TABLE OF CONTENTS

OBJECTIVES .……………………………………………………………………….1

ABSTRACT…………………………………………………………………………...2

OVERVIEW OF SONY CORPORATION

A. Company Mission / Objectives……………………………………………........3-4

B. Assessment of Resources …...…………………………………………………4-5

C. Competitive Advantage…..…………………………………………………......5-6

D. Company Performance………………………………………………………….6-8

E. Overview of Industry……………………………………………………………..8-9

F. Analysis of Macro-environment…………….……………………………….......9

G. Analysis of the Industry…………………………………………………………9-10

ASSESSMENT OF STRATEGIC ENVIRONMENT

A. Product-Service Market………………………..……………………………….11
B. Design Philosophy………………………………………………………….......11

C. Customers……………………………………..………………………………..11-12

D. Competitors……………………………………………………………………...12

SONY and GLOBALIZATION of SUPPLY CHAINS…………………………12-14

A. Business Model……………………………….….…………………………….15-16

B. Critical Success Factors………………………………………………………16-17

C. Generic Strategy for Globalization…………………………………………...17-19

GAP ANALYSIS and GLOBALIZATION

A. Environment Gaps…………………………………………………………….20-22

B. Industry Gaps…………..………………………………………………………22-23

C. Strategy Gaps…………………………………………………………………..23
STRATEGIC OPTIONS………………………………………………………….24-26

RECOMMENDATIONS…………………………...……………………………..26-27

CONCLUSION………………………………………………………………........28

REFERENCES……………………………………………………………………29

APPENDICES………………………………………………………………
…….30-42

INTENDED LEARNING OBJECTIVES

As a person with knowledge of globalization of supply chains,

the author has always brought up to his superiors the viability of
strategy formation regarding the analysis of this issue and at times
fails to understand the reasons or logic behind certain strategic
implementations imposed on it.

By delving into this project paper, the author intends to have

better insights into how the globalization of supply chains are thought
up, formulated and then imparted down into the subsidiaries of
companies and organizations. Utilizing strategic analytical tools such
as SWOT and Porter’s 5 forces model as well as analysing Sony’s
current strategy, the author hopes to have an in-depth understanding
as to how theglobalization of supply chains enables companies and
organizations to compete effectively and profitably in this era of
internationalization where competition is extremely intense.

In order to reinforce the learning objectives, two key focal

issues were focused upon i.e. innovation and diversity. Innovation
was discussed with regard to the globalization of supply chains where
it was renowned for its developmental capabilities to constantly
innovate. Diversity came under strategic thinking and formation as
the author considered the diverse culture, political climate, economic
surroundings, social environment, technological settings, government
policies and legal systems in order to better understand the issues
being discussed.

ABSTRACT

This project paper utilized analytical tools to review the present

macro-environment in the electronic consumer goods industry, and
Porter’s 5 forces to assess the attractiveness of the consumer
electronics industry, for long term sustainability and profitability. From
the analysis, key trends in the environment were then identified, how
the industry worked and the position of Sony within the industry was
ascertained. The paper then moved on to assess Sony’s espoused
strategy with regard to its suitability to international competitiveness
and globalization, during which SWOT analysis was used to re-
examine Sony’s internal capabilities in relation to the strategy being
followed. An overall analysis of the company’s performance in terms
of financial, marketing, operations and human resources was also
conducted to assess and compare Sony’s capabilities with those of
its competitors. Gaps in the capabilities and environment, with
respect to Sony’s business strategy were then identified.

Finally, several choices of strategies to reposition Sony

Corporation as leading player in the electronic consumer goods
industrywill be recommended and evaluated in terms of
appropriateness to the issues reviewed, feasibility in carrying out the
options and acceptability within the key stakeholders and decision
makers. Several key implementation issues related to managing
strategic change will also be addressed as well.

OVERVIEW OF SONY CORPORATION

Sony Corporation is a leader in the electronic consumer goods

industry and strives to put the power of computing in people's hands
so they can access their most important information. Perhaps the
most significant development to come from the consumer electronic
industry is the growth of mobile computing that allows users to
browse the web, access e-mail and files without being linked to a
wired personal computer.

Sony Corporation is a business entity specializing inelectronic consumer

goods. Its products enable its customers to put the power of computing in their

hands, along the process accessing the information they need. Sony

Corporation was established in 1946 by Masaru Ibuka and Akio Morita ( 2001).

A. Company Mission / Corporate Objectives

Sony Corporation aims for sustainable growth as a broad market leader in

the electronic consumer goods industry as well as for segment leadership. In

both cases, the Sony brands will play a crucial part. Sony Corporation is able to

establish its broad leadership usually by acquiring other strong electronics

companies and their products, which are then combined into a new, larger

company. Offering training to its employees, improving the company operations,

and the introduction of new technologies then reinforces the positions of the

various Sony products. This practically results in economies of scale that is able

to create a distribution network for both the local and international Sony products.

If a market is already in the control of other mobile computing companies, Sony

Corporation devotes its attention towards the development of a premium

segment with its various electronic products.

 The mission of Sony Corporation is to secure the growth of the business

in a sustainable manner, while at the same time constantly improving the

company’s profitability. The strategy to achieve this involves four elements:

1. Striving in order to reach a leading position in attractive markets

2. Focusing on securing a competitive share of the electronic
consumer goods market segments.
3. Working in order to improve the company’s efficiency and cut
costs in operations.
4. Continuous growth through selective acquisitions for as long as
they are able to create shareholder value.

B. Assessment of Sony Corporation’s Resources and Capabilities

Sony Corporation is committed on its efforts to continuously

develop original technology that generates a high appeal to the
general public due to its quality and cost effectiveness. Over the
years, Sony Corporation has been able to build a substantial base
meant to boost the company’s designing and manufacturing
capabilities. This enables the company to bring to markets truly
original and more importantly mobile devices that are reasonably
priced. The research and development team ofSony Corporation also
plays a crucial role in the achievement of this feat. The company also
believes that making a positive impact in the society through their
quality products is the very essence of being a manufacturer.

The Porter’s 5 forces analysis lean towards an outside-in

perspective where the environment is taken as the starting point
when determining the strategy. Sony Corporation’s strengths are
determined i.e. using an INSIDE-OUT PERSPECTIVE.

C. Sony Corporation’s Competitive Advantage

Among the competitive advantages enjoyed by Sony Corporation are:

· Economies of Scale and Scope in manufacturing and

research and development arising from its numerous
facilities situated in Japan, the United States and other
countries worldwide.

· Unique Quality Technology owing to heavy

emphasis on research

Sony Corporation’s commitment to research &

development activities has always been one of its top
strategies to remain competitive in the market.

· Differentiated Products
 Through the production and marketing of differentiated
products originating from their research and
development activities, Sony Corporation is able to
create its own firm-specific advantages. The continuous
pursuit of research and development processes
enables Sony Corporation to produce a steady stream
of originally differentiated products which makes it
difficult for competitors to find substitutes. Because of
this differentiated approach,Sony Corporation is able to
market their products worldwide, which enables them in
turn to maximize the returns on research and
development expenditures.

Sony Corporation’s competitive advantages could be sustained

provided the company would continue to focus on its core
competencies (inside-out approach). However, the company also has
to be aware of the latest technological changes (outside-in approach).

D. Measuring Sony Corporation’s Performance

a. Financial Analysis

In the fiscal year of 2003, Sony Corporation was able to

experience a significant progress in several key metrics. The
inventory was reduced from $55 million to $23 million and inventory
turns rose from 12 to 26. The cost of revenues, excluding the benefit
from previous special charges and the applicable portion of the
amortization of intangible assets, decreased from 72.3% of revenues
to 67.8% of revenues. The combination of sales and marketing,
research and development, and general and administrative expenses
was reduced from $ 435 million to $339 million, while at the same
time improving on the pace of innovation. Sony Corporation’s total
revenue has approximately grown from $1 million in fiscal year 1995
to $ 871. 9 million in fiscal year 2003.

b. Marketing

The retailers in Japan and the United States represent Sony

Corporation’s largest sales and marketing channel which encompass
national and regional office supply stores and mass merchants.
Distributors represent Sony Corporation’s second largest channel and
generally sell to both traditional and Internet resellers and retailers. In
Europe and Asia, Sony Corporation’s market share is still relatively
high.Sony Corporation has more than 100 international distributors
located worldwide.

The company uses online stores as venues to sell its

products. This is accomplished through the use of e-marketing
campaigns and product bundles. The company is able to build
awareness of its products and brands through mass media
advertising, public relations efforts and branded Internet properties.
The company also makes it a point to receive feedback from its
customers through market research. The company then uses these
feedbacks to refine its product development efforts and marketing
strategies.

c. Operations

Sony Corporation out-sources all of its manufacturing and

hardware designs of its products to third party manufacturers. This
outsourcing extends from prototyping to volume manufacturing and
includes activities such as material procurement, quality control and
delivery to distribution centres. The company is assured that there is
an adequate supply of components to manufacture its products. The
majority of the company’s products are assembled in Japan.
Distribution centres are operated on an outsourced basis.

d. Human Resources

Sony Corporation knows that its future depends on the

company’s ability to attract new personnel and retain existing
personnel in key areas including engineering and sales. None of the
company’s employees is subject to a collective bargaining
agreement. The company considers its relationship to its employees
to be good. Howard Stringer is the current Chairman and CEO
of Sony Corporation, while Ryoji Chubachi is the current President
and Electronics CEO.

E. Overview of the Industry

Gone are the days when employees work on their desks for eight hours a

day. Today’s employees want to utilize their productivity tools and interact with

different individuals and groups in different settings. The technological

advancement in wireless technologies has allowed workers and employees to

access communication tools in new settings.

Research from Cahners In-Stat/MDR revealed that there are more than

78 million remote and mobile workers in the United States alone (Arora et al.

2001). It also states that the provision of access to mobilebusiness applications

and wireless access to the Internet to the workers and employees will be key

priorities for business. On the other hand, a study by Access Markets

International (AMI) Partners Inc. predicts that more than half (67 million) of the

US domestic workforce will be mobile by 2006 (1997). This should create an

enormous demand for wireless data/Internet solutions.

F. Analysis of the Macro Environment

A detailed analysis of the macro environment can be extracted from

Appendix 1. In summary, the four political trends that have emanated among
countries simply verified that the people in these countries are aware of the

possible benefits of the modernization of telecommunications and electronic

goods. The overall economic outlook of most regions suggests that these

countries are ready to embrace the new technologies that could be possibly

brought about by Sony Corporation. The large number or Internet users in the

ASEAN Region suggest that people in these countries have adequate knowledge

on Information Technology to be able to patronize Sony technology products.

G. Analysis of the Industry

The assessment of the industry attractiveness is based on

Porter’s 5 forces model. A detailed analysis can be found in Appendix
2. In summary, the results of the Five Forces Analysis favor the entry
of Sony Corporation in most markets in spite of globalization. The
threat of new entrants could not be considered as serious because of
the lack of distribution channels of major competitors as well as the
established good reputation of Sony products. Also, Sony products
clearly cannot be easily substituted by other products because of the
undisputable quality of Sony products that made it appealing to
millions of its customers. The bargaining power of suppliers other
than Sony Corporation is relatively low while the bargaining power of
buyers is relatively high. The competitive rivalry between Sony
Corporation and its major competitors indicates that Sony
Corporation is way ahead in terms of product efficiency and
sustainability.

Figure 1. Porter’s Five Forces used in the Assessment of Sony Corporation’s

Strategic Environment

ASSESSMENT OF STRATEGIC ENVIRONMENT (Porter’s Five Forces)

A. Product-Service Market

Sony Corporation’s products include smart-phones, handheld computers

and other electronic products. These are equipped with a Personal Information
Management (PIM) software and other note-taking applications (2001). A range

of additional features including high resolution coloured screens and wireless

capabilities ensure that there's a Sony product designed to meet the needs of

clients anywhere in the world.

B. Design Philosophy

Hand-held computers are different from a laptop. Sony products focus

more on the management and access of information rather the creation and

editing of documents. For this reason, Sony Corporation has developed a unique

set of guiding principles - simplicity, wearability and mobility. Total commitment to

these principles makes Sony products very user-friendly to its customers (1995).

C. Customers

A majority of Sony customers are professionals who rely on mobile

gadgets and expect seamless handoffs every time they make calls. For instance,

a customer phones in a service request from the New York airport while boarding

a plane bound to Paris the same day. The technical people of Sony Corporation

in New York will immediately work on the service ticket of the client. And when

that client arrives in Paris, he / she would be able to call the New York service

center and pick up exactly where he / she left off ( 1999).

D. Competitors
 Sony Corporation is the world's leading producer of electronic consumer

goods. Interestingly enough, Sony Corporation has an even larger share in the

market for hand-held computer operating systems. Around eighty (80) percent of

hand-held computers in the United States operate on a Sony operating system.

Microsoft is the only major competitor with a share of sixteen (16) percent. The

hardware market gives Sony Corporation a market share of sixty (60) % (2002).

Of the major competitors, Handspring is using Sony's operating system, and hold

about 7% and 14% market shares respectively. Other competitors, such as

Compaq and H-P, use Microsoft's operating system, but both companies have

below 10% market share. Sony Corporation has had so much success in the

consumer market, but the future goals include selling more products to

corporations ( 2002).

SONY CORPORATION AND GLOBALIZATION of SUPPLY CHAINS

 It is a common knowledge that the electronic consumer goods industry is

still a relatively new industry and is still in its early stages of development.

However, it has shown signs of rapid growth and it is being estimated that there

will be more than a million mobile and electronic devices that will be shipped

within the year. And it is further being expected that within the next years the

tremendous growth and technological advancements will continue in the

electronic consumer goods industry. Mobile commerce and multimedia terminals

are just some of the technological advancements already being expected.

Therefore, the continued growth and development will also make it imperative for

localization to occur in the electronic consumer goods industry in the years to

come (1993).

The software development for mobile devices of Sony

Corporationcertainly will become the target for localization because of its

dynamism. There are still plenty of operating systems for mobile devices that

software developers can use. But since development cycles are much shorter

than computer software development cycles, Sony Corporation may need to rush

the release of its localized versions of software. By doing this measure, they will

be the first to launch software in various markets, thus putting more pressure on

the localization process. Also, the redesigning and streamlining of both software

development and the localization process will become imperative if this scenario

happens (1997).
 A majority of the localization projects of Sony Corporation for mobile and

electronic devices are part of OEM deals. Sony Corporationoften partners with

smaller companies to ship products with devices. Hence the huge customer

influence on localization projects and product design is undeniable. Changes are

also frequently made to the documentations and the overall look of the

applications. Therefore, this will require the localization process to be a lot more

flexible than in other situations localizers are used to dealing with (2001).

There is also an issue of the lack of experience in dealing with electronic

devices in this industry. Thus, there is still no knowledge base from where to get

the troubleshooting tips. Since most projects require both the software and

localization industries to sign non- disclosure agreements, software developers

who are working on a project and encounter problems won’t be able to go

outside their organization to ask for assistance. Thus, they would have to find

answers and solutions to their problems by themselves. Their solutions also may

never be shared with others. Clearly, there is an immediate need for a knowledge

base that will guide all those in this field (2001).

The points discussed so far bring out the necessity of having cooperation

between Sony Corporation and localization vendors. Both should strive hard in

order to establish streamlined processes for localization. Close collaboration will

help guarantee successful localization for mobile devices.

A. Business Model for Globalization of Supply Chains

The subscription business model has been widely used by most

telecommunication and consumer electronic goods companies, but the

application of this model has started to spread up to this time. Instead of selling

the products directly, most companies nowadays are doing the process of selling

their monthly or yearly access to a particular product or service. As a result, the

company is able to convert a one-time sale of a product into a recurring sale of a

service.

Effect on Sony Corporation

Sony Corporation will surely benefit because of the fact that they are

guaranteed of a constant revenue stream. This will significantly reduce the

uncertainty and the risk-taking of Sony Corporation. Also, most of the time, the

subscription pricing structure is carefully designed in order to make sure that the

revenue stream from the recurring subscriptions could be significantly higher

than the revenue coming from simple one-time purchases. In most subscription

schemes, it also induces the increase of the company’s sales through disallowing

the subscriber’s option to either accept or reject any specific product. This

triggers the reduction of customer acquisition costs, and allows the

implementation of a personalized marketing ordatabase marketing.

 However, subscription business models also have their

disadvantages. Sony Corporation needs to invest to a large infrastructure in

order to help in the management and monitoring of subscriptions.

Effect on the Sony Customers

Sony consumers can also benefit greatly from this business model. If they

will be able to buy Sony products regularly, then they will significantly benefit

from the convenience. However, they will only have to make one particular Sony

purchase decision, then they will just simply have to wait for the Sony product to

arrive. This model will be of great help for those consumers who are in search for

structure and constancy in their hectic lives.

B. Critical Success Factors

For Sony Corporation to be a viable player in the electronic

consumer goods industry amidst the globalization of supply chains,
the following success factors are critical:

· Financial Stability

Financial stability is crucial especially in the pursuit of

research and development activities. In the electronic
consumer goods industry, it is important to remain
updated with the latest technological developments to
be able to stay competitive in the market.
 · Product Performance and Price

The designing of the best mobile products comes as a

result of well-funded research and development
activities. The strong performance of electronic
products in the market could also be linked to their
cost-effectiveness. However, the company has to be
aware of the positioning in terms of process so as to
maintain satisfactory profits margin and remain
competitive in the market.

· Marketing Strategy and Distribution

High brand awareness among the buyers has created

the need for aggressive marketing, and access to
strong distribution channels is critical for the
introduction of new models (2001).

C. Sony Corporation’s Generic Strategy for Globalization

Sony Corporation’s generic strategy in the electronic consumer goods

market lies on product differentiation. Thedifferentiated Sony products are able to

satisfy the needs of customers through a sustainable competitive advantage.

This allows Sony Corporation to desensitize the prices of their products and

instead focus on the values that generate not only a comparatively higher price

but also a better margin.

Figure 2. Porter's Generic Strategies.

Sony Corporation is making an effort to increase awareness of its various

Mobile Workforce solutions. These are actually solutions for people who rely on

carrying computers around as part of their jobs. The first part of this initiative

revolves around the concept of sales in the mobile field.

The purpose of Sony Corporation in this effort is to show how they can

help their customers and clients incorporate their Sony devices into their sales

force automation strategy ( 1997).

The term automation of sales force may seem to imply that a person can

automatically make sales, which is very far from the truth. More precisely, what

the automation of sales force does is to automate the aspects of the processes
involved in sales. Definitely, this would make it easier for the clients to keep track

of the person to call, how and when to follow-up as well as the value of

prospects.

Sales force automation is a good initiative to getting the difficult part away

from these tasks. This would mean finding the appropriate software tools that

would help the client organize his / her contacts and phone calls as well as

remind him / her once in a while of meetings and missed calls. There have been

existing solutions that enable sales professionals to track order history and

status.

What is amazing is that some of the best sales personnel have been

keeping on using paper DayTimers. True, they're portable, but far less portable

than Sony organizers. With these little Sony organizers, there's no longer a need

to bring along laptops or endlessly erase and write in paper planners.

There is no doubt that serious salespersons need a Sony device to help

them to do their jobs efficiently. It's so sleek that it can be slipped into a pocket or

briefcase. Also, it can be easily carried anywhere and takes up little space that it

can be easily hidden.

Therefore, the valuable information that sales people collect can now be

synchronized with the pertinent information in the servers of companies. The

organization will have access to important information about their customers and
the sales staff in turn also will have access to the information that will help them

sell easily.

GAP ANALYSIS and GLOBALIZATION

One of the keys to success of a company lies on the

consistency of its business strategies with requirements of the
industry environment (external consistency). Also, the company’s
capabilities need to be in line with the business strategies being
pursued (internal consistency). Therefore, in the process of
undertaking these processes, it is expected that some gaps will exist.
The gaps, though, provide the opportunity for the company to assess
the appropriate and feasible strategic options needed to improve the
overall competitiveness of the company.

A. Environment-Strategy Gaps

Both the macro-environment as well as industry environment

shall be considered. But it important first to start with the analysis on
how Sony Corporation’s strategies fit with the major trends of
globalization within the industry, after which the possible gaps that
may exist will be identified.

Macro-Environment-Strategy Gaps
Political Trends

The possibility of the occurrence of political and electoral crises

within regions where Sony Corporation has operations will not be
helpful at all to its strategy to solidify its top position in the electronic
consumer goods industry. While the implementation of AFTA
promotes common tariffs among countries, other countries will have
no choice but to follow the individual national tariffs imposed on their
products. Nevertheless, Sony Corporation should view the
globalization of the supply chains of the electronic consumer goods
industry as an opportunity rather than threat as the earlier issues
have identified.

Economic Trends

The possibility of the occurrence of global recessions brought

about by companies closing down and the loss of jobs due to the
globalization of supply chains may have a direct impact on Sony
Corporation’s strategy of dominating the world market. Also, there are
huge differences in terms of the GDP per capita earnings among
countries. This situation should make Sony Corporation ponder about
its positioning strategies in certain countries where it has operations.

Social/Cultural Trends
 With the rise in the middle to upper-middle class households in
certain countries, there exists a strategy mismatch for not considering
the potential for consumer market.

Technological Trends

There is a need for Sony Corporation’s business strategy to be

aligned to any revolutionary technological changes impacting the
electronic consumer goods industry.

Legal Trends

The company has to be aware of any changes in terms of

government legislations within the countries where it has operations.

Industry Environment-Strategy Gaps

Industry Rivalry

There is high level of rivalry that occurs in the consumer

electronics industry. This certainly may have a grave impact on the
overall consumer electronics industry profitability, and pose a threat
to Sony Corporation. The only gap that could possibly arise is the
financial resources of Sony Corporation compared to its competitors.
Buyers

Since the bargaining power of buyers is high, it offers both

opportunities and threats. It also has a deep impact on the consumer
electronics industry profitability. Thus, gaps exist in the form of
customer segmentation, in which Sony Corporation may also
consider positioning itself.

Suppliers

Suppliers have only average bargaining powers resulting in

lower profitability for the consumer electronics industry. Sony
Corporation could capitalize on this situation by forming strategic
alliances with other electronics companies or even acquisitions.

Substitutes & New Entrants

Both of these industry elements pose very little threat to the

consumer electronics industry, much less on the industry’s
profitability. The only issue that may have a major impact on Sony
Corporation’s strategy could be the technological changes that
produce substitutes which may threaten the industry.

B. Strategy-Capabilities Gaps
 Sony Corporation’s technical expertise in the manufacturing
processes and its continuous pursuit of research and development
activities may become a stumbling block with changes in the
technological trends. There is an impending need to have better
market insights. Sound marketing strategies and the access to
distribution channels are not enough to guarantee success for Sony
Corporation. The financial resources of Sony Corporation are way
ahead compared to leading players like Microsoft and Compaq.

STRATEGIC OPTIONS for GLOBALIZATION

Deriving from the gap analysis between the environment,

strategy and capabilities, many strategic options would become
imperative. It is therefore essential to evaluate these strategic options
as to whether they are appropriate to the issues addressed, whether
they are feasible enough to be implemented and their acceptability to
key stakeholders.

A. Business Level Strategy

 There is definitely a need to reconcile both the inside-out and
outside-in capabilities. While Sony Corporation’s business strategy
involves focusing on its core competencies with market position
following its resource base, the company will be put into a
disadvantageous position should it choose to neglect both the macro
as well as industry environment. Therefore, Sony Corporation has to
be aware of the latest technological changes, as well as changes in
political, economic, legal and even demographic trends in order to
develop the outside-in capabilities, such as market sensing, customer
linking, channel bonding and technology monitoring.

The advantages enjoyed by the company may come in the form

of increased revenues. Knowing what the market demands and the
latest trends could help Sony Corporation fully exploit its research
and development capabilities to come out with globalization
strategies which are not only cost-effective but also high in quality.
The strategic option can even be used as marketing tool where the
focus is on staying close to your customers and listening to their
feedbacks. On the flip side of the coin, there will be huge mobilization
of resources involved, and the associated risks bestowed on the
company.

Nevertheless, the mentioned strategic option seems the most

practical in the wake of globalization, since there is a sudden shift
towards a more integrated and independent world economy. The key
stakeholders too should not have any objections so long the
company’s core business is not threatened. By virtue of Sony
Corporation’s centralized control of its subsidiaries, it is being
expected that major barriers should not exist in carrying out such an
option except additional time may be required given the scope and
span of its operations.

Corporate Advantage from Supply Chain Analysis

The product differentiation strategy of Sony Corporation will

definitely be advantageous on any part of the supply chain analysis.
For instance, Sony Corporation’s efforts to gather primary information
that are unique and unavailable to most of its competitors have
successfully initiated differentiation. The product differentiation
strategy of Sony Corporation comes from its uniqueness. The
differentiation advantage ofSony Corporation is achieved either by
changing their individual value chain activities in order to increase the
level of uniqueness of the final Sony product or by reconfiguring the
supply chain.

B. Corporate Level Strategy

Understanding the strategic importance of the impacts of

globalization of the supply chain in the consumer electronics industry
is something Sony Corporation has to be familiar with. Sony
Corporation normally practices a centralized and globally scaled
configuration of assets and capabilities among its subsidiaries. This
allows information dissemination to be retained at the corporate
headquarters of Sony Corporation.

C. Network Level Strategy

There are various strategic options available for Sony

Corporation. These are enumerated as follows:

· Tie up with various local electronics company

· Collaborate with either Microsoft or Compaq

· Alliances with leading players in technology such as

suppliers

RECOMMENDATIONS

A tie-up or merger with various local electronics company offers

tremendous benefits in terms of access to the company’s
subscribers, infrastructure and even its resources. However, Sony
Corporation must not lose sight of its core competencies while
pursuing these tie-ups. Otherwise, the image of Sony
Corporation might be put in jeopardy.
 Meanwhile, the collaboration of Sony Corporation with its major
competitors can be seen as a ridiculous move at first. However, upon
close examination, this move could pave the way for Sony
Corporation to increase even more its market shares and revenues.
The bottom line is both sides would be able significantly gain
financially in such an alliance.Sony Corporation’s strengths in product
development combined with the financial capabilities of either
Compaq or Microsoft can transform them suddenly into an
unbeatable force to reckon with. One possible setback, however, is
the differences in the cultures of the companies involved. Another
possible setback could be whether any of Sony Corporation’s
competitors has the need to form alliances.

The third option also focuses on alliances, but this time with
either one of the suppliers specializing in manufacturing of electronic
products or the product’s operating system. The benefits of these
alliances should outweigh the costs in the long run.

In terms of appropriateness, all three options are able to directly

address the current issues mentioned. However, the question
remains whether Sony Corporation could be able to implement any of
these options, and whether these options can be acceptable to the
key stakeholders. Any merger or alliances may also involve the
sharing of expertise. Sony Corporation has traditionally relied on the
inside-out approach. It is important to note that any merger
transactions would have many implications on the company’s values
and culture as well as the resources. The key stakeholders definitely
would be concerned with such options and need to be convinced of
the positive aspects. Somehow, Sony Corporation will be able to
overcome this barrier in managing strategic changes in the process of
implementing any of the above mentioned strategic options.

CONCLUSION

The results of the analysis carried out on the macro-

environment indicated very significant effects for the consumer
electronics industry, even amidst the threats of political unrest.
Therefore, we could conclude that the consumer electronics industry
could still be expected to grow faster than average. A detailed
Porter’s Five Forces analysis verified an above average current
profitability for the industry as a whole.

The review of Sony Corporation’s capabilities and resources

revealed very little inconsistencies regarding the company’s
strategies for globalization of the supply chain. This is coherent
with Sony Corporation’s traditional inside-out approach. However, the
need to reconcile both the inside-out and outside-in approaches
becomes imperative now for Sony Corporation.
 The gap analysis among the environment, strategy and
capabilities of Sony Corporation revealed certain gaps, most of which
are biased towards the environment. However, these gaps paved the
way towards determining a number of recommended strategic
options to secure Sony Corporation’s international competitiveness.

Also, Sony Corporation has to find a balance between

adherence to internal forces within the company and to the changing
forces of the environment in order to implement such strategic
options.

APPENDICES

Appendix 1: Detailed Analysis of the Macro-Environment

Political Trends

The consumer electronics industry has at least four political trends. These

are: (a) the cry for democracy and reforms; (b) increased popular and local-level
assertiveness; (c) greater public accountability; (d) re-definition of the concepts of

power and politics. Also, the forms of political economies have slowly shifted

from a bipolar (big government-big business) to a tri-polar structure (authorities -

private sector – civil society).

The implementation of the Free Trade Area, or FTA, which laid out a

comprehensive program of regional tariff reduction in the consumer electronics

industry, will be continuously implemented in phases through the year 2008.

Over the course of the next several years, the programs in tariff reductions were

made broader. Efforts to eliminate non-tariff barriers and develop common

product certification standards were initiated. In addition, ASEAN nations also

were able to formulate framework agreements for the intra-regional liberalization

of trade in services. Industrial complementation schemes meant to encourage

intra-regional investment were also approved.

Economic Trends

Despite the adverse economic trends in the first half of the year, the

consumer electronics industry as a whole experienced relatively robust economic

growth. It is estimated that the industry, taken together, posted a better-than-

expected GDP growth of 4.5% last year, slightly higher than the 4.1% growth that

they achieved in 2002. Many countries have also seen the risk-weighted capital
adequacy ratios of their banking systems improve due to government-sponsored

bank recapitalization programs, continued progress in financial restructuring, and

improvements in financial risk management. The capital adequacy ratio of

commercial banks in these countries is now far higher than the 8% Basle norm. It

ranges from about 14% in Malaysia and Thailand to about 20% in Indonesia, with

the Philippine commercial banks reporting an average capital adequacy ratio of

about 18%.

