a business analysis of sony ericsson
TRANSCRIPT
A Business analysis of Sony EricssonFor assignment help please contact at [email protected] and
Sony Ericsson is a joint venture owned equally by the telecommunications
leader Ericsson and Sony corporation- the consumer electronics
powerhouse. It was established in the year 2001 with a capital of
100,000,000 Euro and released its first product in the year March 2002.The
management team of Sony Ericsson is based in Hammersmith in London. It
is the fourth largest manufacturer of phones in the world as of 2009. It has
around 8450 employees with over 2500 contractors worldwide. It has €
6.788 billion revenue and with the profit of € 836 million in last year.
Globally, its market share dropped from 9.4% to 7.9% in Q1 2008.
(Wikipedia.com,2010)
Sony Ericsson is a global provider of multimedia devices such as phones, PC
cards and accessories. The products with its powerful technology and
innovative applications result in mobile imaging, entertainment,
communications and music. In areas of music, design and applications the
products from Sony Ericsson have a universal appeal. It uses
communication technologies such as 2G and 3G platforms in its products,
increasing the offerings to the market.
In this assignment our focus will be on the following arguments:
Sony Ericsson's phone, model number W910i, which is in a declining stage
Reasons for declining of W910i
Situational analysis of Sony Ericsson and W910i mobile phone
A marketing plan for the rejuvenation of sony ericsson W910i
The Argument Structure
Sony Ericsson W910i was one of its kinds. It is a slider phone and was
branded as the Walkman phone. It had features such as shake control which
enable music track change by just shaking the phone, it also had video
games based on Java ME and JP-8. It is available in six different colors and
included a 1GB or 2GB memory card. It can also play FM radio using the
RDS and TrackID service. On the 14 Feb 2008, this phone was awarded the
Best Handset 2008 award by the GSM.
Despite all these features the phone had stability issue which led to its
decline. The phone used to crash and switch off intermittently and as of
November 2009, to fully resolve these issues the company is yet to release a
version of software.
The other instability issue which it has includes screen complaints and
system freezing, button input failures and restarting. Due to these issues
the phone has received a lot of criticism in many forums and reviews and
eventually leading to its decline in the market.
Part A
Situational Analysis of Sony Ericsson and its Mobile Phone W910i
Strengths
Sony Ericsson has diversity in its products. The other major strength is
Sony as a brand name. Sony Ericsson W910i was branded as Walkman
phone. It was the first phone which replace the File manager which is seen
in older models to the present Sony Ericsson Media Manager. It had a large
number of features such as Java based video games and applications, shake
control feature, was available in six different colors. On account of all these
features it was awarded the Best Handset Award in 2008
Weakness
Lack in customer preferences understanding, user centered designs and
brand awareness globally. It had less technology advancement. Sony
Ericsson W910i had many stability issues such as crash and intermittent
switching off. Other issues included system freezing and button input
failures.
Opportunities
The rising young market and developing mobile phone market. High
disposable income and customer demand for innovative product. Network
capabilities and low tariffs are some of he opportunities for Sony Ericsson.
There is an opportunity for Sony Ericsson to bring back W910i into the
market by resolving the compatibility issues it has with Windows Media
Player for the Walkman function and resolving the stability issues.
Threats
Intense competition, introduction of phones for rural areas and customer
bargaining are some of the threats to Sony Ericsson. Sony Ericsson W910i
is highly prices when compared to other sony ericsson phones and phones
by other companies. It has a threat of choices of price, features and good
after sales services.
Mc KINSEY'S 7S MODEL:
Shared Values:
Sony Ericsson has over 9000 employees from over 40 countries across the
globe and is inspired by the cultures the employees belong. The employees
contribute to the unique design, development, marketing, distribution and
sales for a variety of products, applications and accessories. The employees
in Sony Ericsson have an opportunity to grow and it is a challenge to work
for the company.(sonyericsson.com, 2010)
Structure
S. No
NAMES
DEPARTMENTS/DESIGNATION
1
Sir Howard Stringer
President and CEO
2.
Rikko Sakaguchi
Executive Vice President
3.
Kristian Tear
Executive Vice President
4
Bill Glaser
Chief Financial Officer
Strategy
Focus on the expansion in the market and resolve the instability issues in
W910i. Price the products carefully and appropriately. Realize the vision of
Sony Ericsson to become a brand in the communication environment by
inspiring people to do more than just communicate.
