Vodaphone Flops in Japan

[Charles]

Originally Posted by gkanai

Go look for yourself.

http://www.userland.com/aboutUserLand

He aint there anymore. Hasnt been for a while in fact.

Surely you know the difference between the Board of Directors and the Stockholders?

Winer is the sole stockholder of Userland, he owns it lock stock and barrel. He has repeatedly said he has no involvement in day-to-day operations, but he never said he didn't own the company.

[Taro Toporific]

Why Vodafone should ring off from Japan and America
The Telegraph, 11 Dec 2005
Sir John Bond, who becomes Vodafone's chairman in July, should review its global strategy. The mobile operator is in investors' bad books, with its shares trading at a steep discount to the sum of its parts... Take Vodafone Japan, which has been a particularly bad performer...there is little strategic benefit in keeping Japan. Vodafone's initial attempt to force Japan to use the same handsets as the rest of the group is one of the reasons it fell behind. What's more, Japan's poor performance has had a negative impact on Vodafone's stock, disproportionate to its size.
It might seem a pity to sell before the business has been fixed. But the company has been saying it is going to fix it for quite some time...more...

[Greener]

I'll tell you exactly what's wrong with Vodafone and their predecessor J-Phone:

1. They don't have Norika Fujiwara as their official commerical girl anymore.

and

2. Yukie Nakama is the AU girl. You just can't compete with that here.

It's all about the honeys man.

[Mulboyne]

Times: Vodafone succumbs to investor pressure and bows out of Japan
VODAFONE, the beleaguered mobile giant, bowed to investor pressure last night, announcing the sale of its failing Japanese division for up to £8 billion. The proposed sale of the Vodafone KK business to Softbank, the Japanese internet giant, sent shares in Vodafone surging, adding £5.6 billion to its stock market value. Investors, upset with the disappointing performance of the company, had called for Vodafone, among other things, to give up on its failing Japanese business ― its Achilles’ heel. The move to sell the business, which accounts for 20 per cent of Vodafone’s revenues, was also hailed as a landmark move marking the end of the group’s empire-building strategy. A successful sale would mark the first major sell-off by the group in its history...more...

[Big Booger]

Originally Posted by Mulboyne

Times: Vodafone succumbs to investor pressure and bows out of Japan
VODAFONE, the beleaguered mobile giant, bowed to investor pressure last night, announcing the sale of its failing Japanese division for up to £8 billion. The proposed sale of the Vodafone KK business to Softbank, the Japanese internet giant, sent shares in Vodafone surging, adding £5.6 billion to its stock market value. Investors, upset with the disappointing performance of the company, had called for Vodafone, among other things, to give up on its failing Japanese business ― its Achilles’ heel. The move to sell the business, which accounts for 20 per cent of Vodafone’s revenues, was also hailed as a landmark move marking the end of the group’s empire-building strategy. A successful sale would mark the first major sell-off by the group in its history...more...

So like I am about to get a new phone, should I switch to KDDI or DoCoMo? Or will the vodaphone service improve? Disappear? etc...

[kamome]

I was involved (albeit at a staff level) in Vodaphone's acquisition of J-Phone in 2001-2002, and it's sad to see how they totally screwed up their Japan strategy. I thought it would be interesting to see them really take it to DoCoMo, but instead they took the typical gajin-who-thinks-Japan-is-the-same approach and fucked it all up. Why haven't international companies learned that they have to specially tailor their strategy for the Japanese market? Aren't there enough examples of past failures that are instructive of what NOT to do in Japan?

[Mulboyne]

Originally Posted by kamome

Why haven't international companies learned that they have to specially tailor their strategy for the Japanese market? Aren't there enough examples of past failures that are instructive of what NOT to do in Japan?

One of the reasons why Vodafone went ahead with the acquisition was that the vogue thinking on Japan at the time was proclaiming that Japan had changed. Major evidence for this was thought to be Ripplewood's success with Shinsei Bank and Renault's success with Nissan. Both of those managements appeared to have succeeded by employing very unJapanese business practices. At the same time, Goldman Sachs was hoovering up golf clubs and foreigners had already picked up significant real estate portfolios from Japanese banks. A Starbucks on every corner seemed to confirm the trend.

Japan had changed and continues to change but I've always found the principle of convergence very unhelpful. This states that Japan lagged the west (more specifically, the US) but the post-bubble era had seen the country move closer to international standards which could now be imported wholesale. Merrill Lynch made the same mistake when they bought parts of Yamaichi's retail business as did UK retailer Boots and sandwich chain Pret a Manger.

Old Japan hands who still maintained "Japan is different" had made a rod for their own backs by failing to recognize that there had been changes. The typical response of one of their number to an international company trying to engage with the Japanese market was to point out all the micro obstacles. They might just as well have sucked their teeth and said muzukashii for all the practical help they offered. It's not really so surprising that a CEO preferred to listen to people tell him what might be possible rather than what was impossible.

There is no one right answer and some international companies will continue to find new opportunities here while others fall flat on their face. What determines that is partly up to a company's own definition of failure and success. Vodafone could yet have made a go of its Japanese business. It's likely that someone will and perhaps that will be Softbank. If they do buy the mobile unit, then they will have managed to reconstitute the old Japan Telecom because they already bought their fixed line businesses from Ripplewood. Vodafone's shareholders, however, were intolerant of such a high profile failure and it was taking up increasing amounts of management time so it was easier to decide to dump it than solve the problem over a longer period. Carrefour ran a reasonable operation here but the returns were well below what they were seeing elsewhere in the world and problems at home meant they too preferred to sell up. Meanwhile Wal-Mart continues to struggle with Seiyu where another operator might have thrown in the towel.

[Charles]

Good analysis here, but I prefer a simpler explanation. Vodaphone was part of the New Internet Bubble (tm) and they just figured their product was so awesome they couldn't fail. Live and learn.

[gkanai]

Originally Posted by Big Booger

So like I am about to get a new phone, should I switch to KDDI or DoCoMo? Or will the vodaphone service improve? Disappear? etc...

It may be reborn as Yahoo!Mobile but don't wait for that. Switch to AU. I did and I don't regret it at all.

[spyder]

DoCoMo for me. I love it. Sexy phones, awesome service, good price. I am on a "family plan" though, which does make it cheaper.