Part 1
Sony Ericsson, its resources and its competencies
In 2000 Ericsson and Sony established a London-based joint venture, Sony Ericsson, to exploit the opportunities of third generation mobile systems, whose implementation had begun in Japan. Ericsson's strategies were broadly emulated by its major competitors in the world telecom industry, including Nokia, the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and Motorola, and Germany's Siemens, all of whom had telecom equipment sales in excess of $22 billion in 2000. These firms all moved, although at varying rates, to outsource production to contract manufacturers. They also progressively outsourced innovation to cheaper locations (Wallach 2005).
Resources
Sony Ericsson’s resources come from reliable suppliers and manufacturers. The materials used in creating the products have to agree with the company’s greenheart process wherein most part of the product should be recyclable or harmless to the environment.
Financial
The funds can either come from the parent company or from other sources like investors. The budget will be used to pay for the different expenses of the firm. The budget will be used to pay for the rent expenses, the payment for all the employees, the cost of supplies used in creating the products, the cost of electricity, the cost of office materials and other costs or expenses.
Human
In providing excellent service to the clients, a company needs to have a dedicated staff that performs well and knows that the service they give to the client can help the company have a positive or negative image. The staff of the company is well trained to ensure that the best service can be given to the clients. The company makes sure that it hires promising individuals that can assist in the company’s task of reaching their goals.
Skill
The personnel of the Sony Ericsson are well skilled in creating and selling their products. The company makes sure that they hire individuals who are skilled in management, manufacturing or selling. The company also looks for various activities that will help them improve their skill.
Competencies
Core Capabilities
Sony Ericsson’s core competences include its highly advanced product, competitive products and concept of sustainability. Sony Ericsson makes use of its competences to achieve continuous growth and development
Distinct Capabilities
Sony Ericsson’s distinct capabilities include its ability to create products that costs lesser than other cell phone. The company’s product cost less but it is durable like the other company’s products.
Scope
Capabilities
Sony Ericsson’s capabilities include its use of sophisticated technologies to create the best product. Sony Ericsson has commendable personnel that were well trained to create the best product and provide efficient service.
5m’s
Money
Sony Ericsson is well funded. The funds of the company come from its profits, capital and from investors. The company makes sure that its finances are well budgeted and will go directly to the division that needs it the most.
Minutes
Time is important for the Sony Ericsson. The company gives importance to time just like it gives importance to finances and human resources. The company has organized schedules that will ensure that products can be made at an appropriate time. The company makes sure that every member of the organization has a balance of work and rest.
Materials
Sony Ericsson’s materials come from reliable suppliers. The company keeps the materials in reliable storage areas. The company makes sure that its materials will not harm the environment and can still be recycled.
Manpower
Sony Ericsson makes sure that it hires the best personnel that have an idea on the cell phones and its related products. The company engages in online recruitment, personal recruitment and the use of third party to recruit and choose the personnel that fit their needs. The company trains the personnel in accordance with their tasks and role. The company allows their personnel to attend seminars that will increase their knowledge on their forte. The company makes sure that the personnel are given an appropriate compensation based from their role and contribution to the firm. The company makes sure that all social benefits are received by the personnel.
Machines
The company makes use of the best machinery to create the products. The company has a research division that searches for the latest technology that will help them achieve efficiency and effectiveness in creating their products. The machines are well maintained by a special group of personnel. The company makes sure that the machines are regularly checked for problems.
Implications on Management
The use of 5m’s makes it easier for the management to operate the firm. The use of 5m helps Sony Ericsson and its management to focus on strategizing and determining what acts will provide benefits to the company. Through the 5m the management receives assistance in attaining the goals of the firm.
Current strategies of the company
The company is focused on the use of sustainable products. Sustainability is said to be the act of maintaining supplies for future generations. Supplies do have its own limitation; it will run out of stock eventually. Through the use of sustainability companies can make sure that there can be supplies for the present and the future. Sustainability goes with the need to have green supplies. The company makes sure that it uses sustainable supplies. The company makes sure that its supply will not run out. The makes sure that the materials they use are recyclable and will not cause damage to the environment. To maintain the sustainability of supplies the firm makes sure that parts can be recycled.
