Sony Ericsson, Facts and Challenges
1.0 Report Overview
The aim of this report is to deeply understand the importance of applying marketing essential strategies in order for the company to thrive in a dynamic changing environment. Sony Ericsson, the joint venture established in 2001, is an example to be thoroughly examined in this report. Its mobile T68i was revolutionary; it was the first GSM/GPRS color screen handset. Its Bluetooth technology was introduced for the first time in the market. Nevertheless, Sony Ericsson's market share is only 13.65% in 2010 compared to Nokia, 51.40%! Why? (GetJar 2009) The report will focus on revealing the key issues that affect Sony Ericsson's current and future situation in the market. After the great success of Sony Ericsson in selling its Walkman phones that were launched in 2005 (Smith 2006:77), it started to face new challenges in the market. The report will critically evaluate Sony Ericsson's implemented strategies compared to the surrounding environment and highlight the challenges that face the company for this implementation. It is an important report because it will provide a better insight on how marketing strategies are put into practice in a company. It will also help in answering a very important question: what are the challenges the company should handle to maintain its competitive advantage now and in the future.
1.2 Report Structure and Approach
This report will be structured as the following:
Section Two: An introduction to the company's behaviour and the way it responds to changes in the market in order to understand the broader system it works in. Section Three: A deep analysis of the competitive advantage of the company to have a better understanding of its potentials in order to decide what is better for it. Section Four: Identifying the internal and external factors that determines the company's success or failure by evaluating its strengths and weaknesses and opportunities and threats using PESTEL and SWOT theories. Section Five: A conclusion.
2.0 Sony Ericsson Orientation
Sony Ericsson, being in the mobile telephone industry, faces a lot of fierce competition and it has always strived to be a leader in this industry. To achieve this goal, It has adopted a four dimensional organizational orientation strategy which includes product, marketing, production and sales orientation (Schenker 2007).
2.1 Product Orientation
Sony Ericsson has always maintained quality and differentiation in its products while expanding into new markets and making its brand known worldwide. It invests in research and development to develop new products that will satisfy its customers. For instance it was the first in 2005 (Sony Ericsson: 2008) to develop the walkman feature in cell phones. It also developed phones with digital cameras and cyber shot cameras which added value 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 quality (Consumer Reports 2005). A key factor in the product orientation strategy of Sony has been its branding. According to Colton, '' It is wide recognised that brands are one of the most valuable assets that firms own''. This explains why Sony Ericsson always wants to improve on its product design so as to maintain its brand name and image which customers hold about its products. Sony Ericsson's brand strength has helped in innovation and creation of value - creation strategies that its competitors cannot implement or follow as the brand name Sony Ericsson has greater awareness and recognition. Thus a strong brand name can result in a greater profit margin and the more an organisation achieves its objectives. Sony's brand names with their sophisticated features like the recently launched green heart cell phone has had a positive image in the minds of their consumers...