Table 1. Trends in ASEAN GDP Growth Rates

ASEAN GDP Growth Rates

% growth, 1995 - 2005

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005*

Cambodia 6.7 5.5 3.7 1.8 5 5.4 5.3 5.5 5.2 6.0 (e) 2.4

Indonesia 8.2 7.8 4.7 -13.1 0.8 4.8 3.3 3.7 4.5 5.1 5.4

Laos 7 6.9 6.9 4 5.2 5.9 5.5 5.9 5.3 6.5 (e) 7.0

Malaysia 9.8 10 7.3 -7.4 5.8 8.3 0.4 4.2 5.3 7.1 6.0
Myanmar 6.9 6.4 5.7 5.8 10.9 6.2 - - - - -

Philippines 4.7 5.8 5.2 -0.6 3.3 4.0 3.4 4.4 4.7 6.1 4.5

Singapore 8 7.5 8.5 0.1 5.9 10.3 -2.0 2.2 1.1 8.4 4.5

Thailand 9.3 5.9 -1.4 -10.8 4.2 4.6 1.8 5.2 6.8 6.1 5.8

Vietnam 9.5 9.3 8.2 4.4 4.7 6.1 5.8 7.0 7.2 7.5 7.5

ASEAN 8.4 7.4 3.5 -9 3.1 5.9 1.9 4.8 5.3 5.8 5.5

Source: Asian Development Bank, World Bank and other sources

Social / Cultural Trends

There have also been social and cultural trends that have been evident

over the last 12 months in the consumer electronics industry. These include: (a)

the irreversible rise of civil society among countries; (b) the rise of civil society

blends perfectly with a tri-polar structure of political economy; (c) the increase in

the roles of intellectuals; and (d) the beginning of a period of introspection.

Technological Trends
 It is a common knowledge that the consumer electronics industry is still a

relatively new industry and is still in its early stages of development. However, it

has shown signs of rapid growth and it is being estimated that there will be more

than a million mobile and electronic devices that will be shipped within the year.

And it is further being expected that within the next years the tremendous growth

and technological advancements will continue in the mobile world. Mobile

commerce and multimedia terminals are just some of the technological

advancements already being expected. Therefore, the continued growth and

development will also make it imperative for globalization to occur in the

consumer electronics industry in the years to come (1993).

Legal Trends

Intellectual property (IP) and IP Rights (IPR) creation, commercialization,

and protection have been a significant source of comparative advantage of

enterprises and economies and a major driver of their competitive strategies.

Indeed, most countries nowadays are fully aware of the pressing need for a long-

term policy commitment to collectively transform their nations into one which is

largely based on knowledge, driven by innovation and sustained by life-long

learning ( 2002).

Countries have pledged to work together to help accelerate the pace and

scope of IP asset creation, commercialization and protection; to improve the

regional framework of policies and institutions relating to IP and IPRs, including

the development and harmonization of enabling IPR registration systems; to

promote IP cooperation and dialogues within the region as well with the region’s

Dialogue Partners and organizations; to strengthen IP-related human and

institutional capabilities in the region, including fostering greater public

awareness of issues and implications, relating to IP and IPRs. The new action

plan on IPRs for 2004-2010 would cover all these aspects.

Appendix 2: Detailed Analysis of the Industry Environment

The assessment of the industry attractiveness is performed using the

Porter’s Five Forces Model.

Five Forces Analysis

Figure 1. Porter’s Five Forces used in the Assessment of Sony Corporation’s

Strategic Environment

A. Intensity of Industry Rivalry

Sony Corporation is the world's leading producer of electronic devices.

Interestingly enough, Sony Corporation has an even larger share in the market

for hand-held computer operating systems. Around eighty (80) percent of hand-

held computers in the United States operate on a Sony operating system.

Microsoft is the only major competitor with a share of sixteen (16) percent. The

hardware market gives Sony Corporation a market share of sixty (60) % (2002).

Of the major competitors, Handspring is using Sony's operating system, and hold

about 7% and 14% market shares respectively. Other competitors, such as

Compaq and H-P, use Microsoft's operating system, but both companies have

below 10% market share. Sony Corporation has had so much success in the

consumer market, but the future goals include selling more products to

corporations ( 2002)

Table 2. Sony Corporation’s Market Status (Electronic Devices)

COMPANY MARKET SHARES

Sony Corporation 80%

Microsoft Corporation 16%

Other IT Companies 4%

Table 3. Sony Corporation’s Market Status (Hardware Market)

COMPANY MARKET SHARES

Sony Corporation 60%

Handspring 14%
 Compaq 10%

H-P 9%

Others 7%

B. Threat of New Entrants

New entrants in the consumer electronics industry will have to deal with

high costs of entry for their latest technologies. Most of Sony Corporation’s major

competitors have yet to establish strong distribution channels. This will severely

hamper their plans to retaliate with their technological developments as without

distribution channels, their products would never be seriously considered in the

market by customers.Sony Corporation must worry though about certain

government laws in most countries that might weaken its competitive position.

C. Bargaining Power of Suppliers

Suppliers of electronics products other than Sony Corporationhave

relatively lower bargaining power because their products have yet to establish

consistency in the market. This is in contrary to Sony brands where these

products have been able to secure the confidence of its customers worldwide.

D. Bargaining Power of Buyers

 A majority of Sony customers are professionals who rely on mobile

gadgets and expect seamless handoffs every time they make calls. For instance,

a customer phones in a service request from the New York airport while boarding

a plane bound to Paris the same day. The technical people of Sony

Corporation in New York will immediately work on the service ticket of the client.

And when that client arrives in Paris, he / she would be able to call the New York

service center and pick up exactly where he / she left off ( 1999).The bargaining

power of buyers in the mobile computing industry is relatively high because aside

from Sony Corporation, there are only few, large players in their industry.

E. Threat of Substitutes

There are very little threats that could emerge from possible substitutes

such as electronic devices and handheld computers. This is because product-

for-product substitution could not possibly happen especially with Sony products.

Other products cannot simply replace the ingenuity of the established Sony

products in the market. Also, the millions of users of Sony products surely would

find it too uncomfortable using other mobile products other than Sony products.

Appendix 3: Sony Corporation’s Corporate Government

The Sony Corporation Board of Directors and management believe that

sound principles of corporate governance are critical to obtaining and retaining

the trust and respect of stockholders, employees, other stakeholders and the
public. The Sony Corporation board serves at the discretion of Sony

Corporation stockholders and works to represent their interests by enhancing

business strategies and practices for the creation of long term stockholder value.

Governance Summary

• The board consists of three standing committees: Audit

Committee, Compensation Committee and the Nominating and
Governance Committee;
• A majority of board members are independent of the company
and its management;
• The Audit Committee of the board has established policies
consistent with the newly enacted corporate reform laws for
auditor independence;
• The independent members of the board meet regularly without
the presence of management;
• The charters of our board committees clearly establish their
respective roles and responsibilities;
• The company has a clear code of ethics and all employees
must affirm their acceptance of this code. The code of ethics
includes a conflict of interest policy to ensure that key corporate
decisions are made by individuals who do not have a financial
interest in the outcome separate from their interest as company
officials;
 • The company actively monitors compliance with the law and the
global financial policies and practices over critical areas. These
areas include internal controls, financial accounting and
reporting, fiduciary accountability and safeguarding of our
corporate assets.

SONY CORPORATION SWOT Analysis

Strengths:

• Sony Corporation has products that boast of a very powerful

retail. This includes a reputation for value of money,
convenience and a wide variety of products
• Sony Corporation has grown significantly over the years, and
has experienced global expansion.
• Sony Corporation’s main competence lies on the use of
information technology (IT) to fully support its international
logistics system. Therefore, Sony Corporation can see how
their individual products perform within Japan, or even at stores
at a glance. IT also supportsSony Corporation’s efficient
procurement.
• Sony Corporation is able to deliver good customer care, as the
limited amount of work would mean plenty of time to devote to
customers.
 • Sony Corporation’s lead consultants have established a strong
reputation within the market.
• Sony Corporation can afford to change direction quickly if its
management finds that the company’s marketing strategy is not
effective.
• Sony Corporation has little deficits and overheads. Therefore
the company can offer good value to customers on a consistent
basis.

Weaknesses:

• Sony Corporation is one of the world's largest company in

electronics and but has a weak control of its empire, despite its
IT advantages. This could lead to a decrease in productivity in
some areas where they have the least control of.
• Since Sony Corporation sell products across many sectors, the
company may lack the flexibility that some of its more focused
competitors possess.
• Sony Corporation operates globally, but its presence is located
in only relatively few countries worldwide.
• Some of the company’s weaker branches lack market presence
or reputation
• Some of the company’s personnel still lack the essential skills
base in many areas.
• The company is still vulnerable to the temporary losses of its
vital staff (e.g. being sick, leaving).
• The company’s cash flow is unreliable especially in the early
stages of a new product development.

Opportunities:

• Taking over, merging, or forming strategic alliances with other

electronics companies while focusing on strong markets like
Europe or the Greater China Region.
• The branches of Sony Corporation operate only on trade in a
relatively small number of countries all over the world. Thus,
this would open the opportunities for future businesses in
expanding various consumer markets, such as those in China
and India.
• The opening of new locations and branches offer Sony
Corporationthe opportunities to exploit market development.
This could lead to the diversification of the company’s branches
from large super centers to local-based sites.
• Opportunities exist for Sony Corporation to continue with its
current strategy of establishing large branches worldwide.
• Sony Corporation is continuously expanding, with plenty of
future opportunities to exploit for success.
 • The local councils of Sony Corporation are in the process of
encouraging local businesses with work whenever possible.
• The competitors of Sony Corporation may be slow to adapt to
new technologies especially the ones that Sony
Corporation releases.

Threats:

• Being number one means that Sony Corporation is the target of

competition, the company to beat, both locally and globally.
• Being a global retailer means that Sony Corporation might be
exposed to political problems in the countries where the
company has operations.
• The production costs of most consumer products have the
tendency to fall because of lower manufacturing costs.
Manufacturing costs fall because of outsourcing to low-cost
regions around the globe. This phenomenon could lead to
competition in prices, which in turn would result in the deflation
of prices in various ranges. Intense price competition must
definitely be considered a threat.
• The latest developments in information technology which could
possibly change the markets might challenge the company’s
ability to adapt to these changes
 • A slight shift in focus of a large competitor might wipe out any
market position that Sony Corporation has achieved over the
years. This could force the company to specialize in rapid
response but good value services to local businesses. This
would put so much pressure on the company’s consultancy
staff to keep informed with the latest changes in technology
where possible.

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March 13, 2009

EXAMINE THE
STRUCTURE AND
 CULTURE OF YOUR
ORGANISATION ( OR AN
ORGANISATION YOU
KNOW WELL.) TO WHAT
EXTENT DOES
STRUCTURE AND
CULTURE INPEDE OR
CONTRIBUTE TO THE
EFFECTIVENESS OF THIS
ORGANISATION)

An Assessment of Sony Corporation’s Organizational Culture and Structure

Introduction

“It’s a Sony!” Sony is one of today’s leading brand in electronics, from personal

to home entertainment audio and video system, communications gadget, broadcasting and

other professional electronic devices, personal computer, digital camera, to robots. Sony

Corporation is a Japanese electronics giant, and has now evolved into a multinational

company. This essay brings to light Sony Corporation’s organizational culture and

structure. Also, it is going to analyze the extent in which organizational culture and
structure impede or contribute to the effectiveness of the organization. The following

paragraph shows a brief history of the work organization.

A Brief History of Sony

In 7 May 1946 at , Tokyo and gave birth to (), otherwise known as. Four

years after, the “Sony tape”, the first magnetic-coated and paper-based recording tape of

Japan, was introduced in the market. Then in 1955, made a decision to change the logo

of its products, by labeling them as Sony. In January three years after, the company

shifted its name from to Sony Corporation; and by the end of the year, Sony was

registered in the Tokyo Stock Exchange. The year 1960 marked the beginnings of Sony

Corporation’s expansion, in the United States of America, to Hong Kong, to China, and

to the different countries across the globe. Different electronic products were introduced

in the market. Until now, Sony is one of the leading electronics brand.

Organizational Culture and Structure: The Sony Way

The working definitions of organizational culture in this essay are taken from the

lectures at hand. According to (1986), it refers to the “…pattern of development reflected

in a society’s system of knowledge, ideology, values, laws, and day-to-day ritual”.

Organizational culture, as said by (1985), is related with the “observed behavioral

regularities, norms, values, philosophies or policies, the “rules of the game”, and the
“feeling or climate” obtained by the individual as a member of the organization (p.6,9).

In essence, the culture within a certain organization is produced by the members

themselves that comprise the organization. They are driven by their organizational goals,

which affect the life of the organization. In this essay, the data on the organizational

culture has been obtained through secondary sources from different print and electronic

published materials.

What Mr. has envisioned for the company then was “to create a stable work

environment where engineers who had a deep and profound appreciation for technology

could realize their societal mission and work to their heart’s content.” In order to

stimulate his employees personally, he thought of making them “embrace a firm

cooperative spirit and unleash their technological capacities without any reserve” (Sony

History). Such aspiration of the founder therefore is what he wanted to see in the

organization that he was then about to create.

Incorporation objectives include the following: 1) to establish an ideal factory

that stresses a spirit of freedom and open-mindedness, and where engineers with sincere

motivation can exercise their technological skills to the highest level; 2) to reconstruct

Japan and to elevate the nation’s culture through dynamic technological and

manufacturing activities; 3) to promptly apply highly advanced technologies which were

developed in various sectors during the war to common households; 4) to rapidly

commercialize superior technological findings in universities and research institutions

that are worthy of application in common households; 5) to bring radio communications

and similar devices into common households and to promote the use of home electric
appliances; 6) to actively participate in the reconstruction of war-damaged

communications network by providing needed technology; 7) to produce high-quality

radios and to provide radio services that are appropriate for the coming new era; and 8) to

promote the education of science among the general public (Sony History).

It is interesting to note the underlying ideologies behind these objectives that

Sony Corporation has set. The national culture is evident in the way these objectives are

created, aside from the fact that this work organization was born during the aftermath of

the World War II. Mr. has pictured that his company will serve as his contribution for

national development, and that technology is the key to their growth. This is in line with

the national advancement that the Japanese government was aiming at then.

How reliable is the very first incorporation objective? In an interview with Mr. ,

the current deputy president of Sony’s Core Technology and Network Company, when

asked to describe the existing culture within Sony, his testimony says,

“…But Sony’s culture is a mix of very Japanese thinking and not very

Japanese thinking. In a sense we are very free. We are not forced to do

anything as long as we are doing a good job. You really have freedom

in Sony. If you’re innovative, you are given new opportunities. Some

people who may not really be suited for anything in other companies

can still survive in Sony. They will be given an opportunity to try to

realize their dream. … (2000)”

 These are Sony Corporation’s management policies. The first policy states, “we

shall eliminate any unfair profit-seeking practices, constantly emphasize activities of real

substance and seek expansion not only for the sake of size.” Second, “we shall maintain

our business operations small, advance technologically and grow in areas where large

enterprises cannot enter due to their size.” Third, “we shall be as selective as possible in

our products and will even welcome technological challenges. We shall focus on highly

sophisticated technical products that have great usefulness in society, regardless of the

quantity involved. Moreover, we shall avoid any formal demarcation between electronics

and mechanics, and shall create our unique products uniting the two fields, with a

determination that other companies overtake.” Fourth, “we shall fully utilize our firm’s

unique characteristics, which are well known and relied upon among acquaintances in

both business and technical worlds, and we shall develop production and sales channels

and acquire supplies through mutual cooperation.” Fifth, “we shall guide and foster sub-

contracting factories in ways that will help them become independent, and we shall strive

to expand and strengthen mutual cooperation with such factories.” Sixth, “we shall

carefully select employees, and our firm shall be comprised of minimal number of

employees. We shall avoid to have formal positions for the mere sake of having them,

and shall place emphasis on a person’s ability, performance and character, so that each

individual can fully exercise his or her abilities and skills.” Lastly, “we shall distribute

the company’s surplus earnings to all employees in an appropriate manner, and we shall

assist them in a practical manner to secure a stable life. In return, all employees shall

exert their utmost effort into their job” (Sony History).

 Many distinct features lie underneath these management policies by Sony

Corporation. First is the use of the word “we”, which implies the organization’s

commitment to work as a team. This feature is distinctly Japanese, or Asian or Eastern,

as opposed to the West’s individual-based work being the norm. It has also been found

out that during the beginnings of the company, its pioneers were really hardworking that

they work even until after the work hours or until midnight. Among the Japanese

managers, working for long hours, i.e. 12-14 hour workdays adding in “semiobligatory

evenings out with their work team”, is said to be the norm (1997, p. 180).

Secondly, minimalism or miniaturism is distinctly Japanese, as evidenced in their

material culture. Thirdly, there is a stress on innovation. Innovation is a significant idea

for the Japanese. According to (1997), technology has been deemed as the driving force

at the back of the Japanese manufacturing firms’ victory, and the Japanese economy at

the same time. As of the moment, what prompted research pertaining to Japan’s

innovations system is its function to Japan’s speedy economic growth and modernization

(p.1). In Sony’s eyes, the key to success is by possessing the attitude of being

innovative. According to Mr.,

“…Winners win and losers lose, so it has become quite obvious in

many industries in Japan that anybody who is creative and innovative

can really make money and anyone who has maintained the status quo

and is not really creative is losing ground and even going bankrupt”

(2000).
 Four buzzwords are expected for the entire companies in the Sony Group to

resonate. Unique, being so guarantees Sony’s always being innovative. Quality, is what

describes its products. Speed, is to refer to the adaptability of Sony to the market

environment. Cost, points to the significance of competitive pricing once the three are

established (Sony History). These are the essential components of Sony Corporation’s

organizational culture today. It has responded to the current demands, which are

necessary in order to thrive in the global market.

In April 1999, Sony Corporation has reorganized its structure. The reason?

According to Mr. , considering the dawn of the digital network era of the 21st century,

the company deemed it necessary to adapt a new and realign its organizational structure.

Sony is indeed a giant now, but as much as possible the company wanted to maintain the

spirit of being “a small venture company”. In doing so, President , who became

president in April 1995, created two slogans — “Regeneration” and “Digital Dream

Kids” (2000). Says President,

“It is a chance to collaborate with team spirit – not as individuals, but

as a team…To ensure that Sony remains an excellent company over its

next fifty years, I have set forth ‘regeneration’ as a new management

theme. This is a concept that preserves the original founding spirit by

renewing ourselves and aiming for even greater heights… Living in the

digital age is very exciting for people of all ages. Young and old alike

are truly mesmerized by digital technology. These digital dream kids,

are our future customers. And at all levels of Sony, we must ourselves
 become dream kids to continue creating new products that will meet

our future customers’ expectations (Sony History).”

Sony deconstructed itself into four divisional companies. These are Home

Networking Company, Personal and Information Technology Network Company, Core

Technology and Network Company, and Sony Computer Entertainment (2000). The

following figure is obtained from Sony Corporation’s Website.

Figure 1. The Organizational Chart of Sony Corporation as of 1 April 2006

In terms of hiring its employees, according to Mr. , Sony wants to have good

individuals of heterogeneity (2000). The management policy refers to the hiring as only

to carefully select. In reality, it hires not only or merely individuals who come from the
engineering field, but those who have a good eye for the electronic products. Note that

its current CEO today is even of an American nationality, . An employee is said to

acquire a “certain magical feeling”. According to Mr. to work for Sony means “a feeling

of pride and security” to the local populace (2000).

The procurement or purchasing activities of Sony are said to be grounded on two

major principles. The first one deals with the customers, or global customers to date.

They are to meet the expectation of the customers being, that Sony products and services

tender a high level of value. Likewise, customers expect that Sony is a good corporate

citizen by way of its operations. The second one deals with the relationship with the

company’s suppliers. Since the raw materials for the production of their products come

from various suppliers across the globe, procurement activities therefore require “smooth

relationships” that are founded on “trust and cooperation”. Sony puts a premium on

keeping a good partnership with its suppliers. It is in this manner that Sony believes it is

able to deliver its products as well as services best (Sony History).

The organization under study is found to be placing a premium on maintaining a

good relationship with its suppliers. This resounds with the concept of “keiretsu”.

Simply put, it implies collaboration among firms with other firms of a different industry

by way of “intercorporate stockholding and personnel transfer” (1992, p. 139-140). This

leads to a powerful business bloc. Clearly indeed that Sony Corporation considers the

entire key players, from employees to consumers to suppliers, in their actions and

decisions. According to Sony Executive , all Japanese companies arrive at decisions

quickly, but before arriving at a certain decision; everything has to be completely taken

into consideration in order to produce first a detailed business plan (2005).

Sony Corporation’s Efficiency

Sony Corporation stands on a very strong base, which is rooted from its

organizational culture. This essay believes that the organization is truly strong in terms

of its widely held goals, values, policies, and principles. All of which are clear, as

detailed in this essay. And, it is strongly held by its members, especially its founders.

This in turn, defines the organization’s success story that keeps on burning in every

employee’s heart. Employees are encouraged to be participative enough and to work as a

team. They are free to open their ideas. It is in this state that the organization is able to

“regenerate”, thereby contributing to its efficiency.

Sony’s minimalist perspective, combined with innovation, have a bearing for the

effectivity of Sony for its products and their performance. For instance, when Sony

launched its Walkman to the market, consumers have been very receptive to the idea of a

personalized audio gadget. Add the fact that Sony has been in an advantage position for

being the first to introduce such kind of product. According to (1999), the risk behind

Sony’s way of introducing innovative products in the markets is reasonably minimal,

because small only a few resources are needed (p. 47). Add the fact that the products are

asked to be developed with quality and uniqueness, Sony Corporation is able to manage

better its performance. This is also in line with the “digital dream kid” that is said by
President. Interestingly, the organization employs a good decision-making

process. There is a tendency to accumulate various responses or views from the

employees because of their team-based nature of working. The executives are better

equipped with the information needed to come up with a decision because of this, and the

fact that decisions are realized according to its projected effect to the key actors in the

market environment.

Furthermore, Sony Corporation is in a position of advantage upon restructuring

itself. As reflected in Table 1, it has employed a structure that is independent yet

interactive with the other branches of the organization. Recall that one of its principles

too is to maintain the company small yet strong. As (1992) puts it, crosscultural

interactions fill in the Japanese manufacturers’ organizational culture (p. 156). It has

decentralized, yet it better facilitates the needs of the company to survive in the

21st century.

Sony Corporation’s 2 major principles in its procurement activities likewise

contribute to its efficiency. As what has been discussed, according to Harvard University

Professor, “firms should add value to the product that they get from their suppliers before

they pass it on to their customers, otherwise they have no justification for being in

business”. By being careful in the purchase of its raw materials as well as in maintaining

a good relationship with its suppliers, the organization is able to create and maintain

unique and quality products at the same time for the benefit of its consumers across the

globe.
 The organization has learned a lot from its earliest failure — the electric rice

cooker. Mr. I has dwelt on the idea of creating a device that is used on a daily basis. But,

it has turned out to be a failure because of lack of further research and the wrong rice. He

has worked on this by incorporating perseverance to innovate products back to back with

looking for the right kind of rice.

Conclusion

Organizational culture and structure forms the backbone of an organization, like

Sony Corporation. It has been proven that organizational goals, such as profit goals, is

dependent on the kind of culture and structure that exist within the organization. That

change is the only constant thing in the world is a line often heard, but this teaches

organizations to adapt to the existing environment in order to survive. This is the

principle behind Sony Corporation’s innovation. Diversity and decentralization matter to

the organization. Needless to say, organizational culture defines the efficiency of the

organization, especially in the attainment of its goals.

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March 05, 2009

The Real Chocolate

Company case study

Introduction

Chocolate is by far the most common food item that people report that

they crave. Those who crave chocolate tend to do so when they are emotionally

distressed, although a separate dimension, whether one feels guilt, is also

important. There are two major explanations of chocolate craving. First, it is said

to result from a pleasant taste. Alternatively, it has been suggested to reflect

physiological mechanisms, including increased serotonin production; the release

of endorphins; the actions of methylxanthines, phenylethylamine, and

anandamides; and the supply of magnesium. Chocolate is a special food; for

many it has a uniquely attractive taste ( 2004). It has a cultural importance and is

used frequently as a gift on special occasions. Such is its attraction that sections

of the population will admit to craving chocolate. Some will even describe

themselves as chocoholics, although from a scientific perspective the analogy

with addiction may not be justified. Chocolate is chemically complex, containing

many potentially pharmacologically active compounds, albeit in low

concentrations. For example, it contains histamine, tryptophan, serotonin, and

octopamine but these are found in higher levels in other food items without the
appeal of chocolate, so it is improbable that they play a role it the attractiveness

of chocolate (2004). Chocolate is one of the most popular products in the world.

One company that produces such product is The Real Chocolate Company. This

company makes addictive chocolate and cocoa products that are being sold

throughout the world. It has acquired a reasonable number of loyal clients and

suppliers.

External Analysis

TOWS analysis

Threats

Globalization affected greatly almost all the industries of the world. It

brought about the need for change. The changes created a new competitive

environment in this industry. Globalization is one of the threats to The Real

Chocolate Company. Globalization can be a threat to chocolate businesses

because globalization can produce alternative products that can reduce the need

for chocolate products. A threat to The Real Chocolate Company is the

competitors. The competitors will try everything they can to gain a better standing

against The Real Chocolate Company. The competitors might discover systems

that are better than The Real Chocolate Company’s system. The Real Chocolate

Company needs to be always prepared for the threats brought by other chocolate

companies. The threat to the company includes the laws in the country they are

operating in. There may be some future laws that will regulate the ingredients of
products. The laws may be used against production of chocolate products.

Another threat to the company is the tariffs and taxes that the company has in

different countries, each countries has its own rate of taxes and tariff that creates

additional expenses for the company. A threat to The Real Chocolate Company

is the health issues that might be raised by certain groups. The health concerns

on the subscription to chocolate products can be used as propaganda against

the company. Lastly a threat to The Real Chocolate Company is the global

financial crisis which is slowly giving problems to businesses. The global financial

crisis will reduce the client of The Real Chocolate Company and might force it to

close some of its branches.

Opportunities

An opportunity for The Real Chocolate Company is to find out more ways

to give a distinctive look and features to their products. The company can

continue to make sure that their products are uniquely packaged. The company

can create attractive and trendy packages that will attract their target market. By

doing this the company will have competitive advantage over other firms. An

opportunity for the company is to improve the features of their website. The

website can be improved by adding online communication systems that will help

the company communicate with perspective and regular clients or retailers. By

doing this it can attract more clients and retailers from various parts of the world.

An opportunity for The Real Chocolate Company is to continue to make use of

newer technologies that will provide better service to clients. The Real Chocolate
Company can use the advancements in manufacturing facilities and technologies

to make sure that the clients will achieve satisfaction. The company can make

use of newer technologies to create the best product possible. An opportunity for

The Real Chocolate Company is to continue to reach newer markets where it can

offer its products. The company should consider making products that

specifically target clients who are health and weight conscious. This will divert

itself from other companies and will help the company achieve higher income

rates. Lastly an opportunity for The Real Chocolate Company is to increase

public knowledge about the company and the product it provides. This could be

done through the use of internet and other media. This will help have higher rates

of profit and it can help the company maintains its business survival.

Weakness

The Real Chocolate Company’s main weakness is minimal

advertisements. The company doesn’t use many advertisements that can help it

be known to more people. The company relies on word of mouth, the website

and some printed advertisements to market its products. A weakness of The

Real Chocolate Company is the limited area that has been reached by the

company. The company has a small market; this makes it hard for the company

to reach newer clients. It also hampers the chance for the company to innovate

its products. Lastly a weakness for The Real Chocolate Company is its culture of

putting much power on the top management. The company has the tendency to

put less decision making capabilities to their divisions. The top management
cannot always have the information needed to make decisions on the company’s

processes; some decisions may need some inputs from other members of the

organization.

Strength

The company’s strength includes its integrated management systems

(IMS). This system makes sure that the company’s systems are maintained well

so that it can meet expectations. The IMS focuses on the systems of risk

management, quality, injury prevention, damage control, emergency plans, and

environmental safeguards. The IMS helps The Real Chocolate Company have

advantage against competitors through preventing any delay in the operations of

the business. A strength for The Real Chocolate Company is its well established

values. The values help the company achieve its goal and maintain its stature in

the chocolate industry. A strength for The Real Chocolate Company is its high

regard for its community wherein the company provides sponsorships and the

provision of education opportunities. This ensures that the company has a good

relationship with its environment. Moreover a strength for The Real Chocolate

Company is its high regard for the safety of the workers. The company has

acquired certification for its health and safety practices, this shows that the

company uses strategies that have high standards towards the personnel and

the clients. Lastly a strength of The Real Chocolate Company is its website that
is informative and attractive. The website provides information about the

company and information on the products of the company.

Internal Analysis

Resources and Capabilities

Resources

Sony Ericsson’s resources come from reliable suppliers and

manufacturers. The materials used in creating the products have to be made of

the best kind of raw materials.

Financial

The company funds come from either the parent company or from other

sources like investors. The funds are used to pay for the different expenses of

the firm. The budget are used to pay for important expenses, the payment for all

the employees, the cost of supplies used in creating the products, the cost of

electricity, the cost of office materials and other costs or expenses.

Human

In providing excellent service to the clients, a company needs to have a

dedicated staff that performs well and knows that the service they give to the
client can help the company have a positive or negative image. The staff of the

company is well trained to ensure that the best service can be given to the

clients. The company makes sure that it hires promising individuals that can

assist in the company’s task of reaching their goals.

