TO

The Board of Directors

From

Commercial Director

Subject: Proposal of a management strategy for Sony Ericson

MANAGMENT STRATEGIES

To develop core strategies for a company it is very important to understand its strengths and
weakness and also the opportunities and threats that are in front of it. For this purpose a
SWOT analysis is done in order to identify the organisations resources and competences.

Strengths/Weakness

The biggest strength for Sony Ericsson is the collaboration of the two giants of their field.
This is one of the most unique collaboration in which telecom giant has come up to team up
with entertainment giant. Sony Ericsson has always been first among many. They have
always brought new technology to market. The constant product innovation at Sony Ericsson
is a great strength to the company.

It is very hard to pinpoint on the weakness of the company. As it has been in the charter of
Sony Ericsson to overcome the weakness and convert it into strength. Still one of the
weaknesses for Sony Ericsson is the market coverage. Even though the company have
successfully tapped the American and European market but still they are far behind in
covering grounds of the Asian and African markets.

Opportunities/Threats

The biggest opportunity for Sony Ericsson is the partnership with BMG. Now the company
will be able to bring the best and the latest in entertainment content to the customer easily.
Sony Ericsson is also forging ahead in 3-D gaming way ahead of all its competitors. As the 3-
D gaming industry is expanding rapidly it is a real big opportunity for Sony Ericsson to
develop handsets with 3-D enabled gaming in it.

(Ref: http://www.sonyericsson.com/cws/corporate/company/aboutus/profile)

There have always been threats in any form of business and so is it with Sony Ericsson. As
the company operates world-wide it has competition from all over the world. One of the
threats that it faces is competition from other company in the industry. Yet another threat is
the wide spread use of landline connections.

(Ref: http://www.scribd.com/doc/6365157/Marketing-Plan-and-Strategy-of-Sony-Ericsson)
Scope of Possible Strategies

After a careful consideration of all the resources and competences for Sony Ericsson we can
say that Sony Ericsson should consider about market penetration strategies. As it has the
resources for product innovation and also there is huge untapped market by Sony Ericsson.
As the competition is so hard and the market is always coming with new product, Sony
Ericsson should also bring new exciting products to the market. The strategies to be
developed should be dynamic and flexible enough to accommodate the changes that take
place in the market. The strategies that are developed cannot be deployed to all the regions
equally because of the regional barriers constraints and should be modified to meet the
market requirements.

Stakeholders for Sony Ericsson

G. Johnson & K. Scholes, Exploring Corporate Strategy, Financial Times/Prentice Hall, 2002.

The stakeholder for the company can be identified with the help of the power/interest matrix
model given by ‘G. Johnson & K. Scholes’ 2002. Here we have used the help of the model to
identify the potential stakeholders of the company.

Customers: the mobile communication market is perfectly competitive market where the
consumers have the power. The consumers are the end user of the product. Thereby having
the power and interest and placing themselves on top as the stakeholders for Sony Ericsson.

Government: the political environment plays an important in formulating strategies.

Government has the power and also interest in the company. They have the power to impose
tax and various powers which can affect the external environment of the company. They are
interested in a way that the success of the company will indeed help the country to increase
their gross domestic product. If market penetration has to be achieved then the government
should also be favourable to the company.

Owners/Shareholder’s: they are the most powerful people of the company and the most
interested people as well. The strategies are approved by them. The current strategies and the
suggested strategies would be only effective only after their approval.

The stakeholder’s that have been mapped out over here is only identified on a broad basis.
The company operates on an international level which means it has many different types of
environment in each places. Therefore the stakeholder’s might also change according to the
business environment of a particular place. The stakeholders have certain implications on the
designed strategies.

(Ref: http://www.lmcuk.com/management-tool/stakeholder-mapping)

Implications on Company’s Management

The strategies that are being formed have to meet the company’s expectations. The strategies
do not yield the result instantly. The strategies have to be tried and tested. This means now
when the company is forging ahead for implementing a new strategy to gain more market
share it has to wait until it produces results.

The factor that plays an important role here is that whether the strategy does well or fails the
company has to be prepared with a back-up plan and should not break down. The market is
vast and expanding which means there is a huge scope for the company to expand as well.
With the new strategies induced into the management of the company the probabilities of
standing head on with competition increases.

The implication of the analysis given above on company’s management is that it has to bring
in innovative products and gain new markets and the confidence of the consumers.

Governance Chain of Sony Ericsson

The Governance chain at Sony Ericsson is well defined and the power responsibility and
relationship between each unit is well defined. The management is responsible to the seniors
or the CEO. The CEO reports to Board of Directors who in-turn briefs the Shareholders about
the company during the Annual General Meeting. The key players in the governance chain
for Sony Ericsson starts from the Management level which sets out targets for the executive
level and reports to the CEO. The CEO set out the targets for the management and provides a
complete report the board of directors. The board of directors then has to audit the reports and
analyse the performance and decides on the buying and selling of shares.

Principal- Agent Theory

The management and the executive down the line through the employees have a principal –
agent relationship wherein the managers give fair treatment to the employees. The managers
make sure that the employee’s acts as agents of providing service to clients.

At Sony Ericsson

The management tries to keep the beneficiaries well informed of the way their company is
moving ahead in market. The managers do understand the importance about keeping their
client informed about the business activities that could affect their share in the company.

