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CELLULAR PHONE INDUSTRY.   Term Paper ID:29073 Click to get this paper

Essay Subject: Discusses strategic alliances.... More...

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Paper Abstract: Discusses strategic alliances. Joint venture between Sony Electronics and Ericson to market cellular phones on a global basis. Difficulties involved in merging two corporate cultures to form a successful third entity. The situation of the joint venture. Its goals. Products. Marketing challenges. Successes. Threats to the Alliance, both internal and external. Paper Introduction: Introduction In October 2001, Sony Electronics and Ericsson entered into a joint venture agreement in order to capitalize on Sony's consumerorientation and Ericsson's wireless market presence. The joint venture was formed to market cellular phones on a global basis, and to provide access to content that will make the phones more attractive to consumers. Similar joint ventures (including one between Sony and Qualcomm) have faced difficulties as the companies are unable to merge the corporate cultures successfully in order to form a successful third entity. External forces can also threaten strategic alliances, and alliances that operate in highly competitive markets, or highly volatile markets, are particularly vulnerable. Cellular communications is both highly competitive and highly volatile, and thus this strategic al Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. (2 2, January 1 ). (2 2, March 7). 6. Although the companyinitially underestimated demand for its product, it is addressing thatproblem and may make inroads into Nokia's market share. Business WeekOnline, n.p. 28. If Nokia remains strong, however, Sony Ericsson will have toovercome strong consumer resistance to changing brands. While Sony Ericsson has set as its goal becoming the premiersupplier of mobile handsets, the market is already saturated, according tosome analysts. At this point, the alliance appears to bemaking the most of these strengths. Sony Ericsson announced six new mobilephones in March 2 2 that offer multimedia messaging, color screens andwireless connectivity using Bluetooth technology. Vijay Anand,a highly visible segment manager at Ericsson, continued in his role asyouth marketing manager in the joint company, but left after only threemonths. Marketing Week (25), p. Sony Ericsson hopes to capture mobile gaming market. Although the company has enjoyed initial success with its newline of phones, it may well be too early to determine if these innovationswill be enough for existing phone users to buy new handsets ("Is Nokia,"2 2). There is someindication that internal problems might be arising from corporate cultureclash (discussed below), but the company has not lost many key executivesduring these critical early months. By offering low-end phones as well as luxury phones, the companyis hoping to attract customers in the beginning of their consuming yearsand create brand loyalty and brand progression so that consumers are ableto "step up" to other Sony Ericsson phones in the future (Mooney, 2 2). Sony Ericsson talksbig about ambitions for its new baby. Thisresearch considers the strategic alliance's current situation, and thethreats that the alliance could face in the future. If Nokia failsto meet the expectations of the market, Sony Ericsson's task will be mucheasier. (2 2, March 25). In addition to the luxury phones that Sony Ericsson has introduced,the company has also announced a line of low-end mobile phones intended toincrease market share throughout the market without sacrificing profitmargins. Mooney, E. Wilkinson, A. Similar jointventures (including one between Sony and Qualcomm) have faced difficultiesas the companies are unable to merge the corporate cultures successfully inorder to form a successful third entity. SonyEricsson's phones support General Packet Radio Service (GPRS) for Internetconnectivity, but while GPRS has been deployed across the United States,few consumers have signed up for its services, and even GPRS subscribers donot use the full range of services available. EuropeMedia, n.p. Introduction In October 2 1, Sony Electronics and Ericsson entered into a jointventure agreement in order to capitalize on Sony's consumer-orientation andEricsson's wireless market presence. External forces can also threatenstrategic alliances, and alliances that operate in highly competitivemarkets, or highly volatile markets, are particularly vulnerable. V. Nokia is, in fact, a significant factor in Sony Ericsson's long-termsuccess, with a market share greater than 35 percent in 2 1. RCRWireless News (21), pp. Sony Ericsson thus faces thechallenge of marketing not only its phones, but also the services thatrequire the phones in order to work (Mooney, 2 2). The market anticipates Nokia's entranceinto the market with each new technological upgrade, and the company can beexpected to be a strong competitor against Sony Ericsson. In order for the market to sustain higher levels of growththan it has seen recently (there was an increase of only 6.4 percent in2 1), it will need to create demand for the new phones. The Financial Times, p. Current Situation Sony and Ericsson each own fifty percent of the joint venture, whichis built on Ericsson's strength in wireless technology and Sony's access tomusic, games and entertainment. The joint venture was formed tomarket cellular phones on a global basis, and to provide access to contentthat will make the phones more attractive to consumers. Sony Ericsson displays wares. It hasbrought new products to market that use innovative technology and whichhave captured the attention of the consumer. This departure could be viewed as a shiftaway from the youth market, although the joint venture has continued tocourt this highly influential market segment. (2 2, March 11). Although it is onlyspeculation that Anand's departure was due to differences betweenmanagement styles (Sony Ericsson's president came from Sony), bringing twosuch different cultures together can be expected to bring conflict, as well(Wilkinson, 2 2). Is Nokia missing an important call? The alliance was able tobring the phones to market earlier than its largest rival, Nokia, butunderestimated initial orders for the world's first color screen phone andfaced shortages to retailers as a result (Brown-Humes, & Budden, 2 2). SonyEricsson had a market share of just eight percent during the same year(Brown-Humes, & Budden, 2 2). 22-23. References Brown-Humes, C., & Budden, R. According to the statement released to the press, Anand hadcompleted his goal of integrating the youth program into the jointventure's product marketing and sales, and was no longer necessary in thecompany's central organization. (2 2, March15). At a press conference, Sony Ericsson's president noted that thecompany's goal is to be the premier supplier of multimedia communicationsproducts within five years, an ambitious goal that requires not onlymarketing acumen, but also a co-operative external environment. Threats to the Alliance There are both internal and external threats to this alliance. External threats come from the market as well as from the company'scompetition. In addition, the company appears to beplaying to the strengths of each of its parents. Sony Ericsson isattempting to accomplish that through gaming, Internet access and colorscreens. Cellularcommunications is both highly competitive and highly volatile, and thusthis strategic alliance faces risks peculiar to this industry. Critique of the Strategic Alliance At this point, the joint venture appears to be successful. In addition, Sony Ericsson, a joint venture itself, has entered intoseveral other strategic alliances in order to boost its market presence.It has joined with iFone and Synergenix to offer downloadable color gamesfrom a mobile Internet portal to the company's phones. The company hasalso leveraged its relationship with Sony to provide games based on themovies Men in Black and Charlie's Angels, both of which are owned by SonyPictures Digital Entertainment ("Sony Ericsson," 2 2). On theinternal side, there is the clash of corporate cultures between theJapanese conglomerate and the Scandinavian wireless company. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.