Skill

The personnel of The Real Chocolate Company are well skilled in creating

and selling their products. The company makes sure that they hire individuals

who are skilled in management, manufacturing or selling. The company also

looks for various activities that will help them improve their skill.

Competencies

Core Capabilities

The Real Chocolate Company’s core competences include its highly advanced

product, competitive products and concept of sustainability. Real Chocolate

Company makes use of its competences to achieve continuous growth.

Distinct Capabilities
The Real Chocolate Company’s distinct capabilities include its ability to create

products that costs lesser than other products. The company’s product cost less

but it is delicious like the other company’s products.

Scope

Capabilities

The Real Chocolate Company’s capabilities include its use of

sophisticated technologies to create the best product. The company has

commendable personnel that were well trained to create the best product.

5m’s

Money

The company is well funded. The funds of the company come from its

profits, capital and from investors. The company makes sure that its finances are

well budgeted and will go directly to the division that needs it the most.

Minutes

Time is important for The Real Chocolate Company. The company gives

importance to time just like it gives importance to finances and human resources.

The company has organized schedules that will ensure that products can be
made at an appropriate time. The company makes sure that every member of the

organization has a balance of work and rest.

Materials

The Real Chocolate Company’s materials come from reliable suppliers.

The company keeps the materials in reliable storage areas. The company makes

sure that its materials will not harm the environment.

Manpower

The Real Chocolate Company makes sure that it hires the best personnel

that have an idea on chocolates and its related products. The company engages

in online recruitment, personal recruitment and the use of third party to recruit

and choose the personnel that fit their needs. The company trains the personnel

in accordance with their tasks and role. The company allows their personnel to

attend seminars that will increase their knowledge on their forte. The company

makes sure that the personnel are given an appropriate compensation based

from their role and contribution to the firm. The company makes sure that all

social benefits are received by the personnel.

Machines
 The company makes use of the best machinery to create the products.

The company has a research division that searches for the latest technology that

will help them achieve efficiency and effectiveness in creating their products.

The machines are well maintained by a special group of personnel. The company

makes sure that the machines are regularly checked for problems.

Implications on Management

The use of 5m’s makes it easier for the management to operate the firm.

The use of 5m helps The Real Chocolate Company and its management to focus

on strategizing. Through the 5m the management receives assistance in

attaining the goals of the firm.

Current Problem Diagnosis

Global financial crisis is inevitable because it is part of the process of

growing up. It is part of the pain of making mistakes at all levels. Without that

pain, people will not learn how to adjust and how to manage risks. Given that

governments have now gone through a huge and painful process, they need to

address the real sector problems, the financial sector problems, the need for

better transparency, and the issues concerning leverage and derivatives that are

still poorly understood ( 1999). The global financial crisis has created a certain

effect not only to poor countries but to developed countries as well. The crisis

will affect the developed crisis more because they have more stakes in the global
financial market. The crisis has affected businesses. The current problem of the

firm is more on the global financial crisis. The global financial crisis created the

need for the company to rethink about their focus and their goals.

Generation and Evaluation of Strategic options

For an organization to be successful it must be imaginative at devising a

full range of strategic options, so that they can be evaluated and the most

appropriate strategic option chosen. This requires imaginative and creative

people who are able to play a role in mapping out these alternative futures for the

organization and such people are not always easy to find, nor do organizations

always allow creatives to play such important roles ( 2003). Once a full range of

strategic options has been mapped out, they need to be evaluated unless top

management has already decided that it prefers one of them, in which case the

evaluation will be more of a show trial for the undesired options ( 2002).

The first strategic option focuses on changing the direction of the company

and taking a look at the company’s core competency. In the first strategic option

the company’s choice of succeeding action will be based on what the

environment needs, what the environment offers and what the company can

afford. Since there are low sales on some of the chocolate merchandise, this

option will determine means to focus on other products and reduce the order for
the materials used in making some of the chocolate brands that earn low sales.

In this option the company will focus on the products that have higher sales. The

company’s option of concentrating more on better performing products can help

the organization to reach more markets and answer to varying needs of clients. It

can help the company to face the global financial crisis by reducing costs on

unworthy products. The limitation on the first strategic option will be more on how

the clients will respond to the reduction of some of the products. The clients who

buy the chocolate merchandise may be disappointed if they discover that there is

a reduction on the supply of such products

Another strategic option focuses on what is needed by the market and

what will create innovations in the market. In this strategic option the focus is on

the company’s creativity, desire to reach the objective oriented and need to

follow the theory. The market led strategic option for the firm is to sell newer

products not available in the market. These products can help the company

counter the threat of globalization. The sale of new products can be used to

counter the low sales of some chocolate merchandise. The other strategic option

will help the company to increase its product line; it will help in attracting clients

who usually don’t buy chocolate products. This option will give the company

additional income that it can use to prepare for the global financial crisis. A

limitation on the second strategic option is the clients feeling alienated due to the

addition of new product lines.

The chosen strategic option and Courses of action

The second strategic option is the one that will be used to solve the

problem. The strategic option on selling newer products will be the one that will

be used to counter the global financial crisis. The second option is feasible and

the company has enough finances to do such option. The strategic option is

acceptable to both the society and members of the organization. It will not be the

cause of internal or external conflicts. To implement the strategic option there are

different courses of action that needs to be taken

1. Gather the resources that will be used to implement the

strategic option
2. Gradually use the resources to start the implementation of the
option
3. Minimize errors so that the implementation would not take more
time than expected.
4. Have alternative courses of action to make sure that problems
will not hamper the progress of the implementation of the
option.
5. Make sure that the option would be finished at the approximate
time.

Conclusion
 Chocolate is one of the most popular products in the world. One company

that produces such product is The Real Chocolate Company. This company

makes addictive chocolate and cocoa products that are being sold throughout the

world. . The current problem of the firm is more on the global financial crisis. The

global financial crisis created the need for the company to rethink about their

focus and their goals. To solve the company’s problem the company intends to

sell newer products not available in the market. These products can help the

company counter the threat of globalization. The sale of new products can be

used to counter the low sales of some chocolate merchandise.

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February 27, 2009

Different companies are fast

emerging in the global
market
 Global Logistics and Supply Chain

- Table of content

1. Introduction

With the advent of information technology, different companies are fast

emerging in the global market. One of the companies admired in the global

market is Nortel. Accordingly, the company is known to be the leader in providing

communication capabilities which make the promise of Business made simple a

reality for the target market. The next generation technologies, provided for both

service provide and enterprise networks have been able to support multimedia as

well as business-critical applications. The technologies of Nortel, are designed to

help prevent or totally dispersed the barriers for having efficient company and

those that hinders speed and effective performance. This is done by simplifying

networks as well as connecting different stakeholders to the information they

need. The company is operating in more than 150 nations all over the globe.

Primarily, the main goal of this paper is to analyse the supply chain management

approach of and to determine their market entry strategies. Furthermore, this

report aims on identifying how Nortel Networks Corporation controls its global

supply chain and aligns the global operations of the company. Lastly, this paper

aims on comparing the global strategies of

2. Manufacturing Strategies

Telecommunications industry like Nortel is fast becoming one of the major

contributors to the business sector. In this industry there are various trends which

affect the performance of the company (, 2003). In this generation, the major

trends in the environment of Nortel and other telecommunications and

manufacturing companies gravitate towards a global scale. With this, Nortel find

them faced with the challenge of producing new and better products at reduced

cost and market price. Aside from this, the globalization trend is also influencing

the way Nortel operates in the global market. Additionally, globalization calls for

the industry to design strategies which will ensure that the largest scope of

innovations is taken hold of. With these shifts comes the important role that

innovative activities play in the organization's management of its various aspects.

With these trends, Nortel should spark new passions. Innovation comes

from the heart as well as the head. Companies that aren't afraid to innovate

engage employee energies in a new and profoundly different way. When people

are part of a cause and are not considered as just a cog in the wheel, their

innovation quotient skyrockets. And above all, recognize that in today's economy,

capital is plentiful; good ideas are scarce. Companies that look to incremental

change to generate additional revenue will tend toward subsistence at best--

eclipsed by companies that create an environment of innovation, spawning the

new ideas that generate new wealth (2000). The environment where Nortel
belongs monitor these trends through the use of the information technology

system and the use of the internet to determine how these trends could impact

their organizational performance and how they will be able to compete efficiently

with these trends. However, the emergence of different telecommunication

products and service providers has affected the organizational competitiveness

of industries like Nortel. In this regard, the company has been able to use

different manufacturing approaches to survive in the global market.

Based on the case given, it has been mentioned that Nortel has been able

to use distinctive manufacturing strategy to sustain their competitive advantage.

In doing so, the company has been able to change the structure of their 23

manufacturing sites to adapt to the situation in the global market and to ensure

that they will be the number one choice of their clients in terms of system house

(See Appendix 1). Part of the manufacturing strategy of the company is being ah

production or process focused rather than product focused. With this, the

company ensures that all their manufacturing process are able to meet the ISO

9000 standards. ISO 9000 has been described as the fundamentals of quality

management system. The principal philosophy of ISO 9000 is to give a

standardized approach that global company should follow and use. ISO 9000 is

composed of different programs which vary according to the functions in order to

give a structure on which a quality management program system can be

efficiently used for the development of the operations of business organizations (,

2008). Accordingly, Nortel has been able to follow these standards to ensure
quality manufacturing process. The company’s total quality culture involves team

working and investing in their human capital. The company believes that

employees are the main asset of the company and empowering them enhances

productivity and adherence to quality products or services in the

telecommunication industry. Aside from this, the company’s process focused

approach which is known as systems house relies on strategic supply chain

approach.

In this regard, the supply chain management approach in Nortel has

become a key strategic initiative to improving service and reducing costs in order

to remain competitive in today’s global economy ( 2001). SCM is business

strategy focusing on the quick response to ever-changing market needs and

shortened purchasing lead time, also adding value to increasingly demanding

customers at the least cost and time (Water, 2007). The company’s global supply

chain approach aims on having a good relationship to their global suppliers to

provide quality products and services to their clients.

Like any other telecommunication industries, there are also some factors

which affect the operation of the company. This includes the context of market

changes. Based on the given case, the changes in the global telecommunication

market have an enormous effect to industries like Nortel. One of these changes

include the deregulation of the industries which drove the competition to the

traditional PTTs. Such companies are considered for having new ideas, demands

as well as legacy systems.

 Aside from these, the increasing competitions have also affected the

global operation of Nortel. Accordingly, competitors are major threats to the

business. It can be said that there are competitors who are in the business longer

than Nortel. While these competitors has gradually developed its core

competencies and technologies over a very long time period, some of the major

technological assets that underpin Nortel’s contemporary competitiveness have

initially been developed by other firms, and subsequently been acquired by

Nortel. The firm’s inability to keep up with the global market or recognize its

demand, creates a threat for them, a risk that they could be displaced by other

industry leaders like Motorola, Sony Ericsson, Samsung, Nokia and others. The

legal and political environment in the countries where they operate in could

potentially affect the business negatively. Their apparent complacence could be

used by their competitors to their advantage, and take Nortel by surprise, with the

latter realizing too late that they are not the industry leader anymore. Customer

discontent is also a very potent threat being faced by the company, connected to

the hasty decrease in the separate product's life circle. The inevitability of using

all the possible phone variants became one of the side effects of having wide

product line, as Nortel products would show.

According to (2004), the trends and regulations at the network

operator level heavily influence the telecommunications industry.
Despite their immense size, telecommunication products providers
are often at the mercy of international regulations and the demands of
 national operators, particularly in terms of industry standards. As s
result, companies such as Nokia engage in significant and often
skilful lobbying efforts at the European Union and other regulatory
levels to create favorable standards that allow them a degree of
certainty in their production cycles. Today, the telecommunications
industry is affected by the global trends of increasingly mobile
technology, with progressively greater importance placed on speed,
data and multimedia advancements. Moreover, the industry is
affected by a tendency to be overly optimistic about the
implementation of this new technology, leading many firms to create
an excess supply of equipment that the marker has not been quite
ready to absorb. While Europe and the United States have been the
primary targets for telecommunication growth during the 1990s
telecommunications boom, and even during the slowdowns, suppliers
and operators are beginning to focus on emerging markets with
higher growth potential like what Nortel has been doing.

3. Market Entry strategies

In the business arena, it is important that an business industries must be

knowledgeable about the different marketing strategies that must be utilized in

order to make the business prolong its competitiveness and stay in the marketing

world, locally and internationally. The management of an enterprise that are

considering entry into a foreign market must be able to make decisions focusing

on uncertain and changeable circumstances that might be faced. Hence, their

decision must include the consideration of the mode of market entry to be used.

Internationally, entry modes have long been distinguished as closely

related to varying degrees of resource commitment, exposure to risks, control

and profit return. Past studies have shown that the choice of entry modes

depends on different types of factors, including firm-specific factors ( 1997),

industry-specific and country-specific factors ( 1997). Entering a new market is a

complex decision which must be given focus and attention. With the goal of

establishing a business that would be recognized and patronized by consumers,

more and more entrepreneurs are trying to enter the market swiftly. There are

different motivations for market entry. One of the motivational factors to enter an

international market is the chance given by this investment to make the company

become more competitive among its rivals. It can be said that one’s an industry

becomes a multinational company, there is an implication that such company has

been able to establish a competitive position in the marketplace not only in the

local but most especially to the global arena. Marketing entry is also capable in

making a certain business enhance and expand its business portfolio. Based on

the case study, Nortel has been able to use an effective market entry approach

to become a competitive industry in the market. Based on the given case, it can

be said that Nortel has been able to use Joint Venture approach as their

marketing entry strategy.

 It is said that the joint venture mode happen by having a venture with other

bigger and competitive companies in the telecommunication industries like LG.

An international joint venture is a distinct enterprise or multi-organizational

agreement, created as an alliance between two or more parents organizations

working across country borders in designing and managing the venture ( 1996).

In order to do so, the company must ensure that the company is willing to

have a joint venture with Nortel. In addition, Nortel has also been able to use a

third party stakeholder to help them in designing and implementing joint venture

with an existing telecommunication industry in the global market, For instance,

banks, government agencies, union officials, suppliers, distributors and legal

officials often make critical contributions in designing-implementing parts of an

international joint venture. Enterprises with little prior experience in setting-up

joint venture almost always underestimate the impact of third party involvement.

Nortel has been able to use global supply chain approach with their global

partners through joint venture and merger and acquisition. Based on the given

case, the company has been able to merge with stable industries in the global

market and also acquire small industries with good marketability and reputation.

The company made it sure that they are able to have competitive position in the

market place.

The company makes sure that their global supply chain partners will help

them achieve competitive advantage in the market. Accordingly,

interdependence and participation of suppliers and manufacturers in product

design, innovation, as well as research and development characterize the current

international business environment resulting to competitive position ( 2001;2002;

2003) like what Nortel is experiencing. Their global supply chain process has

accommodated their global strategies to meet and satisfy the needs of their

target market. The high cost of acquiring leading-edge, technology-based

equipment and an accompanying highly skilled research and labor force makes

contract manufacturing a highly attractive alternative for many companies (1998;

2004).

It can be said that Nortel has been able to use the most appropriate mode

of market entry which include joint venture, merging and acquisition to make it

products be known in the international market. Further, this method has also

been able to make Nortel diversify its products to other products. In the case of

Nortel, the company used joint venture and merger and acquisitions to stay in the competitive

market and perform better within the marketplace, by providing innovative and new products in

terms of telecommunication through the ideas that the management gain because of merging

with and acquiring other companies. It shows that without such strategy, the company may not be

able to expand its business portfolio and reach more and more customers from local to

international market.

It can be concluded that the right choice of market entry mode along

with the concept of strategic management and other efficient marketing

approach, can make a company succeed in achieving its goal of providing quality

products with their target market. However, decisions should be made strategic
 also. This means, that the company should have the ability to decide which

among the market entry mode can be helpful to the company itself and suitable

for the international market that the company will consider.

4. Compare and contrast with Nokia

Different telecommunication industries have been emerging in the global

market and each of these industries are trying to provide their unique

strategies and approaches.

5. Conclusion

6. References

7. Appendix

Appendix 1

Nortel Networks Systems House

Supply Chain Position

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February 19, 2009

Sony Ericsson's strategy in

action
Question 1

One of the distinct features of the strategy concept is the effort devoted to

planning and control, so that all activities of an organization can and will work

toward a common set of objectives against which their performance can be

measured ( 2002). The process of strategic management involves the systematic

examination of a number of interrelated elements, which results in an explicit

statement of company objectives and how they are to be achieved. The ultimate

purpose of strategic management is to secure competitive advantage of the

organization in question ( 2002). Strategies are made by businesses to be able to

perform well in its industry and react well to the different problems they have

encounter in their day to day operations. Companies use strategic management

to maintain their standing in the market and attain some advantage over

competitors. The most effective business strategy in a period of economic

concentration is to focus on the company's core competency. The core

competency may not be the product line that is creating the most revenue right

now and it may not be the highest ticket item. The core competency is what helps

the company do better than everyone else. It helps them to be better than their

current or potential competitors ( 2002).

Companies that are successful in times of concentration are those who

strive to provide added value to their customers through increased focus on what

they do best which is their core competency and do that by taking as much
wasteful effort out of their internal system as possible. Corporate strategy is

concerned with matching markets to distinctive capabilities. Business strategy

looks at the relationship between the firm and its competitors, suppliers, and

customers in the markets which it has chosen. The success of corporate strategy

is generally measured by financial measures of corporate performance. There

are many alternative financial measures. Some commentators emphasize

profitability and earnings per share, others cash flow and returns to shareholders

although historic cost accounts are the measure of a management's stewardship

of the company's assets, it is current cost accounts which are the key measure of

its competitive position and its corporate strategy ( 2002). Unless the firm enjoys

a competitive advantage relative to the replacement cost of its assets, it enjoys

no competitive advantage in the long run. Successful corporate strategy begins

with the identification of the distinctive capabilities of the firm. But if wish-driven

strategy and copycat strategy are common mistakes of corporations, they are

hardly less common mistakes of governments (1995).

Copycat strategy fails to establish competitive advantage for the firm. It

fails partly because it is difficult to know which are the essential and which the

peripheral aspects of the success of the firm or group of firms to be emulated. It

fails partly because of the efficient market problem. If everyone can do it, it

ceases to offer competitive advantage, or profit, to anyone (1995).An emerging

view of corporate strategy stresses the importance of identifying and developing

resources and capabilities as core elements of any growth strategy or any other

strategic choice that a company faces. An inadequately corrected imbalance

between the resources and capabilities require for a growth strategy and those

available may doom a strategy to failure. The existence of limited resources is

always a starting point in examining a decision, never a final situation. Resources

and capabilities can be developed inside a company or acquired from outside a

company never on an open market as; in this case, those resources would cease

to be unique and valuable by means of alliances with other companies.

Resources and capabilities, therefore, must fit a company's strategy. A growth

strategy that relies on unsuitable resources and capabilities is a strategy that is

born with a handicap, and as such is likely to be destined for failure. Suitable

resources and capabilities are essential for the development of a strategy.

Resources and capabilities must have several characteristics to make a

contribution to the firm's growth: they must have a value for the company and

that value must be sustainable. Resources become valueless when they are not

unique. The development of a unique business concept is fundamental ( 1995).

Brilliant ideas about the future are very useful and necessary. What is

more, a brilliant business concept provides the starting point for a company, but

not the end point. However, a business concept, more often than not, requires a

more or less significant commitment of resources. Strategic decisions are

alternatives that, by definition, exclude others. Thus, the investment in the

development of a certain product that leaves out other products, or in a certain

technology that leaves out other alternative technologies, or in a certain type of

production or distribution process that excludes other alternative processes, is a

decision that not only entails a major commitment of resources but also defines a

certain strategy (2000). Strategic investment decisions are often related to the

development of the company's capabilities. In accordance with the resource-

based view of the firm, achieving a certain market position is not only to be

attributed to a lower cost structure or a better differentiation. Behind these and

other qualities, there are some resources and capabilities that, when adequately

combined, enable the company to achieve that competitive position.

Consequently, the creation of a business concept implies a definition of what

capabilities will be crucial for the company in the future and a program for

developing or acquiring such capabilities. In turn, this program requires a

strategic decision, and an investment of resources in a certain direction, which

excludes other alternative directions ( 2000). For a company like Sony Ericsson,

having a strategy in action means that the firm has completed the resources it

needs to use to complete an action. Sony Ericsson’s strategy is in action when it

sees considerable changes to its operational, financial and environmental

sectors. The strategy is in action if the value and standing of the firm has

improved or worsened, depending on how the company executes the

implementation of the strategy. Once Sony Ericsson’s strategy is in action, the

firm must prepare for the eventual result of the strategy. Sony Ericsson has the
option to create alternative plans that will counter any negative effect of the

strategy in action.

Question 2

The challenge of a cognitive approach in business has been to explore the

way in which an organizational leader process and use strategic information.

More specifically, it is to understand precisely how cognition contributes to

strategy development and to highlight the variables that facilitate or bound the

positive and negative effects of human information processing on strategy

development processes and ultimately organizational performance. It is the

extent to which strategic leaders match appropriate variations to their particular

strategic context that accounts for the effectiveness of the strategy development

process in organizations. The strategy development process is designed and

legislated to happen in concert among first the top team and then the corporate

board. Consequently, the dynamics associated with a group environment are

central to understanding the relationship between cognition and leadership

behavior ( 2001). The development of strategy relies on how Sony Ericsson

implements organizational learning.

The study of organizational learning is an attempt to engage ideas with

some complex and difficult issues associated with organizing. As a result of all

this, organizational learning is a fascinating and an enduring metaphor, one that

continually yields fresh insights about organization (2004). In addition, however,

there are frustrations about the study of organizational learning. There are many

theories and perspectives that claim to inform and to represent organizational

learning, some of which are poorly thought through; prescriptions for

organizational learning in action are at best temporary, but new prescriptions are

nevertheless being invented constantly; and almost every senior manager has

either done that and moved on, is doing it continually, has her or his own way of

defining it in practice, or wants to be told how it can be done ( 2004).

One thing that is generally agreed about the meaning of organizational learning

is that it is a process that is connected to action. There is a difference between

individual learning in an organization and organizational learning. The sum of

individuals' learning in an organization is frequently assumed to equate with

organizational learning ( 2003). Efforts to understand organizational learning

have been assisted in recent years by the general shift of interest away from

organizations and towards organization and organizing. An increasing focus on

collective learning, situated learning, communities of practice, and on politics,

power relations and learning has helped to shift the academic study of

organizational learning away from individual learning, towards social, political and

relational interpretations of learning and organizing ( 2003). Learning in

organizations and organizational learning also happen by accident, from the

unintended consequences of action and through paradoxical tensions that are

integral to organizing ( 2001).

 Strategy development helps Sony Ericsson choose the best action for a

certain instance. Sony Ericsson makes use of environmental analysis,

experiences, studies and organizational learning to continuously develop its

strategies. The challenge of learning can be expressed in attempts to engage

with the paradox, uncertainty and complexity of management and organization.

Organizational learning makes use of various methods to gather certain

information that Sony Ericsson needs at a certain time. Organizational learning

helps in determining the methods used by Sony Ericsson to learn and adapt to

the changes done within the environment of the company. When there is

increase in the changes in the environment there should be increase on learning

for an organization. As changes happen new development and learnings should

be craved by a company so that it can be prepared for the possible effects of the

change. The changes in the environment can give the company benefits but it

may also give a company its problems. Organizational learnings can help the

company prepare for the problems created by changes in the environment. The

amount of learning cannot be separated from the amount of change in the

environment since one complements the other. Organizational learnings can be

attributed to the knowledge the company acquired over the years. Additional

knowledge comes from experiences and the changes that happened. As times

pass by new things are experienced by the company. More knowledge should

come from added experiences and unknown changes.

 For a company such as Sony Ericsson professional learning comes in

many forms. Learning can be in instructional media or personal experience.

Instructional media can be in the form of books, journals or other literary

sources. Instructional media can also be in the intangible form that includes

lessons from teachers, professors and experts. The professors, teachers and

experts make presentations and other materials to further instill in the minds of

the student or anyone who wants information, the knowledge being explained.

Learning can also be in the form of personal experiences. In this method the

person learns through on the job training, synthesis and first hand experience.

Job training involves the actual application of what was noted in books and

discussed in class. Job training can be in the form of daily work experiences. As

a person gains more work days so thus his/her experiences in dealing with

situation and people. The higher the work days the more experience is acquired

by a person. The job training provides the learner a situation that needs solution,

but the solution may or may not come directly from what was discussed in class

or instructed in a book. The learner has to make a solution based from what was

discussed or what the book says. This would help the learner analyze situations

and correlate situations with what he/she know beforehand. In a synthesis the

learner relates what was discussed to him to planned situations. The learner has

to apply the theories and concepts taught to him/her by the book or the

instructor. Although the theories and concepts may or may not be directly used
the idea behind the concept and theories is emphasized and is correlated to a

simulated situation. When it comes to actual experience the learner gets to use

what he/she has learned without assistance from the instructor or the book. The

learner has to adjust to the changes in the situation and know how to act on

certain situations. Strategy development and organizational learning are

important concepts for Sony Ericsson because these concepts help the firm plan

for the best action that they will take.

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February 12, 2009

Sony Ericsson it's resources

and it's competencies
Part 1

Sony Ericsson, its resources and its competencies

In 2000 Ericsson and Sony established a London-based joint venture,

Sony Ericsson, to exploit the opportunities of third generation mobile systems,

whose implementation had begun in Japan. Ericsson's strategies were broadly

emulated by its major competitors in the world telecom industry, including Nokia,

the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and Motorola, and

Germany's Siemens, all of whom had telecom equipment sales in excess of $22

billion in 2000. These firms all moved, although at varying rates, to outsource

production to contract manufacturers. They also progressively outsourced

innovation to cheaper locations ( 2005).

Resources

Sony Ericsson’s resources come from reliable suppliers and

manufacturers. The materials used in creating the products have to agree with

the company’s greenheart process wherein most part of the product should be

recyclable or harmless to the environment.

Financial

The funds can either come from the parent company or from other

sources like investors. The budget will be used to pay for the different expenses

of the firm. The budget will be used to pay for the rent expenses, the payment for

all the employees, the cost of supplies used in creating the products, the cost of

electricity, the cost of office materials and other costs or expenses.

Human

In providing excellent service to the clients, a company needs to have a

dedicated staff that performs well and knows that the service they give to the

client can help the company have a positive or negative image. The staff of the

company is well trained to ensure that the best service can be given to the

clients. The company makes sure that it hires promising individuals that can

assist in the company’s task of reaching their goals.

Skill

The personnel of the Sony Ericsson are well skilled in creating and selling

their products. The company makes sure that they hire individuals who are

skilled in management, manufacturing or selling. The company also looks for

various activities that will help them improve their skill.

Competencies

Core Capabilities

Sony Ericsson’s core competences include its highly advanced product,

competitive products and concept of sustainability. Sony Ericsson makes use of

its competences to achieve continuous growth and development

Distinct Capabilities

Sony Ericsson’s distinct capabilities include its ability to create products that

costs lesser than other cell phone. The company’s product cost less but it is

durable like the other company’s products.

Current strategies of the company

The company is focused on the use of sustainable products. Sustainability

is said to be the act of maintaining supplies for future generations. Supplies do

have its own limitation; it will run out of stock eventually. Through the use of

sustainability companies can make sure that there can be supplies for the

present and the future. Sustainability goes with the need to have green supplies.

The company makes sure that it uses sustainable supplies. The company makes

sure that its supply will not run out. The makes sure that the materials they use

are recyclable and will not cause damage to the environment. To maintain the

sustainability of supplies the firm makes sure that parts can be recycled.
Stakeholders

Internal stakeholders

The internal stakeholders of Sony Ericsson include the management of

the company, employees and creditors. The Stakeholders’ impact on the

governance of the firm is it affects the way the company is managed. It makes

sure that the company performs well according to the stake holder’s standards.

The management of the firm is a stakeholder because the company’s success or

failure is conjoined with the management’s success or failure. The employees of

the firm are stakeholders because the success or failure of the firm will impact

their salary and its increase or decrease. The creditors are stakeholders because

they contributed a certain amount that contributes to the financial resources of

the company.

External stakeholders

The government, clients and potential investors are those groups that are

external stakeholders to the company. The government is a stakeholder for the

firm because they are the ones that checks if the company follows regulations

and laws. The government also observes for any negative effect for the

company’s products. The clients are stakeholders because they are the ones that
are affected by any changes initiated by the company. The clients are the end

destination for the product, thus they need to know what stages a product goes

through before it reaches them. The potential investors are stakeholders because

they observe the financial status of the company and use this as a basis for any

transactions that they will do with the company.

Stakeholder’s strategy

The stakeholders provide assistance in running the firm. They give a little

feedback on how the firm should operate. The stakeholders give their opinion on

the company and the condition it faces.

Future strategy for stakeholders

The future strategy for the stakeholder will focus on improving their

relationship with the company. This can be done through the use of

communication systems that will create a greater bond between the firm and the

stakeholders.

Governance Chain

. Corporate governance is concerned with holding to account the modern

corporation, whether it is a large or small holding company and subsidiaries,

listed, private, government or non-profit entity. One influential interpretation of

corporate governance is to find a way to maximize wealth creation in a manner

that does not impose inappropriate costs on third parities or on society as a

whole. Corporate governance application requires a system of checks and

balances designed to define appropriately the parameters of authority through

accountability ( 2001). The following presents the governance chain for the

company.

