Rajesh Paul Case study 1 1. Characterize the Japanese mobile telephone market.

The Japanese mobile market has shown a remarkable growth in the last decade, with more than 106.2 million 3G subscribers and 4.4 million 2G as of December 2009. The 3G diffusion rate accounts for 90%, followed by that of Korea and this implies the market is almost saturated. Another remarkable transformation is found in its usage: data communication exceeded voice services. Consumers use more often mobile phone as wireless devices not only for transmitting and receiving information via e-mail, SNS, blog, or search engines but also for executing transactions to purchase good at stores or reserve trains and airplanes than for traditional communications. In this sense, Japanese 3G mobile phone has entered a new era first in the world. Three major carriers, NTTdocomo, au, and Softbank, have been dominating the market since the advent of the Internet in mobile phone in 1999. As of March 2010, the total number of subscribers amounted to 112.18 million, of which docomo alone holds 50.00 percent market share. In contrast, au and Softbank holds 28.41 and 19.50 percent market share, respectively. While the number of fixed phone has remained steady since 1996, mobile phone subscribers have been increasing rapidly. Therefore, the mobile phone market has reached to the saturation stage, and the growth rate of subscribers has been slowing down. Moreover, the recent development is found in the fact that data communications exceeds traditional voice communication, and being the first phenomenon in the world. Japanese consumers tend to use more mobile phone as a device to connect to the Internet in order to download various contents such as games (currently social games attract interests of younger generations), digital TV, movies, and music as well as use value added services such as shopping at convenience stores and reservation of trains and airplanes. Now small handsets can even view HPs built for PC access and tend to be devices for mobile computing. Note that, while in 2003, NTTdocomo had only 13.7% market share of 3G comparing to au (85.5%) and Softbank (0.8%), in 2008 it has been raised to 50%. The aus largest market share at the beginning were due to the fact that it offered almost same technology as 2G and bandwidth like 800 MHz for its 3G subscribers which can be said it is not actually 3G rather than 2.5G. This enabled au to use not only the same 800 MHz network and base stations to support 3G deployment, but also the same 2G handsets (Ishii, 2004). In contrast, NTTdocomo started with constructing new W-CDMA network and required to install new base stations to renovate and upgrade existing 2G to 3G network. Besides, focusing on market areas is also different, that is, au has been targeting market areas of populated areas, while NTTdocomo intended to provide services all areas in the country. These made NTTdocomo lagged behind au at the beginning. Despite the trend, NTTdocomo and Softbank offered a number of innovative services to subscribers embodied in handsets; in particular, since the latter entered the 3G market lastly, it offered remarkable pricing strategies including no charges for call between its subscribers.

In June 2007, EMOBILE, the fourth mobile phone operators, entered the market using the WCDMA technology. The carrier offers only 3G services, having obtained NTTdocomos authorization to use its network on an access cost basis. It has currently 2.35 million subscribers. At the same time, mobile broadband services named WiMAX started and two carriers entered this market While in 2003, NTTdocomo had only 13.7% market share of 3G comparing to au (85.5%) and Softbank (0.8%), in 2008 it has been raised to 50%. The aus largest market share at the beginning were due to the fact that it offered almost same technology as 2G and bandwidth like 800 MHz for its 3G subscribers which can be said it is not actually 3G rather than 2.5G. This enabled au to use not only the same 800 MHz network and base stations to support 3G deployment, but also the same 2G handsets (Ishii, 2004). In contrast, NTTdocomo started with constructing new W-CDMA network and required to install new base stations to renovate and upgrade existing 2G to 3G network. Besides, focusing on market areas is also different, that is, au has been targeting market areas of populated areas, while NTTdocomo intended to provide services all areas in the country. These made NTTdocomo lagged behind au at the beginning. Despite the trend, NTTdocomo and Softbank offered a number of innovative services to subscribers embodied in handsets; in particular, since the latter entered the 3G market lastly, it offered remarkable pricing strategies including no charges for call between its subscribers. 2. Should NTT Mobile Communications Network go international (outside Japan)? About NTT Communications NTT Communications (NTT Com) provides a broad range of global networks, management solutions and IT services to customers worldwide. The company is renowned for reliable, high-quality security, hosting, voice, data and IP services, as well as expertise in managed networks and leadership in IPv6 transit technology. NTT Coms extensive infrastructure includes Arcstar Global IP-VPN and Global e-VLAN, as well as a Tier 1 IP backbone reaching more than 150 countries in partnership with major Internet service providers, and secure data centers in Asia, North America and Europe. NTT Com is the wholly-owned subsidiary of Nippon Telegraph and Telephone Corporation, one of the world's largest telecoms with listings on the Tokyo, London and New York stock exchanges. NTT Com was ranked 31st in Fortune's Global 500 list. The companys roots go back over 100 years to the introduction of the telegraph in Japan. Since privatization in 1985, NTT Corp. has been diversifying into new markets, forming new subsidiaries and developing leading-edge technologies. The NTT Group had operating revenues of 10,305 billion for the fiscal year ended March 31, 2011. The Group employed 219,350 people worldwide as of March 2011. 1869 Telegraph service introduced in Japan 1952 Nippon Telegraph and Telephone Public Corporation launched 1985 Nippon Telegraph and Telephone Corporation privatized

