Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code : COM0069

Year : 2005

Industry : Telecommunications

Region : Japan

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:Vodafone K.K., a leading mobile operator in Japan and subsidiary of the world's largest mobile community, Vodafone Group Plc (Vodafone), witnessed a loss of 59,000 customers in its subscriber base in January 2005. Despite introducing seven new 3G handsets by December 2004, the company failed to attract customers and itsmarket share decreased from a high of 18.6% in 2003 to 17.8% at the end of 2004. Japanese customers were drawn towards Vodafone's competitors who offered customised handsets with download speeds up to eight times of that of Vodafone's.

In response, Vodafone not only reorganised its management structure by appointing a person with local market experience, but also planned to offer handsets that were tailor-made for its Japanese customers. Still, analysts were skeptical about Vodafone's prospects in Japan and felt that the company should exit fromitsmobile business in the country. Daisaku Masuno, an analyst at Nomura Securities Co. (a leading securities and investment banking firm) in Tokyo, opined, "The January (2005) subscriber figures (of Vodafone K.K.) were surprisingly bad, and I don't think it's temporary". Vodafone was losing the market position that seemed promising at the time of its entry in Japan.