The key players include the stakeholders, board of directors and the

employees. The stakeholders, board of directors and employees are the ones

that will be affected by any change in management strategy. Any changes in

management strategy can affect the service given to the stakeholders. Any

changes in the management strategy can alter the position and responsibility of

the management team and the personnel. The beneficiaries of any change in the
management strategy include the clients and the government. The clients are

beneficiaries because any change in the management strategy can lead to better

service to them and it can lead to the emergence of better products. The

government is a beneficiary of the change in the management strategy because

they can now make business dealings with Sony Ericsson. The government can

ask the company to make products that fits with their communication needs. This

in turn can help the government provide better service to their constituents and

deal better with outside forces.

Principal- Agent Theory

The management and the employees have a principal – agent relationship

wherein the managers give fair treatment of the personnel. The managers make

sure that the personnel acts as agents of providing service to clients.

Employee Unions

Worker Unions are vital because it gives personnel the chance to express his/her

concern to other workers. The union can be used for one personnel to have

better benefits and compensation from the firm. The management allows for

unions and other groups that intend to unite the ideas and concerns of the
personnel. The management makes sure that they respect any union that the

employee has formed or joined.

Sony Ericsson ethics and Social Responsibility

Corporate responsibility is a pact for the mutual benefit between society

that needs business for economic and social development, and business that

needs a supportive business environment. It is also a pact between capital and

management in modern companies, which has been as shaken up by some

recent scandals where management disregarded the bond of transparency with

shareholders (Dunning 2003).

a. within Sony Ericsson

Sony Ericsson has and believes in corporate responsibility. The company

makes sure that it follows all laws and regulations in every country they operate

in. It has procedures and processes that make sure that corporate responsibility

is implemented not only in internal environment but within its suppliers and

trading partners. Sony Ericsson gives much importance to their personnel; the

company makes sure that the welfare of the personnel is given appropriate

attention.

b. what can still be improved

 Sony Ericsson can improve its social responsibility by engaging in

charitable works such as donation to charity or other non government institutions.

They can even create a charity that will focus on a certain market. Sony Ericsson

can improve its ethical standards by reviewing its current scandals and adjusting

it towards the current situation.

c. alternatives philosophy

Aside from the use of corporate responsibility and ethics, Sony Ericsson

can make use of the fair competition philosophy wherein the company will make

use of strategies that will be just and fair. The company will refrain from

committing acts that are demeaning to fairness in the telecommunication

industry. The company will refrain from engaging in unwanted acts against other

cellular phone companies.

The management strategy that will be changed

Expanding into additional segments, after reaching an acceptable market

share position in the primary market is a prudent option. The common strategy is

to penetrate with either line extensions or technology applications. It is an

acceptable and logical move for a market leader particularly in a flat market. It's

only advisable though if sufficient resources are available to penetrate the new

segment and, providing sufficient management attention and resources are

available to vigorously protect the primary segment (Paley 2006). The target
market of the company involves almost all sectors of the society. The company

aims to provide mobile products to young or old, boy or girl. The company as

much as possible aims to reach all walks of life. This target market is a good

source of income. The company has different strategies that can cater to the

taste and appeal of such markets. The change in management strategy will

focus on increasing the market of the company. In increasing the market the

company will need to make sure that the stores where its products are located

will be in the most profitable places. The distribution stores for the products

should be in places where clients can easily see the store and they can be

encouraged to visit the store and buy products. The distribution store should

make sure that competition in the location they want to put up the branch will not

be too heavy. The market of the company can still be expanded to accommodate

the elder people market. The company can consider such clients as a different

segment that should receive a different kind of product. They should also provide

a different kind of mobile products for such market.

Part 2

The mission statement and how it contributes to the firm

High-level leaders in innovative companies take the long-range view,

looking down the road and striving to anticipate every contingency. They develop

a mission and vision that are consistent, challenging, but realistic ( 1997).They
also develop strategic plans to achieve the mission and cultural plans to achieve

the vision. Innovative leaders attract the voluntary commitment of followers to the

company's mission and vision through example and assertive, convincing

persuasion. Innovative high-level leaders take charge, make things happen,

dream dreams, and then translate them into reality. They make decisions that

serve long-term strategic and cultural purposes rather than making short-term

politically expedient decisions. The innovative company and the role of the leader

in it are dramatically different. Innovative leaders' success will hinge largely on

their ability first to plan and then to empower other people to implement the

plans. An innovative organization must be led by a leader who develops and

aligns the organization with the mission and vision, develops and maintains trust,

ensures that coordinating and communicating occur, and encourages creativity

and learning ( 1997).

High-level managers have an important role in formulating and

implementing an innovative culture for their company. First, they set direction and

get people in the organization aligned. Drawing on their own insights and the

ideas from others, they develop a sense of what is possible, articulate their

vision, and work with people to align them with it. Furthermore, they select, train,

and develop people capable of realizing that vision. Through these people, they

create, shape, and influence how work is done in order to ensure that it gets

done in the best way possible. In essence, they are endeavoring to create their
version of the company's culture. At the heart of the innovative culture lies the

vision of the leader. This vision includes the broader sense of who the company

is, why the company is doing this work, why it's important, the promises they

have made to customers, and the code of conduct (2000).Developing the vision,

though, is not enough. The leader must be able to inspire others with the vision

so that others want to say yes to it. In articulating the broader sense of vision, the

new leader must be able to touch the hearts of the employees. The first person

the new leader must convert to his or her vision is himself. If he is not sold on the

company's vision, it will be next to impossible for him to effectively convert his

employees. As innovative companies move into the twenty- first century they will

be operating with a culture of greater employee autonomy and self-direction.

Teams will be less controlled by management and will exercise more autonomy

in completing tasks from start to finish. It will be the leader's job to ensure that the

team's efforts are bound together by a shared commitment to the mission and

vision ( 2000).

A necessary input to developing the vision, core values, and guiding

principles of the organization is the mission statement from the strategic planning

effort. If a corporate mission statement is not available, the company should take

steps to have one developed before proceeding. The mission and vision should

definitely be consistent and supportive, but they will not be exactly alike since

they serve two different purposes ( 2002). Normally the mission should be
developed first, with the vision of what the organization should be like to achieve

the mission being developed second. Because the mission is directly linked to

the customers and external environment, it makes sense for the vision to be

based on the mission. It is extremely important that the organization's mission

and vision be consistent and mutually supportive. One of the better methods of

testing the vision, core values, and guiding principles is through employee focus

groups. The focus group approach involves leading a group of employees, from

various divisions and levels in the company, through an open, in-depth

discussion of the proposed vision, core values, and guiding principles. Members

of each group session would be chosen from a list of volunteers, so that each

group represents a valid cross section of the company's employees. A session is

usually conducted as a casual roundtable discussion with eight to twelve

participants. The setting should be relaxed and casual to encourage a free and

uninhibited flow of ideas ( 2002). Sony Ericsson’s mission statement concentrate

on making sure that the company will produce the most attractive products. This

mission statement fits well with what the company is doing and showing to the

public. This mission statement can still be used to achieve the company’s overall

goals. Sony Ericsson has partly achieved its mission because it has created a

wide array of eye catching products that are globally competitive and full of

innovation.

Objective setting
 Ambitions and objectives are formulated at three levels. For the long term,

guiding objectives are important. For the short and medium term, a system of

measurable objectives must be created. Finally, the actual missions are the

concrete translation of those objectives to the social players involved. All

companies that wants to have research on a new product or a new idea have

applied strategic management procedures for the identification of new market

opportunities related to the changing conditions of sustainability. Some

companies started specific programs for the promotion of innovation through

product stewardship. Others are adding issues of sustainability to existing regular

strategic routines and audits for the identification of business opportunities

(2004). Some enterprises are designing new search efforts in and beyond the

company to identify options for technological renewal and innovation in view of

arising demands of sustainability. And most companies are right in the middle of

a search process to find strategic management routines to adjust these changing

external conditions. The procedures adopted appear to relate to regular

approaches of strategic management. The enterprises also expressed difficulty in

determining appropriate and clear short- and intermediate-term goals for

sustainable strategies (2004).

This was especially the case in determining business objectives and

strategies for the introduction of new technology ( 2004). Establishing focus is the

competency through which managers ensure that their subordinates are aligned
with the business's objectives and that resources are appropriately prioritized and

allocated. Communication is a key element of establishing focus, because

employees usually perform better and accomplish more when they understand

their role and how it relates to the bigger picture (2000). Of course, to help

others get and stay focused on the most important business objectives,

managers need to stay focused themselves. It is a common complaint of many

employees that their manager is not well focused and does not help them focus,

either. Establishing focus is critical to ensuring that employees are all pulling in

the same direction and making the best use of their time. It is the leaders' job to

align the organization around common goals and objectives. They are tireless in

their efforts to reinforce how the duties and responsibilities of each individual,

unit, and department relate to the organizations overall goals and objectives.

Leaders also deal with nonalignment where it exists by allocating resources and

establishing priorities to ensure that organizational activity supports business

objectives. People know where the organization is going, they know their role in

helping the organization get there, and they are provided the resources they

need to play their part (2000). In setting the objective a clear picture of the

internal and external environment was used by the firm. The environment

showed the firm its weak points or problem areas. Through knowing its weak

points the company was able to plan for future possibilities and future plan of

actions. After the company knew its weak points it was able to create the

objectives by determining the weak points or problem areas that should be given

top concern and priority.

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February 11, 2009

Sony Ericsson needs to

make sure that they will
identify newer strategies
that are globally competitive

Strategic control

Strategic control shapes the decisions that are taken by corporate rulers in

relation to 'the determination of the basic long-term goals and objectives of the

enterprise, and the adoption of courses of action and the allocation of resources

necessary for carrying out these goals. Strategic decisions set or alter the

structure of the basic parameters within which an enterprise acts (1997). To

control the implementation of the new strategy, communication systems will be

used between the members of the organization. The communication systems will

assist in monitoring the new strategy and its effects on the organization. The

implementation of the new strategy will be validated via its effect on the company

and the industry. To assist strategic control, control techniques will be used. The

following part lists the probable control techniques for Sony Ericsson.

A. Balanced Scorecard
 The balanced scorecard was introduced by and to measure whether the

activities of the company is meeting its objectives. The balanced scorecard have

become a fertile field of theories and scholastic research, as times past the

balanced scorecard was altered by various individuals depending on the need of

the environment. When Sony Ericsson implements the balance scorecard it will

translate the company’s vision into operating goals, the balance scorecard will

communicate the vision and then link it to individual and organizational

performance, the balance scorecard will also lead to a much strategize business

planning process, lastly the balanced scorecard will help the company to know

how to gain feedback and learn from such feedback. This in turn will help the

company adjust its strategy according to the feedback and what they have

learned from it. A disadvantage of the balanced scorecard is studies not linking

balanced scorecard to improved financial performance. This could mean that the

balanced scorecard can create changes to the financial performance but it

doesn’t necessarily mean that the financial performance will improve. This also

means that the balanced scorecard can only initiate the movement in the

financial performance and not create methods to increase the financial

performance of the firm.

B. Benchmarking

Benchmarking can help Sony Ericsson compare what it does against what

another organization does; it puts the basis of comparison on its cost, time spent
or quality of service. A problem with benchmarking is it forces restriction on what

has been done. Benchmarking does not help the organization to achieve

marketing share instead it is a catch-up managerial tool.

C. Sony Ericsson Budget

The company’s budget in 2007 reached €5,380,000. This budget was

used for the cost of production and the other expenses made by the firm. Each

expense of the firm was duly noted and recorded. The cost for the company

includes the production expenses, supplies expense, rent expense, salary

expenses, tax expenses and other miscellaneous expenses.

D. Project Program management

Project management will not work if managers are not knowledgeable

about the project they are guiding. Putting project managers that knows about

economics into projects that are purely technical in nature would cause the

failure of such projects. There is a need for performance measurements during

project making. Performance measurements help in knowing whether the people

working in the project can finish such task at the fastest time possible. There are

different methods used to measure performance this includes GANTT, PERT and

CPA. Gantt charts can be understood by a wide audience because it makes use

of a common technique for representing the phases and activities of a project.

Gantt charts show little information per unit area of display. It can be said that
projects are considerably complex than can be communicated effectively with a

Gantt chart. Program Evaluation and Review Technique (PERT) is known as a

method that helps in analyzing the involved tasks in completing a given project.

PERT focuses on the time needed to complete a task. Pert charts require the

minimum time needed to complete the total project. The limitation for PERT chart

involves human errors. Creators of PERT charts may omit certain activities;

PERT chart creators may also organize the activities in the wrong order. Critical

Path Analysis (CPA) calculates the longest path for planned activities until it

reaches the end of the project. CPA takes a look at the earliest and latest

instances that a certain activity can start and finish without making the project

longer. There are instances wherein a schedule made using CPA is not realized

accurately, this results to change in analysis and failure of the project.

E. Project Selection

The NPV is known as a method that uses the time value of money to

increase long-term projects. NPV measures cash flows particularly the excess or

shortfall of cash flows. The problem with NPV is it is not flexible for any issues

after project decision. NPV also has a weakness in dealing with intangible

benefits

Five stage plan

First stage
 The first stage of the implementation will take around 1 to 2 weeks. The

first stage focuses on the initial stages of the implementation. This part focuses

on the initial preparation for the new strategy. The resources for this activity

includes different sources that can provide information on how the business can

grow and achieve its goals; the other resource for this stage includes different

notes and information that will provide the different changes that needs to be

done with regards to the employees and the initiation process. In this stage Sony

Ericsson will gather the needed resources.

Second Stage

The second stage of the implementation of the new strategy includes the

planning stage. The second stage of the implementation stage will take one week

so that proper planning, testing and analysis of the new strategy can be made. In

this stage the effects of the new strategy have been known and are ready for

implementation in the company.

Third stage

The third stage of the implementation stage will take three to four weeks

for proper adjustments. In this stage the focus is on the full implementation of the

new strategy. In this stage everyone concerned has been informed of the

change in strategy and they start to feel the changes brought about by the new
strategy. The resources for this stage are proper information and training tools for

employees about the new strategy.

Fourth stage

The fourth stage of the implementation will involve the control, validation

and evaluation of the new strategy. The resource for this stage included

informative materials that will be used to understand the changes the new

strategy has done to the company and what are the current problems of the

initiated project. The fourth stage will check how the project succeeded in its goal

and how Sony Ericsson should change. The fourth stage of the project will take

around one to two weeks.

Fifth stage

The fifth stage will feature the evaluation of the implementation of the new

strategy. To avoid failure, the implementation of the new strategy should be

constantly checked and evaluated to see if it still performs according to

standards. Evaluation will focus on checking how the firm has adjusted to the

new strategy and how the firm has grown after changing its strategies. Evaluation

will be used to determine the things or issues that should be changed within the
new strategies and determine the next courses of actions that should be taken to

achieve success. This stage will use one to two weeks.

The need for globalization

Professor once mentioned that whether to globalize and how to globalize

have become burning issues for managers all over the world. This generalization

contributed to creating the new strategies out of ideas that are competitive to the

global economy. The new strategy was created by determining the global

situation and determining what actions can be used to compete in a global

economy.

Recommendation

once said that nothing chastens the planner more than the knowledge

he/she must carry to implement the plan. This statement helped in creating one

of the recommendations for the implementation of the new strategy. Those who

will implement the new strategy need to be properly informed of the new strategy

and how it will be implemented. Those who will implement the new strategy

need to be well informed and they need to understand fully the new strategy.

Those who will implement the new strategy need to be prepared for the negative

effect of the new strategy. They need to be prepared for the negative effects of
the new strategy and know what actions should be taken. Sony Ericsson needs

to make sure that they will identify newer strategies that are globally competitive.

The newer strategies should help the company bolster its status and should be

simple so that it would be easily implemented. The newer strategies should meet

the goals of the organization.

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Sony Ericsson needs to

make sure that they will
identify newer strategies
that are globally competitive
Strategic control

Strategic control shapes the decisions that are taken by corporate rulers in

relation to 'the determination of the basic long-term goals and objectives of the

enterprise, and the adoption of courses of action and the allocation of resources

necessary for carrying out these goals. Strategic decisions set or alter the

structure of the basic parameters within which an enterprise acts (1997). To

control the implementation of the new strategy, communication systems will be

used between the members of the organization. The communication systems will

assist in monitoring the new strategy and its effects on the organization. The

implementation of the new strategy will be validated via its effect on the company

and the industry. To assist strategic control, control techniques will be used. The

following part lists the probable control techniques for Sony Ericsson.

A. Balanced Scorecard

The balanced scorecard was introduced by and to measure whether the

activities of the company is meeting its objectives. The balanced scorecard have

become a fertile field of theories and scholastic research, as times past the

balanced scorecard was altered by various individuals depending on the need of

the environment. When Sony Ericsson implements the balance scorecard it will

translate the company’s vision into operating goals, the balance scorecard will
communicate the vision and then link it to individual and organizational

performance, the balance scorecard will also lead to a much strategize business

planning process, lastly the balanced scorecard will help the company to know

how to gain feedback and learn from such feedback. This in turn will help the

company adjust its strategy according to the feedback and what they have

learned from it. A disadvantage of the balanced scorecard is studies not linking

balanced scorecard to improved financial performance. This could mean that the

balanced scorecard can create changes to the financial performance but it

doesn’t necessarily mean that the financial performance will improve. This also

means that the balanced scorecard can only initiate the movement in the

financial performance and not create methods to increase the financial

performance of the firm.

B. Benchmarking

Benchmarking can help Sony Ericsson compare what it does against what

another organization does; it puts the basis of comparison on its cost, time spent

or quality of service. A problem with benchmarking is it forces restriction on what

has been done. Benchmarking does not help the organization to achieve

marketing share instead it is a catch-up managerial tool.

C. Sony Ericsson Budget

 The company’s budget in 2007 reached €5,380,000. This budget was

used for the cost of production and the other expenses made by the firm. Each

expense of the firm was duly noted and recorded. The cost for the company

includes the production expenses, supplies expense, rent expense, salary

expenses, tax expenses and other miscellaneous expenses.

D. Project Program management

Project management will not work if managers are not knowledgeable

about the project they are guiding. Putting project managers that knows about

economics into projects that are purely technical in nature would cause the

failure of such projects. There is a need for performance measurements during

project making. Performance measurements help in knowing whether the people

working in the project can finish such task at the fastest time possible. There are

different methods used to measure performance this includes GANTT, PERT and

CPA. Gantt charts can be understood by a wide audience because it makes use

of a common technique for representing the phases and activities of a project.

Gantt charts show little information per unit area of display. It can be said that

projects are considerably complex than can be communicated effectively with a

Gantt chart. Program Evaluation and Review Technique (PERT) is known as a

method that helps in analyzing the involved tasks in completing a given project.

PERT focuses on the time needed to complete a task. Pert charts require the

minimum time needed to complete the total project. The limitation for PERT chart

involves human errors. Creators of PERT charts may omit certain activities;
PERT chart creators may also organize the activities in the wrong order. Critical

Path Analysis (CPA) calculates the longest path for planned activities until it

reaches the end of the project. CPA takes a look at the earliest and latest

instances that a certain activity can start and finish without making the project

longer. There are instances wherein a schedule made using CPA is not realized

accurately, this results to change in analysis and failure of the project.

E. Project Selection

The NPV is known as a method that uses the time value of money to

increase long-term projects. NPV measures cash flows particularly the excess or

shortfall of cash flows. The problem with NPV is it is not flexible for any issues

after project decision. NPV also has a weakness in dealing with intangible

benefits

Five stage plan

First stage

The first stage of the implementation will take around 1 to 2 weeks. The

first stage focuses on the initial stages of the implementation. This part focuses

on the initial preparation for the new strategy. The resources for this activity

includes different sources that can provide information on how the business can

grow and achieve its goals; the other resource for this stage includes different
notes and information that will provide the different changes that needs to be

done with regards to the employees and the initiation process. In this stage Sony

Ericsson will gather the needed resources.

Second Stage

The second stage of the implementation of the new strategy includes the

planning stage. The second stage of the implementation stage will take one week

so that proper planning, testing and analysis of the new strategy can be made. In

this stage the effects of the new strategy have been known and are ready for

implementation in the company.

Third stage

The third stage of the implementation stage will take three to four weeks

for proper adjustments. In this stage the focus is on the full implementation of the

new strategy. In this stage everyone concerned has been informed of the

change in strategy and they start to feel the changes brought about by the new

strategy. The resources for this stage are proper information and training tools for

employees about the new strategy.

Fourth stage
 The fourth stage of the implementation will involve the control, validation

and evaluation of the new strategy. The resource for this stage included

informative materials that will be used to understand the changes the new

strategy has done to the company and what are the current problems of the

initiated project. The fourth stage will check how the project succeeded in its goal

and how Sony Ericsson should change. The fourth stage of the project will take

around one to two weeks.

Fifth stage

The fifth stage will feature the evaluation of the implementation of the new

strategy. To avoid failure, the implementation of the new strategy should be

constantly checked and evaluated to see if it still performs according to

standards. Evaluation will focus on checking how the firm has adjusted to the

new strategy and how the firm has grown after changing its strategies. Evaluation

will be used to determine the things or issues that should be changed within the

new strategies and determine the next courses of actions that should be taken to

achieve success. This stage will use one to two weeks.

The need for globalization

 Professor once mentioned that whether to globalize and how to globalize

have become burning issues for managers all over the world. This generalization

contributed to creating the new strategies out of ideas that are competitive to the

global economy. The new strategy was created by determining the global

situation and determining what actions can be used to compete in a global

economy.

Recommendation

once said that nothing chastens the planner more than the knowledge

he/she must carry to implement the plan. This statement helped in creating one

of the recommendations for the implementation of the new strategy. Those who

will implement the new strategy need to be properly informed of the new strategy

and how it will be implemented. Those who will implement the new strategy

need to be well informed and they need to understand fully the new strategy.

Those who will implement the new strategy need to be prepared for the negative

effect of the new strategy. They need to be prepared for the negative effects of

the new strategy and know what actions should be taken. Sony Ericsson needs

to make sure that they will identify newer strategies that are globally competitive.

The newer strategies should help the company bolster its status and should be

simple so that it would be easily implemented. The newer strategies should meet

the goals of the organization.

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The strategic alliance of

Sony with Ericsson proved
benificial for both
companies
Introduction

Strategic alliances involving equity investments by each of the partners

tend to be more ambitious and often more enduring undertakings. Moreover,

firms undertaking equity-investment alliances usually have a specific purpose or

objective in mind for the partnership. The agreement may also cover other types

of arrangements, notably the interchange of technology and the supplying or

purchasing of each other's products. Compared to establishing wholly owned

enterprises, strategic alliances may involve more modest investments although

significantly in excess of those for such other strategies as exporting or licensing

( 1993). Their other characteristics also fall in between these two alternatives, as

does the degree of risk, the profit potential, and the degree of control over the

resultant products and their manufacturing and sales. Some alliances consist of

simple cross-border partnerships, in which the company participates in the

foreign market with a local firm. Other alliances are true global ventures, in which

multinational corporations cooperate with other global firms at several levels of

the organization and in multiple locations, usually with the objective of expanding

the operations of both firms on a worldwide level (1993). Strategic alliances are a

global phenomenon because of its various effects to businesses. This paper

intends to determine the reason why companies want to go into Strategic

Alliances. The paper intends to identify how does strategic alliances benefit the
company in surviving and competing with it competitors. Moreover the paper

wants to determine some of the analytical measuring tools.

Discussion of topic

Business trends

Businesses are like mobiles in a windstorm being blown about by

continuously changing gusts of wind. The mobiles' weights have gone awry and

the mobiles shake for a period of time before they can settle into their original

positions. When a gust of wind rips off one of the weights, the mobile again

shakes and then settles into a new position. In this turbulent windstorm all of the

entities that have been shaken about have not yet settled into their new

configurations. People are not sure what things will look like or if they will settle

down in this lifetime (1994). What people do know is that new forces are at work.

Employers and employees will have to be alert in order not to be swept away by

the winds. There are different types of winds, crossing and mingling, making the

mobiles dance and leaving employees looking for work. These winds constitute

the business trends that dictate the new careerism. The increasing globalization

of business has resulted in a windstorm of competition, causing companies to try

to pare down and revitalize their bloated operations to be faster on their feet. The

automatic-elevator, the modern telecommunication systems, and the automatic

teller machine (ATM) are examples of how technology has replaced workers

( 1994).
 Gone some time ago were the friendly elevator operators. Gone are the

switchboard operators. And gone, too, are bankers' hours and many of the

helpful bank tellers. Another wind that has been picking up is the notion of

customer service and high speed management. Another wind affecting

businesses is often referred to as Total Quality Management (TQM). TQM is

shorthand for a number of changes in ways leaders can manage in order to

respond to customer needs and improve the quality of the service or product for

which the business is responsible. These changes include everything from

empowering lower level employees to become involved in problem solving,

decision making, and quality control to the introduction of advanced statistical

process control strategies that can measure output, waste, rejects, and cycle

time (1999).Another wind upsetting the mobiles of business is the force brought

about by experience-based learning. It is not an ill wind. It is the kind of fresh

breeze any industry welcomes, but it does disrupt the status quo. To keep pace

with the changes, it is helpful to have a perspective on the whole range of

industries and occupations. Businesses also have available to them the

opportunity to learn new ideas and perspectives, as international communication

increases and free trade brings increased interchange among national groups.

New industries and occupations are blown in by the winds, and industries and

occupations with which people have become familiar are blown aside. Recently

the terms sunset and sunrise have been used to remind us that while some
industries are downsizing or vanishing altogether, others are starting up or

growing (1999). There are various business trends ranging from economic in

nature, technological in nature or personnel related. To help a company survive

the changing business trends sometimes they engage in strategic alliances. The

strategic alliances reduce the burden of engaging in a business trend by splitting

the cost and minimizing its negative effects.

Key impacts on the business and strategic alliances

The emphasis on financial considerations in the business world is the

cause of important omissions. The assessment of strategic decisions has

sometimes suffered from this shortcoming, when certain financial criteria

imposed subjectively have forced decisions to be studied from a purely financial

viewpoint ( 2004). The goal of maximizing corporate wealth also differs from the

familiar notion of maximizing profit ( 2004). The paramount goal for most

businesses is return. However, within the business, managers are focused on

achievement in the two constituent areas of margin and utilization, with specific

targets relevant to their area of responsibility. The highly competitive nature of

many markets and the likely future prospect of continued economic turbulence as

national and global economic fortunes vary, requires that business managers

continue to look for opportunities to improve performance. This will primarily be

achieved by improving effectiveness in the areas of winning/retaining customers,

developing organizational competence and financial control (1998).

 Business research has identified key factors for business stability. The

key factors involve the management style, concentration on core business,

control of costs and resources, understanding product and service profitability,

control of working capital, maintenance of realistic stock values, and cash

forecasting. The management approach must be relevant to the commercial

requirements of the marketplace and the situation of the business. A different

approach will be required dependant on the boom or recessionary nature of the

market sector and the general economy (1998). There should be no interest in

diversification unless this is clearly linked to the business and yields direct cost or

competitive advantage. Businesses need to consistently pursue cost

reduction/efficiency initiatives and should refrain from the delay of taking action.

Moreover a business needs to have a clear and accurate understanding of the

actual profit generated by different products/services. To do that a business must

have appropriate systems to identify actual costs. There should be rigorous

management of stocks, work in progress and debtors to ensure the minimum of

finance tied up. There should be valuation of all stocks at the true value. Lastly a

business needs to have thorough cash forecasting and good management of

cash flow (1998). Aside from returns or profits, businesses there are other factors

that create a huge impact to business. This includes the inventory cost,

competitions and the problems in distribution of products. The inventory cost or

expenses in keeping supplies or materials impact a business greatly because too

much expense doesn’t help in the business growth and achievement of goals.

High level competition can create huge impact to businesses because the level
of competition may force a business to use too many resources. The problems

in distribution of products can create huge impact to the business because lower

distribution of products may mean lower income, loss of clients, and a tarnished

image. Through strategic alliances, the effects of key impacts to businesses will

be lessened. Through strategic alliances, initial problems of the key impacts will

be given solution.

Why should organizations go into strategic alliances?

There are many motivating factors behind the formation of strategic

alliances and other cooperative strategies. Organizations go into joint ventures

because of the need for resources, notably, money, skill and manpower. There

are three basic motivations for the formation of strategic alliance. One of which is

it represents the lowest transaction cost alternative; strategic alliances enables

an improved strategic position to be achieved, and it gives an opportunity for

organizational learning. These motives may be alternatives, although in some

cases all three motivations may apply. A particular motive for adopting a

cooperative strategy and entering into alliances is provided by the challenge of

entering new international markets ( 1998). The choice is one between exporting,

entry via cooperative contracting such as licensing, franchising, counter-trade,

and contract manufacture, and investment in the target market through setting up

joint ventures with local partners (1998).

 Although the formation of alliances and joint ventures is presented as

typically the result of unitary decisions in the presence of sufficient information to

make them, it is more usually the product of a coalition of views in both partners

pointing to the possible advantages of such an alliance, when the actual benefits

and costs cannot be known until the alliance has been in operation some

considerable time. They are, therefore, as much political as economic decisions

depending heavily on the internal corporate political power of their champions,

and placed at risk if those champions should lose power in their home

organizations strategic alliances are generally formed because each partner feels

inadequate in a particular area of its activities and wants to learn from the other

partner. Clearly this involves risk if total integrity is absent, as one partner may

take and not give fully in return. From an economic perspective, the main

argument for alliances is that they are usually formed as a result of an external

stimulus or change in environmental conditions to which companies respond with

a feeling of internal corporate need that they feel is best met by seeking a

relationship with another corporation (2003). A further factor advancing alliance

formation as opposed to the alternatives of merger/acquisition or organic

development is the need to limit risk. The spreading of financial risk is frequently

cited as a fundamental motivation for the formation of strategic alliances. Another

motive behind the conclusion of strategic alliances is the need for speed in

reaching the market. Alliances are the fastest means of achieving market

presence to meet an opportunity. Finally the motivation to cooperate remains

high even when the alliance has exposed the partners to the temptation to steal
each others' secret (2003). Strategic alliances are needed by firms because of

the changing business scene. Firms need to engage in strategic alliances

because of the need for resources, the need for lower transaction cost, a chance

to improve its strategic position, a chance for organizational learning, a chance of

entering new international markets, the need to prepare for a change in

environmental conditions, the need to limit risk, the need for faster market entry,

and the chance to gain business secrets.

