NTT DoCoMo is currently the largest wireless telecommunications services provider in Japan, with 52% of the mobile phone service market share. However the saturation of the Japanese wireless telecommunications market has resulted in the erosion of NTT DoCoMo’s profits, threatening its long-run business sustainability. Therefore, this report seeks to provide insights about the dynamic interaction of NTT DoCoMo’s business strategy with its competitive environment and it also seeks to examine the ways in which this interaction can give NTT DoCoMo sustainability within the Japanese and Asia-Pacific context.
Our research data was gathered through journals and online articles.
NTT DoCoMo’s corporate belief of creating an “Aladdin’s Magic Lamp” for each customer is a key strength of NTT DoCoMo, giving them a competitive edge in technological innovation as modelled by a stronger and more passionate corporate mindset. However with companies closely aligning their technologies with that of NTT DoCoMo,
Furthermore, the dynamic technologies platform in Japan is eroding the profit margin for the telecommunication companies as more investments is needed to be set aside for R&D while maintaining the price plans for customers. In addition, the presence of substitutes makes price-sensitive customers in a stronger bargaining position to demand for more new services due to the low switching cost involved.
However, companies may face several risks when it comes to the issue of rapid innovation. Especially for established companies like NTT DoCoMo, there may be several factors that would hinder their path to greater innovations. These include the cannibalization of its existing products, structural and cultural inertia that is prevalent in overseas ventures, strict or tedious internal policies to abide to and the fear of destroying its existing competencies. Therefore, a different perspective in handling the business based on each company’s objective should be aligned with their corporate strategies. In one statement, strategy should reflect the company’s distinctiveness and no one size fit all strategy. Hence, NTT DoCoMo decides to engage in large flows of investments in foreign telecommunications companies as a long-term solution to the saturation of the Japanese telecommunications industry. Nevertheless, the sustainability to its overseas strategies in sharing the technological know-how is unknown. The services demanded by customers and the technological infrastructure that is prevalent in Japan may not be applicable to emerging countries due to the differences in lifestyle and supply conditions. Hence, implementation of the full-fledged of technologies may not be feasible for all regional countries NTT DoCoMo chooses to partner with. In our opinion, with regards to the issue of future sustainability to its globalization quest, although it may be feasible for NTT DoCoMo to have its own top management team in overseas representing offices, there could be a possibility for them to engage a more diversified workforce so as to gather more
1. Introduction Asia-Pacific Wireless Telecommunications Services
The wireless telecommunications services market in Asia-Pacific is one of the most dynamic in the world, experiencing tremendous growth over the past decade as increasing consumer affluence and demand for communications accessibility in the region, particularly Japan and China, has led to the rapid surge of the mobile telephony market.
Japan currently holds 38% of the region’s market value, making it the largest wireless telecommunication services market in the Asia-Pacific. This is attributed by how Japanese consumers are not only sophisticated and updated on the latest technologies, but also have high purchasing power to support their demand for different forms of wireless telecommunication services. Further, Japanese telecommunication companies not only...