Increased market shares
Sony Ericsson has been successful in reducing its company losses in the past year. The company cut its total losses by more than half in the second half of 2002. Sony Ericsson should look to continue to cut costs in order to narrow company losses even further. The success of the joint venture will be viewed by its ability to break even and generate profits.
Having a strong brand name means that it will be more likely that Sony Ericsson will sell more handsets, as consumers normally choose to buy branded products with which they are familiar rather than those that are unfamiliar. Sony Ericsson should look to leverage both the Sony and Ericsson brand names, as they are both respected brand names in the fields of electronics and telecommunications. The joining of these two brand names will again help the company to increase awareness of its products resulting in increased sales of handsets. New products:
Sony Ericsson has released a line of new products that it is forecasted will help the company to increase its share of the market, as well as generate extra sales and profits.
The Sony Ericsson joint venture is currently loss making. Sony Ericsson must try to generate profits as soon as possible or the venture may be deemed unsuccessful. Company losses may still be tolerated over the next couple of years, as the Sony Ericsson venture has only been trading for a relatively short period of time. However, sustained losses over a period of time may lead to either Sony or Ericsson deciding to cease their funding of the joint venture.
The launch of the company’s line of new cellular handsets will mean that marketing costs will increase for the months when the products are launched and for the initial period of the products’ life cycle. High marketing costs are a necessity in this situation in order to create awareness and...