Sony Ericsson Topic: Market Share Problem Statement: Why is the market share of Sony Ericsson decreasing?

Introduction: Sony Ericsson Mobile Communications AB is a joint venture established on October 1, 2001 by the Japanese consumer electronics company Sony Corporation and the S wedish telecommunications company Ericsson to manufacture mobile phones. The rea son for this venture is to combine Sony's consumer electronics expertise with Er icsson's technological knowledge in the communications sector. Bert Nordberg is the president of the company since October, 2009. Sir Howard Stringer, CEO and P resident, Sony Corporation, is chairman of the board The company's global management is based in Hammersmith in London, United Kingdo m, and it has research & development teams in Lund, Sweden; Tokyo, Japan; Mexico City, Mexico; Beijing, China and Redwood Shores, United States. By 2009, it was the fourth-largest mobile phone manufacturer in the world after Nokia, Samsung and LG. The sales of products largely increased due to the launch of the adaptat ion of Sony's popular Walkman and Cyber-shot series. In 2010, its market share h ad dropped to sixth place behind Research in Motion and Apple. It was growing but in first quarter of 2008 its market share droped from 9.4% to 7.9%, profits fall significantly by 43% and sales by 8% despite favourable cond itions that the handset market was expected to grow. In second quarter it saw ne t profit crash by 97% and decided that it would cut 2,000 jobs, leading to wide fear that Sony Ericsson is on the verge of decline along with its struggling riv al, Motorola. In third quarter the profits were much on the same level, however November and December saw increased profits along with new models being released such as the C905 being one of the top sellers across the United Kingdom.In 2009 it sold 57.1 million units and again its market share decreased by 3%, from 7.9 % to 4.9%. Market share: Market share is the percentage or proportion of the total market that is served by a company or business. It can be measured by dividing the companys sales volum e by total units in that market or by dividing the companys sales revenue from to tal ssales revenue available in that market.Increasing market sharer is one of t he most impoprtant purpose of the business because market share is positivly rel ated with profitability. So companies try to increase their market share. Objectives: Our objective is: To identify the problems and causes which result in decline of market share. To find the solution of these problems To increase the market share and profitability by eliminating the problems and c auses To create loyal customers To attract new customers as well as retain existing customers Find the ways to decrease cost and increase quality at the same time To increase profitability Reasons of decreasing market share: Market share of Sony Ericsson decreased because their; Design styles has been same for a long time so lot of people feel that it all lo oks same .

It adopted the copy paste strategy, means firstly company earned lot of profit b y making minor changes in their existing hardware and software but latter this s trategy cut their large market share. It issued 40 shares handsets from 2005 to now and all mobiles were very similar to at least one or more of the existing mo biles Mobile suddenly switched off and some times middle key often stop working Mobile stop working because the software got crushed after repair, its speed got slow in processing and week in signal receiving Some mobiles display becomes blank and they reject to accept such mobiles howeve r product had guaranty period Their mobiles were poorly manufactured some of them start with problems such as unable to read the memory card, charging problem, hanging etc. Service center does not have any feed back center Battery and keypad does not work properly. Its battery timing was very short and its keypad losses colors. It losses focus on quality production Solution and Ways to increase market share: Eliminate all the problems and defects from their handsets Produce quality product which make sense to people that they are making good us e of their money Make continuous innovations in your product, use latest technolog, forecast cust omers needs Reduce your cost of production so that customers can be attracted. Best quality at reduced cost can increase your customers and also attract customers of compet itors. They should include lunar calendar with international calendars The names in contact list should have various categories that can be used as add ress book There should be search function in phone log (calls & contacts)