System
Sony Ericsson follows Business system approach linking performance to
strategies. Sony Ericsson has great demand in local and international
markets. Its main focus is on the financial aspect along with the other
aspects such as customer perspective with constant learning, innovation
and establishing its market stand with further growth.
Style
The vision of sony is to become the communication brand with
enternainment. Its motto is "make.believe" and believes in respecting
human rights and treating all employees ethically. It believes that people
are inspired by the entertainment and communication world. This
philosophy drives Sony Ericsson forward from ideas to creation.
Staff
Sony Ericsson has over 9000 employees from over 40 countries across the
globe and is inspired by the cultures the employees belong. The employees
contribute to the unique design, development, marketing, distribution and
sales for a variety of products, applications and accessories. The employees
in Sony Ericsson have an opportunity to grow and it is a challenge to work
for the company.
Skills
Sony Ericssons success is the result of the workforce which is driven by the
ideas. Sony Ericsson is an inspiring beauty with beautiful and functional
products that are complete inside out. Its collaborative work ethic to build
up connections with partners and colleagues and gather resources help
result in new advances.
Porter's Five Forces
Competitive Rivalry
Sony Ericsson's rivals are Nokia, Samsung and Motorola. These companies
constantly bring out new phones into the market which have many new
features and are priced at a low price. This is one of the reasons for the
decline to Sony Ericsson's W910i
Threats of New Entrants
Many new phones are entering the market and grabbing the attention of the
people. As a result these new entrants will harm sony ericsson W910i
posing a threat from the new entrants.
Threat of Substitute products
The threat of substitute products will further limit the use of Sony Ericsson
W910i. these products include landline phones and technology through the
internet such as voice chat and video conferencing.
Bargaining power of Consumers
Due to the demand for low cost phones many mobile phone companies are
bringing out phones with many features and at a reasonable price. Thus,
customers have the option of switching phones from the competitors as
Sony Ericsson W910i is highly priced when compared to other phones.
PESTLE Analysis
Political
Due to the deregulating markets, like other mobile phone companes; Sony
Ericsson is has the authority to be independent in every country it operates.
Economical
The increasing young population and the increase in the amount of
disposable money demands a lot of choices to the people. People demand
more features at a reasonable rate. Though Sony Ericsson W910i has a lot
of unique features its price which is high when compared to other phones
makes it economical. Moreover, it instability issue further acts as huge back
draw.
Social
Sony Ericsson brings about a change in the peoples social life by offering
the most attractive and innovative handsets in the industry. It stands by its
mission to offer communication with entertainment. Sony Ericsson W910i
has all these features but these features could not make it to the peoples
heart due to the stability issues.
Technological
Advancement in the field of technology by other mobile phone companies
leaves behind Sony Ericsson W910i. The advancements include touch
screen, high resolution cameras etc.,
Legal
Sony Ericsson is unique in its design offering the sense motion technology.
But people choose over W910i to other phones due its bad reviews
Environment
All products of Sony Ericsson have a global declaration. It tales initiative to
offer solutions which enable people to recycle the products in an
environmentally friendly way.
Objective and Goal
The Sony Ericsson W910i though offers very innovative and unique features,
its high price and stability problems make it unaffordable by the people.
Sonny Ericsson should take initiative to relauch this innovative and creative
phone resolving all stability issues as reported by end users at a reasonable
and competitive price. It should further enhance the existing features and
offer more features as technology has gone way far ahead. It should focus
on the people with limited buying capacity.
ANSOFF'S MATRIX:
Existing Product
New Product
Existing Markets
Market Penetration:
Sony Ericsson should relaunch its W910i at reasonable and affordable price.
It can offer discount on the older versions of W910i which have stability issues and bringing out a release to solve these issue.
It should re advertise its W910i with enhances features with pomp and ramp.
Product Development:
With the outcome of new technologies it should keep updating its model of W910i.
It should bring out special features matching needs of different people, for example., a high resolution camera for the younger generation and GPRS and Bluetooth for the specialized people.
New Markets
Market Development:
Sony Ericsson should enter new markets offering competitive prices.
It should attract the crowd through advertisements on TV and newspapers.
Diversification:
Sony Ericsson should bring out more innovative solutions to attract customer to establish its stand in the market and gain more profits.
Market Share
Market Growth
Star:
SonyEricsson is no longer a star because it is declining.
It was not accepted by the people due to the various issues it had with stability
Question Mark:
Financial investment to rejunavate Sony Ericsson W910i.
