Japan's Computer and Communications Industry: The Evolution of Industrial Giants and Global Competitiveness

By Martin Fransman | Go to book overview

8 DDI: NTT's Main Competitor

CHAPTER OVERVIEW

The chapter begins with an examination of the origins and growth of DDI, then moves on to describe its growth and current performance. To what extent is DDI's impressive growth the result of the company's internal structure and strategy, and to what extent is it due to favourable external circumstances, such as a supportive regulatory environment created by the Ministry of Posts and Telecommunications (MPT)? What role was played by DDI's least-cost routing systems, which automatically selected the cheapest carrier for customers? How has DDI used the market for inputs into new services as a substitute for in-house R&D, and how effective has the company been in this respect?

The chapter continues with an analysis of DDI's vision for the future based on its beliefs regarding the sources of future growth and profitability. Here two issues are closely examined. The first is the personal handy phone system (PHS), a cheaper alternative to cellular mobile communications. The second is DDI's vision regarding the role that R&D will play in the company in the future.

Will DDI, with its far smaller size and quantity of resources, be able to compete with NTT into the twenty-first century? This is discussed in the final section by distilling the two companies' visions into the beliefs that support them.


Introduction

Since the introduction of competition into Japanese telecommunications services in 1985, Daini Denden (DDI) has emerged as NTT's major competitor. There are two reasons for including an analysis of DDI in this book. The first is to provide a better understanding of the competitive process in the Japanese telecommunications services market by analysing the structure and strategy of this major competitor to NTT. The second reason, closely related to the first, is to examine the contradictory beliefs that underlie the visions, and therefore the strategies, of DDI and NTT. This examination throws further light on an important theme that has threaded its way throughout the book, namely the ways in which corporate beliefs shape corporate vision, competences, and forms of organization.

At a more concrete level, this chapter is concerned with a puzzle: how can DDI, with a tiny force of engineers engaged in R&D and the provision of new

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