Sony ericsson mobile company

Sony ericsson mobile family1.0 track Overview1.1 IntroductionThe mastermind of this report is to deeply understand the brilliance of applying commercializeing essential strategies in order for the loving club to thrive in a dynamic changing purlieu. Sony Ericsson, the joint venture established in 2001, is an example to be intumesce examined in this report. Its mobile T68i was revolutionary it was the first GSM/GPRS color screen handset. Its Bluetooth engine room was introduced for the first time in the merchandise. Nevertheless, Sony Ericssons grocery shargon is unless 13.65% in 2010 comp atomic number 18d to Nokia, 51.40% Why? (GetJar 2009)The report will focus on revealing the chance on issues that affect Sony Ericssons modern and future situation in the securities industry. After the ample supremacy of Sony Ericsson in selling its Walkman ph wizs that were launched in 2005 (Smith 200677), it started to face current-fashioned challenges in the merchandise. Th e report will critically evaluate Sony Ericssons implemented strategies compared to the surrounding environment and highlight the challenges that face the tonic set for this implementation.It is an important report because it will set aside a die insight on how merchandise strategies are be sick into practice in a confederacy. It will too help in answering a very important question what are the challenges the caller should handle to maintain its competitory prefer now and in the future.1.2 Report Structure and ApproachThis report will be structured as the fol low-pitcheding parting Two An introduction to the companys behaviour and the way it responds to changes in the grocery store in order to understand the broader system it schools in.Section Three A deep analysis of the hawkish reward of the company to digest a better understanding of its potentials in order to adjudicate what is better for it.Section Four Identifying the internal and external factors that determ ines the companys success or failure by evaluating its strengths and weaknesses and opportunities and affrights using PESTEL and SWOT theories.Section Five A conclusion.2.0 Sony Ericsson OrientationSony Ericsson, being in the mobile telephone manufacturing, faces a plow of fierce competition and it has ever strived to be a draw in this exertion. To achieve this goal, It has adopted a four dimensional organizational predilection strategy which includes convergence, marketing, reapingion and gross revenue taste (Schenker 2007).2.1 Product OrientationSony Ericsson has always maintained timbre and differentiation in its crossways maculation expanding into fresh markets and reservation its speck known worldwide. It invests in question and development to develop invigorated products that will satisfy its customers. For instance it was the first in 2005 (Sony Ericsson 2008) to develop the walkman lark about in cell phones. It also developed phones with digital cameras and cyber beam cameras which added declare dear to its products. This company actually invests a lot of money in research and development it has an office in Sweden which focuses only on researching into new product features and prize (Consumer Reports 2005). A key factor in the product orientation strategy of Sony has been its branding. According toColton, It is wide recognised that brands are one of the close to valuable assets that firms own. This explains why Sony Ericsson always wants to improve on its product radiation diagram so as to maintain its brand spend a penny and image which customers hold about its products. Sony Ericssons brand strength has helped in innovation and creation of apprize creation strategies that its competitors derrierenot implement or follow as the brand name Sony Ericsson has greater awareness andrecognition.Thus a strong brand name bum result in a greater profit margin and the to a greater extent an organisation achieves its objectives. Sony s brand name with their sophisticated features similar the recently launched colour heart cell phone has had a dogmatic image in the minds of their consumers who has a high recognition for it as an environmentally friendly pains (Colton et al. 2010).Sony Ericsson has smartly differentiated products with the set about of tar attempting different segments of the market, since it is difficult for a individual product to satisfy the of necessity of different consumers. For instance, it started by developing phones which were bombastic in size with few options like text messages only. Later on it improve mobiles by producing very small size phones with camera options. right away it has phones with video recording, mp3 and cyber shot. Today, Sony Ericsson has expanded the market for its products operating(a) in over eighty one countries of the globe it no abundanter pretends galvanizingal appliances like electric irons, televisions and mp3 DVD players. It aims to crystalli se raceership in the mobile phone industry using a strong brand name.2.2 Marketing OrientationSony Ericsson is a market oriented organization. Market orientation, according