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Sony Ericsson is a jointly owned venture of Sales and marketing activities of Sony Ericsson
Japanese consumer electronics giant, Sony are concentrated all across the globe and divided
Corporation and Swedish Telecom player in these following market areas:
Telefonaktiebolaget LM Ericsson. Both of them
hold equal stake in Sony Ericsson (50:50). After ïc [estern areas
its incorporation in October, 2001 with its global ïc Central & Eastern Europe, Middle East and
head quarter in Hammersmith (London), the North Africa
corporation¶s presence can be felt almost all ïc Asia Pacific
around the world and in most of the major ïc China
markets ´ ´ ïc Japan
ïc Americas
Sony Ericsson has been working at high costs
towards its vision, which in their official Their Research and development sites are
documents is stated as ³to be the located in:
Communication Entertainment brand, enabling
people to create and participate in new ïc Lund, Sweden
experiences which blur the line between ïc Beijing, china
communication and entertainment´ ´. ïc Tokyo, Japan
Omatseye in an article calls this joint venture- a ïc California, US
marriage rather than just a joint venture and
The production facility at Beijing , Beijing SE
argues, that this as a significant step in the
Potevio Mobile Communications Co., Ltd. is
telecom world ´ 
Sony Ericsson¶s primary and only in-house
Another news article reports how Sony and
manufacturing facility ´.
Ericsson have replaced older successful research
laboratories by researching on new technology c
such as the Bluetooth technology, standard and c
how this is an evolution in R&D ´. Sony¶s
wide portfolio includes entertainment that c References:
encompasses of music, movies, games etc. while
Ericsson is known for being highly competent in c c › seye, S (  Sony Ericsson phone rrie
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maintains a good relationship with a number of
telecom service providers ´´. Drawing on the c c (  !  Ericss  M ile C icati s
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Fig. 1.1 ´  shows the organisational structure at  c

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functional divisions, where different functions of
the organization have been departmentalized. # c ! c c 
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Stakeholders are those who have rights or The Mendelow¶s Power/Interest matrix indicates
interests in a system ´ c the type of relationship which organizations
Sony Ericsson is known for its sound corporate typically might establish with stakeholder
social responsibility (CSR) practices. In one of groups in the different quadrants ´ Based on
its CSR documents, Sony Corporation identifies his matrix we can map stakeholders on different
the potential stakeholders of Sony Ericsson. quadrants.
[ith more Research one can identify them as
follows ´ :

1.c Shareholders and parent companies


2.c Board of Directors
3.c Customers
4.c Suppliers
5.c Employees
6.c Other organizations
7.c Business Partners
8.c Local Communities References:
9.c Government
c Myers, J (5 Seholders power nlysis
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Stakeholder analysis is used to analyse the level
of interest each group of stakeholder would c Sony Corporion (5 C rp rate ! cial
generally show and the power they yield that Resp siilit Rep rt Jpn: Glol reporin
affect the organisation in one or more ways. One
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Fig 2.1 ´
 maps the various stakeholders of   c  c

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Sony Ericsson according to Mendelow¶s
Power/Interest Matrix. Local Communities
c
Business environment is a set of political,
would be considered as an entity with low power
economic, social, technological, environmental,
and low interest towards the Organisation
legal, competitive forces that are largely outside
because of the minimal effort they make.
the control and influence of a business and that
The government would be an entity which yields
can potentially have both a positive and a
high power because of its ability to introduce or
negative impact on the business ´ 
change laws for instance but they have a
relatively low interest towards how the company Sony Ericsson would be affected by its
fares & they have to be kept satisfied at always. competitors because their actions affect the
SonyEricsson¶s customers, product suppliers, ability of the business to make profits, because
employees, competitors, partners are entities that competitors will continually seek to gain an
would look forward to be informed about the advantage over each other, by differentiating
business and have relatively low power but have their product and service, and by seeking to
a high interest in the organisation and its provide better value for money ´ .
policies. The Board of Directors, Shareholders
& the Parent companies (Sony & Ericsson) The External Environment of Sony Ericsson can
would be considered as the key players of the be much better analysed using 2 popular and
organisation as they yield high power to change highly useful analyzing tools; PESTEL
strategies and their level of interest in Sony ANALYSIS and PORTERS FIVE FORCES
Ericsson is high. MODEL.