Literature review: Sony Ericsson lost market share in the fall due to poor lineup and the sluggishn ess also cut back on the most of the Sony Ericson profitability as it made the e quivalent of just under 10.8 million dollar in profit where it had made $65.9 mi llion in the summer. Much of the short fall was blamed directly on the lack of n ew models. The company is placing most of its faith in the near term on the Xper ia play better known as play station phone. All its existing mobile phones were similar to each other and limited to Symbian and Window mobile which did not hel p Sony Ericson to raise its market share (http://www.electronista.com/articles11 /01/20/sony.ericsson.q4.2010drop.without.more.android.). Sony Ericsson relied on a wealth of new release Xperia in 2010 to help to retain its share of the global market. Bert Nordberg , the CEO of the firm said that t he 4% market share would be retained as new smart phone were launched to help th e fight of stiff competition that has been seen the manufacturer make losses in recent past . He also said that the company would not lose its grip on its curre nt market. However Xperia10 did not get an update to android 2.1 until the end o f the year. (Matt Dixon) The product portfolio straddles a wide brand ranging from Rs.5000 to 35000 tryin g to build on the traction it got with last Xperia series. It launched two more phones in India on Thursday. Xperia are priced at 32000, and Xperia play price a t 35000. The Xperia has got good response. Sony Ericson has 2% market share in I ndian smart phone market but the local brands such as Micromax, Lava and Spice m obile with low price up to 8000 and high features dominate the foreign brands.In response multinational brands have sought to move up the value chain to the hig her end smart phone segments. In focusing on the high end mobile phones they lea

ned heavily on Googles mobile operating system Android.. (Lison Joseph,Place Mumb ai/ agency DNA) At the end of the month jan,2011 Sony Ericsson replaced its top and with the Xpe ria Arc which has 8 megapixel camera and the Gingerbread the latest version of Googles Incs Android operating software and it was expected by 221 analysts that t he sales will be1.79 billion Euro.However sony Ericsson shipped 11.2 million han dsets at average selling price 136 euros, whereas the volume was expected at 12 .2 million units and average selling price a 148 Euro. So it could not achieve its targets.(Bloom Berg) However Xperia series receive good response but it cant make prominent contribut ion towards raising market share of sony ericsson, which goes on declining const antly. With making innovations and improving handsets, It can use other approach es to increase its market share The traditional view of market share considers that market share primarily arise from offensive marketing such as advertising and other offensive marketing vari ables and according to Guadagni Ed All Sales is result of promotional and other variables. This view of marketing is not wrong but the affects of customer satis faction and customer retention are not emphasized in these models except for loy alty. On the other hand according to defensive view (Formell and Wernerfelt 1987 , 1988) marketing resources may be better spent keeping existing customers. Than by attracting new ones. It is five times costly to attract new customer as to k eep an old one (Peters 1988) provide some support for the new position.(Rust ed all) \ Quality is of large importance inbn increasing maret share but there are some ot her tactics that can be used in increasing our market share. Firstly provide the high_end products and reduce your cost which will increase your customer base. Then focus on perpetual and cost_efficient innovation . create personal relatio nship with customers . the individuals within the your organization need to have personal relationshipwith the individuals within your customer organization. It means try to migrate up your organization chartso that your company can have a relationship with more senior people. Try to create a compelling reason for end user to demand your products. It will be a very powerful negotiating tool.(Don $ Martha) According to Greg.E.Stine market share depends on knowing your competition when you better know your competitors. You may find gaps where you have opportunities to stand out. When you are a market leader you should know what is your competi tor doing. Check your Differentiation from other competitors and provide some un iqueness. When you are differentiating your product from others then keep in min d what or whom you are trying to be different from. And if you do not improve yo ur company your competitor will move on your market share.(Greg E. Stine) Every company is in the quest for increasing market share. To be successful in s tealing market share you must know about your customers choices, traditions etc. Do everything you can ensure that your workforce the best trained. Marketing st rategy should not be confusing. Sometimes we cannot get those results that we ex pect because the way used to deliver message was wrong. When you challenge a mar ket reader you must be consistent as you have communicated about your product. Y ou must have clarity in your brand so that your customer can easily identify you r product.( ) when economy is doing well and companies are going to reduce advertising and mar keting budget this is doubtful. Because it will become more difficult to pick up new clients there is so much competition. When economy is in recession or strug gling. It will take less money for you to acquire new customers. You can attract your competitor customers. If you successfully prove that your product will save money. It can help in build market share. It is important to maintain or increa

se advertising and marketing budget when economy is down.( Terry Stanfield)