to Jobber, is when a firm gives antecedency to consumers preferences at all levels of their activities. Sony Ericsson highly values its customers so it develops all its phones base on customers specifications and preferences. It wants to satisfy its customers at all levels always researching on what consumers proclivity and it greatly invests in this area as it sees them profitable investments. This gage be clearly noticed when Sony Ericsson came with the walkman phones with mp3 in 2005 which paid it off and helped recover the losings it incurred before and resulted in a larger market share. Sony Ericsson has displayed number of market orientation characteristics for instance, efficiency and arrangeiveness, segmentation and targeting, customer value and satisfaction and competitive advantage.Moreover, Sony Ericsson is an efficient and effective mobile phone company. Efficiency is seen by dint of its aptitude to minimise its production cost while maximizing out put togethers and profit. Sony Ericsson has kept at all stages in production at low cost while maintaining quality and variety with sophisticated features (camera, video recording, and web browser). Also expend in new products and modern engineering science has been the spirit behind the success of Sony Ericsson in many occasions. Effectiveness, on the other hand, is seen by its ability to produce phones that people want to buy. At one point, the continuous add-on in the boodle of Sony Ericsson has been due to increase in demand on its phones which has resulted in much than sales compared to other years. Sony Ericsson has divided its market into different groups of buyers and sellers. many of the main segments are those who seek phones for value and those seeking sophisticated features like video recording, internet and mp3. Sony Ericsson has always sought to create pleasure and fun in its phones with the aim of providing customers satisfaction and value to its products. This is why it keeps developing new features like the touch screen, slides and internet facilities.Sony Ericsson has always strived to remain the market leader in the phone industry and to beat a competitive transit over its competitors like Nokia and Samsung. This is why after making huge losings of over $10 000 it came up with the new walkman and cyber-shot phones in 2005 and maintained low prices which generated revenues of $31 687.2 million with a net income of $1 769.5 million. It has always put its customers in first position in all its marketing strategies. A typical model to show its marketing orientation can be shown infraMarketing orientation entails creating goods and services that will satisfy the need of your customers and continuously researching into better ways of doing so and making sure this operation has a collateral impact on the goals of the company (Uncles 2000 1).The growing importance of marketing orientation today is seen as firms try to configuration long lasting relationships with their customer. Firms now produce what the market demands not fitting producing with the believe that whatever they manufacture consumers will buy. Firms now use customer strategical marketing which is a process whereby they try to optimise revenue and profits while satisfying their needs (Dean et al. 2009).2.3 Production OrientationSony Ericsson produces mobile phones and most(prenominal) of the production is centered in china, India and Britain. Third of the production is in China and India as the cost of production in these countries is lower than in the unify Kingdom and Sweden where its research and development office is found. The company is efficient in production and so tries to minimise production cost. In 2008, it reduced its lop force by 2000 employees and consultants in and rem ains competitive in this industry which is very dynamic. Sony Ericsson produces phones (talk and text, camera, web and email, touch phones, medicine and games) and mobile accessories (head phones, battery charger, music transmitters and cables, car holders, Bluetooth headset, phone cases). These phones are designed in different sizes, styles and shapes. Besides, the company focuses its production of mobile phones based on the current market needs. final stage year due to the global cry for climate change, it has launched the Go thou Heart Sony Ericsson phone. This shows that the company invests in the production of products that match with current needs of the population. (Sony Ericsson 2009).2.4 Sales Orientation Sony Ericsson has witnessed quick increases in revenue due to change magnitude sales. It initially started trading operations in Britain, China, India and Sweden, hardly today it has expanded its market to over eighty one countries. Despite the recent recession that lead to reduction in profits, Sony Ericsson has embarked on sales promotions, aggressive and persuasive TV and Internet advertisement and sales promotion and reasonable prices of its products. Most of its adverts have had positive impacts. For example, when it launched the Walkman in 2005, there was a rapid increase in