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There are many factors in the external


environment that would affect the decisions
made by the management at Sony Ericsson.
Changes in law, policies, government
regulations, standards, tax etc. are examples of
factors that would affect the organisation
externally. To analyse these factors they can be
categorised using the PESTEL model.

References:


c Mendelow, A (

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Political Factors: has had a negative effect on Sony Ericsson and


as a direct result of this it was necessary to
These factors include all the policies or other remould and reduce the size of the organisation
direct, indirect interventions by the government, around the world. [ithout these reductions it
government priorities etc. Government decisions would have been impossible for Sony Ericsson
can affect Sony Ericsson up to a high extent. to remain competitive and to continue to operate
Sony Ericsson is present in a number of different effectively ´ .
countries worldwide and the political scenario in
each one of them would affect them in one way !ocial Factors:
or the other. Political stability of existing or
potential markets affects the decisions made by Changes in taste, trends of people affect the
the management at Sony Ericsson. organisation too. It also has an impact on the
demand of the firm¶s products.
uconomics Factors: According to Gillespie ³this also has an impact
on the availability and willingness of individuals
These factors include more of macro-economic to work. In the UK, for example, the population
changes such changes in tax rates, rate of has been ageing. This has increased the costs for
borrowings, exchange rates. It has to do with the firms who are committed to pension payments
economic scenario of the country(ies) it carries for their employees because their staff are living
out operations in. Economic status prevailing in longer. It also means some firms such as Asda
different countries and especially the United have started to recruit older employees to tap
Kingdom would affect Sony Ericsson into this growing labour pool. The ageing
significantly. The Rate of borrowing in the UK population also has impact on demand: for
where the co. is originally based in is very low is example, demand for sheltered accommodation
significantly high in 2010 which would affect and medicines have increased whereas demand
their plans for expansion. Inflation has been for toys is falling. ´ ´. Other components of
provoking higher wage demands from these factors include using Ethical business
employees. The Economic conditions in the UK practices and employee welfare. Sony Ericsson
and other western countries are not very good has been having drives to work towards the
with huge economic trade deficits. Due to the benefits of the society and employee welfare.
credit crunchy and the ongoing recession most Sony Ericsson protects the human rights of all
countries have been facing, there have been its employees and complies with all the local
significant changes in exchange rates in 2010 and international regulation policies with respect
which affects imports and exports made by Sony to Human resources. Due to the changing social
Ericsson worldwide. Sony Ericsson has had to scenarios and realizing that businesses play an
formulate new strategies in 2010 with respect to important part in the global community, Sony
segmentation and to work out the new prices of Ericsson has also been involved in other causes
products being launched in different markets and fund raising programs ´ 
because of the changes in these exchange rates.
Low growth in the National income of most of References:
the countries has been resulted in low demand of
c Sony Ericsson (
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the firm¶s products. Because of these increasing
Kindo : Sony Ericsson
costs and problems Sony Ericsson has had to hp://wwwsonyericssonco /cws/downlod/ //5
reduce the size of its organisation in terms of its / 

/SE_Susiniliy_Repor_
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In 2010, the uncertain global economic climate
c Gilespie, (  Foundions of Econo ics, ›xford
Universiy Press Wesie:
hp://wwwoupco /u/orc/in/



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O chnological Factors: L gal Factors:

