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Docomo Imode

In: Business and Management

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Assignment Questions: DOCOMO Case
1. How would you assess the profitability and attractiveness of the telecom industry in Japan at the time of the launch of i-mode? What would you conclude from a five force industry analysis?
Porter’s Industry Analysis considers five forces of the industry.

With respect to the data provided in the case “NTT DoCoMo i-mode TM, following can be concluded: 1) Competitive rivalry
Competitive Rivalry is high if entry into the industry is easy. Ohbushi, the CEO of NTT DoCoMo was determined to keep his company ahead of the competitors. Any new innovation could be copied easily. For example, when i-mode was introduced after an extensive expenditure on R&D, the competitors, DDI Cellular and IDO, announced their own mobile data communication services, called EZ Web and EZ Access respectively. Hence, it can be seen that the competitive rivalry was very high.

2) Power of suppliers
Being in the services sector, DoCoMo’s i-mode’s suppliers were not raw material providers but the content providers whom DoCoMo wished to make its partners. It offered a win-win deal for its partners. DoCoMo proposed that it would not purchase content from the providers or equipment from manufacturers but it would allow its users to access these as its official websites and mobile phones. DoCoMo would act as the gateway. NTT DoCoMo’s insight into the needs of its content providers was an important contributor to its early success. By taking care of the customer billing, iMode made business easy for content providers, who were hesitant to sell online because handling the billing was a large and expensive burden. By paying NTT DoCoMo to do the billing, the content providers were able to concentrate on what they did best – providing content – and still generate earnings. In return for this, iMode charged its content providers 9 per cent of revenue.

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