Sony Ericsson has to take steps to bring out W910i from the declining stage
Cash Cow:
Sony Ericsson W910i dint not make any profit and was unsuccessful in establishing its stand in the market.
Sony Ericsson is a leader in the mobile phone market and its stand in the market is very good, to make W910i a cash cow Sony Ericsson needs to take proper decisions.
Dog:
Sony Ericsson W910i falls in this category because it is not producing profits nor is it producing losses.
Due to slow growth rate it has very low market share.The BCG Matrix
Sony Ericsson W901i can divert from the dog to cash cow, if it invests some
amount on its promotion with innovative features and additional functions.
Investing finance to keep its stand in the market Sony Ericsson can move to
the question mark slot. Good decision- making skills and market research
will make Sony Ericsson W910i a star.
GAP Analysis
The innovative features of Sony Ericsson W910i attracted a lot of customers
and it recorded high sale immediately after its launch, but not now the
product is at a declining stage due to less sales leading to sales gap. This
sales gap is ultimately leading to a profit gap. The key factors that will lead
to rejuvenate Sony EricssonW910i should be identified and documented.
For meeting the current requirement of the market the factors should then
be approved for the variance between its capabilities.
The General Electrix Matrix:
Competitive/Business Position - Strengths
High
Medium
Low
Market Attractiveness
High
Heavy investment to re establish Sony Ericssons' W910i in the market.
No distribution channel, promotional effectiveness and expected product
quality.
Lack of market attractiveness leading to low business position in the
market.
Sony Ericsson W910i does not come into this category.
To grow and to get a reasonable market share Sony Ericsson W910i should
be resolved of all issues in its stability. This needs considerable amount of
investment.
Sony Ericsson W910i has low has very little market share due its stability
issue which has received a lot of criticism
In order to gain income and generate profits, Sony Ericsson W910i should
penetrate the market and establish its stand.
Medium
Sony Ericsson should invest in W910i in order to build attractiveness.
The investment should build the value of W910i and should be selective in
nature.
Sony Ericsson W910i is in a declining stage and does not fall into this
segment.
In order to generate considerable profits and reinstill confidence among the
people it should resolve all its stability issues and should be offered at a
reasonable rate
Sony Ericsson has to pay particular attention to its W910i model.
It should take it back to the maturity level for harvesting
It should be introduced in a particular segment of the market with cost
which are affordable
Low
Sony Ericsson falls in this category as customers are no longer interested in
this model.
In order to regain its value it has to work on its strengths and bring out
more innovative features
In order to gain market attractiveness technological advancements should
be incorporated
According to the market size and growth it should work on its features to
become acceptable and harvestable in the market.
Sony Ericsson W910i falls in this category.
In order to regain value it has to be repositioned with investment, research
and effective decisions
Competitive Strategy
Cost Leadership
Sony Ericsson W910i can gain market stand by pricing it cost effectively
and resolving its stability issue. Sony Ericsson with its innovative thinking,
success passionate and responsiveness to its customers have an advantage
over other companies.
Differentiation
The innovative features in the phone such as the shake control feature
which allows track change by just a shake of the phone, java based
application and games and its brand as walkman phone differentiate it from
other phones of other companies.
Focus
Sony Ericssons primary focus should be to resolve its stability issue and to
price it reasonably. The people have a variety of phones with enhances
feature and cost affordable.
TACTICS
Product:Sony Ericsson when launched initially was very famous due to its
unique innovative features. Nut has now received a lot of criticism due to
stability issues. Customers did not get what they had paid for and eventually
the product is in a declining stage.
Price
Sony Ericsson should focus primarily on its pricing policy. The distributors
should be issues with a retail price and strict monitoring should be
implemented to ensure that the brand is not diluted by selling at price
different from the future tech price.
Place:
The Sony Ericsson model W910i should be placed in the segment globally
with restricted buying power.
Promotion
The product should be branded in such a way that it instantly makes a place
in the memory of the people. Digital media should be used to promote the
product through advertisements. The product can also be publicized in
certain events such as the youth oriented programs to target teanagers.
Local film stars and athletes should endorse the product in order to make
the product more successful. The product should be endorsed in such a way
that it becomes a status of symbol and fashion. Further to this the product
can also be promoted by direct marketing in malls and shops such as
boutiques in order to further improve its brand image.
People:Sony Ericsson should focus on people of different ages and genders.
