The purpose of this study is to recognize and critically evaluate chosen external evaluation. I've chosen the technique of Porter's five makes in the sector of mobile telecommunications technology- Sony Ericsson
The substance of strategic management
Management is a couple of activities (including planning and decision making, business, control such as directing and controlling people) targeted at the organizational resources (HR, financial, materials and information) and used with the purpose of attaining the targets of the business in an useful and effective way.
Managing organizations boils down to making everlasting management decisions, a few of which becomes regular. Part comes from the changes taking place in the vicinity and inside the organization. In literature your choice making process is from the process of dealing with problems. "But the substance of strategy is in the activities-choosing to execute activities differently or even to perform different activities than rivals" (
The idea of strategy originates from the Greek "strategos"-strategist- the leader, leader, manager, master (from "stratos" - army and "agein" - lead). Then, it is to order the army, struggle planning and skilful fine art of war. Proper management is also regarded as way of acting and predicated on recognition of critical (strategic) factors also predicated on examination and determination of the interdependence and the effect on the continuing future of the company. Proper management is a complex process, which is at the mercy of evolution as a significant factor if it involves company success. Important function is also corresponding idea of development to the forecast, considering changing situations, which create market conditions and the surroundings.
The fact of strategy is to make a unique company, allowing both the employees and the environment clearly differentiate the business from competitors. Evidently specify the personal information of the company, whether or not this can be a cafe, hotel, warehouse or hairdresser. The strategy offers us the otherness, which sticks out. The company must be perceived by the surroundings differently than other companies on the market, something must stands out in a manner comprehensible to clients. Sense of uniqueness must have employees and not only the business owner. This plan must be present in every action the company, in its daily life, must be consciously implemented and applied by each employee.
External evaluation of business environment.
"The decision and performance of a firm are affected not merely by its inside organisations and aims; they are also affected by the exterior environment in which the firm operates"
Strategic examination is a diagnostics of company for strategy formulation.
Full strategic evaluation includes
- External business analysis of the environment
- Evaluation of the company.
Analysis of exterior business environment is very important as it models the framework because of its operation and it is carried out at different levels.
"It is normal to identify various proportions such as politics, cost-effective, socio-cultural and scientific. The department of the factors impacting a company (. . . ) is often known as a Infestations analysis. The Infestations framework is generally utilized by organisations to audit their business environment and help them establish a strategic approach to their business activities"
These conditions must be well-know and anticipate.
So there is certainly need looking at the condition of the overall economy where the most important indications are: the progress rate and the repayment of capital, interest, exchange rates, inflation rates, the speed of ingestion, unemployment, debts, demographic changes, which impacting on tastes and tastes, or affecting the option of labour.
Very large impact on the creation of opportunities and threats for companies has legal and political factors (removal of prohibitions, restrictions, customs barriers, legal obstacles).
Factors that influence the development of business are changes on the market environment and competition. This might create opportunities for market enlargement and the potential risks for companies working only on domestic markets.
If it involves analysing competitive environment there may be need to considering come carefully factors that are likely to effect the competitive benefit of the company.
The purpose of this is to identify current and future relationships between the firm and the companies and other organizations collaborating or rivalling with one another.
Well known and trusted method of industry and rivals analysis is the technique of Teacher Michael Porter called Porter's Five Makes Style of Competition.
This assessment will give a remedy to the question of how rivals behave, what they had achieved and what factors influenced the success of some and the inability of others?
An important stage of strategic research is to investigate the internal or internal evaluation of the actual viability and business development in the long run.
Analysis with their potential (technical, trade, activity, creativity to the surroundings) with focus on strengths.
Strategic planning is the concern of tactical options about the pace and route of progress of the business, how to battle the competitive allocation of funds for various tasks and marketplaces.
Strategic planning includes
- To consider proper options,
- Choice of ends and method of implementation strategies
Strategic planning corresponds to the reasoning of planning, matching to which first lay out the objectives, assesses the near future, choose the best strategies and draft a plan.
- Where are we?
- What do we have to use?
- Where do you want to be?
- How do we make it happen?
This process is performed by areas, organizations, programs, and sub-programs
The response to the first question concerns the mission of the company. It is about the content of the business enterprise, geographical range, and assortments of activities and specific targets.
The second question boils right down to an examination of inner and external conditions for the operation of current and future.
The third question includes the development of proper alternatives.
The final level of the tactical management model is to execute the strategy.
- Version of organizational composition and steps for strategy
- Information processes, decision-making
- Strategy Control
The procedure for selecting the strategy is very hard and requires the inclusion of different conditions, and above all something of values recognized by management as particularly important for the business.
In a properly functioning company role, quest and aims of the business should be arranged properly and a strategic plan drawn up. Tactical plan should solve the question of the organization where it is certainly going, who are the customers, what are the real capacities of professionals and what is the very best strategy.
About Sony Ericsson Mobile Communications
Sony Ericsson Mobile Communications established in October 2001. It's the joint venture between Swedish Telefonaktiebolaget LM Ericsson and Japanese Sony Company with headquarter in UK- London. It really is relatively new company and the stated reason for endeavor s to combine Sony's electronic competence with Ericsson's technical command in the communication sector.
Sony Ericsson products have been capturing the attention of journalists, consumers and experts, winning awards for his or her combination of know-how and attractive design.