[ith new technology Sony can create or It refers to the legal and regulatory environment
innovate products for e.g. The [alkman series, Sony Ericsson operates in locally or
Cybershot high definition cameras embedded in internationally. In 2009 and 2010 there have
cellphones etc., this was all possible due to the been there have been many significant legal
technological advances. Technology helps Sony changes that have affected Sony Ericsson. The
Ericsson reduce costs, improve quality, and lead introduction of age discrimination and disability
to innovation and new developments. These discrimination legislation, an increase in the
products benefit the company as well as its minimum wage and greater requirements for
customers. Sony Ericsson works around firms to recycle are examples of relatively recent
technology. In order to stay ahead of its laws that affect an organisation's actions ´ .
competitors they have to stay updated at all Legal changes can affect a firm's costs (e.g. if
times and regularly research and develop. new systems and procedures have to be
developed) and demand (e.g. if the law affects
unvironm ntal Factors: the likelihood of customers buying the good or
using the service). Other factors that have
Environmental factors involve contributing
affected Sony Ericsson recently are changes in
towards avoiding weather and climate change
International policies and environmental acts,
and being sustainable towards the environment.
trade restrictions enforced on many countries for
[ith major climate changes occurring due to
e.g. import of Chinese products in some
global warming and with greater environmental
countries e.g. Syria
awareness this external factor is becoming a
significant issue for Sony Ericsson and other
firms to consider. The general move towards
more environmentally friendly products and
processes is affecting demand patterns and
creating business opportunities ´  Due to the
recent environmental issues and new guidelines
towards sustainability, Sony Ericsson has had to
take initiatives towards being sustainable. For
E.g. it has reduced its carbon footprints
References:
significantly by 2009 and aim to reduce it by 20
percent by 2015, they strive to reduce emissions c Gilespie, (  Foundions of Econo ics, ›xford
in their product lifecycle, use more of renewable Universiy Press Wesie:
hp://wwwoupco /u/orc/in/



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resources of energy, committing to recycling,
den/ddiionl/pe_ h
reducing mobile charging and power
consumptions. All this was done because of the 5c Sony Ericsson (
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changing environmental guidelines and more Kindo : Sony Ericsson
hp://wwwsonyericssonco /cws/downlod/ //5
awareness because of environmental problems / 

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    that affect SE. Nokia is the strongest
competitor and the company that is
The Five Forces model of Porter is an outside-in dominant. Other competitors that SE faces
business unit strategy tool that is used to make threat from are Blackberry, LG, and
an analysis of the attractiveness (value...) of an Samsung.
industry structure. The Competitive Forces
analysis is made by the identification of 5
fundamental competitive forces ´  c
1.c Entry of Competitors: It is not very difficult
for new entrants to enter the c
telecommunication and multimedia market.
c
Although a few telecom regulations, high
investment might be a barrier for new c
players, but it is not very difficult for new
entrants to setup. For e.g. the launch of 3 c
new mobile phone companies in India
offering cheap mobile phones has had a c
negative impact on Sony Ericsson and
c
similarly in other countries.
c
2.c Threat of substitutes: The degree of threat is
relatively high and depends on the product c
and its features. Sony Ericsson has had to
introduce cheap multimedia phones to avoid c
customers from shifting to other multiple
c
cheap substitutes like Mp3 players, cheap
tablet android computers. c

3.c Power of buyers: The power of buyers in c


some markets is very high and some its very
low. Sony is affected by the power of buyers c
around the globe. For e.g. the power of
c
buyers in Asia is relatively higher than the
west. c

4.c Bargaining power of suppliers: Suppliers c


aren¶t very strong in case of Sony Ericsson.
There are a large no. of suppliers that can c
References:
meet the requirements of the firm. Suppliers
c
do not have a very high power.
16.c Porer, ME (

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5.c Rivalry among existing players: There is


very strong competition in this industry. c c
There are a number of big and small players
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The market share of Sony Ericsson by the end of
2010 was better than before. It was around 3.5% c
and the value market share has been somewhere
around 6%. Its sales accounted for around c
11,008 units in 2010 out of 325,556 that were
sold totally. Nokia being the biggest player c
managed to sell 111,473 units ´ .
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cc Sony Ericsson to ensure its devices include the
most desirable applications and features for
ccc consumers, as the mobile content services
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%&&  c 'c The company's expanding content services
business will allow it to record steady revenue
c from these services in coming years.
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Rc R+&   Rc " #  launching new products in recent times. In June
  2009, the company introduced its first mobiles
Rc /+  as part of GreenHeart portfolio strategy, C901

