Sony Ericsson is a joint venture of Sony and Ericsson which take place in October 1st, 2001. They starts off interact because they desires to become the communication entertainment brand, by inspiring visitors to do more than simply communicate, and permitting everyone to set-up and participate in entertainment experiences. Experience that blur the lines between communication and entertainment. Sony Ericsson's main head office is within London.
In this statement we cover topics like main objective behind this jv, main strategies behind this jv, what motivates those to make this jv, why this jv was not as much successful, what problems they encountered in the start of this jv and how they will make this successful by considering strategies which we describe.
Sony Ericsson got in to alliance on 1st October 2001 and the primary objective of the alliance was to be the world's leading position in cell phones.
In 1946 Sony Firm were founded by Masaru Ibuka and Akio Morita. G-TYPE recorder (Tape player or recorder) was the first hardware device created by Ibuka and Morita in 1950. From European Electric they attained licensing privileges to transistor. Sony released first pocket transistor radio in 1957. There engineer's completed cathode-ray pipe in October 15, 1967 that helps them in video innovation. They unveiled Trinitron television for picture quality and then for the penetration in the global market they design this in 1968.
Its Japanese multinational company, and it's one of the leading manufacturers of gadgets, products for the consumer and professional marketplaces. Fundamentally it is a respected manufacturer of audio tracks, video, game, communications and information technology products for the consumer and professional market segments. Sony is uniquely positioned to be a leading personal broadband entertainment company on the globe.
Ericsson was founded in 1876 by Lars Magnus. He began making phones with the probable of improvements in technology. Ericsson is shaping the continuing future of Mobile and Broadband Internet communications through its ongoing technology control, like they can be providing innovative alternatives in more than 140 countries. Ericsson is the one company in the world offering systems for all those major mobile communication criteria, actively promoting standardization and open up systems.
REASONS FOR JOINT VENTURE
The major reason for the project was to incorporate Sony's consumer electronics knowledge with Ericsson's technological knowledge in the marketing communications sector. Ericsson was the buying chips from single source that was Philips. A open fire erupted causing an enormous loose at Philips, scheduled to which Philips was struggling to provide the chips to Ericsson. Ericsson faced a huge reduction due to this incident. There have been gossips that Ericsson might sale its handset division but it found ways to become a member of hands with Sony which could help it to recuperate.
The Eyesight of the business is:
"To be the communication entertainment brand, by motivating visitors to do more than simply communicate, and permitting everyone to create and participate in entertainment experiences. Experiences that blur the lines between communication and entertainment. "
Background OF SONY ERICSSON LIKE A COMPANY
Joint Opportunity of Sony Ericsson begins from October 1st, 2001. The basic ambition behind this joint venture is to provide their experience for the establishment of Sony Ericsson products in the mobile phone developing industry. Sony was the marginal player in the mobile phone market with the show of significantly less than one percent, but Ericsson was at 3rd position and was successful in mobile phone manufacturing industry. Because of open fire at the Philips manufacturing plant who were the single source dealer of Ericsson, this event creates a huge impact at the performance of Ericsson. Company couldn't match the dead lines of purchases completion and because of this Ericsson's market talk about dropped down, because they were relining on only one supplier.
MOTIVATION In back of THIS JOINT VENTURE
Joint endeavor often occurred because of Exchange Cost Economics, because in this cost of singular ownership of a business is higher than the joint ownership of a business. This is also the primary reason of the jv because Sony desired some advantage in cellular phone industry and Ericsson wished to save its mobile phone production business.
Resource-based view is another factor that motivates Sony and Ericsson to make a joint venture. According to this point of view company make alliance because of tangible and intangible valuable resources this creates a unique competitive edge on the market that couldn't be imitable by every other competitor; this could also help for the improvement of performance. Like Sony wished complex knowhow of communication technology from Ericsson and Ericsson's needed new technology of Sony that will assist them in the market competition, that's why they start's work together and make mixture of both company solutions.
Another motivational factor is organizational learning or knowledge because this also motivates Sony and Ericsson to make this alliance. By using this company's could easily acquire each other's skills and functions that could also help organizations to produce a new and impressive product with low priced that is also Sony Ericsson's purpose of alliance.
Strategic Management is also the motivational factor of the alliance, that have been used by both Sony and Ericsson companies. Both companies get this to alliance because they wanted to make a competitive edge in the cellular phone manufacturing industry and also to maximize profits. That is why they design symmetrical technique for the attainment of last goal.
Sony were thinking about this joint venture because they wanted to entre in mobile phone production industry and Ericsson entered in this jv because these were world's number three mobile phone maker plus they were facing huge reduction due to flame at Philips herb who was the sole distributor of Ericsson, so they wished to turn into a successful in cellular phone processing industry. Sony recognizes that Ericsson have access knowledge about technology in communication sector and this may help them in entrance of this industry.
Sony Ericsson after causeing this to be joint venture ended making their distinct mobile products and starts working along. Sony form alliance with LM Ericsson. Before formal announcement of this joint venture, many news papers published that joint venture will cover the wide selection of areas such as development, production and marketing of mobile phones. They sets concentrate on of extension of Sony Ericsson products to the major markets of European countries, Japan, other areas of Asia and USA.
The main aim of this joint venture is "to build up an alliance that would allow Ericsson to reduce shelling out for the costly development of next generation mobile phones at a time when many European telecom companies see their inventories piling up as the world's cellular phone market keeps growing much more gradually. "
Sony Ericsson's strategy was to release new models with the capacity of digital photography as well as other multimedia capacities such as downloading and observing video clips and private information management capabilities.
