Sony Ericsson Negotiation Process

1912 words 8 pages
The creation of Sony Ericsson Mobile Communications

Formal discussions were held between Ericsson and Sony in late 2000 with serious discussions in early 2001. Before the start of reorganising its operations the Ericsson handset division – DCP Division Consumer Products - employed close to 18,000 people, or almost 20 per cent of total Ericsson employment. Between 6,000 and 7,000 were transferred to Flextronics. An estimated roughly 8,000 were released and another 3,500 were transferred to Sony-Ericsson, EMP 900 Technology Licensing (EBT).

A number of companies had already approached Sony before Ericsson became the main solicitor. They included Motorola, Alcatel and Siemens. Nokia had already, at earlier stage in the 1990s
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Sony could have played a more dominant role. However, Sony took a leading role in manning critical functions, and ex-Sony executives are in charge of business units and also in charge of supply chain management. Former Ericsson executives are in charge of human resources and a number of other functions.

Today both sides realize that this joint venture is big and rather complex one. Sony, in particular realized that implementation and consolidation would took much longer than expected and that both partners were too optimistic about early results as they expected profits already during the first year. It has also become evident that the partners had to learn more about each other. Sony also had to learn more about special requirements from the operators and also had to realize that a new platform requires at least one year to develop.

In the meantime Ericsson would have to come to a deeper understanding that handsets are not only complimentary to infrastructure but are products by themselves
London became headquarters for Sony Ericsson Mobile Communications with leadership by Ihara-san and Mr Wäreby. All planning was completed by August 2001 and operation of the joint venture started formally on October 1 2001. The HQ in London was originally planned to have a staff of 20-30 people. R&D was to be carried out in Tokyo, Lund and Kista, although originally scattered to several other places.

Cultural perspectives were


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