SWOT analysis is an instrument for auditing a business and its own environment. It is the first level of planning and helps marketers to focus on key issues.
-combination of high research and creation of two respectable companies (Sony and Ericsson),
- large financial track record,
- swiftly increasing market show of mobile telecommunications technology,
- use of technical facilities of both companies,
- high opportunity of product technology,
-good reputation of the brand within customers,
-high quality of products.
- strong competition in the market of mobile telecommunication technology,
- cost of new products is greater than its main rivals,
- relatively narrow range of products (telephones, modem credit cards, M2M technology, brain sets)
- weak syndication channels (low volume of shops, customers are mainly large companies in the mobile sites such as o2, orange)
- probable of organizational problems due to the cooperation of both companies
- appearance of new customers considering mobile solutions,
- high demand for mobile technology in Asian market segments,
- enrichment products with additional features to meet the growing needs of customers.
- constant development of its main opponents,
- changing needs and preferences of customers,
- increase in sales of substitutable products, local competitor in India and China market. the position of those rivals is very strong as it is reinforced by municipality.
- likelihood of a strong cyclical fluctuations on the market (eg, tough economy).
As a start point of analysing Sony Ericsson, I would like to use PEST research. "There the political, economic, communal and technical factors shaping an enterprise to be able to devise future business strategy".
In reference to the operation of the market, which is very shaky in conditions appealing to customers, the business has located strong focus on building its image as a responsible company, and socially engaged (charities, other situations not associated with the specialized image).
The increasing amount of people with relatively high incomes results in better demand for products using advanced technology. Nowadays the ability to satisfy the basic needs have changing the framework of expenditure. An increasing proportion of the costs is spent on modern devices including cell phones, laptop computers, mp3 etc (especially when the mobile phone is vital to everyday life). Furthermore, changing situation in the global market, mainly with regards to the path of changes in demand for products which may have advanced technology will increase or diminish. Fluctuations in the dollar affect the revenue of the batch, as prices at the developer cell phones are set in us dollars.
Constantly growing population of Africa and Asia created a growing number of wireless telephony interested due to underdeveloped telecommunications infrastructure in those elements of the planet.
As BBC creates: "Global demand for mobile phones remains strong, despite economic uncertainty in rich nations and rising food prices in poorer countries. The progress was powered by growing demand in market segments such as Africa and Asia"
Another aspect is powerful increase in demand for mobile technology among young people and the poor change in habits in the elderly makes the desire for this form of communication. Upsurge in the number of educated people ends in increased demand for mobile and wireless technologies for the reason that group as well.
Technical and technical changes on the mobile phone market are taking place at an extremely fast pace. Furthermore strong competition is the result of the necessity for large shelling out for research and development to keep tempo with competitors. High-tech sector as a whole is destined by patents, licenses, agreements on the use of specific technology.
Sony Ericsson Infestations Conclusions
The company is strongly associated with external business environment and any changes in it has a major effect on the company. Especially large effect on the business enterprise environment has economical and demographic factors on which the business is most dependent. The next greatest impact is the scientific environment. Politics environment has almost no impact on the business because as it works on the global market. The best opportunities are in public and monetary environment, and it is on those areas company should pay the greatest attention.
Michael Porter Five Forces predicated on Sony Ericsson.
The bargaining power of suppliers.
The sector of the suppliers is multiply because there are many manufacturers of components for mobile devices (eg displays). In addition, potential suppliers are scattered geographically - for example, batteries for mobile phones are created in Korea, China, Taiwan, as well as in Ireland and Germany.
The quality of products purchased from a company depends on the grade of the ultimate product. However, specific suppliers provide a fairly easy products whose quality can easily be inspected and possibly replaced by products from other suppliers (eg, casing of mobile phones are by means of simple extrusions of plastic material).
Due to the patents and licenses kept by the device it is impossible to produce the final product. Large number of competitors among sellers make that build much larger components of equipment running at a loss.
The product that is delivered by the suppliers is not at all hard, and its device price is not too much and therefore did not constitute a considerable part of the expense of the final product. The primary part of the price tag on costs incurred on research and development.
Offer of the suppliers is entirely aimed to the sector of potential buyers due to specificity of the final products for example cellular phone monitors do not apply to other devices.
The bargaining power of potential buyers.
There is a lot of potential buyers mainly sites such as O2, Orange, 3 and wholesalers. The solitary buyer purchases a small quantity weighed against the overall development.
There are also opportunities to buy from another distributor (similar deals).
"The Virgin tariff costs 8. 50 per month for 18 months, and carries a new free of charge phone Sonny Ericsson Satio, 100 free minutes and 100 texts per month"
That creates pressure to lessen costs, which might cause the seek out cheaper suppliers.
Buyers are well orientated in the price tag on products, however the quality and capacities can significantly differ, making decisions about the selection of the product more difficult. In addition, the market is unstable and follows the tendencies.
The buyer is purchasing done product for resale, which means quality is very important.
The threat of potential new entrants.
It is impossible to make in small level, because of the high cost of creating a new product (resolved costs).
Due to exclusive agreements is very hard to dominate the existing distribution network, this means the need to build their own.
Due to the advanced of technology used to produce mobile phones it is necessary to provide products with the technology at least as modern as the prevailing market if not better.
In each country there is a need to obtain approval or other appropriate authorizations in order to enter the mobile phone market.
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