When they start as a Sony Ericsson company they released many models that have been new and impressive mobiles, main features of those mobiles were digital photography, getting facilities etc.
There key enhancements are cheap camera devices, cross program technology, operating system experimentation and there milestone handsets are Sony Ericsson T610 in 2003, Sony Ericsson P900 in 2003, Sony Ericsson W800i in 2005, Sony Ericsson K800i Cyber-shot in 2007, Sony Ericsson W910i in 2007.
Up till 2008 Sony Ericsson's numbers of employees are approximately 9, 400 worldwide and their employees on deal bases are 2, 500. Since October 2009, president of company is Bert Nordberg and CEO and Chief executive is Sir Howard Stringer. Chairman of the panel is Sony Corporation.
PROBLEMS THE JV HAS ENCOUNTERED BECAUSE THE FORMATION
The joint venture faces loss in the start, their targeted time frame of making earnings were shifted from 2002 to 2003. They couldn't struggle the main challengers of cellular phone creation industry and came up at fifth position on the market.
The main problem behind this damage was there misrepresentation with their product in the market. It's necessary that companies go for enhancements and offer satisfied product to customers but it is also important that people should also know that customers always want something new and different. So to provide them new and various mobiles company should always go for best Research and Development tools and techniques. Because if your R & D section is not up-to-date, it means that you will be not providing products to customers that they want.
The second problem that they were facing that they could not catered different markets effectively, because after making jv they begins working without get to know that what really customer needs and desires are. So due to this insufficient information their products starts off facing loss and then they had to eliminate their products from the marketplaces. Like in 2002 they stop manufacturing Code Section Multiple Gain access to (CDMA) mobile phones for the marketplace of United States and starts concentrating on GSM as a dominating technology, due to this change in US and Germany quantity of jobs cut in research and development office.
The third problem these were facing was they spend a great deal without get to know that what market situations now-a-days are. Like in 2003 mobile phone prices starts declining but still Sony Ericsson were making expensive mobiles, because of this they couldn't make just as much profits as these were expected.
They are facing problems because they're centering at cost-cutting programs and job losses. In June 2008, they were having 12, 000 employees and after launched this cost-cutting program it acquired slashed its global workforce by around 5, 000 people. R & D is an important department for just about any firm and it play an important role for cellular phone processing companies, but Sony Ericsson take this as an expense and finished R & D departments which were working globally like Chadwick House, Birchwood (Warrington) in UK; Miami, Seattle, San Diego and RTP (Raleigh, NC) in america; the Chennai Product (Tamil Nadu) in India; Hassleholm and Kista in Sweden and procedures in the Netherland, UIQ centers in London and Budapest were also closed down. Because of this change they couldn't create progressive products for customers and this is the key cause of the failure of this jv.
WHY JV IS NOT SUCCESSFUL?
Joint ventures often failed because company not build customer basic products, credited to which customers switched to other competitive products that delivers them more reliable and impressive products. That is also the key reason of inability of joint venture of Sony Ericsson.
They were providing progressive products but online marketing strategy was not all the effective that they could attract customers.
They weren't providing the advanced versions of mobiles all the early on as other competitors of cellular phone making were providing. There R & D was sluggish when compared with other mobile phone manufacturers.
They weren't centering at proactive way, these were also not profitable reactive. So due to this they were facing problems.
Joint opportunity always successful if company establish a target, since it shows that in which direction they may be moving. Sony Ericsson also faces the situation of not achieving the set night out profit, due to which they face loss. So it is necessary that goal should already be described and company works collectively for the accomplishment of concentrate on.
This joint venture is also less successful because Sony needs results as soon as possible and Ericsson's weren't making profits according to expectations, so because of this they starts trim number of careers and also remove Research and Development departments which were working globally, due to this they couldn't make innovative products regarding to customer needs. And when any specialized business don't have R & D department that helps firm in the development then that they could move around in the industry successfully.
Sony Ericsson' s joint venture was not just as much successful because they were not working for the attainment of goals that have been designed after the joint venture, both were bothered for their specific goals like Sony was worried because they required market talk about in mobile phone developing industry and Ericsson was bothered because they wanted their industry reputation back. So that is why these were facing problems.
STRATEGIESUSED TO HANDLE THE JV PROBLEMS
According to our research Sony Ericsson must follow these strategies that will help them to gain a long-term market share and it will also help them to produce a successful jv in future:
First step they should have to occur that they carry out the depth evaluation of different markets according to different countries, that will help them to get to know that what particular region related customers are expected from them and what they could provide them according to customer expectations.
Sony Ericsson must make a connection to customers that will assist those to get market show in the mobile phone production industry. They must have to carry out regular meetings to their customers, by using this they could get to learn that what their customers think about their business, what type of products they really want and how they could provide them products corresponding with their perceptions that satisfies them.
By listening process they may find that what potential needs are of customers and exactly how they could provide them effective solutions.
By using feedback technique they may possibly also remain in connection to their potential clients, this may be far better if maybe it's done occasionally.
There must be a coordination among all sections this will help those to bring a product that will gratify needs of customers and that'll be unique.
They will need to have a strong marketing campaign that will generate a positive impact on overall business, because good representation of product appeals to customer.
They should also have to use social marketing shops like Facebook, Google etc for the advertising with their products; this will improve its public visibility.
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