Stakeholders
Internal stakeholders
The internal stakeholders of Sony Ericsson include the management of the company, employees and creditors. The Stakeholders’ impact on the governance of the firm is it affects the way the company is managed. It makes sure that the company performs well according to the stake holder’s standards. The management of the firm is a stakeholder because the company’s success or failure is conjoined with the management’s success or failure. The employees of the firm are stakeholders because the success or failure of the firm will impact their salary and its increase or decrease. The creditors are stakeholders because they contributed a certain amount that contributes to the financial resources of the company.
External stakeholders
The government, clients and potential investors are those groups that are external stakeholders to the company. The government is a stakeholder for the firm because they are the ones that checks if the company follows regulations and laws. The government also observes for any negative effect for the company’s products. The clients are stakeholders because they are the ones that are affected by any changes initiated by the company. The clients are the end destination for the product, thus they need to know what stages a product goes through before it reaches them. The potential investors are stakeholders because they observe the financial status of the company and use this as a basis for any transactions that they will do with the company.
Stakeholder’s strategy
The stakeholders provide assistance in running the firm. They give a little feedback on how the firm should operate. The stakeholders give their opinion on the company and the condition it faces.
Future strategy for stakeholders
The future strategy for the stakeholder will focus on improving their relationship with the company. This can be done through the use of communication systems that will create a greater bond between the firm and the stakeholders. The communication strategy can be in the form of internet or other online system.
Governance Chain
Corporate governance is concerned with holding to account the modern corporation, whether it is a large or small holding company and subsidiaries, listed, private, government or non-profit entity. One influential interpretation of corporate governance is to find a way to maximize wealth creation in a manner that does not impose inappropriate costs on third parities or on society as a whole. Corporate governance application requires a system of checks and balances designed to define appropriately the parameters of authority through accountability (Kakabadse 2001). The following presents the governance chain for the company.
The key players include the stakeholders, board of directors and the employees. The stakeholders, board of directors and employees are the ones that will be affected by any change in management strategy. Any changes in management strategy can affect the service given to the stakeholders. Any changes in the management strategy can alter the position and responsibility of the management team and the personnel. The beneficiaries of any change in the management strategy include the clients and the government. The clients are beneficiaries because any change in the management strategy can lead to better service to them and it can lead to the emergence of better products. The government is a beneficiary of the change in the management strategy because they can now make business dealings with Sony Ericsson. The government can ask the company to make products that fits with their communication needs. This in turn can help the government provide better service to their constituents and deal better with outside forces.
Principal- Agent Theory
The management and the employees have a principal – agent relationship wherein the managers give fair treatment of the personnel. The managers make sure that the personnel acts as agents of providing service to clients.
Employee Unions
Worker Unions are vital because it gives personnel the chance to express his/her concern to other workers. The union can be used for one personnel to have better benefits and compensation from the firm. The management allows for unions and other groups that intend to unite the ideas and concerns of the personnel. The management makes sure that they respect any union that the employee has formed or joined.
Sony Ericsson ethics and Social Responsibility
Corporate responsibility is a pact for the mutual benefit between society that needs business for economic and social development, and business that needs a supportive business environment. It is also a pact between capital and management in modern companies, which has been as shaken up by some recent scandals where management disregarded the bond of transparency with shareholders (Dunning 2003).
a. within Sony Ericsson
Sony Ericsson has and believes in corporate 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 gives much importance to their personnel; the company makes sure that the welfare of the personnel is given appropriate attention.
b. what can still be improved
Sony Ericsson can improve its social responsibility by engaging in charitable works such as donation to charity or other non government institutions. They can even create a charity that will focus on a certain market. Sony Ericsson can improve its ethical standards by reviewing its current scandals and adjusting it towards the current situation.
