NTT DoCoMo (TM): Value Innovation at DoCoMo SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NTT DoCoMo (TM): Value Innovation at DoCoMo
As of November 2001, NTT DoCoMo is the only company that has been able to make money out of the mobile Internet. This case study describes how, in a very competitive industry engaged in a technology race and strong price erosion, NTT DoCoMo has been able to achieve superior performance, with its novel i-mode services. Launched in February 1999, its i-mode service was an immediate and explosive success. DoCoMo came to exceed its parent company in terms of market capitalization as well as potential for profitable growth as we enter the age of mobile Internet. This case offers a value innovation perspective to analyze the success of i-mode with a particular emphasis on the business model used to exploit the i-mode innovation of DoCoMo.
Authors :: W. Chan Kim, Renee Mauborgne, Ben M. Bensaou, Jason Hunter
Swot Analysis of "NTT DoCoMo (TM): Value Innovation at DoCoMo" written by W. Chan Kim, Renee Mauborgne, Ben M. Bensaou, Jason Hunter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Docomo Mode facing as an external strategic factors. Some of the topics covered in NTT DoCoMo (TM): Value Innovation at DoCoMo case study are - Strategic Management Strategies, Competitive strategy, Creativity, Innovation, IT, Psychology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the NTT DoCoMo (TM): Value Innovation at DoCoMo casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of NTT DoCoMo (TM): Value Innovation at DoCoMo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NTT DoCoMo (TM): Value Innovation at DoCoMo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Docomo Mode, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Docomo Mode operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of NTT DoCoMo (TM): Value Innovation at DoCoMo can be done for the following purposes –
1. Strategic planning using facts provided in NTT DoCoMo (TM): Value Innovation at DoCoMo case study
2. Improving business portfolio management of Docomo Mode
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Docomo Mode
Strengths NTT DoCoMo (TM): Value Innovation at DoCoMo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Docomo Mode in NTT DoCoMo (TM): Value Innovation at DoCoMo Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Docomo Mode in the sector have low bargaining power. NTT DoCoMo (TM): Value Innovation at DoCoMo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Docomo Mode to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Docomo Mode in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Docomo Mode has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Docomo Mode has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Docomo Mode is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by W. Chan Kim, Renee Mauborgne, Ben M. Bensaou, Jason Hunter can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High switching costs
– The high switching costs that Docomo Mode has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Docomo Mode is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Docomo Mode is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NTT DoCoMo (TM): Value Innovation at DoCoMo Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Docomo Mode digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Docomo Mode has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Docomo Mode are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Docomo Mode
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Docomo Mode does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Docomo Mode is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Docomo Mode in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Docomo Mode is present in almost all the verticals within the industry. This has provided firm in NTT DoCoMo (TM): Value Innovation at DoCoMo case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Docomo Mode has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NTT DoCoMo (TM): Value Innovation at DoCoMo Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses NTT DoCoMo (TM): Value Innovation at DoCoMo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NTT DoCoMo (TM): Value Innovation at DoCoMo are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NTT DoCoMo (TM): Value Innovation at DoCoMo, in the dynamic environment Docomo Mode has struggled to respond to the nimble upstart competition. Docomo Mode has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Docomo Mode has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Docomo Mode has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As NTT DoCoMo (TM): Value Innovation at DoCoMo HBR case study mentions - Docomo Mode takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Docomo Mode has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Docomo Mode supply chain. Even after few cautionary changes mentioned in the HBR case study - NTT DoCoMo (TM): Value Innovation at DoCoMo, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Docomo Mode vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Docomo Mode has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - NTT DoCoMo (TM): Value Innovation at DoCoMo should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Docomo Mode products
– To increase the profitability and margins on the products, Docomo Mode needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Docomo Mode, firm in the HBR case study NTT DoCoMo (TM): Value Innovation at DoCoMo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Docomo Mode has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NTT DoCoMo (TM): Value Innovation at DoCoMo, is just above the industry average. Docomo Mode needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities NTT DoCoMo (TM): Value Innovation at DoCoMo | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study NTT DoCoMo (TM): Value Innovation at DoCoMo are -
Developing new processes and practices
– Docomo Mode can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Docomo Mode can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Docomo Mode to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Docomo Mode to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Docomo Mode to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Docomo Mode to increase its market reach. Docomo Mode will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Docomo Mode can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Docomo Mode can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Docomo Mode to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Docomo Mode can use these opportunities to build new business models that can help the communities that Docomo Mode operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Docomo Mode can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, NTT DoCoMo (TM): Value Innovation at DoCoMo, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Docomo Mode can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Docomo Mode can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Docomo Mode is facing challenges because of the dominance of functional experts in the organization. NTT DoCoMo (TM): Value Innovation at DoCoMo case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Docomo Mode can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Threats NTT DoCoMo (TM): Value Innovation at DoCoMo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NTT DoCoMo (TM): Value Innovation at DoCoMo are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Docomo Mode business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Docomo Mode high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Docomo Mode can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Docomo Mode.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Docomo Mode can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Docomo Mode will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Docomo Mode needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Docomo Mode can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study NTT DoCoMo (TM): Value Innovation at DoCoMo .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NTT DoCoMo (TM): Value Innovation at DoCoMo, Docomo Mode may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Docomo Mode
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Docomo Mode.
Technology acceleration in Forth Industrial Revolution
– Docomo Mode has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Docomo Mode needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Docomo Mode demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Docomo Mode with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of NTT DoCoMo (TM): Value Innovation at DoCoMo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study NTT DoCoMo (TM): Value Innovation at DoCoMo needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study NTT DoCoMo (TM): Value Innovation at DoCoMo is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study NTT DoCoMo (TM): Value Innovation at DoCoMo is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of NTT DoCoMo (TM): Value Innovation at DoCoMo is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Docomo Mode needs to make to build a sustainable competitive advantage.