Post on 18-Nov-2015
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DESCRIPTIONSony-Ericsson joint venture story
Joint Venturehandset production
ContentIntroduction of Sony EricssonStrategic planCompetitive advantageFinancial figuresQuestionsAnalysis
Ericsson Mobile Communications
Fire in Philips RFC factory (Ericsson single supplier)Annual losses of b$1.68 3% loss of market share
+-Telecom technology leaderKnowledge and experience in cell phoneLost market share, Negative revenue
European telecom crisis Handset market shareEricsson GE Mobile Communications1989-1993
?Product DevelopmentStrategic Decision
Innovation Management and New Product DevelopmentBy Paul Trott3
+-Consumer electronic expertise
Battery, high resolution screen, camera, entertainment will help development of future cell phones
No expertise in cell phone technology Market share degradation
QuestionsWhat chances did the joint venture have of becoming a successful player on the market?
Which factors were not taken into account in this joint venture?
Dear CustomerSorry! we do not have time to investigate what makes value for you.We are too busy to implant PlayStation, Cyber- shot and Walkman to Ericsson phone
Consider value for customers or products integration ?
e.g. In US the average price for smartphones fallen by 50% in 3 years
Price trend and Market DynamicQ2-2011
ST Ericsson vs QualcommST-Ericsson was a 50/50 joint venture of Ericsson and STMicroelectronics established on February 2009 and dissolved August 2013.
Does Ericsson give major competitive advantages to Sony-Ericsson?
Sony and Ericsson financial situation
Degraded Net Margin: No interest for extra operation cost
2008: Laid-off 5000 out of 8500 employees, closed several R&D centers around the world.
The EndSony needed market share, same as Consumer electronic Ericsson wanted to get reputation back
October, 2011: Sony acquired Ericsson's stake
Joint venture without aligned Goal
Current Market Share