c. alternatives philosophy
Aside from the use of corporate responsibility and ethics, Sony Ericsson can make use of the fair competition philosophy wherein the company will make use of strategies that will be just and fair. The company will refrain from committing acts that are demeaning to fairness in the telecommunication industry. The company will refrain from engaging in unwanted acts against other cellular phone companies.
d. Freedmanism
Freedmanism is the belief in ideas such as Deontology, Utilitarianism, Teleology, Egoism and Ethical relativism. Deontology is the philosophy that focuses on the rightness or wrongness of intentions or motives behind action such as respect for rights, duties, or principles. Utilitarianism is the belief that the worth of an action is determined by its contribution to overall use of that action. Teleology is the belief that things are designed for or directed toward a final result. Egoism is the idea that people should do that they think satisfies their self interest. Ethical Relativism is the belief that ethical ideas do not reflect objective and/or universal moral truths. All the ideas under Freedmanism relates to different characteristics of the personnel. The limitation of Freedmanism revolves on the contrasting characteristic of each belief under it. Deontology, Utilitarianism, Teleology, Egoism and Ethical relativism each have a characteristic that contrasts the other, the use of it under one philosophy can create confusion and does not help in making one productive and efficient.
The management strategy that will be changed
Expanding into additional segments, after reaching an acceptable market share position in the primary market is a prudent option. The common strategy is to penetrate with either line extensions or technology applications. It is an acceptable and logical move for a market leader particularly in a flat market. It's only advisable though if sufficient resources are available to penetrate the new segment and, providing sufficient management attention and resources are available to vigorously protect the primary segment (Paley 2006). The target market of the company involves almost all sectors of the society. The company aims to provide mobile products to young or old, boy or girl. The company as much as possible aims to reach all walks of life. This target market is a good source of income. The company has different strategies that can cater to the taste and appeal of such markets. The change in management strategy will focus on increasing the market of the company. In increasing the market the company will need to make sure that the stores where its products are located will be in the most profitable places. The distribution stores for the products should be in places where clients can easily see the store and they can be encouraged to visit the store and buy products. The distribution store should make sure that competition in the location they want to put up the branch will not be too heavy. The market of the company can still be expanded to accommodate the elder people market. The company can consider such clients as a different segment that should receive a different kind of product. They should also provide a different kind of mobile products for such market.
Part 2
Tradeoffs
The change in strategy would help the firm gain more clients and increase its income. The change in strategy would help the firm improve its status in its industry. The potential problem with changing the strategy is a situation wherein the firm would lose control over its current markets. The new market would keep the company busy and may cause it to neglect the older markets.
Nature of People
Purpose
Ambitions and objectives are formulated at three levels. For the long term, guiding objectives are important. For the short and medium term, a system of measurable objectives must be created. Finally, the actual missions are the concrete translation of those objectives to the social players involved (Keijzers 2004). Communication is a key element of establishing focus, because employees usually perform better and accomplish more when they understand their role and how it relates to the bigger picture (Zwell 2000). In setting the objective a clear picture of the internal and external environment was used by the firm. The environment showed the firm its weak points or problem areas. Through knowing its weak points the company was able to plan for future possibilities and future plan of actions. After the company knew its weak points it was able to create the objectives by determining the weak points or problem areas that should be given top concern and priority. The company engaged in constant communication to determine what will be their objectives. To further identify the nature of the objective of the firm the lynch polygon will be used.
Lynch’s Polygon of purpose
Timing
Sony Ericsson’s plan for change should begin as soon as it has enough funds and resources to introduce the change. The company cannot wait for too long before it introduces the change because the new strategy might not fight the future situation.
Innovation
Sony Ericsson is one company that has proven its innovativeness through combining cell phones with walkman functionality. The company can use such innovativeness to create more products that will be accepted by the market.