It should focus on people with limted buying power such as in the rural
areas where there are not many means of communication such as internet ,
magazines etc.,
Process
Sony Ericsson's sophisticated processes such as hardware, applications and
innovative solutions brings about easiness in use and attracts customers.
Physical Process
Sony Ericsson W910i should be introduces within a focused market segment
such as rural areas with not much means of communication.
Action
With regard Sony Ericsson W910i's marketing activities let us consider the
GANTT chart below:
Marketing Activities
Time (Jan 2010-Jun 2011)
Staff (Assumptions)
Budget (Rs. 50 m)
Market research
January 2010 to February 2010
Naveed
1.5 m
Launching
During March 2010
Neha
2.5 m
Distribution
April 2010
Pasha
5.5 m
Advertising & Promotion
May 2010 to May 2011
Zeeshan and Pasha
9 m
Sales promotion
June2010 to January 2011
Neha
7.5 m
Personal selling
July 2010 to September 2010
Javed
2.5 m
Sponsorship
August 2010 to May 2011
Rahul
9.5 m
Brand management
March 2010 to March 2011
Sarah
3 m
Customer acquisition
April 2010 to May 2011
Sarah
6 m
Reminding the customers
January 2011 to June 2011
Zeeshan and Pasha
3 mSetting Budget:
Objective
Rejuvenating Sony Ericsson W910i
Tasks
Market research, Launch, Distribution, Sales promotion ,Advertising and
promotion, , Sponsorship, Brand management, Personal selling, Customer
acquisition and reminding the customers about Sony Ericsson W910i
Cost of Task
Rs. 50 million
Budget
Rs. 50 million (Sony Ericsson should spend around Rs 50 million in order to
rejuvenate W910i)
Control
Monitoring and Control
Objective: Rejuvenating Sony Ericsson W910i
The Marketing Audit
Budget: Rs. 50 million
Time
Year 2010
Year 2011
J
F
M
A
M
J
J
A
S
O
N
D
J
F
M
A
M
J
Marketing research
No more than 1.5m
Launching
Only2.5m
Distribution
5.5 m
Advertising & promotion
Advertising & promotion needs more finance so 9 m will be sufficient for
this.
Sales promotion
Sales promotion might requires considerable finance, so 7.5 m will be
alloted.
Personal selling
Small period so 2.5m are enough.
Sponsorship
Sponsorship costs higher, 9.5 m are enough for a long period
Brand management
Long period, but would not cost much, 3 m is enough.
Customer acquisition
Long period but will require reasonable amount i.e. 6 m.
Reminding customers
3m would be enough for reminding customers about W910i.
Conclusion
Sony Ericsson is a leader in the mobile phone market know for its
innovative and stylish mobile phones. But the Walkman Phone W910i is
declining in the market because consumers are generally very selective and
choose the popular or the next cool make of phone in the market. earlier,
people with a lot of disposable income used to change their hand sets every
three years, but now with slow down in economy this is not a trend
anymore. The growing popularity of Apple's iPhone, the Walkman phone of
Sony Ericsson is losing its charm. (casestudyinc.com). Moreover, the higher
price of its phone leads to customers making a choice over to the phones by
the rival companies. The SWOT, Porter's five force analysis and Pestle
analysis clearly suggest that Sony Ericsson W910i is in a declining stage.
Recommendations
Sony Ericsson in order to bring back its Walkman Phone W910i into the
market should do extensive market research and bring out new strategies,
invest considerably and control and monitor activities.
Due to competitive advantage from rival mobile phone companies , Sony
Ericsson should reduce the price of is mobile phone W910i
Sony Ericsson should come up with innovative promotional strategies and
employ people with fresh ideas.
Sony Ericsson should use technology advancements and come up with more
creative looks, features and user friendly options
Sony Ericsson should provide services such as Warranty and Insurance to
attract customers. It should also provide after sale services to further
differentiate it from rival mobile companies.
It should set up 24/7 toll free line with professional staff to help customers
to solves their issues with phone and answer any queries.
In order to increase sales volume and capture a market share it should
focus on a particular market segment such as rural areas with not much
communication means.