Implementing strategic alliances

There are many types of alliances, but commitment is what makes

alliances strategic. Companies enter a number of more transactional

relationships through licensing, joint programs, and sourcing arrangements.

Whereas all those are important, they are not considered strategic alliances.

Alliances are about growth. Alliances are about capabilities. Alliances are about

consolidation. Combining a business’ technology with someone else’s distribution

systems gives big advantages to both companies without either one of the

business losing their independence. If businesses cooperate well, neither one of

them has to deal with the other parts of each other's business that they don't

understand or need (1998). Capabilities are widely recognized as the key

competitive differentiators among corporations. But few companies are the

worlds best at more than a handful of capabilities, and rarely on a global scale.

One of the most important challenges for growth is to be able to deploy world-

class capabilities wherever one conducts their business. So the best companies
are searching to obtain capabilities from whatever means available whether it is

acquisition, internal development, hiring, and various forms of partnerships and

alliances. Alliances are redefining corporate boundaries (1998).

The nature of strategic alliances has shifted from issues peripheral to the

core business of the partners to issues squarely in the crosshairs of the firms'

strategy. In a brief ten years; strategic alliances have leaped onto the global

business stage as one of the most important vehicles for growth and

competitiveness. Alliances have become larger and closer to the strategic core of

companies and have become a larger and larger part of the corporate portfolio.

The major drawbacks of strategic alliances such as difficulty in negotiating and

managing are receiving considerable top-level attention as alliances become an

ever-greater part of the corporate portfolio. The United States trails Europe and

Asia in alliance skills ( 2002). When comparing their own practices with those of

companies that achieved superior alliance results, the self assessment ratings of

European and Asian companies were higher than those of U.S. companies.

European and Asian companies indicated that their U.S. counterparts were

behind in the critical skills of integration planning and implementation. U.S.

companies are too quick to think the job is completed when the negotiations are

finalized. As the Europeans and Asians know, that is just the beginning.

Companies’ best at establishing alliances use a process consisting of four

stages: identification, evaluation, negotiation, and implementation (2002).

Implementing the strategic alliances starts after the agreement has been reached

between two companies. Part of the implementation stage is the gradual

integration of some aspects of both businesses. In gradual integration the goal is

to assist members of the organizations in adjusting to the alliance. One problem

with the implementation of strategic alliances is the resistance to it by some

personnel. As long as the firm has plan of action towards the resistance, the

implementation stage should proceed smoothly. To manage the implementation

of strategic alliances, analytical measuring tools such as KPI should be used by

both organizations.

KPI analytical measuring tool

The concept of key performance indicators (KPIs) is a way of formalizing

and describing critical success factors (CSF). At the corporate level, a periodic

survey of customers would be a key performance indicator, since corporate

managers are responsible for the overall corporation effort. Measurable activities

that contribute to improvements might be improved product quality, improved

customer service and support, improved delivery times, and more customer-

suggested product improvements. Each of these activities suggests its own set of

key performance indicators (1999). The most important part of this process is

that the KPIs are measures that the people responsible for them can actually

control and for which they can be held accountable. And because of this

combination of responsibility, control, and accountability, these KPIs, including

financial ratios, are certain to be relevant and important to the managers

assigned to them. The success that the typical company has in attaining its

general objectives and measurable short- to long-range strategic planning goals

depends on the degree of integration of operations that are critical to its success.

A company’s CSF forms the basis for measurement using KPIs and financial

ratios (1999).

For a typical company, there are a number of KPIs that are useful in

determining viability ( 1997). Typical ones include the ability or inability to make

changes to a company’s strategies, increase or decrease in company sales,

increase or decrease in market share, increase or decrease in customers’

satisfaction, research on continuing the status quo or bringing new products to

market, acceptance or non acceptance of new products and services by

customers, increase or decrease in quality of products and services, improved or

unacceptable delivery times, increase or decrease in sales and operating

expenses and increase or decrease in gross profit and cash flow for a

company’s products and services In a similar manner, a number of KPIs can be

developed not only for a company’s other functional areas but also for the

company as a whole. These KPIs tend to focus on financial ratios. Overall, a

company has control over KPIs. The company is able to manage the

performance of these areas and make changes when necessary (Sayers 1997).

KPI or Key Performance Indicators assist the organization in defining and

measuring its progress via comparing the company's achievements with its
organizational goals. KPI will see if the implementation of the strategic alliance is

still intact with the organization’s goals. KPIs make use of various factors to

assess the current state of a business and then prescribe certain courses of

action. KPIs are different and depend on the nature of a certain organization and

that organization's strategy. KPI helps an organization to measure its overall

progress compared to organizational goals. It focuses on knowledge-based

processes that are difficult to quantify. Critics of KPI describe it as too expensive

and difficult. A serious issue in KPI is that once it is created, it becomes difficult

to change it yearly because yearly comparisons can be easily lost. Moreover

some believe that KPI's are extremely difficult for an organization to use specially

in terms of getting comparisons with other similar organizations.

Case Study

In 2000 Ericsson and Sony established a London-based joint venture,

Sony Ericsson, to exploit the opportunities of third generation mobile systems,

whose implementation had begun in Japan (2005). Sony Ericsson makes use of

its competences to achieve continuous growth and development. The strategic

alliance of Sony with Ericsson proved beneficial for both companies; their

alliance gained them a unique identity in the cell phone industry. The alliance of

Ericsson with Sony helped both companies survive a tumultuous business

existence and helped them achieve better profits. Sony Ericsson’s resources

come from reliable suppliers and manufacturers. The materials used in creating

the products should be recyclable or harmless to the environment. Sony

Ericsson’s competences include its highly advanced product, competitive

products and concept of sustainability.

Conclusion

The alliance of Ericsson with Sony proved that strategic alliances help

companies satisfy their need for resources and their need for lower transaction

cost. The alliance of Ericsson and Sony gave both companies a chance to

improve its strategic position and gain learning as an organization. Moreover the

strategic alliance of Ericsson and Sony paved the way for them to have a chance

at entering new international markets. The alliance of Ericsson and Sony proved

further that business success can be acquired through engaging in Strategic

alliances.

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February 10, 2009

Sony Ericsson's
implementation of new
strategy
Time needed to implement the new strategy

The first stage of the implementation will take around 1 to 2 weeks. The

first stage focuses on the initial stages of the implementation. This part focuses

on the initial preparation for the new strategy. The resources for this activity

includes different sources that can provide information on how the business can

grow and achieve its goals; the other resource for this stage includes different

notes and information that will provide the different changes that needs to be

done with regards to the employees and the initiation process. In this stage Sony

Ericsson will gather the needed resources. The second stage of the

implementation of the new strategy includes the planning stage. The second

stage of the implementation stage will take one week so that proper planning,

testing and analysis of the new strategy can be made. In this stage the effects of

the new strategy have been known and are ready for use. The third stage of the

implementation stage will take three to four weeks for proper adjustments. In this

stage the focus is on the full implementation of the new strategy. The resources

for this stage are proper information and training tools for employees about the

new strategy. The fourth stage of the implementation will involve the control,

validation and evaluation of the new strategy. The resource for this stage

included informative materials that will be used to understand the changes the

new strategy has done to the company and what are the current problems of the

initiated project. The fourth stage will check how the project succeeded in its goal
and how Sony Ericsson should change. The last stage of the project will take

around one to two weeks.

Monitoring and evaluation systems

In a business setting there is a chance that new strategies might fail. New

strategies are not perfect and it will contain certain flaws. If these flaws merge wit

forces within the environment the result would be the failure of the

implementation of the new strategy. Failure can be due to the lack of preparation

or planning wherein the manager became too concentrated on the end result

rather than the specifics of then new strategy. Failure can also be due to lack of

cooperation between the manager and his subordinates. When there is no

teamwork between the manager and the subordinates’ aspects of the

implementation of the new strategy will not be completed. Another cause of

failure is when the manager does not take risks. The risk may have given the

new strategy a better chance for success. Moreover a cause of failure is the lack

of alternative strategies that should be used whenever there are small problems

or irregularities seen when the new strategy is being undertaken. Lastly a cause

of failure is the inability to use the approved strategies. There are certain times

that managers fail to make use of strategies set by the organization, this results

to an altered direction for the company and in the end failure of the project. To

avoid failure, the project should be constantly checked and evaluated to see if it

still performs according to standards. Evaluation will focus on checking how the

firm has adjusted to the new strategy and how the firm has grown after changing
its strategies. Evaluation will be used to determine the things or issues that

should be changed within the new strategies and determine the next courses of

actions that should be taken to achieve success.

Strategic control

Spurred by the rise in strategic planning, the field of strategic management

has evolved into a distinct sub discipline in management studies. Models of the

strategic management process generally show three basic stages: strategy

formulation, strategy implementation, and strategy evaluation or control. In the

most general sense, strategic control is the feedback mechanism for the strategic

management system. ( 2002). It compares strategic goals with progress and

exposes shortcomings. Strategic control is the part of strategic management

which also includes strategy formulation and strategy implementation that

compares strategic goals with progress toward those goals and identifies

shortfalls. Strategic control, then, occurs during plan implementation and focuses

on whether the plan is succeeding ( 2002). Strategic control shapes the decisions

that are taken by corporate rulers in relation to 'the determination of the basic

long-term goals and objectives of the enterprise, and the adoption of courses of

action and the allocation of resources necessary for carrying out these goals.

Strategic decisions set or alter the structure of the basic parameters within which

an enterprise acts (1997).

 They concern such matters as the source and level of investment funds,

the allocation of these funds to alternative uses, calculation of the rates of profit

that are to be earned in different branches of the enterprise, the recruitment of

the top executives, and the resolution of such constitutional issues as mergers,

takeovers, and liquidation. Operational power, on the other hand, involves the

detailed implementation of corporate strategy and thus concerns the immediate

day-to-day administration of corporate operations at plant and divisional level.

Strategic control concerns the use of capital, and all those that influence the flow

of capital to an enterprise may be able to participate in its control. The exercise of

strategic control has been seen as participation in the processes of corporate

rule through which corporate strategy is formulated ( 1997). These strategic

issues have been distinguished from the lower-level processes of decision-

making that concern the operational administration of an enterprise within the

financial constraints set by its corporate strategy. These lower-level processes

are, in one sense, equally strategic, as they involve a deliberate instrumental

maneuvering for tactical advantage. Considerable confusion arises, however, if

they are not distinguished from the formulation and pursuit of a long-term

corporate strategy. The strategic aspects of operational administration are the

outcome of a continuing series of short-term decisions in which middle managers

respond in ad hoc and pragmatic ways to the pressing demands of those higher

up the corporate hierarchy. Corporate strategy, by contrast, typically involves a

more conscious and deliberate process of decision-making, in which long-term

planning and the monitoring of the consequences of decisions play a central part
( 1997). To control the implementation of the new strategy, communication

systems will be used between the members of the organization. The

communication systems will assist in monitoring the new strategy and its effects

on the organization. The implementation of the new strategy will be validated via

its effect on the company and the industry.

The need for globalization

Globalization of business has been one of the dominant characteristics of

the past two decades but will develop even faster in the future. Many companies

from both developed and developing countries have become multinational

players seeking market opportunities across nations. Globalization has become

the cornerstone of firms’ overall business strategies ( 2003). Globalization is no

longer only a business option but also a part of effective corporate strategizing. In

other words, present business strategy is increasingly global. Today’s global

scope of business is markedly different from yesterday’s business pattern

( 2004). Presently, numerous goods and services are available across borders

even in those countries that were closed markets of command economies. World

consumers have been exposed to a variety of products and services that had

only been available to affluent consumers in industrialized countries. When

customers across nations started demanding products and services for better

living, companies strived to meet such demands by competing not only with local

firms but also with other multinational firms ( 2002).

 Corporations would like to pursue economic rationality in the context of an

increasingly global economy. They generally base their decisions to form

strategic alliances and joint ventures on market considerations. In fact,

corporations care more about freedom to invest and market their products than

about the nature of the political system or the relationship of a particular

government with its own citizens. The needs of the global economy, therefore,

are always under some tension from the needs of national and foreign policy

objectives ( 1995). once mentioned that whether to globalize and how to

globalize have become burning issues for managers all over the world. This

generalization contributed to creating the new strategies out of ideas that are

competitive to the global economy. The new strategy was created by

determining the global situation and determining what actions can be used to

compete in a global economy.

Recommendation

once said that nothing chastens the planner more than the knowledge

he/she must carry to implement the plan. This statement helped in creating one

of the recommendations for the implementation of the new strategy. Those who

will implement the new strategy need to be properly informed of the new strategy

and how it will be implemented. Those who will implement the new strategy

need to be well informed and they need to understand fully the new strategy.

Those who will implement the new strategy need to be prepared for the negative
effect of the new strategy. They need to be prepared for the negative effects of

the new strategy and know what actions should be taken. Sony Ericsson needs

to make sure that they will identify newer strategies that are globally competitive.

The newer strategies should help the company bolster its status and should be

simple so that it would be easily implemented. The newer strategies should meet

the goals of the organization.

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Globalization is todays
business trend

Report Writing
“Why Strategic Alliances and Partnership of Logistics is important in
modern business. What are some of the analytical measuring tools
and techniques a company can apply to better manage the success
of Alliances and Partnerships.”

Table Of Contents:

1: Introduction – Definition, Conception and Beneficial.

2 : The Business Trend - Evolution and Globalization.

3: The Competition of the Logistics Industry

4: Manage the Outsource by Outsourcing-3PL versus

4PL 5: Analytical measurement tools & techniques.

(i) Determining strategic partnering of logistics objectives.

(ii) Establish a realistic analytical measurement tools/

techniques that meet your objectives.

(iii) Understanding the benefits and risk brought to alliances

6: Case Study
7: Conclusion

8: References

Introduction.

Strategic alliances are defined as "the pooling of specific resources

and skills by the cooperating organizations in order to achieve
common goals, as well as goals specific to the individual partners"
(1995). For small and medium sized businesses, strategic alliances
can be used to build innovative capability and technological
competence. Through a strategic alliance, small or medium sized
firms have a greater opportunity to overcome weaknesses such as a
poor financial position or low levels of expertise in production,
marketing, and management

Strategic partnerships and alliances are integral to business

strategy. The objective of these relationships is to share knowledge
and core capabilities in order to increase competitiveness and the
value of services offer to clients. Additionally, these strategic
partnerships and alliances bring together complementary industry
relationships and further broaden the range of potential business
opportunities for all parties.

The success of these relationships is reflected in the long-term

relationships that have established with clients and impressive
contract retention rates. Partnership/alliance approach creates an
ideal environment in which to explore synergies, bring about close
alignment of goals and increase performance.

Alliances of many different types: agreements between transportation

companies to share equipment and terminals and to extend each
participant’s reach; alliances between logistics providers in different
countries to create a more global service; partnerships between
software companies to offer a broader set of solutions; alliances
between manufacturers and suppliers to speed the development and
production of goods, and between manufactures and retailers to more
accurately forecast demand; and a mélange of less obvious alliances
that are designed in some way to provide a complementary match of
corporate strengths.

“Creating value, a bigger pie, is fundamentally a cooperative

activity involving customers and suppliers that a company can’t

accomplish alone”
Strategic alliances and partnerships between logistics
companies will enhance its industry's comprehensive integrated
technology-enabled management systems and services. The
combination of the Logistics' advanced technology infrastructure,
provides state-of-the-art tracking for product shipments and instant
Internet visibility to document imaging for expedited delivery receipt
and claim management while integrating over-the-road and interposal
transportation alternatives. The new alliance enables a combined
team of dynamic, experienced professionals to provide customers the
flexibility to ship more time-sensitive and customer-direct business via
the best, most efficient and cost-effective route

The benefits of Strategic Alliances are

· Reduce costs

· Increase access to new technology

· Increase ROI

· Inhibit competitors

· Enter new markets

· Reduce cycle time

· Improve quality

THE BUSINESS TREND

Economies are continually evolving and globalization is one among

several other continuing trends. One such trend is that as industrial
economies mature, they are becoming more service-oriented to meet
the changing demands of their population. Another trend is the shift
toward more highly skilled jobs. But all the evidence is that these
changes would be taking place—not necessarily at the same pace—
with or without globalization. In fact, globalization is actually making
this process easier and less costly to the economy as a whole by
bringing the benefits of capital flows, technological innovations, and
lower import prices. Economic growth, employment and living
standards are all higher than they would be in a closed economy.

But the gains are typically distributed unevenly among groups within countries,

and some groups may lose out. For instance, workers in declining older

industries may not be able to make an easy transition to new industries. ( May

2000. )
Trend

Continues

The world moved the industrial economy to the networked and digital
economy. In this new century, with the advance of information
technology and the expansion of Globalization, you will see the world
economics environment coming out with a new and different nature.
The economics world has shifted from being a small group of national
economy to a Global and interdependent marketplace. This is the era
of full and entire Globalization of economic activities.

Business and markets are no longer confined to geographical

borders, but they are links to a complex worldwide network.

The new economy is Global, because its aspects, from financial to

productions, are organized on a Global scale, directly through
multinational corporations or directly through networks of association.
What differential the new Global economy from the economy of the
previous ages is “ it is an economy with the capacity to work as a unit
in real time on a planetary scale.

The increasing Global Trading is changing the nature of firms, and

they have shifted from national firms to international and global
corporations. The complexity of business environment has forced
companies to form collaborative agreements with their suppliers,
buyers, competitors and allies. With such arrangement the firm create
a network of complex business relationships, and these
organizational relationships have become an integral of part of
globalization. Mergers of companies, joint ventures, collaborative
agreements and short and long term alliances between firms have
characterized the business world of today.

GLOBALIZATION

Economic "globalization" is a historical process, the result of human

innovation and technological progress. It refers to the increasing
integration of economies around the world, particularly through trade
and financial flows. The term sometimes also refers to the movement
of people (labor) and knowledge (technology) across international
borders. There are also broader cultural, political and environmental
dimensions of globalization that are not covered here.

At its most basic, there is nothing mysterious about globalization. The

term has come into common usage since the 1980s, reflecting
technological advances that have made it easier and quicker to
complete international transactions—both trade and financial flows. It
refers to an extension beyond national borders of the same market
forces that have operated for centuries at all levels of human
economic activity—village markets, urban industries, or financial
centers.

Markets promote efficiency through competition and the division of

labor—the specialization that allows people and economies to focus
on what they do best. Global markets offer greater opportunity for
people to tap into more and larger markets around the world. It
means that they can have access to more capital flows, technology,
cheaper imports, and larger export markets. But markets do not
necessarily ensure that the benefits of increased efficiency are
shared by all. ( May 2000 )

GLOBALIZATION is a current business trend which even involved the SMEs

,which are gradually become significant participants. Nonetheless, the SME

segment has not been able to match with the speed and scale of the larger

organisations, they are able to do so with the private equity investor’s influences

and even more aggressively.

ADVANTAGES

SUPPLY CHAIN – eventually a tremendous proportion of the

financial transaction will be seamlessly integrated into the sale of
goods and services.
VALUES RECOGNITION – global valuation and the ability to have
initial public offers in the best context.

MERGERS & ACQUISITION – consolidations to survive , and ability

to issue shares when making acquisition as the newly issued shares
will be the currency of the new economy.

There’s Always an Alternative

“Alliances and partnerships may offer a lower cost and potentially faster and less

risky alternative to globalization. They use the capital, competencies and existing

business bases of allies to bolster capability.” They can also reduce or spread

the risk. [1]

The Competitive Logistics Industry

The Global Logistics and Freight Forwarding market has undergone

significant change and widespread consolidation. This has
dramatically impacted on the dynamics of the market as well as the
competitive capabilities of many players. Most customers now
recognize that their global supply chain activity is a key potential
source of competitive advantage. The impacts of globalize
competition and the increasingly global capability of larger providers
has led to effectiveness, efficiency, quality service and customer
focused solutions becoming the key measures for providers and their
customers in both the Logistics and Freight Forwarding arenas.
We can see companies are getting more and more aggressive in
ways of doing businesses. Spending tons of money just buying
another company for the sake of killing the market shares. “ The
commercial world is always a battle field ” to all of us . The stronger
will stays and the weaker will falls. A beautiful world which created by
God has turned ugly because of too heavy competitions . Let see
what will get worst from now….

Alliances and partnerships is important in business

consolidation. They enable in the strengthening of vital elements in
the logistical chain of an organization. This leads to an overall
improvement in organizational efficiency. Strategic Alliance (SA) is
one such partnership which enables the allying firms to pursue
specific market opportunities by collaborating their resources.

The compulsions of today’s global economy have given rise to the

practice of strategic alliances and partnerships. This enables a firm to
develop long term relationships with like-minded firms and the
synergy, thus developed, drives all the participating firms forward.
Trust is the underlying factor in any partnership. It is the key to
success of a partnership.
Global technology connectivity is ubiquitous today, creating more opportunities to

shrink supply chain problems to manageable sizes and farm them out to

specialized providers. Globalization enables this hyper-specialization.

It also demonstrates how business, like water, always seeks its own level. We

licked the problems of connectivity, of delivering data to users without the need

for intermediaries, and of providing real-time data.

So what now? We have a plethora of small, specialized chunks of information

that can be offshore or outsourced. Globalization plays a significant role in

solving these problems because it allows us to leverage the knowledge of people

in different parts of the world even though they are not physically there.

Also, because of technologies that grant visibility into different transportation

systems, companies have become agnostic in terms of where they source. This

is crucial because it keeps production going.

Businesses today maintain a lot of goods and services in the pipeline, which is

fine as long as the line is flowing and they have inventory outputs and inputs. If
the pipeline gets blocked and production is stopped, however, the cascade effect

can be devastating.

Leading companies can be toppled quickly if they lose capital, market share,

customers, suppliers, and their reputation. In this global age, the difference

between leadership and bankruptcy is actually very small.

So logistics companies must be nimble and quick to change as processes and

conditions change.

MANAGE THE OUTSOURCE BY OUTSOURCING

- 3PL VERSUS 4PL

Outsourcing is a viable option for companies. Businesses outsource

for many and varied reasons-increase shareholder value, reduce
costs, business transformation, improve operations, overcome lack of
internal capabilities, keep up with competitors, gain competitive
advantage, improve capabilities, increase sales, improve service,
reduce inventory, increase inventory velocity and turns, mitigate
capital investment, improve cash flow, turn fixed costs into variable
costs and other benefits, both tangible and intangible. To the
maximum, and if done correctly, outsourcing and business process
outsourcing can be used to create a viable virtual corporation.

Third Party Logistics (3PL)

A third-party logistics (3PL) firm is an external supplier that performs

all or part of the company’s logistics functions. The definition
encompasses providers of services such as transportation,
warehousing, distribution, financial services and so on.

The use of third party logistics providers has grown dramatically over
the last several years and has increasingly become an effective way
to reduce costs and spread risks for traditional, vertically integrated
firms.

The economic advantages of using 3PL suppliers are:

• Elimination of infrastructure investments

 • Access to world-class processes, products, services or
technologies

• Improved ability to react quickly to changes in business

environments

• Risk sharing

• Better cash-flow

• Reduction of operating costs

• Exchange of fixed costs with variable costs

• Access to resources not available in one’s own organization

As customers grow accustomed to using the services of a 3-PL

provider for certain activities such as transportation and warehousing,
they become better candidates for a broader range of service
offerings, or value-added services. Examples of value-added services
provided by 3PL providers are:

• Pick and pack

• Marking, tagging, and labeling

• Product returns and reverse distribution

• Packaging and repackaging

 • Salvage and scrap disposal

• Telemarketing

3PL is an extension of trucking, warehousing, and distribution. It is

the provision of these products under one roof, with the aim of taking
over some of the associated functions such as stock keeping and
documentation. 3PL services also include basic functions comprising
physical activities such as transportation, warehousing, line haul and
the rental of material handling equipment.

However, the task of providing a full outsource solution comprising

different services from one service provider is difficult. It is, therefore,
not surprising that opportunities are created for 4PL service providers
to assist companies in coordinating all the different 3PL activities,
which are provided by different service providers.

4PL Service Providers

4PLs represent the next stage of development in logistics service

providers. Consequently, while the traditional activities of
warehousing, inventory management and transportation may be
given out to one 3PL, other processes like HRD, security and product
development are done by other 3PLs. In effect, the activities done by
a set of internal departments are now being carried out by a set of
3PLs. As a result the companies now have to deal with a whole set of
3PLs and each needs to be coordinated with and linked via personnel
and IT. The number of transactions and the costs reduced are thus
offset to a great extent by the cost and time of transacting with all
these 3PLs.

Today more and more business processes are being outsourced. In

the West, processes like bill payment, credit tracking, invoice
generation, HRD, transport and warehousing are all being
outsourced. Outsourcing of these activities may indeed add
considerable value to the product, but on the flip side, even in a
developed economy like the US, there are no 3PLs that offer every
process with equal competence or reach.

The 4PL is an integrator that assembles the capital, technology and

resources of its own organization and other organizations to design,
build and run

supply chains. The typical 4PL would eliminate complexity, share

benefits of scale and capital and can drive innovation due to its
overall view. In other words, a 4PL manages other 3PLs.

The primary role of the 4PL is the management of complexity and

time. Two key distinctions make the concept of 4PL unique and set it
apart from other supply chain outsourcing options available in the
market today:

• A 4PL delivers a comprehensive supply chain solution

• A 4PL delivers value through the ability to have an impact on

the entire supply chain.

In both these concepts, 4PLs have evolved because of constraints

faced by the 3PLs. In other words, 4PL is the evolution of supply
chain outsourcing. The convergence of technology and the rapid
acceleration of e-capabilities have heightened the need for an over-
arching integrator for supply of chain spanning activities. 4PL is a
non-asset based logistics operator which has chosen to become an
outsourcing specialist – assessing the entire supply chain and
contracting those best able to provide the required services, all in
order to reduce the customer’s investment in inventory.

4PL operators handle the client’s entire logistics function for optimum
results. It is not just about reducing costs of warehousing and
transport, but rather about managing the logistics functions and
achieving optimization. 4PL consultants are being used to analyze
certain areas and recommend solutions where processes can be
optimized.
It follows naturally that 4PL service providers must become long-term
partners, as they are directly involved in the business processes and
strategies.

The 4PL service provider manages and coordinates the relationship

between all the different activities of the consumer. It must be able to
strategize and manage all the different assets that are dedicated to a
customer and, where possible, coordinate break-bulk distribution by
co-loading different customers’ products on the same vehicle. This
can be done when a 3PL service provider has a great number of
customers, thus providing the critical mass to allow break-bulk
distribution.

The 4PL planning in such a scenario plays a great role in reducing

costs. In essence, the 4PL logistics provider is a supply chain
integrator and assembles and manages the resources, capabilities
and technology of its own organization with those of complimentary
service providers to deliver a comprehensive supply chain solution.

The development of 4PL solutions leverages the capabilities of 3PL

providers, technology service providers and business process
managers to deliver a comprehensive supply chain solution through a
centralized point of contact. The 4PL will integrate the client’s supply
chain activities and supporting technologies across these “best of
breed” service providers with the capabilities of its own organization.

Analytical Measurement Tools & Techniques.

To compete in this changing environment and be positioned as the partner of

choice with key strategic player, management should review their companies’

approaches to mapping out, establishing, and managing alliances. Becoming the

industry leader and maximizing the value obtained from alliances and partnership

of logistics involves three key steps.

Step 1: Determining strategic partnering of logistics objectives.

Step 2: Establish a realistic analytical measurement tools/ techniques.

Step 3: Understanding the benefits and risk brought to alliances.

Step 1: Determining strategic partnering of logistics objectives.

· Benchmark or target value for logistics costs and key performance

measurements.

· Increasing logistics skill requirements.

· More advance on logistics information system/ Technology.

· Focus resources and concentration core business area.

· More adequately meet end-user customer requirement.

· Attain a competitive position.

After determining the objectives, the next step is to establish a realistic

measurement tools or techniques. In this report we will list out four types of

tools / techniques which enable companies to better manage their alliances and

partnership. They are Logistics Outsourcing, Engage Third Party Logistics

Provider, Joint Venture and lastly using Key Performance Indicator to measure

your logistics performance and process. [2]

Step 2: Establish a realistic analytical measurement
tools/ techniques that meet your objectives.

· Logistics Outsourcing.

· Engage a Third Party Logistics (3PL).

· Joint Venture Partnership.

· Key Performance Indicator measuring performance and process.

