Sonny Ericson's Evaluation of the Alliance and its Performance

Evaluation of the Alliance and Its Performance

IN A NUTSHELL, both Sony and Ericsson joined forces with the end in mind of generating more profits than if they had struck it out by themselves in the telecommunications business. The financial statements show a failure of the Sony Ericsson brand of company to cope with the aftershocks of the current depression enveloping the entire earth. However, this leader in the mobile phone industry is expected to bounce back to its old self after the depression evaporates into thin air probably by 2011. Conclusively, the company is on the right track in producing new mobile phone models each year to fill the needs of its current and prospective clients. The Sony Ericsson co opting alliance was mainly due to the pooling of the resources of both companies to derive economics of scale or limit its risk (Lorange & Chakravarthy 2007, 94).

Financial measures of Sonny Ericson Alliance

Financial measures of this Alliance

Sony Ericsson did not do financially well if net income is used as a basis for deciding whether the company passed its benchmark with flying colors. The net income for quarter 4, 2008 is a loss of 187 millions. The company also generated a net loss of 25 million for the third quarter of 2008. In addition, the net income for the fourth quarter of 2007 is a profit of 373 million. The annual net income of Sony Ericsson for 2007 is1,114 million. On the other hand, the net income for the year 2008 is a loss of 73 million. This clearly shows that there seems a decline in the demand for mobile phone during the year 2008 as compared to the prior year, 2007.