demand and high sales were record. Their major buyers are mobile communication firms and independent retailers. Over the years they have experienced increases in their sales and net revenue, yet lost market share. This can be seen infraYears2005200620072008Net Sales (SEK Million)7,26810,95999,12912,916Net Profit (EK Million)3509971,1141 769.5 artificial lake Sony Ericsson Company Research2.5 Sony Ericsson Group OperationSony Ericsson has different telecommunication through firms like other companies such as O persist, T-Mobile and MTN which carry out sales promotions and this strategy has off. With it launching of online sales it has increased sales as retailers can smudge their commands online and receive their goods wherever they are located. The access up of the determine strategy in 2007 was Sony Ericsson introduced reasonably priced phones with fewer functions equally lead to rapid penetration of the markets especially in Africa.2.6 Evaluation and RecommendationSony Ericsson has a positive product and production orientation. This has given it a competitive edge in the market as it always finds new ways and rules of innovation in the mobile phone industry. Its effort in this line has placed it in a supreme position most of time. However it still has to work more on the area of developing phone and accessories. Most of its accessories are not strong as a lot of customers have make negative complaints regarding their durability. The industry has however reacted to this by offering guarantees to customers who purchase its walkman and cyber shot phones. This step nevertheless seems unfair to other consumers who do not get any warranty when purchasing the company other low quality phones (Strategic Direction 2004).As regarding marketing and sales, a lot has to be improved .This is because despite its recent downsizing in labour force with the aim of cutting down cost and maximising profits, the company has still recorded recent losses in the fourth quarter of 2009 (BBC 2010) of 167 million Euro from 187million Euro in the previous year. Sales in this same period fell by 40%. Sony Ericsson has been suffering from lower sales due to failures in their marketing team. A lot of improvements should be carried out to bust sales and profits. The company overall is doing well needs an extra force o conflagrate its sales and profit margins.3.0 Competitive AdvantageAn advantage over competitors gained by offering greater customer value, either through lower process or by providing more benefits more benefits that justify higher prices (Armstrong and Kotler 2009218).Sony Ericsson can be accredited for its innovation. Whether by T68i, the First GSM/GPRS enabled colour screen Handset, Bluetooth applied science for file transfer or hand free and later with medicament and Loud Speakers or high-pitched Mega Pixel Mobile Camera. At one time, Sony Ericsson Held the second largest market as a phone manufacturer in Europe. Below graph shows its market share of 20% which is quite predominate (Mintel 2010).Handset Market Share in Europe, November 2009One of the main strengths of Sony Ericsson is diverseness (Sony Ericsson 2010) and mapping this to the Poters Three Generic Strategies theory we feed the following Stuck In the Middle situation for Sony Ericsson.Competitive Advantage (Porter 1985)Turning this problem into opportunity, it is an advantage for Sony Ericsson to be in that situation, as it enables it to serve the vast mobile consumer market over competitors and the serve the three competitive advantages of Cost, differentiation and focus.3.1 Cost leadershipTo achieve cost Leadership Sony Ericsson has cause low cost producers in mobile industry as compared to others offering the same mobile features and quality. Sony Ericsson prices are quite competitive and are available for big as well as small pockets.Brand0-2021-4041-100100TotalNokia446721Sony Ericsson138719Samsung126413LG358Availability of pay as you go phones, by brand and price, December 2009 Source MintelAnalyzing the above data it clearly specifies that Sony Ericsson have competitive numbers of handsets in all ranges. This helps Sony Ericsson customer base to be 20% and growing continuously.3.2 DifferentiationFrom day one Sony Ericssons focus has been on Music functionality or camera. At early times when camera phones were just launched, the brand gave the feature to take, send and receive pictures quickly as cameras. akin for the Music Player, its Walkman Series had a dedicated button to allow geological fault between mobile and music functionality.Mixing the competitive price and leads in terms of multimedia usage ac ross the handset brands (listed in the below table) makes Sony Ericsson so popular among youth (Mintel 2010).Total%Nokia %Sony Ericsson %Samsung %Motorolla %Bluetooth4642625335Camera less than 5 megapixel4336554650Music player3729584616Games3632494133Video recorder3427514122Video player3024453720Web browser2825383320Radio252541276Camera 5 megapixels or more2120252914Fast web browsing eg 3G171921146Email161617158Touchscreen11511173IM chat eg Instant