Outsourcing refers to the delegation of non-core operations from

internal production to an external entity specializing in the
management of that operation. Logistics Outsourcing is one of the
analytical tools/ techniques that shifts the organization logistics
activities and process to a third party provider who can better manage
it, the third party logistics provider (3PL). [3]

As we have mentioned earlier, Third Party Logistics is supply chain

where one or more logistics functions of a firm are outsourced to a
3PL provider. Typically, they are specialize in warehousing,
distribution and value added services or products that can be scaled
and customized to customer’s needs based on market conditions and
the demands or delivery service requirements for their products and
materials. Outsourcing logistics to 3PL had prove to solves the
problems caused by suppliers and carriers who fail to coordinate
shipments and deliveries, and late shipments that result in the loss of
money and customers.[4]

A joint venture is an entity formed between two or more parties to

undertake economic activity together. The parties agree to create a
new entity by both contributing equity, and they then share in
the revenues, expenses, and control of the enterprise. Joint ventures
enable the companies to share their company resources, manpower,
information, knowledge and technologies in order to gain a better
awareness of their logistics process best practices. The results help
to minimize their logistics operation cost, better customer services
and attain a competitive position in their logistics business. [5]

Maximizing value from alliance-based strategies requires a

continuous cycle of performance measurement. Those performance
measurements are referred as Key Performance Indicators (KPIs)
which will assist your company in determining what is important to
measure, how you will measure it, and how you will use that
information to run a more successful logistics business. Key logistics
performance indicators normally measure for the customer response,
Inventory management, supplies, transportation, and warehousing.
Indicators are captured in the areas of financial performance,
productivity performance, quality performance, and cycle time
performance.[6]

Step 3: Understanding the benefits and risk brought to

alliances.

Manage the success of alliance and partnership mean how to make

your analytical tool/ technique work therefore understanding what the
key benefits and risk factors would bought to alliances are important.

Key Benefits.

· More Focus on core

competencies.

· Enjoy world class technology/system.

· Benchmark against competitive logistics practice.

· Spreading costs and risks

Vertical alliances are relationships between organizations in different industries.

This is a type of alliance most commonly found in the service sector where

collaboration of expertise can be coordinated to offer complete solutions to

clients. Outsourcing your logistics to 3PL is good example of vertical alliance.

This allows company to only focus on their core business area by getting rid a lot

of time and money on the non-core sophisticate logistics operation to a third

party provider. The significant benefits are to enjoy the efficient use of worldwide

Labour, technology and resources which provided by a 3PL while still maintain

your logistics operation at lower rates and high customer satisfaction level. [7]

Horizontal Alliance included firms from the same industry. Alliances are usually

used to achieve scale, to adjust for seasonal changes or handle niche areas of

expertise. Joint venture is an example of horizontal alliance when two or more

company from the same industry decided to conduct a business together. The

strategy helps companies to combine and share their resources, manpower,

technology and knowledge together in order to achieve their common goals. In

return both or all parties will be able to minimize costs/risk and maximize return in

investment. [7]
Performance Measurement has become an important measuring tool for any

kind of alliances. Companies use key performance indicators (KPI) not only to

measure their own performance, but also the performance of their business

partners. The benefit of applying this strategy is to have more visibly on your

partner performance in order to benchmark against competitive logistics best

practice.[6]

Risk In Logistics Outsourcing

Hidden Cost – many firms underestimate the costs related

to selecting a third party logistics provider, and negotiating and drafting a

logistics outsourcing contract. Estimating of transition cost can be very difficult.

Most firm do not realize how much they have spend until the transition is

complete. Managing the effort probably represents the largest category of hidden

costs because it covers three areas :- 1. Monitoring to see logistics providers

fulfilling their contractual obligations, 2. bargaining with them, and 3. negotiating

any needed contract changes. Management often does not consider these costs
because they only become visible when overall outsourcing costs have

noticeably escalated ( 2001 ).

Dependence on 3PL provider - A firm that outsourcing its logistics activities to

an third party logistics runs the risk of becoming dependent on that provider over

a long period of time, the firm may find itself in an increasingly vulnerable position

and even lose control of part of its logistics activities.

Loss of Logistics Innovative Capacity – A third party logistics provider does

not guarantee a firm to maintain long term comprehensive ,competitive,

competencies and to have new ways of providing customized logistics services.

The Possibility of Inefficient Management – It is difficult for a firm to manage

logistics outsourcing . In some cases , there will be a need for a more

professional and highly trained purchasing and contract management group.

Case Study

One successful business alliance of partnership happened in Sony is the Sony

Vaio notebook door-to door distribution in Pan Asia. Sony Japan decided to set

up Vaio hub in Asia. To facilitate the distribution in Pan Asia region, Sony Japan

selected Sony Supply Chain Singapore as hub for the distribution of VAIO
 notebook business. VAIO business is very different as compared to the AV

products of SONY, which no or minimal inventory is kept at Sony dealers shop

fronts. All stocks are auto replenishment once the set was sold at dealer shop

fronts. To meet this short lead-time we need a forwarder who is able to fulfill the

shipment and delivery to end customer within the next day. After much

consideration, Sony Supply Chain Singapore decided to establish a business

alliance partnership with FedEx who are able to provide a door-to-door service

worldwide.

Sony Supply Chain being the sister company of Sony Japan has the advantages

as compared to the 3PL companies. Following are the advantages:

a) Know Sony business culture well

b) Close contact with Sony sales company worldwide

c) Familiar with trade regulation, documents and documents

legalization (example: C/O application and embassy documents
legalization…)

d) Strong team of logistics personnel. (e.g.: packing, picking,

storage…)

e) As for the Singapore market distribution , Sony Supply Chain has

their owned fleet of trucks to carter for the island wide distribution
f) For documents support, they have a team of staffs to prepare the
necessary documents for example: CO application, permit
application, SASO application and document legalization)

As for FedEx, they are strong in their door-to door service worldwide. On tap of

this, they have the tracking system which can help Sony Japan to track the cargo

movement. As compared to other air freight forwarder, FedEx has the advantage

of express clearance at the custom check-point.

This is a very successful business alliance of partnership because both Sony and

FedEx as they are able to tap on each other strong point and neutralize their

weakness.
Conclusion.

Strategic partnerships and alliances are integral to business strategy. It is

important in the modern business world as their combination and relationships

will to share knowledge and core capabilities in-order for increase in

competitiveness and the value added of services which can offer to customers is

great.

To compete in this changing environment and be positioned as the partner of

choice with key strategic player, management should review their companies’

approaches to mapping out, establishing, and managing alliances with the help

of analytical tools.

Globalization is today business trend. It refers to the increasing integration of

economies around the world, particularly through trade and financial flows.

Global markets offer greater opportunity for people to tap into more and larger
markets around the world. It means that they can have access to more capital

flows, technology, cheaper imports, and larger export markets.

Sometimes we ask ourselves , what will be the trend of tomorrow … will it benefit

the peoples or just for the commercial world…

Strategic
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February 09, 2009

Multinational strategies had

always featured in the
telecom industry
Part 1

Sony Ericsson, its resources and its competencies

Multinational strategies had always featured in the telecom industry.

Ericsson, based in the small Swedish market, established manufacturing

operations in Russia and sales subsidiaries in China and Mexico as early as the

1890s. Around one-third of Ericsson's total production was manufactured in

eleven factories outside Sweden in the 1930s. By 1990 it only operated

telephones in Argentina. By that year Ericsson was the fourth largest telecom

manufacturer, holding around 7 percent of the world market, and having 70 000

employees ( 2005). In the 1980s the industry underwent a major change with the

development of cellular or mobile telephony. The mobile phone industry had two

components: mobile communication infrastructure and mobile handsets. The

early mobile networks were for the most part incompatible between countries. In

the United States, several competing systems and standards evolved in different

parts of the nation. Subsequently second generation systems, which used digital

rather than analog technology, were introduced. A pan-European system known

as global system for mobile (GSM) communication was launched in 1990, and

accounted for seven-tenths of the world's subscribers by the new century. The

remainder used two competing US standards or the Japanese standard ( 2005).

 The market for telecom equipment came to be dominated by a small

number of large multinationals. In 2000 Ericsson's sales of over $30 billion

included nearly one-third of the world mobile infrastructure equipment market and

10 percent of the world cellular phone market; however competitive pressures led

it to divest rather than further expand international manufacturing. During the

1990s it reduced the number of its production plants from seventy to less than

ten worldwide. The residual plants either focused on the development and design

of new products, or on standardized products. The latter were concentrated in a

few low-cost sites ( 2005). A decision to concentrate on mobile telecom

infrastructure led to the sale of many of its plants at the turn of the century and

the outsourcing of its non-core manufacturing to contract electronic

manufacturers. In 2000 Ericsson and Sony established a London-based joint

venture, Sony Ericsson, to exploit the opportunities of third generation mobile

systems, whose implementation had begun in Japan. Ericsson's strategies were

broadly emulated by its major competitors in the world telecom industry, including

Nokia, the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and

Motorola, and Germany's Siemens, all of whom had telecom equipment sales in

excess of $22 billion in 2000. These firms all moved, although at varying rates, to

outsource production to contract manufacturers. They also progressively

outsourced innovation to cheaper locations (2005). Sony Ericsson’s resources

come from reliable suppliers and manufacturers. The materials used in creating
the products have to agree with the company’s greenheart process wherein most

part of the product should be recyclable or harmless to the environment. Sony

Ericsson’s competences include its highly advanced product, competitive

products and concept of sustainability. Sony Ericsson makes use of its

competences to achieve continuous growth and development.

Governance Chain

Diversity and social inclusion are core themes which guide governance

applications at the social, organization, institutional, political and economic levels.

In turn, governance considerations focus on concerns of how institutions and

people understand the processes of inclusion/exclusion and diversity at these

various societal levels, including that of the family. In particular, governance is

concerned with how employment and inclusion are enabled by sound economic

and financial policies that generate the funds driving the economy, provided such

policies are grounded in an inclusive and sustainable framework policy

formulation ( 2001). At the organizational level, corporate governance

traditionally has addressed issues concerned with the exercise of choice and the

creation of opportunities, and how choices and opportunities have an impact on

institutions, decision-making and accountability. Corporate governance has

focused on corporate entities, created under the law, and often locked together

by ownership within groups. Corporate governance is concerned with holding to

account the modern corporation, whether it is a large or small holding company

and subsidiaries, listed, private, government or non-profit entity. One influential

interpretation of corporate governance is to find a way to maximize wealth

creation in a manner that does not impose inappropriate costs on third parities or

on society as a whole. Corporate governance application requires a system of

checks and balances designed to define appropriately the parameters of

authority through accountability ( 2001). The following presents the governance

chain for the company.

The key players include the stakeholders, board of directors and the

employees. The stakeholders, board of directors and employees are the ones

that will be affected by any change in management strategy. Any changes in

management strategy can affect the service given to the stakeholders. Any

changes in the management strategy can alter the position and responsibility of

the management team and the personnel. The beneficiaries of any change in the

management strategy include the clients and the government. The clients are
beneficiaries because any change in the management strategy can lead to better

service to them and it can lead to the emergence of better products. The

government is a beneficiary of the change in the management strategy because

they can now make business dealings with Sony Ericsson. The government can

ask the company to make products that fits with their communication needs. This

in turn can help the government provide better service to their constituents and

deal better with outside forces.

Sony Ericsson ethics and Social Responsibility

The process of globalization over the past decade has created

unprecedented opportunities for global companies in trade, investment, services,

and production. The fact that the rapid pace of growth of economic opportunity

has not corresponded with the growth of leadership in business ethics and a

sense of corporate responsibility has potentially threatening consequences for

the reputation of free market economies and businesses. Public concern is

accelerated by a wider use of electronic communications that is changing the

nature of politics as much as that of business operations ( 2003). The leadership

of a few progressive companies, the rise in consciousness of corporate

responsibility as an essential feature to sustain global capitalism, and emerging

evidence of partnership initiatives which hold the key to equitable development,

are all encouraging pointers towards progress. Corporate responsibility is a pact

for the mutual benefit between society that needs business for economic and

social development, and business that needs a supportive business environment.

It is also a pact between capital and management in modern companies, which

has been as shaken up by some recent scandals where management

disregarded the bond of transparency with shareholders ( 2003).

All too often professional managers and their advisers have been tempted

to see the resources of public companies as their own property without the sense

of stewardship that owner-managers once had. The balance can only be struck

by combining professionalism with transparency. The international nature of the

operations of business in trade, investment, and production brings a more

complex dimension to business ethics and corporate responsibility in both the

cultural aspect of doing business in environments with different norms and

values, and in diversity of employees and stakeholders. While, until recently,

some companies would argue that they should respect local values even if these

are more tolerant of low standards and corruption, the prevailing ethos of the

leading multinational enterprises and international institutions is that standards

should be universal (1996). This is not without dilemmas in operating in different

cultures, not least where preference is given to relationships along family, tribal,

ethnic, and community lines. One of the fundamental problems of addressing

ethics and corporate responsibility in an international setting is the existence of

many governments that lack the capacity for proper market regulation, let alone

the many states which are weak, corrupt, and in a few cases failed states

engaged in internal conflict and civil war. Companies engaged in such locations
have a compelling reason to engage in collective efforts to promote an enabling

environment for corporate citizenship (1996). Sony Ericsson has and believes in

corporate responsibility. The company makes sure that it follows all laws and

regulations in every country they operate in. It has procedures and processes

that make sure that corporate responsibility is implemented not only in internal

environment but within its suppliers and trading partners. Sony Ericsson gives

much importance to their personnel; the company makes sure that the welfare of

the personnel is given appropriate attention.

The management strategy that will be changed

Expanding into additional segments, after reaching an acceptable market

share position in the primary market is a prudent option. The common strategy is

to penetrate with either line extensions or technology applications. It is an

acceptable and logical move for a market leader particularly in a flat market. It's

only advisable though if sufficient resources are available to penetrate the new

segment and, providing sufficient management attention and resources are

available to vigorously protect the primary segment ( 2006). The target market of

the company involves almost all sectors of the society. The company aims to

provide mobile products to young or old, boy or girl. The company as much as

possible aims to reach all walks of life. This target market is a good source of

income. The company has different strategies that can cater to the taste and

appeal of such markets. The change in management strategy will focus on

increasing the market of the company. In increasing the market the company will
need to make sure that the stores where its products are located will be in the

most profitable places. The distribution stores for the products should be in

places where clients can easily see the store and they can be encouraged to visit

the store and buy products. The distribution store should make sure that

competition in the location they want to put up the branch will not be too heavy.

The market of the company can still be expanded to accommodate the elder

people market. The company can consider such clients as a different segment

that should receive a different kind of product. They should also provide a

different kind of mobile products for such market.

Part 2

The mission statement and how it contributes to the firm

High-level leaders in innovative companies take the long-range view,

looking down the road and striving to anticipate every contingency. They develop

a mission and vision that are consistent, challenging, but realistic ( 1997).They

also develop strategic plans to achieve the mission and cultural plans to achieve

the vision. Innovative leaders attract the voluntary commitment of followers to the

company's mission and vision through example and assertive, convincing

persuasion. Innovative high-level leaders take charge, make things happen,

dream dreams, and then translate them into reality. They make decisions that

serve long-term strategic and cultural purposes rather than making short-term

politically expedient decisions. The innovative company and the role of the leader

in it are dramatically different. Innovative leaders' success will hinge largely on

their ability first to plan and then to empower other people to implement the

plans. An innovative organization must be led by a leader who develops and

aligns the organization with the mission and vision, develops and maintains trust,

ensures that coordinating and communicating occur, and encourages creativity

and learning (1997).

High-level managers have an important role in formulating and

implementing an innovative culture for their company. First, they set direction and

get people in the organization aligned. Drawing on their own insights and the

ideas from others, they develop a sense of what is possible, articulate their

vision, and work with people to align them with it. Furthermore, they select, train,

and develop people capable of realizing that vision. Through these people, they

create, shape, and influence how work is done in order to ensure that it gets

done in the best way possible. In essence, they are endeavoring to create their

version of the company's culture. At the heart of the innovative culture lies the

vision of the leader. This vision includes the broader sense of who the company

is, why the company is doing this work, why it's important, the promises they

have made to customers, and the code of conduct (2000).Developing the vision,

though, is not enough. The leader must be able to inspire others with the vision

so that others want to say yes to it. In articulating the broader sense of vision, the

new leader must be able to touch the hearts of the employees. The first person

the new leader must convert to his or her vision is himself. If he is not sold on the
company's vision, it will be next to impossible for him to effectively convert his

employees. As innovative companies move into the twenty- first century they will

be operating with a culture of greater employee autonomy and self-direction.

Teams will be less controlled by management and will exercise more autonomy

in completing tasks from start to finish. It will be the leader's job to ensure that the

team's efforts are bound together by a shared commitment to the mission and

vision ( 2000).

A necessary input to developing the vision, core values, and guiding

principles of the organization is the mission statement from the strategic planning

effort. If a corporate mission statement is not available, the company should take

steps to have one developed before proceeding. The mission and vision should

definitely be consistent and supportive, but they will not be exactly alike since

they serve two different purposes ( 2002). Normally the mission should be

developed first, with the vision of what the organization should be like to achieve

the mission being developed second. Because the mission is directly linked to

the customers and external environment, it makes sense for the vision to be

based on the mission. It is extremely important that the organization's mission

and vision be consistent and mutually supportive. One of the better methods of

testing the vision, core values, and guiding principles is through employee focus

groups. The focus group approach involves leading a group of employees, from

various divisions and levels in the company, through an open, in-depth

discussion of the proposed vision, core values, and guiding principles. Members

of each group session would be chosen from a list of volunteers, so that each

group represents a valid cross section of the company's employees. A session is

usually conducted as a casual roundtable discussion with eight to twelve

participants. The setting should be relaxed and casual to encourage a free and

uninhibited flow of ideas ( 2002). Sony Ericsson’s mission statement concentrate

on making sure that the company will produce the most attractive products. This

mission statement fits well with what the company is doing and showing to the

public. This mission statement can still be used to achieve the company’s overall

goals. Sony Ericsson has partly achieved its mission because it has created a

wide array of eye catching products that are globally competitive and full of

innovation.

Objective setting

Ambitions and objectives are formulated at three levels. For the long term,

guiding objectives are important. For the short and medium term, a system of

measurable objectives must be created. Finally, the actual missions are the

concrete translation of those objectives to the social players involved. All

companies that wants to have research on a new product or a new idea have

applied strategic management procedures for the identification of new market

opportunities related to the changing conditions of sustainability. Some

companies started specific programs for the promotion of innovation through

product stewardship. Others are adding issues of sustainability to existing regular

strategic routines and audits for the identification of business opportunities

(2004). Some enterprises are designing new search efforts in and beyond the

company to identify options for technological renewal and innovation in view of

arising demands of sustainability. And most companies are right in the middle of

a search process to find strategic management routines to adjust these changing

external conditions. The procedures adopted appear to relate to regular

approaches of strategic management. The enterprises also expressed difficulty in

determining appropriate and clear short- and intermediate-term goals for

sustainable strategies (2004).

This was especially the case in determining business objectives and

strategies for the introduction of new technology (2004). Establishing focus is the

competency through which managers ensure that their subordinates are aligned

with the business's objectives and that resources are appropriately prioritized and

allocated. Communication is a key element of establishing focus, because

employees usually perform better and accomplish more when they understand

their role and how it relates to the bigger picture ( 2000). Of course, to help

others get and stay focused on the most important business objectives,

managers need to stay focused themselves. It is a common complaint of many

employees that their manager is not well focused and does not help them focus,

either. Establishing focus is critical to ensuring that employees are all pulling in

the same direction and making the best use of their time. It is the leaders' job to
align the organization around common goals and objectives. They are tireless in

their efforts to reinforce how the duties and responsibilities of each individual,

unit, and department relate to the organizations overall goals and objectives.

Leaders also deal with nonalignment where it exists by allocating resources and

establishing priorities to ensure that organizational activity supports business

objectives. People know where the organization is going, they know their role in

helping the organization get there, and they are provided the resources they

need to play their part (2000). In setting the objective a clear picture of the

internal and external environment was used by the firm. The environment

showed the firm its weak points or problem areas. Through knowing its weak

points the company was able to plan for future possibilities and future plan of

actions. After the company knew its weak points it was able to create the

objectives by determining the weak points or problem areas that should be given

top concern and priority.

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Sony Ericson's resources

and it's competencies

Part 1
Sony Ericsson, its resources and its competencies

Multinational strategies had always featured in the telecom industry.

Ericsson, based in the small Swedish market, established manufacturing

operations in Russia and sales subsidiaries in China and Mexico as early as the

1890s. Around one-third of Ericsson's total production was manufactured in

eleven factories outside Sweden in the 1930s. By 1990 it only operated

telephones in Argentina. By that year Ericsson was the fourth largest telecom

manufacturer, holding around 7 percent of the world market, and having 70 000

employees ( 2005). In the 1980s the industry underwent a major change with the

development of cellular or mobile telephony. The mobile phone industry had two

components: mobile communication infrastructure and mobile handsets. The

early mobile networks were for the most part incompatible between countries. In

the United States, several competing systems and standards evolved in different

parts of the nation. Subsequently second generation systems, which used digital

rather than analog technology, were introduced. A pan-European system known

as global system for mobile (GSM) communication was launched in 1990, and

accounted for seven-tenths of the world's subscribers by the new century. The

remainder used two competing US standards or the Japanese standard ( 2005).

 The market for telecom equipment came to be dominated by a small

number of large multinationals. In 2000 Ericsson's sales of over $30 billion

included nearly one-third of the world mobile infrastructure equipment market and

10 percent of the world cellular phone market; however competitive pressures led

it to divest rather than further expand international manufacturing. During the

1990s it reduced the number of its production plants from seventy to less than

ten worldwide. The residual plants either focused on the development and design

of new products, or on standardized products. The latter were concentrated in a

few low-cost sites ( 2005). A decision to concentrate on mobile telecom

infrastructure led to the sale of many of its plants at the turn of the century and

the outsourcing of its non-core manufacturing to contract electronic

manufacturers. In 2000 Ericsson and Sony established a London-based joint

venture, Sony Ericsson, to exploit the opportunities of third generation mobile

systems, whose implementation had begun in Japan. Ericsson's strategies were

broadly emulated by its major competitors in the world telecom industry, including

Nokia, the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and

Motorola, and Germany's Siemens, all of whom had telecom equipment sales in

excess of $22 billion in 2000. These firms all moved, although at varying rates, to

outsource production to contract manufacturers. They also progressively

outsourced innovation to cheaper locations ( 2005). Sony Ericsson’s resources

come from reliable suppliers and manufacturers. The materials used in creating

the products have to agree with the company’s greenheart process wherein most

part of the product should be recyclable or harmless to the environment. Sony

Ericsson’s competences include its highly advanced product, competitive

products and concept of sustainability. Sony Ericsson makes use of its

competences to achieve continuous growth and development.

Sony Ericsson ethics and Social Responsibility

The process of globalization over the past decade has created

unprecedented opportunities for global companies in trade, investment, services,

and production. The fact that the rapid pace of growth of economic opportunity

has not corresponded with the growth of leadership in business ethics and a

sense of corporate responsibility has potentially threatening consequences for

the reputation of free market economies and businesses. Public concern is

accelerated by a wider use of electronic communications that is changing the

nature of politics as much as that of business operations ( 2003). The leadership

of a few progressive companies, the rise in consciousness of corporate

responsibility as an essential feature to sustain global capitalism, and emerging

evidence of partnership initiatives which hold the key to equitable development,

are all encouraging pointers towards progress. Corporate responsibility is a pact

for the mutual benefit between society that needs business for economic and

social development, and business that needs a supportive business environment.

It is also a pact between capital and management in modern companies, which

has been as shaken up by some recent scandals where management

disregarded the bond of transparency with shareholders ( 2003).

 All too often professional managers and their advisers have been tempted

to see the resources of public companies as their own property without the sense

of stewardship that owner-managers once had. The balance can only be struck

by combining professionalism with transparency. The international nature of the

operations of business in trade, investment, and production brings a more

complex dimension to business ethics and corporate responsibility in both the

cultural aspect of doing business in environments with different norms and

values, and in diversity of employees and stakeholders. While, until recently,

some companies would argue that they should respect local values even if these

are more tolerant of low standards and corruption, the prevailing ethos of the

leading multinational enterprises and international institutions is that standards

should be universal ( 1996). This is not without dilemmas in operating in different

cultures, not least where preference is given to relationships along family, tribal,

ethnic, and community lines. One of the fundamental problems of addressing

ethics and corporate responsibility in an international setting is the existence of

many governments that lack the capacity for proper market regulation, let alone

the many states which are weak, corrupt, and in a few cases failed states

engaged in internal conflict and civil war. Companies engaged in such locations

have a compelling reason to engage in collective efforts to promote an enabling

environment for corporate citizenship ( 1996). Sony Ericsson has and believes in

corporate responsibility. The company makes sure that it follows all laws and

regulations in every country they operate in. It has procedures and processes

that make sure that corporate responsibility is implemented not only in internal
environment but within its suppliers and trading partners. Sony Ericsson gives

much importance to their personnel; the company makes sure that the welfare of

the personnel is given appropriate attention.

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February 05, 2009

Diabetes is a syndrome of
disordered metabolism
resulting to high levels of
blood sugar

IMPACT OF DIABETES ON PHYSICAL FUNCTION IN OLDER PEOPLE

Executive Summary

Diabetes is a syndrome of disordered metabolism resulting to high levels of blood

sugar. Diabetes is common among the elderly, and which cause them many

complications that affects their functionality and mobility. Aiming to contribute to

the diabetes literature, this study could lead to developing systematic

understanding the issue. In UK, most especially, diabetes is regarded as one

among the challenges to the health sector, with 1.8 million diagnosed to be

suffering from diabetes. Studies revealed that diabetes is a disease in

industrialised countries and does not only lead to physical disabilities but also

cognitive and emotional. Diabetes impacts directly the quality of life and loss of

independence and is more common among the women. Through the

interpretivism framework, the research aims to analyse the dynamics of physical

functionality and dysfunctionality among the elderly group with diabetes. It seeks

to answer the key question: How diabetes impacts the physical functioning of

elderly people? An exploratory approach, the study will be carried out through the

British Diabetic Association or simply Diabetic UK. It is planned that 200 elderly

having diabetes, aged 60 and above to be surveyed and interviewed. The

respondents should be living in London and must be a member to the Diabetic

UK. Results of this research will be communicated and disseminated through

written reports and online publishing.

1.0 Title of Research

The working title of the research is initially drafted as Impact of Diabetes

on Physical Function in Older People. A syndrome of disordered metabolism,

diabetes mellitus results in unusually high levels of blood sugar, due to the

combined hereditary and environmental causes. Diabetes could cause many

complications that might affect the functionality of an affected individual. Such

complications are most common and more severe among the elderly, affecting

their physical and/or mental abilities.

2.0 Justification of the Study

It is of my best belief that the study could lead to significant improvements

in the health care sector especially when it comes to devising policies and

strategies relating to sustaining the quality of life of diabetic people despite their

lessened mobility. As such, studying how diabetes impact of the older people

could lead to the development of a systematic understanding of how diabetes

could likely to impede the functionality of people. Given that studies about the

topic are very limited, the findings of this study will be very important in

developing evidence-based healthcare service. This research will be significant

for practitioners and service managers as well as policymakers and diabetic

community. Such study will be also important area of study to the academia

towards proper education of healthcare professionals regarding the issue.

Likewise, this research will serve as a supplement to the limited study about the

topic and it is hope that the findings will contribute important inputs.

3.0 Summary of Literature Review

Older people make up a significant portion of population in the UK. The

population of older people aged 50 and over amounts to 20 million. As these

people grow older, they increasingly experience age-related changes, diseases

and disorders. Such conditions have profound impact on older people’s ability to

function well, mentally and physically. A report confirms that diabetes is one of
the biggest health challenges in the UK and that the 10% or £10 million of the

NHS spending goes to treating diabetes and its complications on a daily basis.

Three percent of the population or 1.8 million was diagnosed to have diabetes –

almost 250, 000 have Type 1 diabetes and over 1.5 million with Type 2 diabetes.

As such, diabetes was perceived to be a significant contributor in mortality and

morbidity in the UK.

Preliminary studies indicate that such condition in which the level of sugar

(glucose) in the blood is too high could cause a variety of symptoms that

eventually damages some of the body organs such as the eyes, nerves, kidney

and feet. Govindi (1990) argues that blood glucose is normally carefully

controlled by a hormone, insulin, which is secreted from the pancreas gland. If

there is insufficient or ineffective insulin in the body (as in diabetes), the glucose

obtained from food cannot be stored or used for energy and thereby leading to

dysfunctionalities. Increasingly becoming a common disease in elderly people in

industrialised countries, diabetes not only leads to physical disability but also on

comorbidities and cognitive decline, falls and fractures and other geriatric

syndromes, apart from having direct impact on quality of life, loss of

independence and demands on caregivers.

Studies showed that risks of disabilities are related to mobility and

performance of daily tasks wherein people with diabetes find difficulties in

walking for 400 metres and inability to do housework, prepare meals and

manage money especially among women. Other studies revealed that diabetic
women are more prone in being disabled double the rate of non-diabetic women

and that they are more inclined on risks of falling and hip fractures. As well,

research showed that the physical dysfunctionality among the elderly with

diabetes has a direct linkage on the behavioural and sociocultural changes and

the prevalence of non-participation even in small-scale activities. Social

determinants of health, as discovered, played a great role in the incidence and

management of diabetes mellitus.

Further, researchers experience challenges in recruiting participants for

the focus groups and that response rate to survey questionnaires are moderate.

Project implementation was obstructed by recruitment of focus groups,

participant disappointment and survey return rates. Another challenge is on the

development of valid and reliable health-related quality of life (HRQL)

questionnaire for patients with type I and type II diabetes.

4.0 Research Aims and Objectives

The main purpose of this research is to analyse the dynamics of physical

functionality and dysfunctionality among the elderly group with diabetes.

Specifically, the objectives of the research are to:

 To evaluate the extent to which diabetes affects the physical

function of elderly people
  To determine how the physical condition of the elderly people
with diabetes are being managed
 To assess the physical-related comorbidities among the elderly
people with diabetes
 To analyse how physical dysfunctionality among elderly people
with diabetes affects the social function of the patients

To accomplish such aim, the study will seek to address the key research

question: How diabetes impacts the physical functioning of elderly people? In lieu

with this, the following research questions will be addressed:

1) How the physical condition of elderly people with diabetes is being

managed?