1987 NTT Corp. listed on Tokyo Stock Exchange 1988 NTT Data Communications System Corporation (later NTT DATA) launched 1992 NTT Mobile Communications Network, Inc. (later NTT DOCOMO) launched 1995 NTT DATA listed on TSE 1998 NTT DOCOMO listed on TSE 2010 NTT Corp. wholly acquires Dimension Data Growth Strategy: Vision 2015 8

NTT Com, under its Vision 2015

Growth strategy, is emerging as a global leader of ICT services that enable companies worldwide to expand their global operations quickly. As part of this strategy, the company is strengthening its core Competitive advantages in Asia and beyond. NTT Com also is partnering with individual customers, empowering them with advanced tools and applications via secure, convenient ICT services for new methods of communication.
3. Would a Western company like Motorola be able to reach a position in

Japan where they could threaten NTT Mobile Communications Network?

The followings are the reason why the Western company like Motorola is unable to reach a position in Japan or they may threaten NTT Mobile Communications Network. First, NTT DoCoMo created a group separate from the existing business where they were free to and encouraged to think of new ideas. Christensens work [2] on disruptive technologies has also found the creation of a separate group to be critical to the success of incumbents in disruptive technologies. A new group is needed in order to break people free from the paradigms and measurements of the existing business. Second, NTT DoCoMo hired outsiders, people who knew very little about the existing business, but a lot about other businesses. These people were able to look at the mobile Internet in ways that the long-time NTT DoCoMo people were unable to do. They identified general consumers as the key market while the long-time NTT DoCoMo people pushed business users. They created a new business model that required a micro-payment system. The new group considered the success and reasons for success of products and services developed by its competitors, even though these products and services did not really threaten NTT DoCoMos core business. The new group considered the success of e-mail services from competitors, which by the way the Europeans have not done. In spite of the overwhelming success of short messaging services (SMS) with young people, the Europeans continue to target business users, probably because they have relied too much on people who have spent their life in the mobile phone industry. Third, NTT DoCoMo provided top management support for these new people and 12 ideas. Senior Vice President Keiichi Enoki supported the new people and protected them from existing departments that saw the new group and its outsiders as a distinct threat to them. In particular, the business services department continually pushed for an

emphasis on business users and without the support of Mr. Enoki this probably would have been the likely outcome since the conventional wisdom was that business users would be first. Since disruptive technologies require firms to focus on a new set of users, they require firms to abandon long-held paradigms and business models. Few employees have the desire to challenge a firms long-held paradigms and business models since this can obviously be detrimental to their career. The existence of disruptive technologies is another reason why top management must be involved from the beginning with evaluating new technologies and creating a new strategy for them. Implications for disruptive technologies in network industries There are also a number of implications for network industries particularly when they experience a disruptive technology. For example, industries such as transportation, power, and telecommunication all experience strong network effects and thus NTT DoCoMos success in the mobile Internet has implications for new technologies like electric vehicles, solar energy, and digital television. First, NTT DoCoMo created a business model that encourages other firms to participate in its network. This business model includes the subsidization of phones, a semi-open portal, and a micro-payment system. It created an official portal in order to receive cooperation from content providers. This portal is semi-open in that only some firms are allowed to participate in the official portal. Therefore, NTT DoCoMo can preferentially enjoy the benefits from this cooperation and the resulting positive feedback in the system. Simultaneously, however, it allows any firms to offer so-called unofficial sites that can be accessed by inputting a URL. A micro-payment system was an important part of this semi-open portal. In some ways this micro-payment system is an innovation in capitalism in that it represents a microcosm of our capitalist system. Firms are rewarded for providing contents that

