National University of modern language

Business Policies and Strategies

Submitted by: Saqib Gondal I-2037 Mansoor Ahmed I-2032 Waleed Zahoor I-2051

An Assignment on Sony Ericsson Submitted to:-

Sir Adnan

Introduction
Sony Ericsson Mobile Communications AB is a joint venture established on October 1, 2001[1] by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to manufacture mobile phones. The company's global management is based in Hammersmith, London, and it has research and development teams in Lund, Tokyo, Mexico City, Beijing, and Redwood Shores in the US. By 2009, it was the fourth-largest mobile phone manufacturer in the world after Nokia, Samsung and LG.[5] The sales of products largely increased due to the launch of the adaptation of Sony's popular Walkman and Cyber-shot series.
But On October 27, 2011, Sony announced that it would acquire Ericsson's stake in Sony Ericsson for 1.05 billion ($1.47 billion), making the mobile handset business a wholly owned subsidiary of Sony. The transaction's completion is expected to occur in January 2012.

Discussing and identifying Nature of change By Sony Ericssoon

In 2001, the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to manufacture mobile phones and develop new strategies for it,because before this joint merger,Sony was producing consumers electronics and Ericsson Ab was providing wireless services to Telecom sector,combinely they made a very interesting dicision to Produce mobile phones and their main focus was having lead the way in establishing the true camera phone category, Sony Ericssons new focus will be music. Details of the new entertainment and imaging led strategy will be unveiled at the 3GSM World Congress in Cannes, starting next week. The company is also nominated for an award for one of its success products. Sony Ericsson has managed to avoid any major patent disputes, mainly because its large patent portfolio means that it is able to solve patent issues by cross licensing agreements, whereby it may use other players' patents in return for them using Sony Ericsson's technology

Being a young phone manufacturer, Sony Ericssons expanded presence at the 3GSM Congress, trying out award nominated phones and new products in an experience zone. This is located at a dedicated, 630 sq m pavilion at Gray DAlbion Beach on the Croisette, adjacent to the 3GSM Congress centre. Miles Flint, President of Sony Ericsson since June 2004 will also give a personal Fireside chat interview on Wednesday 16 on the topic of Driving Value for the Wireless Services of Today & Tomorrow.

Having established a profitable base and a reputation for quality, innovation and design in 2004, this year will see Sony Ericssons expanding product portfolio and challenge the market once again with new thinking and stunning designs said Miles Flint. 3G will also become increasingly important as the year progresses he continued, although 3G sales amounted to less than 5 percent of the overall market in 2004, we expect this segment to come close to 10 percent of overall volumes during the year with further rapid expansion in 2006. Among the handsets on display will be the V800 for Vodafone, nominated for an award as Best 3G Handset by the GSM Association; and also the popular K700, S700 and P910. In 2004, the T610 won the prestigious award for Best handset, terminal or device during the GSM Associations Awards evening at the 3GSM World Congress.

The Way Change Was Managed

The strategic alliance between Sony and Ericsson was not without challenges. Both companies are experiencing turmoil in their handset businesses before they enter into a strategic alliance. The strategic alliance was seen as a way for both companies to create an independent unit that will produce handsets that will attract the consumers and uplift the position of Sony and Ericsson in the market. Because of both companies extensive knowledge and expertise in different areas and because of their strong backgrounds in the business, several problems and challenges were encountered. Three of those challenges were design, technology transfer and cultural gaps. 1. Design -The initial stage of the alliance was challenging and both companies endeavored to come up with a distinct design that will attract consumers. Sony designers proposed Ericsson designers, to create a round-shape cellular phone rather than straight line ones. It was hard to explain this to Ericsson people logically. At Sony, design philosophy is not clearly written in a document, and Sony and Ericsson did not understand each other due to their internal terms (inhouse words).

2. Technology Transfer The initial stage of the alliance was also faced with challenges in the transfer of technology know-how. Sony has its headquarter in Japan while Ericsson is in Sweden. In order for the alliance to work, both companies must combine their capabilities. Sony is known for its technological capabilities. 3. Cultural Gaps The joint venture required considerable time to handle cultural gaps including differences in corporate values and differences in business orientation.

Management of Change Perhaps one of the biggest changes that Sony Ericsson implemented as a joint-venture is the creation of a separate entity from its parent companies. Both Sony and Ericsson have different and at times conflicting organizational culture. Managing change at Sony Ericsson focused on organizational culture. The joint venture between Sony and Ericsson was not considered hostile considering the 50-50 arrangement between the two companies, instead it was task oriented and equal. The goal for venture was to create synergies between the two companies, and become market leaders within their field of action (Boultwood 2004). By utilizing each others assets, knowledge and possibilities, they focused on creating new technological solutions for a global market, and developing products combined by fun and function. The difference in managerial styles and accounting practices between Sony and Ericsson contributed to tension in the integration process. The differences in managerial styles could be considered ethno-cultural in the case of Sony Ericsson due to significant cultural differences between Swedish and Japanese employees.