2) How diabetes changes what and what cannot elderly people do? What

are the activities that elderly people with diabetes engaged into?

3) To what extent do the damages to vital organs contribute to the physical

disabilities of elderly people with diabetes?

4) How diabetes in elderly people lead to physical-related comorbidities?

What are those physical-related comorbidities?

5) How physical functionality contributes or exacerbates the social

functioning of elderly people with diabetes?

 The hypotheses of this study are:

A) Diabetes among the elderly group limits the ability of these individuals to

perform both small scale and large scale activities.

B) Diabetes among the elderly people influences the social functioning of

these individuals because of physical disabilities.

C) Diabetes among elderly people results in physical-related comorbidities.

5.0 Theoretical Framework

The theoretical framework I have chosen to utilize in conjunction with this

research is an interpretivist one. Interpretivism is the necessary research

philosophy for this study because it allows searching the ‘details of the situation

to understand the reality or perhaps a reality working behind them’. Limitations

inherent with this type of framework would include a susceptibility to projecting

my subjectivities on to the healthcare schema in the context of the research

study. I would tend to think that there are serious consequences to the lack of

strategies, development and regulations for diabetic patients in the UK but this

may not be the case from the research’s perspective, and I would need to remain

vigilant when engaging in interviews and interpreting data in this research study

with regard to my own subjectivities.

 I would hope to use this theoretical framework to expound on the health

structure and institution applications inherent in this research study by analyzing

the position of the diabetics themselves in a local organization setting. There are

two reasons for situating myself in this type of theoretical framework. First, I am

interested in conducting my research in a qualitative manner because I want to

place myself in the position of viewing the value of healthcare services and the

support of the government. Secondly, the research questions that I want to

answer fit the Interpretivist framework. I want to gain first-hand knowledge about

the issue and the resulting data analysis will hopefully shed new light (be it

positive or negative) on how people view the value of health care structure,

system, strategies, development and policies for people with diabetes.

6.0 Research Methodology

Concurrent with this theoretical framework are some pertinent research

methodologies. The research strategy to be used is exploratory research

because it aims to know more about the phenomenon of diabetes. Exploratory

research will enable the study to look at the problem in both descriptive and

exploratory manner. This approach is a preferred mean of finding out “what is

happening to seek new insights” or “to ask questions or to assess phenomena in

a new light.” This study will use the principal ways of conducting exploratory

research, which include: literature search; talking to experts about the subject

and conducting survey and interview.

 My research will operate within the cross-sectional design, as I will be

collecting data on more than one case, using semi-structured interviews,

structured observation, and document analysis. The benefit of this would be that Ì

would be able to focus on the breath and depth of the research. Moreover, by

exploring the breath of the topic, I am increasing my validity and the truthfulness

of my research, and thereby minimize the confounding variables. As the

researcher, I will be using the Instrumental Activities of Daily Living

questionnaire. The questionnaire to be developed will be based on the criteria of

use of a phone book to dial, answer, or find someone's phone number; traveling

in a car or using public transportation; shopping for food or clothes; preparing

meals; doing housework; using medications properly; and managing money.

The primary sampling technique to be used is the purposive sampling.

This non-probability sampling refers to sampling with specific criteria in mind. As

such, the researcher will survey and interview 200 elderly people taken from the

list of a local medical organization in UK. From the list, simple random sampling

will be applied. The researcher will consider every 4th elderly to include in the

sample population. The criteria will be elderly individuals with diabetes, aged 60

and above. The respondents must be living in the London area. The researcher

will work hand-in-hand with The British Diabetic Association. Simply Diabetic UK,

the organisation is responsible for caring and treating people with diabetes in

order to improve the quality of life for people with the condition.
7.0 Location of Research

As already mentioned, the location of the research is through a local

organisation named Diabetes UK. Diabetes UK works for people with diabetes as

well as their carers, family and friends with over 170, 000 members. Their

mission is ‘to improve the lives of people with diabetes and to work towards a

future without diabetes’. The organisation represents the interest of all people at

diabetes by means of lobbying the government for better standards of care and

the best quality of life. This year, Diabetes UK received a research budget of

£7.38 million to be spent on research to improve the treatment of diabetes and

search for a cure.

Diabetic Association became British Diabetic Association in 1954.

Nonetheless, the organisation was founded in 1934 by HG Wells and RD

Lawrence, aiming to ensure that every individual in UK with diabetes could gain

access to insulin in whatever financial situation they may in. The organisation,

along with its founder and 400 local voluntary groups continued to challenge

accepted ideas of how people should be treated. British Diabetic Association was

renamed as Diabetes UK in 2000 to help raise the profile of the organisation as

the leading diabetes charity in the UK.

The governance structure of Diabetes UK includes a board of trustees

with up to 12 members and a UK advisory council which is made up of 2

councils. The first council is the Council of People Living with Diabetes (CPD)

consisting of 30 members and the second is the Council of Healthcare

Professionals with 20 members. In gaining access to the respondents and the

organisation, a written letter will be considered. The letter will explain the reasons

of research and how it may contribute Diabetes UK, its members and the diabetic

community as a whole. The list of people to be surveyed will be obtained and

schedules of surveying and interview will be accomplished through personal

contact with the care, information and advocacy services department. It is

planned that representatives from the two councils will be interviewed.

8.0 Resource Implications/Requirements

It is hope that the research will push through simply because I believe that

the evaluation and implementation will benefit the healthcare community. There

are directs costs to the research including transportation costs and research

materials costs as well as research administration costs. Nevertheless, the costs

have differing relationships with the level of activity with respect to the study

itself. For instance, the cost of research supplies is fixed while other may vary

depending on the changes of the level of activities. Overall, the study is feasible

considering the unit of activity. For every unit of activity, accomplishing an

estimate of cost allocation would be plausible. In the meantime, the actual cost of

research cannot b determined because it is yet to decide whether to use top-

down or bottom up approach to cost valuation of evaluation and implementation.

Initial requirements for resources, personnel and budget are described as

follows:
Resources

2 research assistant

1 ream bond paper

1 desktop computer set

1 computer printer

4 ball pen

1 Sony tape recorder

8 pieces AA battery

4 recordable audio cassette tapes

Personnel

The first research assistant would draft and make the letter of permission

to the Diabetic UK and hospitals while the second one will follow up and pass all

the required documents needed for the research. One will be tasked to distribute

questionnaires and the other one will collate and tally the answers of the

respondents based on the questionnaires. A research assistant will accompany

me in doing the interviews and will take care of recording the process. The first
one would also transcribe the audio tapes of the interview while the other will

type the answers and the findings on a document. Both can also do further library

research on the subject if needed.

Budget

2 research assistant $200/day for 5 days $1000

Travel expenses $75

1 ream bond paper $20

1 desktop computer set $400

1 computer printer $50

4 ball pen $2

1 Sony tape recorder $17

8 pieces AA battery $2

4 recordable audio cassette tapes $4

TOTAL $

1570
9.0 Data Analysis and Presentation

Data gathered using these instruments will be collated for analysis. Data

analysis will primarily be characterized by comparative and statistical approach.

Initially, after gathering empirical data, comparative contextual analysis of the

literature will be adopted. Comparative contextual analysis refers to the method

of comparative research whereby contextual analysis of similarities and

differences is possible. Qualitative data analysis will be used to collect relevant

themes from the interview responses and categorize them accordingly. From

those themes, the study will develop insights regarding the subject. The following

statistical formula will be used in thematic content analysis.

1. Percentage – to determine the magnitude of the responses to the

questionnaire.

% = -------- x 100 ; n – number of responses

N N – total number of respondents

2. Weighted Mean

f1x1 + f2x2 + f3x3 + f4x4 + f5x5

x = --------------------------------------------- ;

xt

where: f – weight given to each response

 x – number of responses

xt – total number of responses

The dissertation shall be divided into five chapters in order to provide

clarity and coherence on the discussion of the comparisons of the effects of

diabetes on the physical functioning of elderly people. The first part of the

dissertation will be discussing the problem uncovered by the researcher and

provide ample background of the topic. The chapter shall constitute an

introduction to the whole dissertation, and the statement of the problem in order

to present the basis of the study. Moreover, the chapter shall also have a

discussion on the scope of its study as well as the significance of the study to

society in general.

The second chapter shall be discussing the relevance of the study in the

existing literature. After the presentation of the existing related literature, the

researcher shall provide a synthesis of the whole chapter in relation to the study.

The third part of the study shall be discussing the methods and

procedures used in the study. The chapter shall comprise of the presentation of

the utilized techniques for data collection and research methodology. Similarly, it

shall also contain a discussion on the used techniques in data analysis as well as

the tools used to acquire the said data.

 The fourth chapter shall be an analysis on the tabulated data. After the

said tabulation, the data are statistically treated in order to uncover the

relationship of the variable involved in the study. With the said data, the chapter

seeks to address the statement of the problem noted in the first chapter.

The last chapter shall comprise of three sections, the summary of the

findings, the conclusions of the study, and the recommendations. With the three

portions, the chapter shall be able to address the problem stated in the initial

chapters of the study.

The research will be presented in written form with the addition of data charts

which will present the project’s results. Pie charts and network charts will be needed

to illustrate some of the analyzed data. This cannot be confirmed, however, until the

research data have been analyzed.

10.0 Ethical Considerations

The project will abide by the regulations outlined in the University’s Ethical

Approval Process which identifies ethics procedure policies and principles. This

means that ethics approval will be sought for all questionnaires and interview

questions. For this research, I will complete the ethics checklist and, as the

nature of my research does not answer “yes” to any seven of the questions in the

checklist, I will sign the form and give it to my supervisor. The research will
include primary data, but it will not include any personal information on

individuals, so Data Protection Act does not apply for this situation.

The respondents of the survey will be able to choose whether to identify

them or stay anonymous. Before sending out the questionnaires and doing

interviews, I will check them with my supervisor. Participation consent forms and

interview consent forms will be also accomplish (examples are provided in 1.0). I

will ensure that the data will be kept confidentially. I will establish with the data

providers the use of my data and will ask their permission in case of publishing

data. Before getting interviews recorded, I will ensure if it is acceptable by person

to be interviewed.

Further, care should always be given so that the patient can be

comfortable and is in an excellent condition when doing an interview or is

answering a questionnaire. As a researcher, his/her prime role is making the

patient/respondent feel at ease during the interview and answering process. An

interviewer therefore should refrain from pestering the respondents with regards

to his/her answer. The interviewer must also see to it that confidentiality is

fostered between the patient and the respondent. It must be made clear to both

respondent and the interviewer that any information exchanged and stated by the

patient will remain confidential.

11.0 Proposed Timescale

 TASK 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th

Read Literature

Finalize Objectives

Draft Literature
Review

Devise Research

Approach

Review Secondary

Data

Organize Interviews

Develop Interview

questions

Conduct Interviews

Analyze secondary

& primary data

Evaluate data

Draft Findings

Chapter

Complete remaining

chapters

Submit to tutor and

await feedback

Revise draft and

format for

submission

Print, Bind

Submit

12.0 Dissemination Methods

 I will feed back the findings of the research to everyone who takes

part. There are two ways by which results will be communicated. First is through

written reports. This may take the form of a summary report at the end of the

project. The research is planned to be disseminated to universities across

Australia as well as to international medical journals such as CHEST, Blackwell-

Synergy, and MEDLINE as well, disseminating my findings through dedicated

websites. The final written report will be published in medical journals accessible

to users and electronically via putting the findings on a database or dissemination

network accessible to both users and other stakeholders. There will be also

informal discussions of the findings with relevant stakeholders.

13.0 Appendices

APPENDIX A

Sample Signature Page for Research Involving an Elderly

You are making a decision whether or not to have

_____________(Name of the Respondent)_______________
participate in this study. Your signature indicates that you have read
(or been read) the information provided above and decided to allow
him/her to participate.

You will receive a copy of this signed informed consent document.

Signature of a Relative or Legally Authorised

Representative Date

Or Legally Authorized Representative

Signature of Investigator

Date

Signature of Witness

Assent of the Elderly

[Name of the Elderly] (name of the

elderly) has agreed to participate in research titled [Title of
Project] .
Signature of the

Elderly

Date

Waiver of Assent

The assent of ______________________________ (name of the

elderly) was waived because of:

Age _________

Maturity ________

Psychological state of the elderly________

Signature of a Relative or Legally Authorised Representative

Date

Interview Consent Form

Title of Research __________________________________________

1. I agree to be interviewed for the purposes of the student research named

above.

2. The purpose and nature of the interview has been explained to me, and I have

read the assignment and/or information sheet as provided by the student.

3. I agree that the interview may be electronically recorded.

4. Any questions that I asked about the purpose and nature of the interview and

research have been answered to my satisfaction.

5. Choose a), b) or c):

a) I agree that my name may be used for the purposes of the research only and

not for publication.

OR

b) I understand that the student may wish to pursue publication at a later date

and my name may be used.

OR
c) I do not wish my name to be used or cited, or my identity otherwise disclosed,

in the research.

Name of interviewee_______________________________________

Signature of interviewee____________________________________

Date______________________

6. I have explained the project and the implications of being interviewed to the

interviewee and I believe that the consent is informed and that he/she

understands the implications of participation.

Name of interviewer________________________________________

Signature of interviewer_____________________________________

Date_____________________

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The impact of market orientation on firm perfomance

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 Management of Change of
Sony Ericson

MODULE: MANAGEMENT OF CHANGE

The individual assignment will required the student to select an organization that

has undergone transformational changes to critically evaluate the management

by the organization of such changes. The organization use will bySONY

ERICSSON.

Words: 2000 plus minus 10%

Harvard Referencing

Minimum of 12 references from textbook, journals, business magazine,

newspaper

Layout:

1) Introduction

1a) Background of Organization

2) Change event x02

2a) Actions taken x 02

2b) Success? or Failure? Contrast between the 2 of them

3) Critical evaluation

4) Summary

Tips from the lecturer: Assignment to include

· Change (eg: 1st order change / 2nd order change / Between 1st and

2nd order change)

· Resistance

· Approach

· Implementation

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Sample paper of Sony

Ericson's management of
change
MODULE: MANAGEMENT OF CHANGE

The individual assignment will required the student to select an organization that

has undergone transformational changes to critically evaluate the management

by the organization of such changes. The organization use will bySONY

ERICSSON.

Words: 2000 plus minus 10%

Harvard Referencing

Minimum of 12 references from textbook, journals, business magazine,

newspaper

Layout:

1) Introduction

1a) Background of Organization

2) Change event x02

2a) Actions taken x 02

2b) Success? or Failure? Contrast between the 2 of them

3) Critical evaluation

4) Summary
Tips from the lecturer: Assignment to include

· Change (eg: 1st order change / 2nd order change / Between 1st and

2nd order change)

· Resistance

· Approach

· Implementation

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February 02, 2009

"Marketing Management
Sample" Generation Y also
known as the echo boomers
 or the millenium
generations are considered
to be the new type of clients

Marketing Management

Topic No. 3

Discuss which brands do you feel successfully target the group

"Generation Y". Which brands do not? What could they do better?

Generation Y also known as the echo boomers or the millennium

generation are considered to be the new type of clients that 21st century

companies should be given attention. With the growth of the Generation Y

composed of teens and college students of this generation. They are defined as

the linear extension of the market trends noted for the Generation X (2008). It

has been noted that Generation Y are known to be highly marketing-savvy group

which understands how various industries actively covert their business

operations. The brands that targeted Generation Y include cell phone or mobile

phone brands such as Nokia, Sony Ericsson, Samsung, I-Phone and other

mobile phone brands, computer brands including laptops such as Mac, Dell,

Apple, IBM and others, automobile brands like Toyota and sports brands like

Nike and Adidas and other high technology brands and gadgets. These brands
have been able to effectively target generation Y groups. On one hand, the

brands that do not successfully meet the needs of this generation Y include

banking industries or financial industries. In order to do better in the marketing

arena, these brands should be able to establish their brands well and innovate

their products and services to meet the needs of this generation Y market. In the

competitive market environment, connecting with the target market is getting

more complicated for different industries (2003). Accordingly, it takes an

effective management and approaches to win over the skeptical target market

which suggest that it is the moment to forget everything that has been learned

regarding marketing and branding ( 2003). It is mentioned that it is the target

market that is in control of improving the power of branding. In this regard, it is

not the company who brand their target market, but the clients are the one which

brands the company and their products and services offered.

Topic No. 5

Discuss what is meant by the lifetime value of the customer and customer

relationship management (CRM). Using examples, what changes do

organisations need to make if they totally embraced the concept of lifetime

value of customers.
 Good customer relationship is among the top priorities of current

marketing approaches of businesses and organizations. Within the marketing,

organizations must consider how individual customer needs can be provided so

as to provide high levels of customer satisfaction to gain good customer

relationship. Furthermore, organizations must be able to identify their specific

customer groups clearly. The marketing concept has been able to produce

different terms and contexts and this include customer lifetime value. Customer

lifetime value is a measurement used to determine how a company can provide

greater attention on customer services and long-term customer satisfaction, than

giving attention on short-term sales.

Customer relationship management, better known as CRM, is a set of

strategic practices that purports finding, marketing to, selling to and servicing

customers. CRM is a broadly used term that covers different functions and

concepts of organisations in aspects of operational, collaborative and analytical

frameworks. There are many benefits the company could derive upon

implementation of CRM systems. These benefits are: customers, suppliers and

co-suppliers linkage, access, hassle-free communication, and reduction of

implementation cycles, centralised and regularised systems upgrade,

centralisation of maintenance and enhancement expertise and homogenisation

of CRM technology ( 2001).

In order to totally embrace the context of customer lifetime value, the

company should consider an organizational change of having a new customer

relationship management approach and the management should also establish a

new department who will be responsible for computing the customer lifetime

value.

Topic No. 7

When it comes to buying decision process, what are the differences

between consumer buying behaviour and that of business-to-business?

Why is it important for a marketing manager to know the difference?

Discuss using examples.

Customers are said to be loyal when their buying behavior remains

consistent to one type of item and completely ignore the pleas of competitors.

Indeed, it is a known fact that customer loyalty is beneficial to businesses (2000).

Customer buying behavior is yet another factor that affects consumer

choices and trends. Recognizing consumer behavior’s essentiality to business,

marketers attempt to develop means on assessing or measuring how a customer

behaves ( 2000). Consumer buying behaviour is said to be different in business-

to-business context in a way that consumer buying behaviour tends to have

varying attitudes regarding the needs and purpose of buying while the business-

to-business approach is an approach which is more on supplier-company

relationship. Business to business is one of the categories of e-commerce that

has been characterized as profit-oriented whose aims is to obtain information

and retain information that uses different type of motivation in which it has a

shorter route of channel in terms of distribution. In B2B it seeks to realize

transactions that necessitate performed financial and commercial activities via

the internet while in consumer buying behaviour in tends to follow their desires

based on customer self-need. For instance, in buying new sports shores, the

individual customer tends to follow their personal attributions than the business

attributions.

Topic No. 8

"The notion of market segmentation is very important and is in fact

marketing's contribution to business management".

Do you agree or disagree with the statement above?

Formulate your answer around, though not necessarily limited to the

following issues:

• The definition of segmentation.

• The underlying assumptions of segmentation.

• The criteria for effective segmentation.

• The notion of mega-marketing.

Support your arguments using examples, include...more

Topic No. 10

Using the Product Life Cycle concept, do you feel brands have finite lives?

Discuss some of special categories of product life cycles.

Topic No. 12

Discuss the different means of differentiating products and services.

Which ones do you think have the greatest impact on consumer choices?

In your answer, use examples of certain brands that rate highly on a

number of these different means of differentiation.

Topic No. 13

Is service marketing different from product marketing. Discuss using

examples.
Topic No. 15 & 16

A job description of a Marketing Director is shown below:

"A cornerstone position with Disney Land Merchandise, as Marketing

Director you will be responsible for the development and implementation of

publicity, advertising campaigns and distribution of Disney Toys. With full

responsibility for the strategic positioning, public relations, advertising

campaign and distribution, the role is critical to the successful launch and

profitability of Disney Toys in Hong Kong".

Topic No. 17

What are some of the Public and Ethical issues in Direct Marketing?

Using examples, how are marketing databases used by consumer products

marketers?

Topic No. 19

a. Discuss some of the key issues facing retailers in Hong Kong.

b. Discuss the opportunities and risks of major brand Manufacturers

providing and selling private label products.

Topic No. 18

Discuss the key retail e-commerce lessons for businesses in the Asia-

Pacific region.

What are the main differences between pure-click companies and Brick-

and-click companies?

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January 16, 2009

Mass media become the

primary source of
 entertainment and
information
Case Study of Video Game

Introduction

Today, mass media become the primary source of entertainment and

information. Most of the time, people are more entice to turn-on the television set

to watch entertainment programs. The more media subscribed to entertainment

programs the more people are hooked and hold to watch. The addiction of

people on media especially those which produce entertainment lures is rooted

from the hedonistic human nature of man—the desire to gratify our pleasures. In

fact, media theorists believed that what predominantly preoccupied media is how

to create programs which are entertaining. In fact, even the news programs are

not devoid of entertainment. Moreover, we have now what we call infotainment—

a combination of information and entertainment in a single unit of program.

One of the enticing moments that man subscribes into is gaming. Studies

revealed based on psycho-social researches that people adhere or even

addicted to games because of the pleasure it ushers. More than the surface

elements it revealed were the usefulness it afforded to cognitive development.

Yet, with much exposure to gaming eventually lead to addiction and destabilizing

behavior towards other human psychological aspects.

On the other hand, let us see how the main propagators of medium on

games with its great impact on people struggling to market their high-ends

products and assumed a powerful place in their respective industry. The use

therefore of environmental and organizational analysis is important in order to

understand the internal and external processes organizations undertaken in

order to be successful in marketing their own products.

Part 1

Political/Legal – The case study about rivalry among multinational video games

manufacturers implicitly provides semblance of thoughts regarding the political

and legal aspect among multinational producers. Throughout the case analysis of

contending video games producers, what was only construed to have a political

and legal underpinning was the Japanese consumers’ alienated expression

towards an American video game product Microsoft Xbox. Other concerns on

political aspect may be seen in a larger scale like the open trade and political

systems of other regions which allows other countries to open business ventures

and exchange goods but still observe the regulated laws and economic policies.

Economic – The global and technological trends set forth for the economic boom

of Japan. With its sophisticated and innovative technological production such as

video games gadgets provide a wider audience and access to various continents
and regions of the world as also set by the globalization. Moreover, as global,

national and local economic trends changes, competition among video game

manufacturers also change economic and business strategies in order to attune

to global changes.

Socio-Cultural – the socio-cultural factor is more evident in the case analysis

since the object of this reflection is focused on consumers. The adaptability and

significant gratification of consumers brought an economic growth and

competition among leading manufacturers. In the level of behavior, consumers

tend to behave differently and perceive to have higher percent of interest in video

gaming.

Technology - Quite clear in the analysis the technological advancement created

by different manufacturers in order to achieve the highest position in the industry,

which Sony successfully made it. Technological sophistication and mobilization

was catered to attract more consumers and gain bundle of profits.

Environment – Any material production inescapably causes the environment.

Issues on differentiation of cultural and social human behavior brought by

commodification of products such as video gaming can indirectly affect the

environmental processes. In this case, the mere process of production materials

can have hazardous effects to the environment in general.

Part 2
Threats of New Entrants – this can be a long explanation if one of each entry like

Sony, Nintendo, Senga and Microsoft will be put into account. What is viable and

significant to underline in this aspect was that each entrants prepared a tedious

and rigorous management strategies and invested multimillion resources to

defeat its competitors. The competition between Sony, Nintendo, Senga and

Microsoft clearly speak of how each of them tried to get the pick the head of the

line.

Bargaining power of suppliers – Different companies employed suppliers that can

reach their expectations regarding the product output. Like the Sony, and

Nintendo which they employed software and hardware makers that performed

their work more than what the company expected from them. This high level of

performance coming from the suppliers exceedingly contributes to the profits of

Sony and eventually maintains their status as a leading manufacturer of video

games or even home entertainment.

Bargaining power of Buyers – Each company’s products have their own

consumers and buyers yet, some consumers who are more into advance and

sophisticated products shifted to another company that met his/her expectation.

The strong competition among companies like Sony, Nintendo, and Microsoft,

brought significant ambiguity from the buyers. Yet, Sony made it to gather

powerful buyers compared to its competitors like Microsoft and Nintendo.

Threat of Substitutes – this became prevailing among the companies in order to

adapt to the changes of consumers behavior towards material products.

Moreover, substitutes also becomes detrimental if executed wrongly like what the

Senga tried to risk when it introduced a new product which Sony defeated in

terms of its worldwide production.

Rivalry – Quite interesting to observe and see how each company tries to

compete and defeat each other’s weaknesses. Understandably, the competition

is fierce and close-knit. Yet who prevails among the rest is one with great power

to strategize highly effective managerial and business methods and create

friendly and attractive products for consumers’ consumption.

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December 23, 2008

The more media subscribed

to entertainment programs
 the more people are hooked
and hold to watch

Case Study of Video Game

Introduction

Today, mass media become the primary source of entertainment and

information. Most of the time, people are more entice to turn-on the television set

to watch entertainment programs. The more media subscribed to entertainment

programs the more people are hooked and hold to watch. The addiction of

people on media especially those which produce entertainment lures is rooted

from the hedonistic human nature of man—the desire to gratify our pleasures. In

fact, media theorists believed that what predominantly preoccupied media is how

to create programs which are entertaining. In fact, even the news programs are

not devoid of entertainment. Moreover, we have now what we call infotainment—

a combination of information and entertainment in a single unit of program.

One of the enticing moments that man subscribes into is gaming. Studies

revealed based on psycho-social researches that people adhere or even

addicted to games because of the pleasure it ushers. More than the surface
elements it revealed were the usefulness it afforded to cognitive development.

Yet, with much exposure to gaming eventually lead to addiction and destabilizing

behavior towards other human psychological aspects.

On the other hand, let us see how the main propagators of medium on

games with its great impact on people struggling to market their high-ends

products and assumed a powerful place in their respective industry. The use

therefore of environmental and organizational analysis is important in order to

understand the internal and external processes organizations undertaken in

order to be successful in marketing their own products.

Environmental Analysis

The political, economical, social and technological factors are primary

forces which affect the marketing strategies of any business company. Vital in

establishing effective marketing strategies are the consideration on the PEST

factors. It must be pointed out that the treatment in making strategies should

considerably favorable to the forces embedded within the society and structures

it interacts. Hence, the industry’s profitability level goes up when these forces are

being taken seriously. The three business firms which marketed video game

products waged a higher competition by exquisitely use technology as the

powerful means to take a competitive advantage. The technological innovation

sets the tone for each competitor to develop complex and intricate products that

would strongly appear to the pleasure of people engaged on gaming.

 The basis of competition is grounded on technology and marketing

strategy. The use of technology as a raw material becomes vital to the creation of

video game products. We see how industries develop high-end software and

create artistic and sophisticated hardware in order to take an advantage from

other competitors regardless of the expenses it will consume. The evolution of

video game products and the innovative strategies of different major distributors

and makers provide us the idea that in business like this “winner takes all” is

insufficiently viable. Moreover, competitors still believe that through the proper

use of technology and utilization of it can gain a “winner takes all” status.

Organizational Analysis

The strategic moves of each business firms like Nintendo, Sony,

Microsoft, and Senga are different. Each of them develops marketing strategies

that primarily hampered the competitiveness and profitability of the competitors.

However, more of the marketing strategy is the strategy method of use how to

develop a quality product based on highly qualified technological raw materials.

The availability of sophisticated and high-ends software enforce the quality of

products and eventually attract consumers. The “consumer friendly” approach

irregardless of its costs is very important. To take an example was the problem of

Microsoft video products marketed in Japan when consumers reacted negatively

about the incapability and low quality of the product. In contrast to other products,

Nintendo and Sony set a competitive atmosphere to gain the status of being a

leading manufacturer of video games. Some industry may have lost its
competitive advantage, yet, struggling to regain the position of being in the same

line of those still in the power house.

The highly competitive performance of each business company is notable

and the explicit appearance of each capabilities show how the company’s

management deals on competition. Indeed the need of effective marketing

strategies and sophisticated use of technology are vital elements to confront and

establish a highly competitive advantage against other industries of the same

manufacturing products. Hence, not only marketing and technology have the vital

role but also the collective effort and performance of people utilizing resources

and knowledge in order to gain consumers’ satisfaction and loyalty.

Recommendations

The ever fast growing of trends and technology today would be an

avenue for any organization to wage higher standard on competition. The fact

that in order to stay at the global club of powerful businesses, the need of having

foresight to be vigilant with the drastic changes in technology is significant.

Organizations now in order to gain the attention of consumers are not merely

dwell on how to develop and use exquisitely technology and marketing strategy

but also on how to manage the organization culture within and the knowledge

management.

These I think are significant too in making abreast with the competitive

world. Unexpected changes and trends brought about the magnificent

construction of man’s ability to create and invent things are brought by the power

of our knowledge. Thereby the need to have an effective management of

knowledge, the use of technology, organizational culture, and the exploitation of

media are recommendable to further enhance and maintain the business power.

If and Microsoft are businesses which contend to establish high

competition the need for integration of different effective modes in production

available outside can be used.

Hence, not only technology and management skills can lead an

organization to a higher prosperity and profitability. But, the determination and

the significance of various entities which are effectively discharge information

and attraction to consumers are highly recommendable. Lastly, deep evaluation

and research analysis are important and significant.

