NTT DoCoMo, Inc.

I have to say that I enjoyed reading about the technologies that DoCoMo is developing; however, the case really seemed to jump around a lot, which made it somewhat confusing. It switched back and forth so much with different partnerships and competitors that I'm still a little confused on the different options that DoCoMo has moving forward.

I do think that the company has done a very good job with the FeliCa Networks, and that is the basis of their competitive advantage. While the idea of having a phone equipped with eMoney, building IDs, and other applications appeals to me, I am very concerned with the security issues around this new technologies. The case does touch on the security issues, but not as much as I would like to have seen. For instance, if something happens and you lose your phone, how hard is it for someone to use the money stored on there or gain access into a building? I know the case mentions that you can call your service provider to have the phone functions disabled, but there may be times where you don't realize your phone is gone until it is too late. I would suggest that you are required to provide a 4 digit password anytime you use your phone for something like money transactions or gaining access to secure buildings. This would at least help to prevent some unauthorized use of the features. Although this would slow down the transaction process itself, I think it is a necessary step. Perhaps this goes against the whole idea of the "speed of the process", but without solid security measures, there could be some very unhappy customers.

As far as the case is concerned, I think DoCoMo needs to work with Edy and Suica to develop a reader that will incorporate the three different FeliCa cards at checkout. This would be a strong incentive for retailers to push for this form of payment. I agree with the case when it states that retailers would not want to install three different readers. This would be a step in the wrong direction for them. It should be noted though that only 10% of total consumer spending in through a credit card, so this method of payment has to be largely advertised if it is expected to grow. If this segment does grow, DoCoMo should work hard to ensure that it's cards are the first ones that end up in a consumer's wallet.

Overall, DoCoMo needs to be careful as it moves forward with its operations. As noted, the company does not have a large amount of experience in dealing with financial services. In the past, it has been strong on the transaction side, which is where it's strategic advantage is best found. If DoCoMo decides to transition further into the credit industry, it must gain further knowledge about how companies in this industry are successful. Providing credit to unworthy candidates could have some very negative effects on the company. I would suggest that DoCoMo enter a nonexclusive partnership with incumbent credit card companies or enter an exclusive partnership with a single card issuer. This would allow DoCoMo to benefit from what it does best (transaction processes), while allowing the partner(s) to benefit from their core strengths (issuing of credit). It would be taking quite a risk for DoCoMo to not have a partner and this may end up damaging the company in the future.

Netflix

If there is one thing in my life that I would not trade, it is my Netflix subscription. Since my first rental on January 3, 2006, I have rented and viewed 532 movies (I actually just counted this tonight). If you do the math, that is 49 months that I have held my account. A simple conversion equates this to nearly 11 movie rentals a month. To some people, it may seem like I have nothing better to spend my spare time on. I'd say this were true if I didn't have such a love of movies. Thank god the girl I am marrying in September of this year shares my passion. The best part about Netflix is that I pay $15.79 per month for an unlimited amount of 2 movies at a time (This is only the middle-of-the-road plan). If I had rented through Blockbuster at $4 per movie, I would be paying nearly $44 per month. Savings with Netflix since January of 2006 = $1,422.

This is actually the first time I've done this calculation and am surprised by the savings I've received for an industry I love. I realize that everyone is not as fanatical about movies as I am, but only renting 4 movies a month would have been a breakeven point. I had to laugh when I read in the case that Blockbuster never thought that online video rentals would be a sustainable business model. I used to rent from Blockbuster.....then Netflix starting showing up at my door. The only time I returned to Blockbuster was to get a new release that I would have needed to wait for through Netflix. Now, Netflix has a content management system which limits the time you have a wait for the newest, most popular release. Needless to say, my Blockbuster card is currently occupying space in a landfill as compared to my wallet. Blockbuster lost millions and millions of dollars by turning a blind eye to the potential of the online video rental industry in early 2000. It's move to an online subscription in 2004 was simply an attempt to recover what it had already lost. Unfortunately for Blockbuster, Netflix has already established its position and gained a large amount of loyalty from its users. Blockbuster's online service simply minimizes the damage done by Netflix.

I've been with Netflix as it has moved through its progression toward VOD. I currently own a Playstation 3 and have the Netflix CD which allows you to stream instant movies to your TV through the PS3. This system works incredibly. The only complaint I have is that the instant movies on Netflix are never the newest releases, but I can deal with that as I typically receive those in the mail. I think Netflix has chosen the correct path, given the options presented at the end of the case. It was smart to not partner with a competitor....Netflix was already too strong of a brand. The progression of "view instantly" on your computer to now being able to stream to your television has kept me very satisfied with Netflix. The company has recognized where its market is going and has adapted itself to those directions. I will be very interested to see where this industry goes as consumers begin to demand new releases immediately available for viewing on their HD televisions. We are in a period of transition and I am rooting for my friends at Netflix.