#&   GreenHeart and Naite. It also launched the
world¶s first motion activated headphones,
c MH907, which enables users to listen to the
According to Data Monitor Reports and research music by plugging in two earphones and pause
the opportunities and threats in 2010 for SE can by removing one earphone, in September 2009.
be stated as follows. In December 2009, the company added the Sony
Ericsson Elm phone, the Sony Ericsson Hazel
›pporuniies:
phone and the Bluetooth Noise Shield Handsfree
u   

     The VH700 to its GreenHeart portfolio. In addition,
company has been expanding its content the company introduced VH110 and VH410,
services portfolio in recent times. PlayNow is new Bluetooth headsets in June 2010. The
Sony Ericsson's content delivery platform. In company's increasing new product portfolio will
recent times, it has expanded PlayNow to offer help it to gain market share and revenues in
movies and an application store, in addition to coming years.
music and game downloads. Additionally, Sony
 
 
  The global smartphone
Ericsson announced, in 2009, its
market is expected to grow in the coming years.
'Communication Entertainment' strategy, which
According to the industry sources, the
aims to broaden and unite entertainment
smartphones are forecast to grow at an annual
experiences into a single offering. In November
rate of 32% between 2010 and 2014. More than
2009, the company launched the Xperia X10, the
50% of this growth in handsets is forecast to
first phone in a family of phones with a new user
come from the developing markets of Asia-
experience (UX) platform. The UX platform,
Pacific, including China and India, and Central
built on the Open OS, creates user experience by
and Latin American states. Also, the smart
combining entertainment features with signature
phones are expected to represent 26% of all
applications, integration of social media services
handsets in 2014, compared to 14% in 2009. The
and graphical user interface. In addition, the
company also offers smartphones to its
company launched Sony Ericsson Vivaz, the
customers as part of its portfolio. In addition, in
second installment in a new family of
June 2010, Sony Ericsson launched Xperia X10,
communication entertainment phones and also
X10 mini and X10 mini pro smartphones.
with HD video capabilities in January 2010. The
Growth of smart phones presents an opportunity
company also has content licensing deal with
for the company to enhance its revenues in the
Sony Music Entertainment. This strategy allows
coming years. ´

References:


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hres: regulations and other similar programs that


might be enacted in the future. Non compliance
i
  

 The company faces severe with these regulations may result in penalties or
competition in the mobile phones market. In the suspension of the company¶s operations thereby
low end mobile devices segment, the company adversely affecting its brand image.
has been facing competition from South Korean
mobile device companies such as LG and
Samsung, while it continues to compete with
Nokia and Motorola, among others. In the high
end mobile devices/smartphones segment, the
company is facing intense competition from
Apple, RIM, HTC, Nokia, HP and Samsung.
Additionally, it is also facing competition from
mobile network operators offering mobile
phones under their own brand. The company's
market share and revenues have been
significantly affected by intense competition in
recent times. Intense competition will continue
to affect the company's operating performance
and market share in coming years.

u  
  
  Sony Ericsson is
subject to a broad range of environmental,
including laws and regulations relating to air
pollution, water pollution, the management,
elimination or reduction of the use of hazardous
substances, decreases in the level of standby
power of certain products, waste management,
and recycling of products, batteries and
packaging materials. For instance, the company
is required to comply with a number of
environmental regulations enacted by the
European Union such as the Restriction of
Hazardous Substances (RoHS) Directive,
restricts some heavy metals and two types of
brominated flame retardants (BFR). Some public
interest organizations are advocating for
strengthening of the RoHS directive by
imposing restrictions on all BFR as well as
polyvinyl chloride (PVC) in electronics put on
the market. Similar regulations are being
formulated in other parts of the world, including
China and South American countries. The
company may incur substantial costs in
complying with the above-mentioned
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