Information on the Joint Venture of Sony and Ericsson
The quest to make quality and technologically advanced phones brought Sony Corporation Japan and the Swedish telecom company, Ericsson together turning a joint venture in the year 2001. The two companies formed the brand name Sony Ericsson. They both agreed to have 50% each in the business. The aim was to bring together Sony’s expertise in consumers’ electronics with Ericsson’s leading prowess in the realm of technology, especially in the trove of mobile communications. As at October 2001, the company’s mission was to be addressed as the most attractive and innovative global brand in the mobile handset industry (Sony Ericsson 2008). Looking into the administrative part of the company, this essay is poised to diagnose the problems of the Sony Ericsson company and the treatment that caused the parting of the two owners and why Sony’s becomes alone.
Problems
Before their coming together, the Swedish Ericsson had a large market across the globe but its products were not really attractive to customers while Sony, selling other products well but mobile phones, was relatively a mushroom Japanese company that yearned to go beyond the Japanese horizon. Also, the difficulty of competing with Nokia which was ruling the world’s telecommunications made the two companies become a joint venture. Plus this, Ericsson’s market in the globe was dropping to 10.7%. The option of a joint venture became the life line for both Sony and Ericsson.
After becoming one, the differences in the company cultures of Sony and Ericsson caused a lot of disgruntlement and it almost led to conflict and weak management of the firm. Other issues include, non-unifying products lines, violent competitions, product delay, logistic issues and many other problems you could imagine happen to join ventures.
Why Sony Takes full Control of the Sony Ericsson Venture
Problems aforementioned and other problems like delay in release of products. Speaking in London, the Chief Executive Officer of Sony, Sir Howard Stringer mentioned that the £1.05b price paid for Ericsson’s 50% share that ended a decade of their partnership business was to enable the company to ramp its smartphone efforts up as well as defend the company’s TV and PC and letting the consumer enjoy the goods and services irrespective of their places of residence or the kind of desired residence.
Stringer ensured that Sony would deliver the whole family of consumers’ needs. Thus, the telecommunications becomes a highly competitive realm of technology. Sony works on answers to Apple’s iTunes by establishing the Sony Entertainment Network purposely meant to stream films, games, and music to devices including the company’s Bravia TV sets, PlayStation. The service of the PlayStation shocked people when over 90 million people became members.
In summary, the Sony Ericsson was birthed in 2001 by the coming together of two different companies known as Sony and Ericsson. What broke the camel back of the two companies was the development of android apps as well as Nokia and Symbian software.