Considering Ericsson is not really entering a new market, there is no new risks of entering there is no new risks of entering into VOIP mobile phone market. Although the production costs of this phone will be astronomically high, Ericsson should expect the cost of development and production to decrease as parts become easier to mass produce and manufacturer. Regulations within this industry are as usual within other Sony Ericsson phones. There is a substantial loyalty to both Sony and Ericsson products. There I would fully expect sales to be strong of this product.
Both companies are well-known for cutting edge technology within their respective fields of specialties that are electronics and telecommunications. Convincing people to change handsets should not be too much of a problem considering the VOIP feature should encourage existing and new customers. This is because of the lure of free phone calls instead of subscription based network calls. Ericsson has very good distribution channels. They have many partners within this industry that will help distribute the phone efficiently.
At this moment in time Sony Ericsson are unable to undercut other existing business. 2) The threat of substitutes Ericsson are not really in danger of anything else going onto the market that negates interest of our VOIP mobile phone unless another competitor does something better than Ericsson does. There is no danger to a complete loss in market if Ericsson brings out their phone early within the market and continues to add functionality towards the future iterations of the phones.
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But future improvement in mobile broadband technologies to improve the quality of services of the VOIP capability within the phone is something that can be a unique selling point. Profits will therefore be very high initially but will obviously have to drop over time as the market may become saturated. 3) The bargaining power of buyers We expect many buyers to go out a purchase this phone because it will be one of the best phones on the market, good enough to at least rival the best phones out there.
We expect many people to go out and purchase this phone especially new customer without a network provider because this will mean that they will not have to spend as much on a subscribed network provider line. Many of consumers may search around for the best deals available on the market but will see the combination of VOIP calls and network minutes as an attractive option 4) The bargaining power of suppliers Suppliers should not be any cause for concern for Ericsson as they have good relations with most of their suppliers.
5) Rivalry among businesses in the industry Rivalry will be quite fierce within this sector because as mentioned earlier. This is because you would expect competitors to emulate Ericsson's product This would be by undercutting Ericsson's prices and possibly thinking of something else, that we've have not incorporated into our VOIP phone Product It is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It is created by preference and culture.
Here, SonyEricsson partners Skype for Mobile Internet telephony(VoIP), to create the iSonyEricsson. Product differentiation Core product: The new iSonyEricsson transcends the problems solved by mobile phones. It is the new wave to connect more people wirelessly using the latest cutting edge Wi-Fi technology which would stimulate a bigger audience due to its main VoIP feature - Unlimited Free communication(phone calls) within wireless connections. It solve the usually problems faced amongst consumers, "I ran out of phone credit".
The western world already boasts of fast internet broadband connection, the iSonyEricsson will be the latest must-have accessory to have in order to fully utilize the internet. Actual product: This is the new iSonyEricsson which includes the regular features of SonyEricsson phones, and new features to support the VoIP capabilities e. g fast mobile broadband Augmented product: This consists of extra benefits built around the core and actual products. It includes free warranty for a year and Technical support(Toll-free telephone number).
Consumer product: bought for personal use by final consumers. The iSonyEricsson is categorised as a Shopping product because before selection and purchase, it will be compared with other similar product. The immediate competitor to the iSonyEricsson is the 3G Skypephone, also launched in the same month. The key to the iSonyEricsson's success over its competitor will be SonyEricsson's strong reputation and brand e. g during the fiscal year ending 2006, the SonyEricsson's phones outsold Apple's ipod by almost two-folds.
Also, they are the second most profitable handset maker, just behind market leader Nokia. Place Is the setting where a product can be bought. Sony Ericsson sponsors the Women's Tennis Association(WTA), and helps promote the Tour in about 80 cities. This will help bring exposure to the iSonyEcrisson phone to people associated with the events. All these elements will then be integrated to form a distinctive, but logical promotion. Conclusion The external analysis carried out above, shows the concerns that Sony Ericsson will face in launching the new product to the public.
Sony Ericsson will therefore be able to diversify into a new division quite easily because the company will has an idea on the public's view and social concerns on the new product. The effect of the external environment on Sony Ericsson in the past 18 months was explained above in order to show how those problems can interfere with the new product. According to the research being carried out on the new product, the external environment will tend not to have a large effect on the new product as explained above.
The strategy is a long term plan of action designed to reach a particular set of goals. The main aim of Sony Ericsson in the creating of the new division is to aim at customer satisfaction and generating profit on goods and services. In order to achieve this aim, the combination of the three main processes in strategic management will be used this includes strategy formulation, implementation and evaluation.
(1)Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental. (2) Concurrent with this assessment, objectives are set. This involves crafting vision statements (long term view of a possible future), mission statements (the role that the organization gives itself in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives.
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