The paper "The Rise and Failure of Sony Ericsson" is a great example of a Management Case Study. The joint venture of Sony Ericsson (SE) was established in 2001 between two corporations Sony and Ericson. Both are the largest shareholders in SE with 50%. The joint venture was established to combine consumer products from Sony electronics expertise with Ericsson’ s technological leadership and the largest market in mobile communication networks. It was driven by the desire of becoming the most attractive and innovative global brand in the mobile handset industry and electronics (Yamanda 2001). The motivation for the joint venture For a group to have a joint venture there should be a hidden motivation behind the desire to joint and operate as one team.
Sony was motivated for the joint venture by the strategic factors that prevailed and that would be offered by the market. The first one was seeking Ericsson’ s technological excellence in telecommunication in specific the technical wireless expertise and the largest market share that Ericsson had that would enable it to excel in the market that was ‘ so fiercely competitive’ (Kietzman 2008; Yamanda 2001). Ericsson still had its distinct motivations; Ericsson aimed at accelerating the financial state of the company and improving its technological capacity, with the goal of being able to produce electronics that would rival the position of Nokia as a market leader in the telecommunication industry.
Thus the joint venture had a shared common goal and would allow SE to present a range of products that were far much ahead in terms of technology and innovation than any other electronic company then (MobileInfo 2001). The success of the joint venture would have facilitated penetration to the closed Japanese market through Sony, as well as its unique technical know-how in the entertainment technology and design would have complemented well with the mobile technology provided by Ericsson mobile.
Ericsson would not have been left without significant benefits from the venture; the joint venture would have allowed Ericsson access Sony’ s design and production processes in addition to the imaging, music, audio and video entertainment that Sony had through the production of new, innovative entertainment handsets that would enter the virgin markets of the world.
This venture was also in line with Sony’ s future strategy in the cellular market. This was supported by the views of the Sony President, ” the cellular handsets business is the Sony’ s key strategic area in future, and I vow to make handsets one of Sony’ s key internet-related products” (Latour 2001; MobileInfo 2001). Expansion of Sony’ s minuscule market share was also a key desire to join Ericson, this would position its handsets on a global market which was relatively weaker compared to that of its competitors. Sony’ s electronics sector was doing well but its handset market had been going through a “ rough patch” , this was making the market more difficult to gauge, and the dominance of Nokia as the leading industry leader was affecting the share of the struggling competitors (Dunn 2001) The challenges of each company in accessing the market were also an item that must have motivated them to join hands in the venture.
Ericsson produced well-functioning, high-quality phones but they would never sell them as they did not cater to the tastes of the consumer, this was the biggest headache.
On the other hand, Sony was failing to be a competitive handset market yet it was doing great in other electronic products. This showed that the combination of the two electronic and mobile giants would potentially prove to be successful (Kietzman 2008).
BBC News UK, 2008, "Ericsson and Sony in mobile tie-up" viewed 24 April 2013
Brown, C 2002, 'Sony Ericsson inside the last-chance saloon', Financial Times
Daniels, J, Radebaugh, L, and Sullivan, D 2007, International Business: Environments and Operations, 11th edn, Pearsons-Prentice Hall, New Jersey
Harris, E 2001, 'Sony, Ericsson Mix Technology, Marketing Savvy --- New Mobile-Phone Brand Aims to Topple Nokia; Just the Logo Is Ready', The Wall Street Journal
Hill, C.W.L 2007, International Business, 6th edn, New York: McGraw Hill
Jennifer, L 2007, 'Challenges for Sony Ericsson's New Chief; After one week on the job, Hideki Komiyama is painfully aware of competition from the iPhone, Google's mobile plans, and Nokia's new wireless offerings', BusinessWeek
Kantrow, B 2003, 'THE BOTTOM LINE: Sony Ericsson Fails To Live Up To Hopes', Dow Jones International News
Kietzman, S 2008, "What is a Joint Venture", viewed 23 April 2013
MobileInfo 2001, "Acquisitions, Mergers & Agreements" Viewed 25 April 2013
Yamada, M 2001, "Sony and Ericsson in joint-venture talks", IT World Canada, IDG Network