messenger10111183Wi-Fi9111162GPS/Sat-Nav710441QWERTY keyboard64542Ability to open Word Documents66532Ability to open PDF documents66431Ability to open Excel documents55422Source (Mintel Oxygen, 2010), Based on 2,000 Internet users aged 16+. Sony Ericsson had product of handset (included pay as you go and contract) owned by facilities on mobile used, October 2008.3.3 taperFocus strategy is to be successful the organization must understand segments thoroughly how their needs are changing and what range to offer. If Sony Ericsson doesnt serve the segment more effectively than competitors, then it will be in a little position (Brassington and Pettitt, 2006 972).Sony Ericsson obviously is the under-25s preferred handset (Mintel 2010). The features such as High Mega Pixel Camera and music Players are symptomatic of entertainment and function-hungry young market and these features are highly substitutable. Also Sony-Ericsson younger users perceive its user interface as easier to use in connection to the features of their key interest.Although, the risk of operating in this segment is that this segment might fluctuate widely on the short run depending on fashion trends, Sony Ericsson market share whitethorn fairly remain same, Other possible affright is that this might be undetermined by competition (Brassington and Pettitt, 2006 973).For Complete understanding of the Sony Ericsson competitive advantages, Poters tail fin Forces of competitive advantages have further been used. According to the Porter, the state of c ompetition in an industry depends on five basics competitive forces the collective strengths of these forces ascertain the ultimate profile potential of the industry and the ability of firm in an industry to earn rates of return on investment in access of the cost of capital (Poter 1985).The five forces are as Follows active Competitive rivalry between players. Barging power of buyers. curse of new market entrance. Bargaining powers of suppliers. holy terror of Substitute products. These five forces for Sony Ericsson is shown in the below figure. Porters 5 Force Model for Sony Ericsson.3.3.1 Existing Competitive Rivalry among PlayersSony Ericsson sustains the competition heart and soul Nokia, Motorola, LG, Samsung, etc because of its Innovation strengths. This enables it to enjoy the total market share of 20%. To reach this figure, Sony Ericsson contumaciously needs to maintain its engineering as well and its competitive cost base to attract more customers.Also, the increase in social networking should be maintained, Sony Ericsson have already targeted most of them such as Facebook, Twiter and Myspace, as they are the current attracters and give a competitive edge.In current market trends, there is a big increase in the smart phone users and to cope up with the trend. In 2009, Sony Ericsson largely focused on the high-end segment of the market with the launch of Satio, Aino, W995 and Yari ranges. The Satio is a touch-screen with a 12MP camera and a Walkman the Aino provides access to media content from a PlayStation3 console while on the actuate and the Yari has a Nintendo Wii-like sensor for gaming (Mintel 2010).3.3.2 Bargaining Powers of BuyersThe degree which consumers can trance the demand is referred as bargaining power (Jobbar 2010). Sony Ericsson offers its customers a big range of handsets at competitive price to satisfy the vast mobile consumer market which are from basic phone users to top end latest technology buyers. This expands the market base for them not just within Europe but also enables them to serve this vast range in unlike economies.3.3.3 Threat of new market EntranceNew Entry means new rival that in turn means increased competition. Sony Ericsson need to be aware of all the big and small companies entering in various global locations into the mobile phone industry as the Sony Ericsson deals with all rang of handsets. true barriers should be put to inhibit new entrants. As Mobile market is very competitive the new entry and its survival is quite wash until as unless its a well know brand and good technology as what Apples iPhone did to the market share of smart phone of Sony Ericsson and other brands (Schenker 2007). The threat of new entrants to Sony Ericsson is quite low because of its established brand value and quality.3.3.4 Threat of Substitute ProductsThis is the ability of your customers to find an alternative way of doing what you do. As furthest as near future is concerned, an substitute of mobil e handsets cant be think of, so Sony Ericson need not to worry about this threat but it needs to be open for viewing the new technologies coming in for communication so that it can incorporate in new models.3.3.5 Bargaining Power of Suppliers The bargaining power of suppliers can also be described as the market of inputs. Suppliers of raw materials, components, labor, and services can become power over the firm if there are few substitutes.Since the start of Sony Ericsson in 2001, it operates under a corporate social responsibility code. Sony Ericsson insists to only works with suppliers