Critical Reflection
Sony Ericsson:
Sony Ericsson is a world leader in mobile phone manufacturers. Sony
Ericsson being young, diverse and a global company offers great
opportunities in carrier development and progress. Sony Ericsson loves
what it does and just five years since its inception has become a leading
global company in the telecom industry. The success behind Sony Ericsson
is the result of its workforce which is driven by ideas. The concept that
drives Sony Ericsson forward is that entertainment and communication are
an inspiring force for the people. Sony Ericsson's products are functional
with innovative features as well as beautiful with bold colors, turn screens
into windows and lightweight. These entire features make their products
complete from inside to out just as its Company. Due to these features Sony
Ericsson prices its products very highly and is not affordable by all. It really
asks for what it offers to its customers and never comprises on its quality
and pricing. In spite of all this some mobile phones from Sony Ericsson are
declining in the market such as W910i, K800i and some others. There
various reasons for their decline in the sale in the market. For the purpose
of this report, I have chosen Sony Ericsson W910i as a declining product.
W910i has been criticized a lot due to its stability issues and high price.
Sony Ericsson W910i was very popular when it was launched initially in
2007 and was branded as the "Walkman Phone". It also received the best
handset 2008 award. But Sony Ericsson failed to keep this phone alive in
the market.
Sony Ericsson focused mostly on the customers with high buying capacity.
It failed to promote this phone in rural areas where the few or no means of
communication. It also failed to target the middle class customers who look
for phones that are priced reasonable and offer many features. Sony
Ericsson frequently brings out many new mobile phones in the market with
innovative features and creative designs. As the company is coming out with
series and phones it is proportionately increasing its mobile phone prices
never compromising on quality.
The innovative features in Sony Ericsson W910i such as walkman, the shake
control feature Java based applications made it a very popular phone when
it was released initially. But people started criticizing this phone due the
various stability issues which are yet to be fully resolves such as crash,
intermittent switch off, freezing and button input failures. Sony Ericsson
then introduced its successor W980i and other models which had more
enhanced features. Consequently people moved their interest to other
phones leaving behind W910i with low sales and poor market share. Lack of
promotion and sales tactics for existing mobile phones and emphasis only
the new version of phones also contribute to the decline of W910i.
Learning Outcomes
I joined this course with a vague idea of the subject and the desire to learn
more. There were hundreds of questions running in my mind about what is
marketing, the principles behind it, how to grow and excel in this field etc
etc., this course was an answer to all my questions. Many ambiguities and
unclear concepts were cleared through this course. Each session offered
something new to learn and lust of acquiring more knowledge about the
subject grew more and more. Prior to this course I had heard the name of
the models, had heard that about some strategies and happenings in the
marketing world; but I now understand what each model is, the various
strategies in depth and many other things. Apart from giving an in-depth
theoretical knowledge it led us to think practically in every aspect related to
marketing. It made me realize the importance of marketing for any business
to establish itself in the market, and how to use the various models and
strategies in relation to the same.
Initially I was a layman to the marketing concepts and ideas. If there was a
discussion with someone about this subject, it used to be only one sided as I
did not have an in-depth knowledge of the subject and many of the concepts
were unclear. I can now confidently talk and explain the concepts to anyone
and participate in a dialogue with people. I can use the skills acquired
through this course to write a marketing report on any product or company.
I can confidently apply these concepts if I start working independently and
can advice anyone about a business. This shows that the learning outcomes
are very positive and highly effective. If I have any questions about any
concept or it something is unclear, with the knowledge that I have acquired
I know where to look for them and find answers with the knowledge
provided in the course.
The various assignments and case studies were a source of instilling
confidence in us. Each case study and assignment was unique which made
each concept clear. It gave a sense of practical application of the concepts
to the real life scenarios. Some of these applications included the SWOT
analysis, the Porter's five force analysis, the Pestle analysis, marketing mix,
the DRIP framework etc., These case studies have very much enhanced my
knowledge and if now a different case study or if I come across a real life
scenario I can apply the concepts and techniques without any hesitation and
resolve issue independently.
The different frameworks, models and marketing concepts are very much
clear and have no ambiguity when it comes to their application in a real life
scenario. I now have knowledge of many marketing concepts and
techniques of marketing, the various products and services in the market,
the analysis of strengths and weaknesses, how to go about creating a
marketing plan etc., each lecture was different and had new to offer and
learn with clear conceptualization.
This course has offered me more than my expectations and I have felt as
though I have lived this subject which is full of life. The course has
enhanced my decision making capability, handle different situations and
tackle them confidently which occur in different time and space. The
purpose of the subject which was to enhance our skills and knowledge in
terms practical application has clearly been achieved. Each and every
concept of marketing is very much clear and I can confidently apply these
techniques in my future life and hope to bring out more innovative concepts
and strategies and contribute to the field of marketing.