NTT Docomo, Inc. (9437) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for NTT Docomo, Inc. (Japan)

Based on various researches at Oak Spring University , NTT Docomo, Inc. is operating in a macro-environment that has been destablized by – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing transportation and logistics costs, increasing energy prices, increasing commodity prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of NTT Docomo, Inc.

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NTT Docomo, Inc. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NTT Docomo, Inc., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NTT Docomo, Inc. 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of NTT Docomo, Inc. can be done for the following purposes –
1. Strategic planning of NTT Docomo, Inc.
2. Improving business portfolio management of NTT Docomo, Inc.
3. Assessing feasibility of the new initiative in Japan
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NTT Docomo, Inc.

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Strengths of NTT Docomo, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of NTT Docomo, Inc. are -

Learning organization

- NTT Docomo, Inc. 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 NTT Docomo, Inc. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NTT Docomo, Inc. emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– NTT Docomo, Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of NTT Docomo, Inc. have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of NTT Docomo, Inc.

– The covid-19 pandemic has put organizational resilience at the centre of everthing NTT Docomo, Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy of NTT Docomo, Inc. comprises – understanding the underlying the factors in the Communications Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Superior customer experience

– The customer experience strategy of NTT Docomo, Inc. in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– NTT Docomo, Inc. has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NTT Docomo, Inc. to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

– Suppliers of NTT Docomo, Inc. in the Services sector have low bargaining power. NTT Docomo, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NTT Docomo, Inc. to manage not only supply disruptions but also source products at highly competitive prices.

Sustainable margins compare to other players in Communications Services industry

– NTT Docomo, Inc. has clearly differentiated products in the market place. This has enabled NTT Docomo, Inc. to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped NTT Docomo, Inc. to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– NTT Docomo, Inc. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NTT Docomo, Inc. staying ahead in the Communications Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– NTT Docomo, Inc. is present in almost all the verticals within the Communications Services industry. This has provided NTT Docomo, Inc. 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.

Successful track record of launching new products

– NTT Docomo, Inc. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NTT Docomo, Inc. 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.

High switching costs

– The high switching costs that NTT Docomo, Inc. 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.

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Weaknesses of NTT Docomo, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of NTT Docomo, Inc. are -

High bargaining power of channel partners in Communications Services industry

– because of the regulatory requirements in Japan, NTT Docomo, Inc. is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Communications Services industry.

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 NTT Docomo, Inc. supply chain. Even after few cautionary changes, NTT Docomo, Inc. is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left NTT Docomo, Inc. vulnerable to further global disruptions in South East Asia.

Products dominated business model

– Even though NTT Docomo, Inc. has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. NTT Docomo, Inc. should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

NTT Docomo, Inc. has a high cash cycle compare to other players in the Communications Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to strategic competitive environment developments

– As NTT Docomo, Inc. is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.

Skills based hiring in Communications Services industry

– The stress on hiring functional specialists at NTT Docomo, Inc. 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.

Lack of clear differentiation of NTT Docomo, Inc. products

– To increase the profitability and margins on the products, NTT Docomo, Inc. needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow decision making process

– As mentioned earlier in the report, NTT Docomo, Inc. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Communications Services industry over the last five years. NTT Docomo, Inc. even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High dependence on NTT Docomo, Inc. ‘s star products

– The top 2 products and services of NTT Docomo, Inc. still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though NTT Docomo, Inc. has relatively successful track record of launching new products.

Ability to respond to the competition

– As the decision making is very deliberative at NTT Docomo, Inc., in the dynamic environment of Communications Services industry it has struggled to respond to the nimble upstart competition. NTT Docomo, Inc. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ less understanding of NTT Docomo, Inc. strategy

– From the outside it seems that the employees of NTT Docomo, Inc. don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

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NTT Docomo, Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of NTT Docomo, Inc. are -

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. NTT Docomo, Inc. can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, NTT Docomo, Inc. is facing challenges because of the dominance of functional experts in the organization. NTT Docomo, Inc. can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for NTT Docomo, Inc. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, NTT Docomo, Inc. 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 NTT Docomo, Inc. to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Learning at scale

– Online learning technologies has now opened space for NTT Docomo, Inc. 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. NTT Docomo, Inc. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NTT Docomo, Inc. can use these opportunities to build new business models that can help the communities that NTT Docomo, Inc. operates in. Secondly it can use opportunities from government spending in Communications Services sector.

Building a culture of innovation

– managers at NTT Docomo, Inc. 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 Communications Services industry.

Creating value in data economy

– The success of analytics program of NTT Docomo, Inc. has opened avenues for new revenue streams for the organization in Communications Services industry. This can help NTT Docomo, Inc. to build a more holistic ecosystem for NTT Docomo, Inc. products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– NTT Docomo, Inc. can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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 NTT Docomo, Inc. 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NTT Docomo, Inc. 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 NTT Docomo, Inc. to hire the very best people irrespective of their geographical location.

Better consumer reach

– The expansion of the 5G network will help NTT Docomo, Inc. to increase its market reach. NTT Docomo, Inc. 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.

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Threats NTT Docomo, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of NTT Docomo, Inc. are -

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. NTT Docomo, Inc. 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.

Stagnating economy with rate increase

– NTT Docomo, Inc. 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 Communications Services industry.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Easy access to finance

– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. NTT Docomo, Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Regulatory challenges

– NTT Docomo, Inc. needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Communications Services industry regulations.

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 NTT Docomo, Inc. business can come under increasing regulations regarding data privacy, data security, etc.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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 NTT Docomo, Inc..

Environmental challenges

– NTT Docomo, Inc. needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. NTT Docomo, Inc. can take advantage of this fund but it will also bring new competitors in the Communications Services industry.

Increasing wage structure of NTT Docomo, Inc.

– 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 NTT Docomo, Inc..

Consumer confidence and its impact on NTT Docomo, Inc. 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 Communications Services industry and other sectors.

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. NTT Docomo, Inc. needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– NTT Docomo, Inc. has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, NTT Docomo, Inc. needs to keep up with the evolution of technology in the Communications Services 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.

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Weighted SWOT Analysis of NTT Docomo, Inc. Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NTT Docomo, Inc. 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 NTT Docomo, Inc. 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 NTT Docomo, Inc. 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, Inc. 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 NTT Docomo, Inc. needs to make to build a sustainable competitive advantage.

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