A Business analysis of Sony Ericsson

For assignment help please contact at help@hndassignmenthelp.co.uk and hndassignmenthelp@gmail.com

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.