the best way to enter the market is through an acquisition of a