Sony Ericsson Mobile Communications Ab
Project Report on
Sony Ericsson Mobile Communications AB -
Consumer Electronics - Sweden
Strategic Direction
·
Sony Ericsson is the market
leader in Sweden in the mobile phone sector since it dominates the market with
a stable share of around 45%. The continuing popularity of its new phone models
will ensure that the company retains its leading position in the Swedish market.
·
The main challenge facing the
company is to keep growing and maintaining its appeal to new consumers, who are
more familiar with the other multi-nationals that are now seeking to get larger
shares of the Swedish market. Although their shares remain small, companies
such as Samsung, Motorola and LG are a constant threat, working hard to gain
share from Sony Ericsson. Another competitor to look out for in the future is
Apple that entered the Swedish mobile phone market in June 2008 with the
iPhone.
·
Sony Ericsson maintained its
market position in 2007 and developed some of the most popular mobile phones in
Sweden - everything points towards its continued success.
Key Facts
|
Full name
of company:
|
Sony
Ericsson Mobile Communications AB
|
|
Address:
|
Nya
Vattentornet, SE-221 88 Lund, Sweden
|
|
Tel:
|
(+46) 4619
4000
|
|
Fax:
|
(+46) 4619
4100
|
|
www:
|
www.sonyericsson.com
|
|
Activities:
|
Mobile
phones
|
Source: Euromonitor International from
company reports
|
|
2005
|
2006
|
2007
|
|
Net sales
(SEK million)
|
51,489
|
79,248
|
99,129
|
|
Net profit
(SEK million)
|
3,031
|
10,196
|
13,360
|
|
Number of
employees
|
2,016
|
2,278
|
2,244
|
Source: Company research
|
|
2005
|
2006
|
2007
|
|
Net sales
(EUR million)
|
7,268
|
10,959
|
12,916
|
|
Net profit
(EUR million)
|
350
|
997
|
1,114
|
|
Number of
employees
|
6,000
|
7,500
|
10,400
|
Source: Company research
Company Background
·
Sony Ericsson was founded in
2001 as a joint venture owned in equal parts by the Sony Corporation and
Ericsson AB. The mother company, Sony Ericsson Mobile Communications AB, is
registered in Sweden where also its headquarters are. However, the global management
of the Sony Ericsson Group is located in London.
·
Sony Ericsson is a global
supplier of mobile phones and accessories with a presence in all the major
markets.
·
Sony Ericsson has invested
heavily in its Walkman music mobiles. By becoming known as a producer of mobile
phones, it is getting customers to buy its phones instead of MP3 players. The
fact that Walkman is one of Sony’s most popular and best-known products has
given greater credibility among consumers to Sony Ericsson’s claim that its
mobile phones are good and reliable music players, as well as good telephones.
·
Ericsson, the part owner of
Sony Ericsson, is a Swedish company, therefore its retail and distribution
network is well developed with a presence throughout Sweden wherever mobile
phones are sold. Sony Ericsson has also a close collaboration with phone
companies such as Telia Sonera and Telenor.
·
In September 2008 the Sony
Ericson Group announced that it needs to reduce the number of employees,
including consultants, with 2,000 people globally in order to ensure that it
can remain competitive in the dynamic and fast-paced telecommunications
industry.
Production
·
The mobile phones and related
products produced by Sony Ericsson are manufactured outside Sweden and imported
for sale.
·
Sony Ericsson does not have any
production facilities in Sweden. When the company was founded in 2001 the
company did not have any production facilities and production was outsourced to
other producers. In 2008, about a third of the production was from the company’s
own factories that are mainly located in China. The main reason for the
production outside Sweden is the high wages and related costs within Sweden.
·
In 2007 Sony Ericsson began to
produce mobile phones in India through its partners Flextronics and Foxconn,
and announced the intention to establish a product development unit in Chennai.
·
Sony Ericsson produces
platforms for LG Electronics’ mobile phones.
·
The main office of Sony
Ericsson’s research and development department is located in Sweden.
Competitive Positioning
·
Sony Ericsson is present only
in the mobile phones market and related accessories.
·
Sony Ericsson is positioned at
the higher end of the market and is a technological leader, responsible for
innovative technological solutions.
·
Sony Ericsson has a wide
product portfolio within mobile phones. For examples, in 2008 Sony Ericsson
continued to strengthen its position in middle-range and low priced phones with
fewer functions, a strategy introduced in 2007.
·
The company is the Swedish
market leader with a market share of about 45%. The share was stable in 2007.
·
Sony Ericsson is planning to
maintain its leading position within Sweden while expanding its operations and
making its brand better known internationally, where it aims to be one of the
top three within the market. In 2008, Sony Ericsson strengthened its position
in North and Latin America as well as in Western Europe due to its Walkman and
Cyber-shot phones. Sony Ericsson expects that the majority of the future growth
is in emerging markets where lower priced phones dominate.
·
Sony Ericsson has a strong
position in the fast-growing segments of mobile phones with integrated music
players and cameras.
|
Product
type
|
Value share
(%)
|
Rank
|
|
Mobile
phones
|
45.0
|
1
|
Source: Euromonitor International
Also read Strategic Analysis Report on Zenith Computers Ltd. Contact Mahasagar Publications.
