Docomo Case

Docomo Case

-------------------------------------------------

Strategic Innovation
1231.3635.01

Case Questions:
(1)   How did DoCoMo create distinctive value at low cost? How did DoCoMo combine the strength of the mobile phone and the PC-Internet? How did the value curve of DoCoMo’s i-mode differ from those of the mobile phone and PC-internet?
(2) Where and how did i-mode create new buyer utility? What is i-mode’s business model?
(3) How did NTT DoCoMo make profits out of its i-mode service?

(1)   DoCoMo broke "Red Ocean" by ignoring the technology race and price competition in highly crowded voice-based market. The industry has reached a maturity stage and by taking a Breakaway positioning approach DoCoMo succeeded to reposition a mature product for growth and to redefine a fierce competition. It created a “Blue Ocean” strategy by inventing new ways of using mobile services. This value innovation enabled to increase the value to customers and to reduce the costs at the same time.
  * Distinctive Value: DoCoMo created new uncontested market space by bringing Internet Services to cell phones and playing the role of the gateway (concierge) to the Internet.
  * In order to break the value-cost trade-off the business concept was changed. “Telecom worldview” (structuralist view) of closed environment controlled explicitly by content providers and carriers was replaced by “Internet worldview” (reconstructionist view) that opened the mobile data services environment for multiple content providers.
  * Open platform and partnership with multiple content providers players created network effect and triggered growth in users’ numbers and vice versa.
  * It also empowered a positive sum game and enabled advantage in costs structure – revenue sharing instead of acquiring the content like DoCoMo’s competitors did.
  * The partnership concept also enabled additional costs advantage in handsets adjustment.   DoCoMo leveraged close relationship with large suppliers...

View Full Essay