Ngo THi Xuan Huyen Student ID: 1101/7937 (a) What major problem is DoCoMo facing?

What strategy has the company chosen to address this problem? The major problem of DoCoMo is facing: The first problem is competition. Docomo must confront increasing competition in the market from KDDI Corp and Vodefones Japan unit which are pushing down fees for regular calls and data services. The second problem is technology. The consumers who are from Japanese prefer to use cash to payment. They are focus on security concern but the consumers must to pay the commissions from 2 to 5 percent but they do not willing to pay. Therefore, DoCoMo addressed security concerns by adding remote locking mechanisms to the FeliCa chip so that lost or stolen phones could not be used for illegal purchases. The company also tried to entice merchants to accept FeliCa payments by paying for the installation of the FeliCa readers that connect to cash registers. The last problem is staff issue. (b) Is this a good strategy? Why or why not? Are there any other strategies that you would recommend? (c) What outside forces have contributed to the challenges DocoMo faces?

NTT Docomo is japans leading cell phone company with 49 milliion customers. Since its creation in 1992, Docomo has established a track record of success and innovation. Now the company in is unfamiliar territory. For the first time ever, Docomos revenue decreased from March 31, 2004 through Mar 31, 2005. Docomo must confront increasing competition in the market from KDDI Corp, and Vodafones Japan unit, which are pushing down fees for regular calls and data services. NTT Docomo l cng ty hng u ca Nht Bn in thoi di ng vi 49 milliion khch hng. K t khi thnh lp vo nm 1992, Docomo thnh lp mt h s theo di thnh cng v sng to. By gi cng ty trn l khng quen thuc lnh th. u tin bao gi ht, Docomo ca doanh thu gim t 31 thng 3 nm 2004 thng qua 31 03, 2005. DoCoMo phi i u vi s cnh tranh ngy cng tng ti th trng t KDDI Corp, v Vodafone ca Nht bn n v, trong ang y mnh xung chi ph cho dch v cuc gi Internet ln d liu thng xuyn.

Docomo blazed the trail for cell phones, email and web browsing services, as well as downloadable ringtones. Then came a service that delivered information to customers on their small cell phone screens, including the ability to access their bank account. Docomo enlisted

other companies to provide content for the service, with usage charged to the userss phone bills. Docomo would then take a 9% cut of II transactions. DoCoMo blazed ng mn cho in thoi di ng, email v duyt dch v, cng nh ti v nhc chung web. Sau , n mt dch v cung cp thng tin cho khch hng trn mn hnh in thoi di ng nh ca h, trong c kh nng truy cp ti khon ngn hng ca h. DoCoMo cho gia nhp cng ty khc cung cp ni dung cho cc dch v, vi vic s dng tnh cho cc ha n in thoi ca ngi dng. DoCoMo sau s c mt ct gim 9% ca cc giao dch II. The service, named i-mode was launched in 1999 to great success. Docomo became the leader in what was dubbed third generation phone service.

Akio Shibashi, an engineer at East Japan Railway, had developed a system that would enable train passengers to pass through the stations turnstiles by waving a card near a sensor. His ultimate goal was to install a card containing a Sony Felica radio frequency chip (RFID) in cell phone. The product soon became a priority for DocoMo as a way to raise customer loyalty. Docomos imode wallet phones featuring the FeliCa chip reached the market in July 2004. Each phone stores up to U.S $450 in cash and credit card numbers for some credit cards used in Japan so prople can use the phone to charge purchases. The train ticket use for which the phone was initially intended for was not available right away, but subscribers immediately started using the phones to carry electronic cash, open the doors to their homes, sign in at karaoke bars, and accumulate frequent shopper points from retailers. Today users can make purchases with their phones from more than 20,000 merchants including restaurants and supermarkets. Docomo is trying to sign up as many payment services as possible to make use of ubiquitous i-mode Felica. Akio Shibashi, mt k s ti ng st ng Nht Bn, pht trin mt h thng m s cho php hnh khch tu i qua cc trm turnstiles bi vy tay cho mt th gn mt cm bin. Mc tiu cui cng ca ng l ci t mt th c cha mt Sony Felica tn s v tuyn chip (RFID) trong in thoi di ng. Sn phm nhanh chng tr thnh mt u tin cho DocoMo nh mt cch tng lng trung thnh ca khch hng. DoCoMo ca imode v in thoi tnh nng FeliCa chip n th trng vo thng 7 nm 2004. Mi in thoi ca hng ln n Hoa Kz $450 bng tin mt v s th tn dng cho mt s th tn dng c s dng ti Nht Bn do , prople c th s dng in thoi tnh ph cho vic mua bn. Vic s dng v xe la m in thoi c d nh ban u cho l khng c sn ngay lp tc, nhng ngi ng k ngay lp tc bt u bng cch s dng s in thoi mang theo tin mt in t, m ca cho nh ca h, ng nhp ti qun bar karaoke, v tch ly thng xuyn mua sm im t cc nh bn l. Hm nay ngi dng c th lm cho vic mua bn vi cc in thoi ca h t cc thng gia trn 20.000 bao gm cc nh hng v siu th. DoCoMo l c gng ng k{ dch v thanh ton nh nhiu nht c th lm cho vic s dng ph bin th nht-ch Felica. The technology faces some obstacles. Japanese consumers prefer to use cash in general. They also have security concerns. Any some merchants are unwilling to pay the commissions, usually 2 to 5 percent, that accompany this form of payment. Docomo addressed security concerns by adding remote locking mechanisms to the FeliCa chip so that lost or stolen phones could not be

