Sonny Ericson: Alliance management and performance

Alliance Management

The Sony Ericsson company’s management style needs lots of improvement. The sales for the fourth quarter above show that the company has been affected by the worldwide depression. The loss generated for the first quarter of 2009 means that the people are no longer craving for expensive phones like the Sony Ericsson. The people have to feed their hungry stomach first before they think of dishing out lots of excess money to buy expensive mobile phones. A research should be done to determine what went wrong (Burwell,1999,19).

Alliance Performance

From the viewpoint of an outsider, the company is not doing well. It generated a lost for the first quarter 2009. The company generated a loss because it could not grab a material part of the customer pie of Nokia and other market segment. The company officers should have a brainstorming to determine their next course of action. This meeting must push through to revitalize its current marketing strategy because it seems to lose its effectiveness in increasing territorial segments. The strategy of the company should be to spy on the highly salable products of its top competitors like Nokia.

It must produce outputs that would outshine or outdo its competitors in the mobile phone industry and other jobs in the future. The future of the company is not as bleak. The world economy is expected to recover by the end of 2010. This clearly shows that the alliance may break apart if the total cost of production and expenses to operate are higher than the revenues generated from selling its mobile and other electronics –based products(Slavin,1989,595).

Sonny Ericson Company profile

Company Profiles

The alliance between Sony of Japan and Ericsson of Sweden is geographical. functional and product based. Sony had a low sales performance before the merger with Ericsson in 2001. The merger immediately catapulted Japan’s Sony phone sales because the customers of Ericsson saw a strong alliance between the expertise of Sony and the Expertise of Ericsson. This is what synergy is all about (Anderson et al.,1984, 134) Synergy is defined as the one plus one is equal to more than two (Churchill & Peter,1995,192). The exchange of customer information, production knowledge and marketing strategies plus the established customer base of one alliance partner is being bolstered by the attachment of the name of its alliance partner when entering into the other partners’ established market segment (Ingram, 2004,63)

The alliance between Sony of Japan and Ericsson of Sweden is also functional. The features of Sony’s expertise in technology are being permeated into the products of Ericsson. In the same light, the features of the Ericsson quality products are being fused into the Sony products. The marriage of the functions of both alliance partners created a strong demand for their new products. The Sony Ericsson mobile phones are equipped with cameras, MP3s and Java games, clock, and other features resulting to the increase in the demand for their products (Solomon,2003,175).

The alliance between Sony of Japan and Ericsson of Sweden is also product based. Sony Ericsson is selling a product that is a necessary. It is one of the basic needs of man, with due respect to Maslow’s hierarchy of needs. A manager needs to mobile phone to talk to the branch manager on the other line while travelling in an airplane. The production manager needs the mobile phone to contact the market manager in another city to determine the number of products to be manufactured while the production manager is in a board of directors’ meeting. The teenagers need the mobile phone to take pictures of his group swimming, dancing or drinking the night away. The mothers gives her ten year child a mobile phone so he could contact her inside the classroom to inform her that classes have been dismissed early and he wants to be fetched (Hughes et al., 1998,95).

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.