The Formation and Evolution of Sony Ericsson Alliance Assignment - 2

The Formation and Evolution of Sony Ericsson Alliance - Assignment Example The merger was also approved by the European and other regulatory authorities. The new company, headquartered at London, UK, envisaged total employee strength at the time of merger at 4000 of which Ericsson brought 2500 and balance contributed from Sony. The mission statement of the new company is to become the communication entertainment brand enabling everyone in creating and participating in entertainment experiences. The new company’s product line includes Mobile phones and handheld multimedia communication products. As per the data provided by International Data Corp (IDC), Nokia controlled 30.8 percent market, Motorola at 14.6 percent and Ericsson at 10 percent of market share in mobile market at the time of the merger. Thus, Ericsson’s market share is way below market leader Nokia. In forging the alliance, Ericsson had the benefit of access to Sony’s Japanese market, and Sony’s consumer experience particularly in digital screens, and Memory stick. Sony had the benefit of access to Ericsson base stations and 3G infrastructures. Moreover, Sony had access to Ericsson handset core technology and entry to US market. Informing a joint venture, Sony had the benefit of sharing Ericsson’s international telecommunication experience and chance to fill missing link in form of satellite, gateway, and phones. On the other hand, Ericsson had access to Sony’s design and production processes and facilities in China. Sony’s financial strength was in benefit to Ericsson in the long run. Research and development costs could be shared between the partners in the current competitive arena. Ericsson was categorical in its financial report of 2001 that Ericsson will have a chance of augmenting supply chain strength from Sony’s proven and established supplier resource base.