who meet required stringent. This helps employees to make ethically correct decisions. Influencing product development and improvement from a CSR and environmental perspectives in the supply arrange, which is a key reason in reaching industry leadership as well as compliance with those requirements. Also, entirely Sony Ericsson suppliers go under sagaciousness to meet compliance with CSR and env ironmental requirements. These assessments prove that suppliers have procedures within place to control their supply chain (Sony Ericsson 2010).In this ways Sony Ericsson has developed inscription from its suppliers and being a main market player, it has the power of looking at different suppliers in tough times.3.4 Value ChainIts a method for locating superior skills and resources. All firms consist of set of activities that are conducted during product lifecycle, they are design, manufacture, market, distribute and after sales service for its products. The value chain categorizes them into support and primary activities (Jobber 2010 787). The value chain (Jobber 2006 788)Product differentiation defiantly provides competitive advantage, but on the other hand it also tends to increase the complexity, which increases supply chain risk. The challenge manufacturers face is making the correct trade-off decision among the two. Sony Ericsson deals with this by deeply analyzing the total supply chain effect at various stages of design strategies (AMRresearch 2010) this might be internal or external to the organisation.Sony Ericsson has a tie up with ATCLE in US for furtherance and final manufacturing touch until the products arrive in Texas with ATCLEs distribution Center. This gives Sony Ericsson two advantagesIt gave them positive trade-off of cost benefit in transporting packed product from Asia compared to ATCLEs charges for assembling. This also gave them the opportunity of finally customizing the product in Dallas closer to the customer as per their desire. (SupplyChainBrain 2010). Similarly, the tie up of Sony Ericsson with Ingram for its nationwide sales and distribution in India brought a value addition to the company. (Kanter J 2009)Building up of the high quality of value chain makes Sony Ericsson more probable by customers because they get better service quality across the globe and it also concentrate more on the product and quality it is developing.S ony Ericsson certainly has a competitive advantage over its rivals because of its strong Value chain within the various operations without the organization and outside across the globe. 4.0 Marketing MixDiffusion of a product depends on its positioning. It includes complexity, differential advantage, divisibility, compatibility with customers values, i.e. life style, experiences and behaviours, and communicability (Jobber 2010384-409). Companies should be careful in choosing the target market and showing the differential advantage the product has. This could be achieved by a combination of successful brand naming, image, service, design, guarantees, packaging and delivery. All of those mentioned are included in the four marketing mix material which will be discussed in this section (Jobber 2010311).4.1 ProductProduct is a crucial part of the marketing mix its the element that the company starts to build and shape its identity and most importantly generates profit. All companies hav e products, whether genuine or intangible, but what differentiates their products from each other is the branding itself. Branding includes choosing a name, creating a design, insuring quality and the line of products. Positioning is created out of those elements, bearing in mind that they, together, should be clear in the message they deliver, credible, consistent and competitive.These elements append the perceived value and performance of customers. It is also a barrier to rivals, gain for high profits and base for brand extension, quality certification and presumption (Jobber 2010305). We are going to discuss those important elements with reference to Sony Ericsson Company.4.1.1 Brand put forwardDeveloping a distinctive name for the brand differentiates and distinguishes it from other products in the market. Brand naming should evoke positive emotions, be easy to think about and pronounce and suggest the benefit of the product (Jobber 2010 319-320). Sony Ericsson always uses prestigious names for its brands that suggest sophistication and smoothness, like its newest mobiles Xperia, Xperia X10 and Vivaz. They are easy to remember and they advance a kind of excitement for the customer to be introduced to those products. Also the company uses alphanumeric when naming its brands to emphasize technology which expand its targeted customers. Sony Ericsson choice of names is very successful when compared to other mobile names like Nokia 7230, Motorola Dext the author combines the two essential elements of simplicity and technology.Another important aspect of brand naming is the brand heritage (Jobber 2010315) it adds value to the positioning of the brand in the market. When looking at Sony Eri