The beneficiaries are partly the owners of the company as well. The following chart shows
the break-up of the beneficiaries of the company. Therefore it is well understood by the
company that any decision that the company desires to undertake will affect the company’s
beneficiaries. So it becomes very important for the managers to keep their beneficiaries well
informed about all the activities of the company that could affect their interests
Sony Ericsson ethics and Social Responsibility
Sony Ericsson believes in corporate social responsibility. The company makes sure that it
follows all laws and regulations in every country they operate in. It has procedures and
processes that make sure that corporate responsibility is implemented not only in internal
environment but within its suppliers and trading partners. Sony Ericsson also takes care about
their workforce and looks after their welfare at the same time. With regard to their social
responsibility they have started the GreenHeart in which they make sure that none of their
product is harmful for the nature.

"The social responsibility of business is to maximise its profits." This well-known, widely
quoted, assertion comes from Milton Friedman of the University of Chicago.

Friedman believed that the main aim of the business is to maximise its profit. But it also
didn’t mean that it should not be helping the society to move ahead for its betterment. This
means that a business should help the society when it can do so by its actions that could affect
the society. It does not mean to share out its profit with the society or to give out its own
money. The company fulfils its social responsibility by helping the government in regulating
prices of the product during the times of inflation.

Thus the catch phrase of corporate social responsibility is not about sharing the wealth of the
company with the individuals, but it is about the responsibility the company strives to fulfil as
an entity an artificial entity. There is no individual who could be held responsible, if a
company does not fulfil its social responsibilities. But then the company that does fulfil the
social responsibilities are highly recognized by the people.
Part 2

The Nature of Purpose

Innovation

Sony Ericsson has been one the leaders in innovation and one of the main purposes of the
company has been to bring the latest technology to consumers. Sony Ericsson launched the
first mobile phone with a camera in it. This is way back before any other company launched
the camera phones. It was the first company to come up with GSM technology. The launch of
T610 was revolutionary in the history of mobile communications.

Value Added

Sony Ericsson is known for its rich-features enabled high specifications mobile. At the same
time they have been able to deliver the product to consumer at prices which can be afforded.
This has made the brand a value added company.

Survival

Sony Ericsson has been able to survive even in the toughest of times. During the time of
recession it was able to take up the heat and didn’t compromise with the quality of the
product.

Leadership Growth

The company has been first among many and has set a leadership in the field of
communication combined with entertainment. They have been able to take remarkable steps
in the 3-D gaming technology and are coming forth with 3-D gaming enabled handsets

Stakeholders

Sony Ericsson has been able to provide its stakeholder’s the much anticipated benefits from
time to time. The annual growth of dividend for the shareholder’s in the year 2008 has been
at .5% which is a fair amount of profit.

Value and Lifestyle

Sony Ericsson has been able to create awareness about the mobile communication technology
integrated with entertainment to the consumers. They have tried to bring the latest lifestyle to
the consumers through their constant innovation which has proved to be their great strength
as well as their asset at the same time.
The Company’s Mission Statement

Our vision is to become THE communication entertainment brand.

(Ref: http://www.sonyericsson.com/cws/companyandpress/aboutus/mission?cc=gb&lc=en)

The Nature of the Business

Sony Ericsson is big name in the communication sector. This is a unique collaboration of
communication and entertainment. The business deals mainly in producing mobile
communication devices and also entertainment devices. Considering the nature of the
business its mission is very clear wherein it states that it has to become the sole brand in
communication entertainment.

The Customer Perspective

The consumers of Sony Ericsson have always in mind that they get the best out of the product
from Sony Ericsson. The customer’s have responded well o the products that the company
had brought forth in all these years. The customer expectations of the future of the mobile
communication have to be met thoroughly. The latest in technology feature have to be added
in the upcoming products to be delivered to the consumers.

Values and Beliefs of the Organisations

The mission reflects the basic values and beliefs of the organisation. The collaboration of two
giants in the field of communication and entertainment are in an attempt to bring the best in
communication and entertainment to the consumers. They have valued the customers and
have tried to provide value added product and service to them all through-out. The
organisations belief that the latest in technology should be brought to consumers can be
demonstrated by the fact that they were the first to bring almost all the latest technology to
the consumers.

Elements of a sustainable competitive advantage

The basic element of the sustainable competitive advantage for Sony Ericsson is the fact that
they are able to bring in entertainment to the industry of communication. The ever changing
world and the consumers demand keep on changing every day which implies that there
should an element of an advantage to the company. The fact that Sony Ericsson is able to
bring the latest in technology and entertainment integrated communication devices have
always helped them to stay ahead of their competitors and they have always been able to
display it in their mission.

Their Approach

The company has a basic approach of penetrating in the market through their pricing strategy
for different segments. The main reason for their choice of this approach is mainly because of
the consumers. The highest consumption of mobile devices is with the age group of 15-25.
Therefore the company has to select their strategy according to the wants of that segment.

Company’s Mission Statement: Prescriptive or Emergent

A prescriptive strategy is the one which the company plans and wants the company to go in a
particular way. This is to say that the mission statement hence proposed would be
deliberately formed with clear mission and pre-planned and proposed strategies.

An emergent strategy is the one which comes into being with the time. These mission
statements arise from the working of the company. These are dynamic and it happens because
the changing environment in the business.

Now the company can chose among the two approaches to develop its mission statement. The
first one that is prescriptive will be helpful for a static environment where the variable are
almost near to constant and the second one that is Emergent approach is suitable for a
dynamic environment where the business keeps on changing according to the economic
environment.

The telecommunication sector is a dynamic sector with changes occurring every now and
then they have to be very clear to as to be dynamic in nature. There is a deep and hard
competition in the industry therefore the only chance of standing up to the competition is to
have a competitive advantage over others. At Sony Ericsson they have always tried to be
more innovative than any other counter parts in the industry.

Finally the realised strategy is always the mixture of both approaches therefore it is always
best to follow a mixture of both strategies.