Sony Ericsson Mobile Music Strategy - Case Study Example

Sony Ericsson Mobile Music Strategy Key strategic issues Sony Ericsson faces many strategic issues even though it is a good market player in the sector. Some of the strategic issues are as follows: Research and Development issues: Like any other business, the company faces some strategic issues in the field of marketing. The major reason for this issue is the stiff competition in the market. Mobile phone market is highly competitive all over the world. Mobile phones get outdated very easily because every day new and varied products with different features enter the market. Therefore, continuous investment is required to be made in Research and Methodology. This is one of the major strategic issues that the company faces. Instability of the products: When Sony Ericsson launches a new product in the market, the competitors will come up with fresh products that are advanced in features and these are offered in the market. They introduce a variety of such good featured products in a price range less than Sony Ericsson’s products. Therefore, the company encounters less stability for its products and, as a result, the products become outdated. Stiff competition: Stiff competition is another major issue that the company faces. The mobile phone market faces stiff competition because of the very large number of players in this industry. Technology is considered as the primary driving factor of this sector. So, continuous efforts are needed to be put in by the company in order to be the market leader. SWOT analysis Strength: The strength of the company is that it enjoys a good brand image in the minds of the customers through their higher quality products. The most important strength is that Sony Ericsson is a joint venture between two companies that are specialized in two different production techniques. Ericsson is specialized in providing telecommunications and mobile phone technology and Sony is specialized in sound quality. Therefore, the combination of the expertise of both companies is its basic strength. Sony Ericsson also holds the distinction of being the first producer to introduce a high quality music player in mobile phones. Weakness: The weakness of the company is that it launched the walkman phone in the beginning in which only songs with ATRAC format could be played. This rendered the product a failure in the market when Apple launched its ipod in which songs of all formats could be played. However, the company rectified the mistake with its next launch but still could not restore the market share. This strategy was the weakness of Sony Ericsson. Opportunities: The opportunity of Sony Ericsson is that the company has already launched various music edition phones which are highly competent in the market. This made the brand highly accepted in the market. The company has also grabbed a distinctive name in terms of sound quality of its mobile phones. Its products are a favorite among youngsters across the world. Therefore, it has very good opportunity in this segment of mobile phones which is highly promising for their future market share. Threats: The main threat of the company is its strong competitors. At present there are many other mobile phone companies with good technology introduced in the market. These companies also keep updating their technical know how to deliver products that are appealing to the consumers. Nokia, Samsung, Motorola and many other strong players are in the market with latest technology in sound quality. This has made Sony Ericsson to concentrate more on developing new technology and products in order to survive in the market. Underlying structure of the mobile business Earlier, mobile phones were considered only as an instrument for communication. For a very long period since the first launch of mobile phones in the market, this remained the basic theme. But now the concept has changed entirely and mobile phones have now become a medium for entertainment besides being a communication instrument. Today the mobile companies are competing to launch newer products in the market periodically. One of the most important features of the mobile phone market is that the products get outdated very easily. Technology is the major factor on which the structure of mobile phone business is built. Every company that is able to enter the market with best technology can be successful in the market. Sony Ericsson was able to revolutionalize the market by the launch of its walkman brand. Their major competitors in the market are Nokia, Samsung and Motorola. Even if the company has a brand value if it is not up to date in technology it will fail in the market. Therefore, they should invest more in Research and Development, and focus on introducing new technology. Since there are varied ranges of products in the market the customers always seek the products that offer them best technology at affordable price. Success factors in the market The success of mobile phone companies in the market depends upon the following factors:- Brand value: Brand value is the primary factor that determines the success of the mobile phone products in the market. There are many players in the market in this sector. But Sony Ericsson’s and Nokia’s are most sought after. This is basically due to the high brand value that both companies enjoy. Compared to these two companies LG, VK mobile etc has less acceptability because the brand value is lower. Samsung and Motorola are also emerging as leaders in brand value. Good technology: The second factor makes mobile phone a success is the technology used in their development. Nowadays majority of the customers buy these products for entertainment purpose also besides its primary utility. So, naturally, they choose products with features like camera, radio, music and video players, good connectivity tools, memory and many other features. So, a company can be successful in the market only by introducing products with up to date features in it. Knowledge of the market: The company should always be aware of the changes in the market trends. If a company launches any product in the market with any varied products the competitors will launch another product in the same segment in order to compete. Due to this reason all companies need to keep continuous attention on the changes in the market trend. The marketing team of Sony Ericsson should be aware of the products launched by other producers. Only then Sony Ericsson can launch a fresh product to compete. This strategy is common to all the mobile phone companies. Quality and Durability: Quality and durability are other factors that are important for the success of a mobile phone. If a mobile phone is of low quality and gets damaged very easily the customers won’t choose it. The quality of such a product is also spread by word of mouth. Therefore defective products become obsolete from the market. Price: Price is the next factor that determines a mobile phone’s success in the market. The customers are also very keen about the product’s price. If a customer finds that the feature that he desires is provided by two producers at different prices he will choose the product is cheaper. So price becomes another aspect that producers should consider for capturing larger market share. Resale value: Resale value can also be considered by the customers while they purchase a mobile phone. Most of the customers do not like to retain the same mobile phone for a long period. They prefer to change their handset when new models enter the market. Therefore, they expect better value for their old handset when it is sold. This makes them choose handsets with better resale value. Global strategy for Sony Ericsson: Mobile phone market is a highly competitive and booming market. The stiff competition and the flexibility of the market compels Sony Ericsson to devise a global strategy for its operations in the future. Following are the strategies that will help the company to be the global market leader. Quality improvement: Sony Ericsson should research more on maintaining the quality of the mobile handsets. Customers prefer better life for their products. In such as case if Sony Ericsson products supply better quality products in the market it can definitely improve the market share. Aggressive advertisement: Advertisement should be made more widely by the company in those countries where the mobile phone market is in developing stage. This will help the company to penetrate in to the developing markets. It is an accepted fact that many of the customers buy a product because of impressions created by advertisements. Products according to market: a company should understand the pulse of the market to be successful in business. The products are to be designed and supplied according to the requirements of the market. What the customers want must be the first factor that the company should consider. Brand building: Sony Ericsson was successful after they introduced their walkman brand. The brand was highly accepted and appreciated by the market. “It was estimated that the company had shipped around three million units of Walkman phones from the time of product launch in August 12, 2005, to the final quarter ending December 31, 2005.” (Sony Ericsson’s Mobile Music Strategy. 2006). This has helped the company to improve the market share and increase its profitability. Similarly, the company should also attempt to create a separate brand for camera phones. Introduction of such a brand will take the company to further heights of success. Better after-sales services: The Company should launch a better after sales service network because when the customers face problems with the handsets, they are to be repaired properly. At present, the after sales network is not very extensive and the customers are left with the only choice of disposing off the defective handsets at a low price. Better dealer network: A better dealer network can definitely improve the market share of the company. The company can introduce its own retail outlets and service centers. This strategy will boost the sales of the company as this will help them to be move efficient apart from enabling them to supply the handsets at lower prices. The customers also become reassured of the quality of the handsets through this method. Works cited Sony Ericsson’s Mobile Music Strategy. The Walkman Phone. ICMR. 2006. 3 Dec. 2008 Read More