users like and NTT DoCoMo benefits from these successful contents just as we benefit when other firms and people participate in value-enhancing transactions. Government policies also played a critical role. While many European countries have forced their service providers to open their portals before they even have any users, the Japanese government has largely left the these decisions to the mobile service providers. This enabled NTT DoCoMo to reap the benefits from the success of its portal
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and naturally this has encouraged DoCoMo to actively create and promote this portal. Now however, DoCoMos success has made it almost a monopoly provider of mobile Internet services. This requires a different set of government policies, which the Japanese government is currently implementing and NTT DoCoMo has announced that it will open its portal to other Internet service providers before the end of 2002. This sounds very similar to the differences in US, German, and British policies towards electric power at the end of the 19th century. While local governments in the US and Germany liberally provided their firms with the rights to lay cables and other necessary equipment in the cities, the local and federal governments in Great Britain responded quite negatively to electric power. This caused Great Britain to lag behind the US and Germany for many years in this industry, a loss to both consumers and producers; US and German companies are still some of the leading providers of this equipment while the British are not. But US and Germany did not maintain a hands-off policy towards the electric power industry forever. They developed extensive health and safety regulations as it became apparent that these were required. NTT DoCoMos success in the mobile Internet has other implications for government policy particularly in countries that are trying to create new industries. Governments need to be aware of the powerful role that disruptive technologies and

network effects play in new industries. In particular, disruptive technologies often provide opportunities for developing countries since they are first to recognize the disruptive nature of a new technology. The greater price sensitivity of their consumers causes their firms to emphasize the cost-cutting capability of disruptive technologies while the developed countries focus on the performance-enhancing capabilities or lack thereof.This is one of the reasons why Japanese firms noticed the disruptive nature of the transistor on the consumer electronics industry while US firms initially pushed transistor applications for the military. Network effects magnified the early success of Japanese firms and helped them became leaders in discrete components, consumer electronics, and semiconductors. It was only the occurrence of a second disruptive technology, the PC, which reinvigorated the US semiconductor industry and made the US again the leader in this industry. The disruptive nature of the PC, consumer electronics, and mobile Internet provide lessons for both advanced and developing countries. The combination of these disruptive technologies and network effects, particularly if we include feedback loops, spillovers between firms, and complementary assets in our definition of network effects, can be the source of new growth and opportunity for everyone.
Case Study 2

1. Which political and economic factors in the global environment would have

the biggest effect on: (a) The global sales of Caterpillar construction and mining equipment? Caterpillar Inc. said Friday that global retail sales of its construction machinery rose 31% in the three months to the end of October, but growth slowed in Latin America and Europe.

The October period was the 18th straight three-month period of sales expansion for the world's largest seller of bulldozers, excavators and mining equipment. But the growth has been moderating in recent months because of tougher year-ago comparison figures and weakening economic conditions throughout the world, particularly in Europe. Dealer-reported sales climbed by 31% and 34% from a year earlier in the two reporting periods to the end of September and August, respectively. The drop-off has been most pronounced in Latin America. October-period sales from the region rose 16% from a year ago, but that's down from the 33% increase logged for September and a 43% increase in August. Latin America has been one of Caterpillar's best-performing geographic markets this year as construction activity and mining expansions in developing countries such as Brazil drive demand for equipment. Sales in Europe, Africa and the Middle East were up 32% in the October period. Sales rose 41% during both the September and August periods. Europe's ongoing debt crisis is widely seen as choking off economic expansion on the continent as companies and consumers reel in their spending. In North America--Caterpillar's largest market--sales rose 38% in the October period, up from a 26% increase in September and 30% increase in August. While commercial and residential construction activity in the U.S. remains anemic, retail sales growth in the region has been driven by dealers buying equipment for their rental businesses and customers replacing worn-out machinery. In Asia, sales rose 33% in the three months through the end of October, compared with a 27% increase and a 24% increase in the September and August periods, respectively. Asia sales recovered faster than other regions coming out of the 2008 recession, as investments in infrastructure construction and mining in China, Australia and other developing economies fueled sales growth for Caterpillar's machinery. But China's moves to rein in inflation, along with sales and production disruptions in Japan following the March earthquake, have cooled Caterpillar's Asian sales growth in recent months.

