The Sony-Ericsson Endeavour

Two losing groups in mobile telecommunications entered into loose talks in the summer of 2000 to join forces – for Ericsson to reduce its severe losses as well as for Sony to re-enter the international industry in mobile handsets. Significant discussions followed by the end of the year, although real planning for a full-scale joint venture began only after a Memorandum of Understanding were signed in April 2001. Both the companies brought together complementary resources making impressive statements at the start on October 1 2001. This report covers the background and partially covers the implementation process. Sony has been capable of considerably broaden its platform for mobile communications which it thinks of great importance to its future presence in advanced electronics consumer products and systems. Ericsson at the same time departed from consumer products and concentrated its strategy on mobile infrastructure….

There are numerous causes of partners to create a joint venture. They include both stated and observed goals for example technology exchange, risk reduction, international expansion, as well as other financial targets. Resources moved to a joint venture include both tangible and intangible assets, along with organizational capabilities. The initial ones include physical and financial means while intangible assets technical knowledge and patents, company reputation and brand name, and in addition organizational morale. A significant benefit from JVs is the combining of resources the responsibility of which has rarely been tackled in the empirical literature as a crucial characteristic of success. Nonetheless, it is obvious that the flow of resources from partners makes up a critical dimension of JV performance….

Source: European Instiute of Japanese Studies

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