i-Mode's M.O. - NTT DoCoMo i-mode™: Value Innovation at DoCoMo

Refusing to follow its competitors' strategy of waiting for third generation wireless Internet protocol to become available before introducing mobile services, i-mode is globally regarded as one of the "killer applications" of recent times. The INSEAD Distinguished Fellow of Strategy and International Management Renée Mauborgne; Chan Kim, the Boston Consulting Group Bruce D. Henderson Chaired Professor of International Management, and Professor of Technology Management and Asian Business Ben Bensaou detail how, despite being in a very competitive industry NTT DoCoMo enjoyed instant and phenomenal success when launching its i-mode services in early 1999.

by Ben Bensaou, Chan Kim, Renée Mauborgne
Last Updated: 23 Jul 2013

By the late 90s, several mature markets for mobile telephony were slowing considerably. But by 2001 NTT DoCoMo, formed amidst controversy as part of the break-up of Japan's vast telephone monopoly, was the only firm in the country to have profited from the mobile Internet. Even though battling for market share was especially cutthroat in the 1990s Japanese market, the case reveals how the firm's first CEO, Kouji Ohboshi, had done the near-unthinkable several times before i-mode's high-risk introduction.

INSEAD's Distinguished Fellow of Strategy and International Management, Renée Mauborgne; the Boston Consulting Group Bruce D. Henderson Chaired Professor of International Management, Chan Kim; and Professor of Technology Management and Asian Business Ben Bensaou detail how, despite being in a very competitive industry subject to strong price erosion and needs for constant technological innovation, NTT DoCoMo enjoyed instant and phenomenal success when launching its i-mode services in early 1999.

By the mid-90s, the Japanese market for existing mobile Internet services was moving to saturation, both in the number of potential new users and in bandwidth capacity. Ohboshi believed the company's very survival depended on "creating a new market, not by adapting to changes, but by creating the changes through positively transforming their corporate strategy".

This was the CEO's "Volume to Value" strategy, by which he sought to exploit the fact that non-voice-based wireless communication was exploding in terms of global demand. If a new market could be created via completely circumventing overburdened voice networks, the sky could well be the limit.

Its eventual overall success was extraordinary. But why had DoCoMo triumphed in bringing together some of the key advantages of two alternative industries, 'i.e., PC-Internet and mobile communications) when WAP had been such a resounding failure after attempting much the same?

The case is designed for flexibility in teaching strategic aspects associated with value innovation, particularly but not exclusively in IT-based industries. It provides first-hand insight into the tools of value innovation, as NTT DoCoMo so boldly but single-mindedly flew in the face of the dominant conventional wisdom held by its competitors, both domestic and foreign.

The case can be employed individually in a standalone module on value innovation, or as part of a sequence. In the first instance, it can be used as a discussion basis of Value Innovation Logic, the Value Curve and Six Path Analysis. Alternatively, it also provides a vehicle for discussion of three underlying concepts of value innovation: the Buyer Utility Map, the Price Corridor of the Mass, and the Business Model.

INSEAD-EAC 2003

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