In Caterpillar's engine business, overall sales rose 13% in the October period, compared with a 12% increase in September and a 14% increase in August. Sales of marine engines fell 12% in October, after falling 1% in September and rising 6% in August. Sales of industrial engines were up 13% in the October period, compared with a 17% increase and a 25% increase in the two previous reporting periods. The major factors are

Economic recession around the world. Global Protests. War on Terror. Global warming.

Case study 3

What are the advantages and disadvantages of launching cars for the Indian market

(a) through an own subsidiary? International marketing takes place when a business directs its products and services toward consumers in a country other than the one in which it is located. While the overall concept of marketing is the same worldwide, the environment within which the marketing plan is implemented can be dramatically different from region to region. Common marketing concernssuch as input costs, price, advertising, and distribution are likely to differ dramatically in the countries in which a firm elects to market its goods or services. Business consultants thus contend that the key to successful international marketing for any businesswhether a multinational corporation or a small entrepreneurial ventureis the ability to adapt, manage, and coordinate an intelligent plan in an unfamiliar (and sometimes unstable) foreign environment. While companies choosing to market internationally do not share an overall profile, they seem to have two specific characteristics in common. First, the products that they market abroad, usually patented, are believed to have high earnings potential in foreign markets. Second, the management of companies marketing internationally must be ready to make a commitment to these markets. This entails far more than simply throwing money at a new exporting venture. Indeed, a business that is genuinely committed to establishing an international presence must be willing to educate itself thoroughly on the particular countries it chooses to enter through a course of market research. DEVELOPING FOREIGN MARKETS There are several general ways to develop markets on foreign soil. They include: exporting products and services from the country of origin; entering into joint venture arrangements; licensing patent rights, trademark rights, etc. to companies abroad; franchising; contract manufacturing; and establishing subsidiaries in foreign countries. A company can commit itself to one or more of the above arrangements at any time during its efforts to develop foreign markets. Each method has its own distinct advantages and disadvantages.

New companies, or those that are taking their first steps into the realm of international commerce, often begin to explore international markets through exporting (though they often struggle with financing). Achieving export sales can be accomplished in numerous ways. Sales can be made directly, via mail order, or through offices established abroad. Companies can also undertake indirect exporting, which involves selling to domestic intermediaries who locate the specific markets for the firm's products or services. Many companies are able to establish a healthy presence in foreign markets without ever expanding beyond exporting practices. A company can also expand abroad by setting up its own manufacturing operations in a foreign country, but capital requirements associated with this method generally preclude small companies from pursuing this option. Large corporations are far more likely to embrace this alternative, which often allows them to avoid high import taxes, reduce transportation costs, utilize cheap labor, and gain increased access to raw materials.
Automobile Industry in India is growing dramatically from last two decades, beside Maruti Suzuki many major world player has arrived in India through either with its own subsidiary or with some joint venture. US auto giant General motor corp. has started business by setting up there own subsidiary . The advantages are they can use there own technology by educating some skilled labors which will help to reduce their production cost. In case of subsidiary the company can take the strategic decisions independently, they can promote their product as they want. They have the brand image to promote their product themselves it will effect for long. The disadvantages are as they are new in the foreign country they must face some difficulties in the social, cultural ,political and geographical situations in the country. That is the reason GM has launched Ford Icon India first as it was a very successful sedan car model in US and EU, but when they realized the actual need of

the Indian market the moved towards Hatchback or small cars and they launched Spark and Beat et. b) through a joint venture with an Indian partner? The adventages of setting a JV is the Company operating in India for long or Indian company in born they are very similar to the Culture,Geographic,demographic nature of the country and it is easy to promote a right product in right place . They can easily handel the licencing part or any other political issues etc,they can produce comeratively cheaper price. The disadventages are there may be some misunderstanding in between the companies under JV regarding strategies or technology transfer etc. 2. Regarding the entry mode: what recommendation would you make for Ford?

My suggestion is to go for JV in case of ford to enter Indian market.