Case Analysis First Direct : Branchless Banking

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Creating a new communications culture Dr. Keiji
Tachikawa President and CEO
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(No Transcript)
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• Group 2B FT 2005
• Simone Huijs / Suraj Basnet / Ken Kodaka
• / Eugene Kolesnikov / Joan Moreau / Piercarlo
  Oddone
• Rotterdam School of Management
• Erasmus Graduate School of Business

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Intro
Joan
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Agenda

• Case summary
• Business model
• Competitive advantages
• Current Challenge (1996)
• Strategic Recommendations
• Case update

To be setup at the end
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About DOCOMO
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• History
• Started July 92
• I-mode, launched feb 99
• Growth by 150 in 2001

Suraj
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About DOCOMO
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• Market competitors

Suraj
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What is i-mode?
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• Packet communication service or Electronic
  Concierge enables
• E-mail
• Information from internet
• M-commerce

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What is i-mode?
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• 1. EntertainmentCharacter Download / Horoscope
• / Fortune Telling etc.
• 2. InformationNews Updates / Weather Forecasts
• / Sports News, etc.
• 3. DatabaseTelephone Directory / Search
• / Restaurant Guide, etc.
• 4. TransactionMoney Transfer / Balance Check
• / Security Trading, etc.

A 3D baseball game
Pokemon Hiroba
CNNUp-to-the-minute news
Weathernews
Northwest AirlinesFlight schedule, prices,
Amazon.co.jpThe online store allowing
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About i-modeTechnology
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• WML and c-HTML technology
• Easy for contents provider to offer sites to
  i-mode
• Creating win-win situation between DoCoMo
  and official and unofficial site
  providers

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About i-modeTechnology positionning
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Eugene
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Distinctive valuesBusiness model
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Eugene
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Distinctive valuesValued network
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• Players
• Customers / Docomo / Content Providers (CSP)
• Network promotion Contract Management
• Advertising
• Selection CSP / Web sites screening
• Substitute PC/ISP networks
• Account management for CSP
• Subvention of the mobile phones -gt TO BE CHECKED
• Service Provisioning
• Integrated (CSP/ISP) billing system
• Provisioning
• Packet fees to any site not integrated
• Integrated provisioning to any site partner of
  DOCOMO
• Infrastructure Operation
• Complete management

Eugene
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SWOT today
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• Strengths
• Network synergy with NTT
• First mover advantage/ Image
• Compatible technology
• Broadband capability

• Opportunities
• Low penetration rate European/US market
• Network effect for Japan
• Transition to 3G/4G First player on multimedia
• M-Commerce

• Weaknesses
• Technology Japan based
• Lack of own network in other countries
• Less convenient than PC
• Image not international
• Proprietary technology

• Threats
• GPRS/UMTS Palm terminals
• ISP -gt direct competitors
• WiFi not really
• self made competitors

Eugene
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Porters analysis
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New entrants ISP / Data providers Barriers Switch
ing cost
Buyers Short term Competitors in Japan Not in
Europe High switching cost Long term
Convergence lower switching cost Standardization
increase bargaining power
Suppliers CSP Non-partners will increase their
independency Value of partnership reduced Billing
system is a barrier to bargaining Manufacturers M
ay increase the costof handsets due to
specialization Infrastructure In Europe, TelCOs
are partners and may go to the standard networks
(cost increases) In Japan, no impact
Industry rivalry Docomo main competitors in
Europe are ISPs and cartels of CSPs
Substitutes Handsets PDAs (based on WindowsCE,
PalmOS, etc..) Network Standardized networks
(GPRS/UMTS) Content Open standards (WAP2)
Joan
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Key issues
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Eugene
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Innovation
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Eugene
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Partnership
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• ATT wireless ?

Simone
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Partnership
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• Its future strategy?

Simone
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Transformation to 4G
1980 1G
1990 2G
2010 4G
2000 3G
Voice Service
Voice Low Speed Data Transfer 64kbps
Voice High Speed Data Transfer 384k- 2Mbps
Voice Super High Speed Data Transfer 50M-
100Mbps
From Analogue To Digital
Improve efficiency in frequency utilization
Providing Seamless service

• Beginning of data transfer service

• Solution to multimedia communication needing huge
  data transfer

• Solution to lack of frequency
• Alignment to global standard
• Proposition of affluent contents

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Probable feature of 4G
4G Seamless, anywhere and Super high speed
connection

• Business use
• Everywhere super high speed internet connection
• Business trip with super high speed connection
  anywhere with PC
• TV conference from high speed train
• On time supply chain management, reporting system
  by video
• Home use
• Solution to avoid redundant between mobile phone
  and current internet connection
• More fluent and fast connection for video
  download or TV telephone than 3G

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4G Strategy against Wireless
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4G Strategy against Wireless-Market overview-
Mobility
Wide Area
4G
Urban Area
2G,3G
Wireless LAN, ISP
Limited Spot
Competition from seamless service providing
No mobility
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Speed of communication (Mbps)
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4G Strategy against Wireless
Hegemony in internet connection

• Maintain current customer base
• Prevent ISP providers from entering into mobile
  4G market
• Penetration into ISP or WiFi service market
• Cost reduction for connection
• Campaign for creating consumer awareness to
  enclosure current ISP user
• Partnership with ISP

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4G Strategy against Wireless
Proposition of wide range of i-mode contents

• Provide TV program, movies by partnership with
  media companies
• Collaborate with CRM system
• Provide higher quality pictures or videos message
  than 3G
• Introduce interactive mobile games

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Other future strategies?
ALL
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Questions ?