First Change: Adoption of Global Thinking Rather than focusing on the cultural backgrounds of its parent companies, Sony being Japanese and Ericsson being Swedish, the management adopted a global thinking. The strategies that were created by the Sony Ericsson management aims toward the future of the company as an independent body rather than existing differences between its parents countries of origin. In order to communicate its commitment to global thinking, the headquarter of Sony Ericsson was established in the United Kingdom. The global environment in the organization helps in the adoption of global thinking as it resembles more of a born global company than a Swedish or Japanese one. The conviction is using the best strategies from both cultures, and integrating all collected knowledge form all countries around the world, with leaders from many different countries. The collected knowledge creates a foundation for organizational growth (Boultwood 2004). The company has achieved cultural diversity and different cultures are well represented in different offices of Sony Ericsson around the world. This spirit is a shared basic assumption demonstrating underlying values for the organization as a whole. Global thinking is supported by the though that the location of a companys operation is of greater importance than the nationality of company ownership, meaning that their specific culture is applicable in every office of their worldwide activity, and not dominated by its parent companies.

Second Change: Integrating a Distinct Corporate Culture Successful consolidations, considering people and relationships to be important, call for more thoughtful creative and differentiated approach to integration. In contrast, a fast, decisive and highly directive approach works best in situations where two entities make similar products or share several customer segments. In the process of creating a new corporate identity, Sony Ericsson put special focus on the cultural aspects. After studying current knowledge presented in reports of earlier mergers and joint venture, they decided to use a self-made change program without interference from consultants operating from the outside (Lind and Stevens 2004).

The change program consisted of a process divided into three stages: 1. Cultural Awareness 2. Culture Change 3. Managing the New Culture

Conclusion Sony Ericsson presents a different case, far more different from the pattern that were discussed in several management books. From the information that I have gathered so far, I can say that Sony Ericsson was able to promote changes that shaped the company into what it is today. From a small company, Sony Ericsson has grown into a big company with market presence in different parts of the world. The clashing cultures of its parent companies was a major issue. The management realized that in order for the company to succeed it is important for them to create a distinct culture, that integrates not only the culture of its parent companies but also the cultures of the countries where Sony Ericsson operates. The company managed to acquire and pass on to the employees a global mindset.

Sales Of Sony Ericsson Year Unit sales, millions

200 42[31] 4 200 50[32] 5

Year

Unit sales, millions

200 74.8[33] 6 200 103.4[34] 7 200 96.6[35] 8 200 57.1[36] 9 201 43.1 0

Sony Ericssons Leadership

In the start, Sony Ericsson was led by Sony's Katsumi Ihara as president and Jan Wareby, a former Ericsson executive .The company has been first among many and has set a leadership in the field of communication combined with entertainment. They have been able to take remarkable steps in the 3-D gaming technology and are coming forth with 3D gaming enabled handsets Ericsson and Sony Corporation in 2001 jointly announced that they have signed a Memorandum of Understanding (MoU) with the intention to create a new company that will incorporate their respective mobile phone businesses worldwide. The new company, to be named Sony Ericsson Mobile Communications, will be equally owned by Ericsson and Sony and will draw upon Ericsson's leading expertise in telecommunications and Sony' leading expertise in consumer electronics products. Expected to begin operations on October 1st this year, subject to completion of a definitive agreement and applicable regulatory requirements, the joint venture will be

responsible for product research, design and development, as well as marketing sales, distribution and customer services. Ericsson and Sony, parents of the joint venture, will provide support to the new company, and foster closer cooperation with each other. "By combining the complementary strengths of Ericsson and Sony, the new company is uniquely positioned to become a world leader in telecommunications, as the industry moves rapidly toward Mobile Internet," said Kurt Hellstrm, Ericsson President and CEO. "We are a perfect match. Sony brings vast experience in consumer electronics and entertainment - music, pictures and games - and Ericsson contributes with our mobile technology lead and the world's largest customer base among mobile operators. This is the ideal partnership for the growing market of 3G and Mobile Internet." Sony Corporation President and Chief Operating Officer Kunitake Ando said "The mobile phone industry is fast moving toward multi-media broadband and poised to grow significantly in the years to come. Millions of customers will require mobile handsets that can handle rich content such as movies, pictures and games smoothly and effortlessly, regardless of their location. Our collaboration with Ericsson, the undisputed leader in the global telecommunications industry, holds significance for us in creating an ubiquitous value network that is always connected, on demand and interactive." Global corporate management of the joint venture will be based in London and headed by Katsumi Ihara, Corporate Executive Vice President of Sony Corporation, who will be named President of the joint venture. Kurt Hellstrm, President and CEO of Ericsson, will be appointed Chairman of the Board. Jan Wareby, President of Ericsson's Consumer Products Division, will assume the role of Executive Vice President of the joint venture. While respecting existing product lines under the Ericsson and Sony brands, the new company will create a new and powerful brand for its range of future products. Ericsson's existing manufacturing partners and Sony's production facilities will continue to manufacture current and future products worldwide. Ericssons Mobile Technology Platform unit will remain as a separate organization and will supply state of the art technology to the new company.

What Approach was followed by Sony Ericsson ?

By my opinion, Sony ericsson is following both approaches,as in 2007,the company was receiving the highest revenue and returns with the growth rate at its best which was planned to achieve with respect to Prescrivtive Approach,and at 2007,with the launch of Jobs iphone ,the sales and returns was purely decreased and then the company chased the emergent approach that they will make changes in the mobiles phone because the demand from the consumers,the new look,touch screen and wifi features,that was on the basis of emergent approach as it came with the time

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