Value Added
The innovative nature of Sony Ericsson adds value to their products. If the company wants to show that they have value then they need to prove it by creating more innovative products and services.
Survival
Survival in the telecommunication industry can be achieved by innovation and the use of appropriate strategies. Sony Ericsson is already innovative, it just needs to make sure that it will use appropriate strategies or make new strategies to continue to survive in a competitive cell phone industry.
Growth
One goal of Sony Ericsson is continuous growth. The company has already risen from its humble beginnings but it still wants to reach better heights. To do that the company needs to focus on the new strategy and defend itself against competitive traps.
Brand
Apart from each other Sony and Ericsson has created a name for themselves in their respective industries. Together they have become one of the biggest cellular phone companies. With proper use of marketing strategies and the use of unique packaging, the company can still create a more unique brand that can create a huge impact on the cell phone industry.
Leadership
Sony Ericsson has good leaders that have guided them from their birth up to this day. The current and former leaders have helped the company make a name for itself in its field. The leaders of the firm are one reason for its success and they are the ones that can truly guide the company to its objectives.
Stakeholders
The stakeholders are a vital group that contributes to the success of Sony Ericsson. Their guidance and assistance have helped the firm achieve its current status. Without the stakeholders the firm will lose its focus and will do things unnecessary for its survival.
Value and Lifestyle
The company has achieved its current status because it was able to maintain its value at the same time it introduced new trends that increased its value. The company has achieved a household status and is becoming a need rather than a want.
Knowledge
Sony Ericsson values the gathering and use of knowledge. The company makes sure that through its research and development division it gathers the data that it needs to survive its environment. The company uses knowledge to innovate its products and services.
Time
Time is of the essence. All planned actions of Sony Ericsson should be implemented so that the company can reap its benefits and initiate changes if there is such a need for it. The company cannot afford to delay the implementation of the new strategy since the new strategy was only made for the current situation of the firm.
Company Mission
Evaluation
An innovative organization must be led by a leader who develops and aligns the organization with the mission and vision, develops and maintains trust, ensures that coordinating and communicating occur, and encourages creativity and learning (Oden 1997).At the heart of the innovative culture lies the vision of the leader. This vision includes the broader sense of who the company is, why the company is doing this work, why it's important, the promises they have made to customers, and the code of conduct (Cook Jr. 2000). The mission and vision should definitely be consistent and supportive, but they will not be exactly alike since they serve two different purposes (Kanji 2002). Sony Ericsson’s mission statement concentrate on making sure that the company will produce the most attractive products. This mission statement fits well with what the company is doing and showing to the public. This mission statement can still be used to achieve the company’s overall goals. Sony Ericsson has partly achieved its mission because it has created a wide array of eye catching products that are globally competitive and full of innovation.
Evaluation of mission statement against the five elements
Innovation
The mission statement of the firm has innovation as its core. The company innovates to achieve its mission. In every aspect of the firm, innovation is the concept deemed as most vital.
Brand
The company has made sure that it is known all over the world. The company has established itself on various parts of the world. This coincides with the firm’s mission of having a global identity.
Growth
The firm already has fully developed and grown it can be seen through its global brand. Sony Ericsson’s worldwide fame proves that the firm has achieved some basic goals and it has matured from its initial identity.
Stakeholders
The company works with the stakeholders in achieving growth and development. The stakeholders boost the company for it to achieve its goals and compete well in its industry.
Value and Lifestyle
Sony Ericsson wants to be attractive. They have achieved this mission through producing unique products that catches one’s attention.
References
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strategy, Quorum Books, Westport, CT.
Dunning, J 2003, Making globalization good: The moral
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Kakabadse, A 2001, The Geopolitics of governance: The
impact of contrasting philosophies, Palgrave, New York.
Kanji, GK 2002, Measuring business excellence, Routledge,
London.
Keijzers, G 2004, Government and sustainable development,
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Nielsen, RP 1996, The politics of ethics: Methods for
acting, learning, and sometimes fighting with others in
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