DoCoMo - The Japanese Wireless Telecom Leader

Background Note Contd...

NTT had a 67% majority stake in DoCoMo, while the remaining was held by the public. Kouji Ohboshi (Ohboshi), associate vice president of NTT's Chugoku Telecom division, was made the CEO of DoCoMo. DoCoMo began its operations in July 1992. Having inherited the wireless communication business of NTT, DoCoMo was primarily involved in offering various wireless communication devices and services. The initial product portfolio of DoCoMo included mobile phones, car phones, maritime phones, in-flight phones and pagers.

DoCoMo formulated its policies in line with this corporate philosophy of creating a new communications culture (Refer Table I for DoCoMo's basic management policies). With the entry of foreign players like Motorola into the Japanese cellular phone market, the number of subscribers increased from 2.13 million in 1993 to 31.4 million in 1997.

However, as the competition intensified, DoCoMo registered a drastic decline in sales during 1992-94. To sustain its position in the market, the company in October 1993, decided to stop taking rental security deposits on handsets. Following this, in April 1994, DoCoMo launched its own handsets, and encouraged its customers to purchase these handsets rather than renting them, and reduced the initial subscription fees.

This strategy resulted in a substantial increase in its subscriber base. In December 1996, the company eliminated the initial subscription fees for its service altogether, which further triggered the subscriber base growth. On account of its focused initiatives and the growing demand for mobile telecom services in Japan during the mid 1990s, DoCoMo emerged as the market leader by 1997. However, during the same period, the company sensed that there was little differentiation between the products offered by various mobile players in Japan.

Apart from this, feedback from its customers showed that the growth rate of voice services (1G – first generation technology) was gradually declining. DoCoMo thus realized the need to shift to a higher-level technology, to differentiate its services from those of its competitors KDDI and J-phone to sustain its growth in the market. Following this, the company began focusing heavily on Research and Development (R&D) to develop advanced second generation (2G) wireless products.

DoCoMo - The Japanese Wireless Telecom Leader - Next Page >>>

Case Details

Case Code : BSTR049
Themes: Differentiation
Case Length : 17 Pages
Period : 1992 - 2003
Organization : NTT DoCoMo (DoCoMo) Inc
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Telecommunication

Free Case Studies

Business Strategy
Finance
HRM
Insurance
IT and Systems
Marketing
Operations
Leadership
More Case Studies >>

Micro Case Studies

Business Environment
Business Ethics
Business Strategy
Human Resource Management
IT and Systems
Marketing
Operations
Micro Case Studies >>

Free Resources

Micro Case Studies
Case Studies
Articles
Interviews
Book Reviews
Glossary
Online Quiz
More Free Resources >>

Case Related Links

Best Selling Case Studies
Business Case Studies
Learning With Case Studies
Cases Used in Textbooks
Prize Winning Case Studies
Business Updates
More Case Studies >>

Case Studies and Management Resources