used for illegal purchases. The company also tried to entice merchants to accept Felica payments by paying for the installation of the Felica readers that connect to cash registers. Cng ngh i mt vi mt s tr ngi. Ngi tiu dng Nht thch s dng tin mt ni chung. H cng c mi quan tm an ninh. Bt kz mt s cc thng gia l khng mun tr tin hoa hng, thng 2 n 5 phn trm, m i km vi hnh thc thanh ton. DoCoMo gii quyt mi quan tm bo mt bng cch thm cc c ch kha t xa vi FeliCa chip do b mt hoc b nh cp in thoi c th khng c s dng cho vic mua bn bt hp php. Cng ty cng c gng li ko cc thng gia chp nhn thanh ton Felica bng cch tr cho vic ci t cc trnh c Felica kt ni vi tin mt ng k{. With more than five million wallter phones sold, Docomo is far ahead of most telecommunication companies in the world when it comes to M-Commerce. It is difficult to call the product a success, though, because many subscriber are not using the wallet features. Soon, Docomos rivals KDDI and Vodafone will release their own phones equipped with the Felica chip. Vi hn 5 triu wallter in thoi bn, Docomo l n nay trc ca hu ht cc cng ty vin thng trn th gii khi ni n thng mi M. l kh khn gi cho cc sn phm thnh cng, mc d, v nhiu thu bao khng s dng cc tnh nng v. Ngay sau , Docomo ca i th KDDI v Vodafone s pht hnh in thoi ring ca h c trang b Felica chip. Now senior vice president Takeshi Natsubo wants to turn NTT Docomos cell phones into credit cards. The next generation of Docomo cell phones into creadit cards. The next generation of Docomo cell phones with come with an embedded credit card. One that bares the Docomo logo. Natsimo hopes that the i-doe Felica phones will enable Docomo to tap into Japans $256 billion micro-payment market ( purchases of under $30). Once consmers become comfortable with making these types of payment with their phones, Natsuno belives that they will make larger purchases on credit. By gi cp cao vice president Takeshi Natsubo mun bin NTT Docomo ca in thoi di ng vo "th tn dng". Th h tip theo ca Docomo chp vo "creadit th". Th h tip theo ca Docomo chp vi i km vi mt th tn dng nhng. Mt trong nhng m bares biu tng Docomo. Natsimo hy vng rng cc in thoi Felica b nng lng th nht s cho php Docomo khai thc vo th trng vi thanh ton 256 t USD ca Nht Bn (mua hng di $30). Khi consmers tr nn thoi mi vi thc hin cc loi hnh thanh ton vi in thoi ca mnh, Natsuno belives m h s lm cho vic mua bn ln hn v tn dng. For the credit card phone to take off, Docomo must disvorce customers of their cash spending preference and overcome their lack of experience in finance. It also must and train staff to field credit card-related issues and maintain good relationships with bank . Finally, merchants and banks must euip their stores and ATMs with creadit card chip readers. This latest initialtive is a great risk, but one that Docomo managers believe it must take to counter dwindling sales and create a new revenue stream. i vi in thoi th tn dng ct cnh, Docomo phi disvorce khch hng ca h tin chi tiu u tin v khc phc s thiu kinh nghim trong ti chnh ca h. N cng phi v o to nhn vin cho lnh vc th tn dng lin quan n cc vn v duy tr mi quan h tt vi ngn

hng. Cui cng, cc thng gia v cc ngn hng phi euip cc ca hng v my ATM ca h vi creadit c th chip. Ny initialtive mi nht l mt nguy c rt ln, nhng mt trong nhng nh qun l Docomo tin rng n phi thc hin truy cp bn hng ang gim v to ra mt dng doanh thu mi.