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November 24, 2008

TO DIFFERENTIATE AND
COMPARE MUSIC
 MARKETING STRATEGIES
IN UK AND CHINA

CHAPTER 1

1.0 Introduction

Music industry is one of the contributors for economies in the global world. In

this regard, various industries are trying to initiate a marketing approach that

would be able to enhance their market position and to sustain their competitive

advantage. Primarily, the main goal of this dissertation is to investigate the

differences of marketing strategies in the music industry in United Kingdom (UK)

and China. Music marketing in the modern music industry poses challenge for

record label distributors. Publicity is a buzzword for musicians, singers, record

producers and the like. Publicity strengthens the name register and the quality of

the music. Though it is more instrumental in building awareness, it is the degree

of marketing which will truly sell a record (Summers, 2004).

Since most studies regarding music marketing are relatively focus in

general, this study proposes examining music marketing strategies from a

specified locations as UK and China. There are several reasons why marketing

music in these regions is a challenge. On the one hand, music marketing in

China passes through a political scrutiny wherein all music and videos are

subjected to formal examinations of various bureaus under the State Council and
authorized provincial distributors (Li, 2003). On the other hand, the development

of clubbing, DJing and partying in different UK destinations inhibits a presence of

oneself in music destinations over just merely listening to it (Horner and

Swarbrooke, 2005). There is drive to understand how these two countries

overcome such challenges and continually keeping their respective music

industries alive.

The rationale of this study is basically to differentiate and compare music

marketing strategies in UK and China. This study will be useful for companies

and musicians that are willing to market their produce in UK and China.

Research Questions

The study will answer the following questions:

1. What are the relevant music marketing strategies in existence

in UK and China?
2. What are the challenges and conflicts in implementing music
marketing strategies in UK and China?
3. What are the similarities and differences of music marketing
strategies in UK and China?
4. Do the music marketing strategies in UK and China proved to
be feasible financially and economically?
 5. How the success of a specific music marketing strategy does is
measured?

Research Objectives

The study will address three key objectives as follows:

 To determine the music marketing strategies employed in UK and China

and to identify their similarities and differences

 To determine the challenges and conflicts these music marketing

strategies are experiencing and to identify factors that underpin such

 To determine the performance of different music marketing strategies in

UK and China and to identify success or failure indicators

Research Model

Since this study will focus on marketing of music industry in UK and

China, the research model to be used is Marketing Mix. The idea of the

marketing mix has been around for many years - well before an 'e-' came in front

of 'marketing' or anything else. Marketers devise strategies and tactics aimed at

providing satisfaction and adding value for customers. The marketing mix can be

defined as the blend of tools and techniques that marketers use to provide value
for customers. It is most widely known as '4Ps': Place, Product, Price and

Promotion. Place refers to the routes organizations take to get the benefits of the

product or service to the intended customers. Product means both tangible

product and also 'service' and all the ways in which an organization adds value.

Price means not just the price charged, but also all aspects of pricing policy.

Finally, promotion is not just the more specialised sales promotion, but

also every way in which a product is promoted to customers – from print

advertising to websites. The 4Ps are used as an approach to marketing planning.

The prominence of the 4Ps derives largely from Kotler's and colleagues' (e.g.

2003, 2001) focus on these as central to marketing strategy.

In recent decades, there have been numerous attempts to update and

revise the marketing mix. Jefkins (1993, p. 37) pointed out that the concept of

4Ps is no more than a simplifying convention that “loses sight of the

chronological sequence. He devised a more realistic twenty-element mix that

attempted to describe the marketing process sequentially, starting from

conception, through pricing, product, distribution and sales to maintaining

customer interest and loyalty.

For some marketers there are '5Ps' of marketing, with the fifth being

'People'. 'People' has two meanings in this context. First, customers are people,

often buying according to emotion and whim; without them, there is no business.
Second, people make it happen. Without people to put marketing plans into

operation, nothing happens. Furthermore, Booms and Bitner (1982) proposed

that for marketing services, the marketing mix should be extended to seven, with

the sixth and seventh being 'Process' and 'Physical Evidence', respectively. For a

service, where there is no tangible product, the process of providing the service

is all-important. Similarly, a service cannot be sampled. The provider needs to

present evidence of the quality of the process.

In recent years, what marketers actually do has changed radically. Some

authors (e.g. Gronroos, 1997) have questioned whether the old idea of the

marketing mix can still be valid. The challenge is based on a shift of emphasis

towards relationship marketing and customer relationship management (CRM),

aspects which are fundamental to marketing the e-Business. One development

has merit as being descriptive of the way marketers think about the customer.

The '4Cs' (Lauterborn, 1990) imply more emphasis on customer wants and

concerns than do the 4Ps. In this paradigm, 'Place' can be thought of as

'Convenience for the customer', recognising the customers' choices for buying in

ways convenient to them. Rather than being something that a company makes,

'Product' can be thought of as a 'Customer benefit' - or satisfactions wanted by

customers.

Furthermore, 'Price' may be what companies decide to charge for their

products, but 'Cost to the customer' represents the real cost that customers will

pay, including, for example, their own transport costs. Lastly, 'Promotion'
suggests ways in which companies persuade people to buy, whereas

'Communication' is a two-way process also involving feedback from customers to

suppliers.

Marketing and promotion costs are among the most significant costs

incurred in the music industry. Such expenditures are necessary to help artists

stand out from competing releases. Whereas major labels achieve significant

economies of scale in promotion, small labels are hampered by, for example, the

high costs associated with obtaining radio airtime. In an online world where

consumers have many more listening choices, the role of promotion will become

even more critical in differentiating individual artists and driving sales. Owing to

the high costs associated with promotion and distribution independent labels

rarely reach large audiences (Coats et al., 2000).

CHAPTER 2

REVIEW OF RELEVANT LITERATURE

2.0 Introduction
One of the recognized industries in the world today is the music industry. For

years, music had very little to do with business. Basically, the music industry

revolves on business activities including fast-phased unit-led production,

licensing, marketing and distribution. The objectives of the music business is

primarily concentrated on fast distribution of products, speed of re-stocking and

selling products on major territories and be more competent. The music industry

is a department that is in-charge with the promotion, creation as well as

preservation of music. In the business world, the music industry is simply

equated as the business of music. Since the popular music is of worldwide

significance, the international music industry is deemed highly relevant. And

according to Burnett (1996), the international music industry is widely based on

thee production and sales of phonograms (records, cassettes, mini and compact

discs).

Today, the music industry does not only consist of cassettes, mini and

compact discs. The music industry has gone a long journey which enabled it to

become more loosely integrated vis-à-vis the rest of the entertainment industry.

The music industry has become one of the most profitable industries in the global

marketplace. Indeed, the music industry has been highly commercialized.

However, in the recent years, there has been a noted decline on the global sales

of music. This can be attributed on the lack of “blockbuster” releases, competition

from other media such as computer games for younger consumers, and the
availability of free music on the Internet. Because of this, issues have been

raised regarding the delivery of music over the internet. (Fox, 2004)

Chiefly, the access to free music has made a great on the delivery of

online music. As a result, companies under the music industry are pressured to

devise strategies that can address the threats of online music delivery. There is

also an urge for them to adopt new business models in order to meet consumer

needs successfully in the e-commerce milieu.

In the ever-changing environment of the music industry, competition

becomes the major organizational principle of marketing activities. As time

evolves, consumer behavior, trends and issues put the music business on

considerable stress. Changes and marketing approaches would have to be

altered accordingly. Thus all companies in the industry are challenged to

formulate marketing strategies that will ensure them of achieving competitive

advantage over other companies. In order to position themselves on top of the

competition, many companies are focusing on developing loyal customers –

customers that avail of its products and services consistently over time, generally

at regular prices, commonly ignoring the pleas and platitudes of competitors. The

main objective of this dissertation is to compare the marketing strategies of music

industries in China and UK. In order to achieve the objective of this paper, the

literature review will focus on the following topics: Business Strategy for Music

Industry, UK and Chinese Music Industry Marketing Strategy; the government

policy of UK and Chinese music industry; Effect of the information technology

and internet on marketing strategy of UK and Chinese music industry for non-

academic literature. For academic literature the discussion will include the

discussion of consumer behaviour, specifically the audience development of

music industry in UK and China. For this paper, the research model to be used

will be based on the 7ps of marketing.

Business Strategy for Music Industry

Business model is an integrated and coordinated set of commitments and

actions the firm uses to gain a competitive advantage by exploiting core

competencies in specific product markets (Rindova & Fombrun, 1999). Only

firms that continuously upgrade their competitive advantages over time are able

to achieve long-term success with their strategy and implementation. Choosing

the appropriate business model is intended to create differences between the

industry’s positions relative to those of its rivals (Drejer, 2002). To position itself a

firm must decide to whether it intends to perform activities differently or to

perform the different activities as compared to its rivals. Thus, the firm’s

business model is a deliberate choice about how it will perform the value chain’s

primary and support activities in ways to create unique value. Over the years,

different companies and organization are trying to utilize the business model in

which they think should bring success to the over-all performance of a business.

In addition, business model is also referred as the mechanism or system by

which any firm or business aims to produce profit or revenue. It is the totality of
how the industry intends to serve its target market. It involves both the marketing

strategy and its strategic implementation. Throughout the years, the uses of

business model are regarded as complicated and sophisticated. Business

models have different kinds.

However, the business model that has been used by the music industry

prior to the emergence of the internet is the basic business model which is the

subscription business model. In this chosen model, different music industry like

Sony Music, or EMI do not sell their products directly. Instead, these industries

are selling their products monthly or annually. In this model, the effect simply lies

on the conversion of a one-time sale of a particular music labels or musical

records into a frequent sale of a product. This to know where the target market

lies, providing their products on time that they know it will hit the target market

and tries to promote it through advertisement.

Prior to the use of Internet, music industry’s competition depend largely on

how they locked their consumers. This means that the music industry is in

control of their consumers by means of the kind of music that the music industry

will offer. The relationship between the organization and the consumers are

being embedded to consumer as a buyer and the organization as the producer.

In this manner, the consumer would tend to buy the music products from the

store just to hear the particular songs that they wanted to listen to. Herein, It does

not matter whether the other songs or tracks included in the album may or may

not attract the consumer. In addition, the music industry prior to the use of
internet tries to market their products depending on the artists or the musicians

and the labels that they have.

Using the Porter’s Five Forces Model (See Appendix 1), the model of the

music industry can be seen in Table 1. As can be seen in the table the

competition for the music industry vastly depends on the musicians in which the

industry has. And the competition not only lies within music industry but also to

its rival competitors. Moreover, the competition on the labels is very tight since

consumers have different taste when it comes to music and its label. The music

industry depend its profit on the musicians and the artists. On the other hand, in

the suppliers of the music industry will also depend on the musician, labelling and

the consumers. Herein, a certain music industry likes for example the Sony. The

company will be able to get their supplies from those musicians who wanted to

use their industry as the promoting agency. The labelling, will include copyrights

for its original holders, the agreement is in between the music industry and the

people behind a certain musical records.

Utilizing still the Porter’s Five Forces Model, the buyers of a certain music

industry is depended on their listeners through the labels and the concerts. The

labelling in this manner came from different distribution channels, promotional

media, retail outlets and customers with playback devices. The only threat of a

music industry during the times when the business does not utilize the internet is

the emergence of new popular sounds and new bands. Moreover, the threat will

also include new record labels and other musicians and for the audiences the
threat would possibly be the digital lifestyle due to the technological progress.

However, the music industry’s marketing or business strategy may also have its

own substitute. This enters music videos and movie soundtracks in which they

can use as an alternative to get the attention of their target market. Moreover,

labelling may include different variance such as tape, cassettes, CD of DVD. On

the other hand, the substitutes for the music industry for the audiences may

include new media, peer-to-peer audiences and the digital lifestyle as well

(Henderson and Mihas, 2000).

Likewise, the music industry also value brands and brand creation.

Indeed, in any firm, building brand is a significant management skill. Branded

product lines generate a distinct set of benefits that is covered within a

recognizable character. Along with these products are the connection between

the customers and the product. In the music market, the artists are the brands

themselves. When the brand is strong and powerful enough, it produces an

image and identity for a certain product or company. This further establishes the

relation between brands and consumers. When the requirements of the

customers are met by particular music brands, consumers tend to become loyal.

Upon failing to do so, consumers are quick to patronize other brands.

UK Music Industry’s Marketing Strategy

 The UK music industry is enjoying a boom as new artists are breaking

through the scene and the people are lapping them up. Not including

compilations, CD sales are higher than ever and albums by British artists have hit

a seven-year sales peak in 2005 (Youngs, 2006). According to a recent survey

by research firm XTN Data, around 85% of people buy at least one album

monthly. Legal song downloads are also enjoying sales increase (Youngs, 2006).

Although online digital music sales are a small fraction of the overall UK

music market, they are increasing rapidly. According to the International

Federation of the Phonographic Industry (IFPI), online sales tripled in 2005 to

reach 6% of the overall market (Reimer, 2006). In another report, it was revealed

that legal song downloads more than quadrupled in 2005 (Youngs, 2006).

According to the British Phonographic Industry (BPI, 2006), in 2005, the

UK's digital music business was worth $69m, bigger than Germany ($39m) and

France ($28m) combined. The $69m / £38m total was split £25m a la carte

downloads, and £13m mobile – which does not include an estimated £2.5m from

subscriptions (BPI, 2006). As more sales move from CD to online transactions,

the UK music companies are enjoying increased profits as a result of lower costs

for digital distribution compared to the costs for physical media.

However, the growth of legal music downloads is being challenged by

illegal filesharing. In a report by TNS Worldpanel (2006), the cost to British music

of illegal filesharing reached £1.1bn from 2003 to 2005. Figures estimate the cost

to British music in 2005 of people illegally filesharing rather than paying for music
was £414m; 2003 had £278m lost sales and 2004 had £376m lost sales (BPI,

2006). According to Peter Jamieson, BPI chair: “The UK record industry is the

biggest single investor in British music. Too often people believe that when they

take music illegally over the Internet it is a victimless crime. But when people

share music files illegally, they are stealing the future of British musicians and the

people who invest in them” (BPI, 2006, p. 1). The figure below shows the change

in spend on entertainment products in the UK.

The downloading of free music by young consumers is also a particular

concern for the music industry in many countries worldwide. In the United States,

evidence shows that these consumers are purchasing less music: Between 1991

and 2000, the overall market share declined from 18.1% to 12.9% for 15-19-year-

olds, and from 17.9% to 12.9% for 20-24-year-olds (Recording Industry

Association of America, 2001). Understandably, these findings raise concerns

about the future of music as a product, particularly with regard to young

consumers, whose future music-purchasing habits are being influenced by the

availability of free music over the Internet.

Offsetting the above concerns are predictions that delivery of music over

the Internet, that is, music as a service, will expand significantly through the

coming years. Aside from the sale of physical music products over the Internet,

sales of music downloads may increase significantly over the next few years.

Most downloadable music sales are expected to take the form of subscriptions,

wherein users pay a monthly fee to gain access to and download as many songs
or albums as they choose. Estimates indicate a rapid increase in both a la carte

and subscription music sales. While the predictions may be overly optimistic, the

distribution of music as a service (rather than a physical product) likely will grow

significantly in the future and will comprise an increasing proportion of overall

music sales.

Free music online has redistributed power in the music industry from

music labels to individual consumers. The record labels have attempted to thwart

the efforts of free music providers through the creation of copyright-protected

files and through lawsuits against providers of free music. According to Sherman

(2001, p. 36): “Ultimately the best response to online piracy is a legitimate

alternative.” Currently, record labels are increasingly competing with free

filesharing systems for consumers. To compete effectively in this context, labels

will need to come up with marketing strategies aimed at encouraging consumers

to legally download music or buy physical music products online.

The market of music in the United Kingdom is very big. Aside from the

large population of the place, music is also highly relevant in the lives of the

people. Various artists in the international arena came from United Kingdom.

Undoubtedly, music in this area makes it big in business. The market reach of

this industry is not only concentrated on the domestic or local level but as well as

in the international level.

According to Youngs (2006), the UK music industry enjoys its ‘boom’

today. Specifically, the business is booming as talented new artists are breaking
through and the public are lapping them up. Moreover, the industry asserts that

excluding compilations, CD sales are higher than ever and albums by British

artists have hit a seven-year sales peak. In fact, 85% of its people buy at least

one album per month and the legal song downloads have even quadrupled. As a

result, the continued investment in the UK record’s industry is definitely paying

off. And this success has been the basis of building digital business. More

importantly, there has been a strong growth within downloads as well as within

the mobile space.

In 2004, there has been a price war on the online music market between

Apple and the RealNetworks. Specifically, there has been a cutback on the price

of online music by the RealNetworks Company. Because of this, it directly

undercut its arch-rival Apple. They sell their music products half of the price of

Apple. And, this move has created a fuss on the market competition for online

music. (BBC News, 2004)

The situation presented above greatly reflected the nature of e-commerce

on the music industry in the United Kingdom. Obviously, this is an actual case on

the music industry of UK. More importantly, the case presented a promotional

tactic in order to acquire a large market of online music. In addition, the cutting of

prices did not only outsmart its competitor but also encouraged people who are

currently downloading illegally to start buying online music legally.

Indeed, the year of 2005 has been a good year for the music industry in

UK. This is because of the claimed victory in its first battle with the illegal file-
shares. Twenty people have paid £50,000 in order to settle their crimes out of

court. The illegal sharing was done through the use of different file sharing

software such as Kazaa peer-to-peer network, Imesh, Grokster, WinMix and

BearShare. The compensations payments were returned to the music copyright

holders. (BBC News, 2005)

Chinese Music Industry

Because of the rapid changes in the market environment, music industries all

over the world are trying to initiate their own marketing strategy and Chinese

music industry is never an exemption. In the Chinese music industry it is said that

the only sale of music in a virtual approach is through the booming of the

ringback and ringtone market that generated a $1.5 bln in revenues for China

mobile in 2007. However, the emergence of this market caused some problems

with the labels and artists of Chinese music industry.

Currently, the music industry that is considered as the big winner in China is

Baidu with business mainly focused on digital music. Scholars believed that

China represents rock bottom for their music industry, specifically on the

economics of the creative side. It is said that CD business for music industries in

China has disappeared and the businesses which have emerged have not been

able to help the artists.

 In an article by Kennedy (2006) he has mentioned that in this generation,

Chinese market can be considered as the most exciting new market in the global

market, especially for the international recording industry. Having been able to

realise the potentialities of the Chinese market, major international record

industries have been bale to establish their presence in the country. For instance,

EMI has launched a joint venture with one of China’s recording industry,

i.e. Shanghai-based Push Sound. On one hand, other multinational industries to

enters the Chinese music market include Sony BMG which established a

partnership with Shanghai Audio and Visual Press; Warner Music Group, one the

other hand has created a local version of the industry which is the Warner Music

China and Universal Music have been associated with the Shanghai Media

Group.

In addition, independent industries are also seeking for new opportunities to

invest in China and enter the music industry in the county. For instance, some

music industries are experimenting with new types of business model which is

not common in the market. Accordingly, the Chinese music market in this period

of time has a picture of untapped competencies. The nation has a population of

more than 1.3 billion which is one sixth of the total population of the world. The

Chinese music industries target market includes the rising numbers of middle

class with disposal income and young people who are music enthusiasts.

Many believed that if Chinese market and music industry will work together,

the country may experience an exciting growth in the years to come. Chinese
music industry is also being challenged by the emergence of various digital

music services. Presently, there are five legitimate digital music industries in

China and this is forecasted to increase more in the next years. The transition of

China to digital has been reflected across the globe. In this regard, the record

and music industries have rapidly changed themselves from an enterprise

dominated by revenue streams like radio and physical retail sales to one of

various licensing channels, from the use of ringtone to subscription music

service, from mobile downloads to the music video. In the article, it has also

mentioned that China has been able to cope into the digital period with the help

of the music industry. It is said that great opportunities comes with various

challenges and the music industry of China is now facing various challenged.

One of the challenges is the issue on the development of a legal environment,

promotion of legitimate music channels and most of all to destabilise the culture

of music piracy in the market which affects the music industry in a negative

manner.

Government Policy of UK and Chinese Music Industry

The music industries all over the world have been threatened by different

challenges and one of this is about piracy. Basically, piracy is a criminal activity

being theft of others’ intellectual property. In relation to the music industry, piracy

is considered as unauthorized copying and in this aspect falls into 3 categories

(IFPI, 2004c):
 Piracy is the illegal copying of an original recording for commercial profit
without the permission of the rights’ owner. Herein, the packaging of pirated
copies differs from the original one.

 Counterfeits which are copied and packaged to be like the original as

closely as it can be. In this regard, the original producer’s trademarks as well
as their logos are reproduced so as to mislead the targe audience into
believing that they are purchasing the original product.

 Bootlegs referred to the unauthorized recordings of broadcast or live

performances. Such copying refers mostly to Audio and Video CDs only.

The advent of the mass-produced CD has changed the face of piracy from a

problem largely confined to local borders to a sophisticated which include Laser

Discs (LD), Video Compact Discs (VCD) and Digital Versatile Discs (DVD), are

inexpensive to manufacture and easy to distribute. In 2000, over 20 million

pirated optical discs were seized, and by comparison, 4.5 million videos were

seized worldwide in the same period. Unlike traditional analog piracy, a digital

pirated disc is as pure and pristine as the original (MPAA, 2004). In addition, a

production facility can churn out huge volume of illegal discs in relatively short

time (MPAA, 2004).

Wit this challenge, the government of UK and China has been able to

regulate their own policies to protect their music industry. As compared to other

media industries like press or the broadcasting, the music industry of UK has not
been considered as the object of much governmental interest except on the

notion of occasional amendments of copyright law. However, in the 80s, British

music industry has been given emphasis in terms of the development of the local

government cultural industry policy implementations, and since the 1997 election,

the labour government has changed the policies of UK music industries to the

national level through the establishment of Music Industry Forum, Creative

Industries Task Force and others. Part of this was the provision of the British

Department of Culture, Media and Sports (DCMS), regarding the three strands of

the music policy which include the education and training (both as an element of

employment regulation and as a policy for securing British Music industry’s future

talents and artists base); rights protection which is specifically made for the

protection of the British rights in global environmental situation and in new

technology; and social inclusion which is referred to the use of music to articulate

the modern multicultural British for the nation and for the global brand of the UK’s

music industry. It can be said that the policy of UK begs two essential aspects:

first, it shows that the British music industry is equivalent with their record

industry and secondly, the policy assumes that there is a modified national music

interest (Frith, 2000).

Unlike in other nations, the intellectual property protection of China as

part of their government policy for music industry is still at its early phase for a

market economy. The condition of the IPP in China is the same to the situation of

the protection of the environment which shows that there is a gap between the
day-to-day reality and government policy. The enforcement of intellectual

property policy can also be considered as ineffective and weak in most parts of

the nation. because of the local protectionism and because of the lack of an

independent enforcement authorities to implement the polices, infringers of

intellectual property are mostly not punished or prosecuted. Although, the

government is issuing fines, the fines are noted to be low to defer or eliminate

infringing operations.

During the last years, Chinese government policy for music industry’s ip

protection has seen essential improvements. In china, internet piracy has rapidly

increased in China which threatens to strangle the improving legitimate digital

music market. In addition, China has seen an alarming growth in websites, and

other streaming sites along with illegal-file sharing which needs attention.

Chinese music industry in cooperation with the government agencies is said to

stepping up their attempts to eliminate the infringing internet sites from the

networks. In 2005, China has sent over a thousand warnings which aims on

taking the sites down through ISP’s. However, the government has find this

process to be slow and cumbersome hence, they have proposed new internet

regulations to give incentives for ISPs who are effectively fighting piracy and shift

the burden of accountability for tackling infringement towards the ISPs.

Progress of IPP is considered to be more visible in big cities in the

country. In Beijing, for instance, a copyright protection centre was established by

the government in 1993 to protect the rights of the artists in their music industry
as well as in the performance arts. In this regard, it can be said that China are

trying to improve their government policy to protect their music industry

(Objectiva Software, 2008).

The music industry relies greatly on copyrights. Copyright enables record

companies to provide sufficient capital and enterprise in producing commercial

recordings that can be exploited in both local and overseas markets as they

contain legal protection to counter unauthorized reproduction. Furthermore,

copyright is significant in assuring that all talents used by successful artists are

given due recognition and reward. In the music industry, there are two significant

copyrights involved (Monopolies and Mergers Commission, 1994). The first

copyright protects the performance and efforts employed to create the product,

including those of the artist and the composer. The second copyright protects the

actual sound recording involved in the production of the music when a certain

artist completes a musical work and is recorded.

Normally, the sound recording copyright is owned by the record company,

although copyrights may be granted or licensed to others. These copyrights are

vital to the owners as they provide several rights, such as the sole right to

produce product copies as well as the exclusive right to perform the music piece

in public, including broadcasting. Moreover, performing the record in public, such

as in public places, radio or television, permits record companies to receive

license fees. Copyright is interpreted as territorial in its application and is

enforced by international agreements (Mansell and Steinmueller, 1995).

Business Strategy for Music Industry

Business model is an integrated and coordinated set of commitments and

actions the firm uses to gain a competitive advantage by exploiting core

competencies in specific product markets (Rindova & Fombrun, 1999). Only

firms that continuously upgrade their competitive advantages over time are able

to achieve long-term success with their strategy and implementation. Choosing

the appropriate business model is intended to create differences between the

industry’s positions relative to those of its rivals (Porter, 1980). To position itself a

firm must decide to whether it intends to perform activities differently or to

perform the different activities as compared to its rivals. Thus, the firm’s

business model is a deliberate choice about how it will perform the value chain’s

primary and support activities in ways to create unique value. Over the years,

different companies and organization are trying to utilize the business model in

which they think should bring success to the over-all performance of a business.

In addition, business model is also referred as the mechanism or system by

which any firm or business aims to produce profit or revenue. It is the totality of

how the industry intends to serve its target market. It involves both the marketing

strategy and its strategic implementation. Throughout the years, the uses of

business model are regarded as complicated and sophisticated. Business

models have different kinds.

 However, the business model that has been used by the music industry

prior to the emergence of the internet is the basic business model which is the

subscription business model. In this chosen model, different music industry like

Sony Music, or EMI do not sell their products directly. Instead, these industries

are selling their products monthly or annually. In this model, the effect simply lies

on the conversion of a one-time sale of a particular music labels or musical

records into a frequent sale of a product. This to know where the target market

lies, providing their products on time that they know it will hit the target market

and tries to promote it through advertisement.

Prior to the use of Internet, music industry’s competition depend largely on

how they locked their consumers. This means that the music industry is in

control of their consumers by means of the kind of music that the music industry

will offer. The relationship between the organization and the consumers are

being embedded to consumer as a buyer and the organization as the producer.

In this manner, the consumer would tend to buy the music products from the

store just to hear the particular songs that they wanted to listen to. Herein, it does

not matter whether the other songs or tracks included in the album may or may

not attract the consumer. In addition, the music industry prior to the use of

internet tries to market their products depending on the artists or the musicians

and the labels that they have.

Using the Porter’s Five Forces Model (See Appendix 1), the model of the

music industry can be seen in Table 1. As can be seen in the table the
competition for the music industry vastly depends on the musicians in which the

industry has. And the competition not only lies within music industry but also to

its rival competitors. Moreover, the competition on the labels is very tight since

consumers have different taste when it comes to music and its label. The music

industry depend its profit on the musicians and the artists. On the other hand, in

the suppliers of the music industry will also depend on the musician, labelling and

the consumers. Herein, a certain music industry likes for example the Sony. The

company will be able to get their supplies from those musicians who wanted to

use their industry as the promoting agency. The labelling, will include copyrights

for its original holders, the agreement is in between the music industry and the

people behind a certain musical records.

Utilizing still the Porter’s Five Forces Model, the buyers of a certain music

industry is depended on their listeners through the labels and the concerts. The

labelling in this manner came from different distribution channels, promotional

media, retail outlets and customers with playback devices. The only threat of a

music industry during the times when the business does not utilize the internet is

the emergence of new popular sounds and new bands. Moreover, the threat will

also include new record labels and other musicians and for the audiences the

threat would possibly be the digital lifestyle due to the technological progress.

However, the music industry’s marketing or business strategy may also have its

own substitute. This enters music videos and movie soundtracks in which they

can use as an alternative to get the attention of their target market. Moreover,
labelling may include different variance such as tape, cassettes, CD of DVD. On

the other hand, the substitutes for the music industry for the audiences may

include new media, peer-to-peer audiences and the digital lifestyle as well

(Henderson and Mihas, 2000).

Likewise, the music industry also value brands and brand creation.

Indeed, in any firm, building brand is a significant management skill. Branded

product lines generate a distinct set of benefits that is covered within a

recognizable character. Along with these products are the connection between

the customers and the product. In the music market, the artists are the brands

themselves. When the brand is strong and powerful enough, it produces an

image and identity for a certain product or company. This further establishes the

relation between brands and consumers. When the requirements of the

customers are met by particular music brands, consumers tend to become loyal.

Upon failing to do so, consumers are quick to patronize other brands.

Changes and marketing approaches would have to be altered

accordingly. Indeed, the Internet has been the most significant phenomenon to

strike the Music Industry since its inception (Ashurst, 2001, p.101). Within the

Music Industry the Internet is no longer a “neglected” medium (Mathews, 2001)

as it has been researched significantly. This development however, still presents

many challenges in marketing music through the internet. Despite the research

and a genuine eagerness to make the Internet work for the music industry,
marketers’ research and practice have been so far thwarted in uncovering an

effective method to use marketing on the Internet (Holt and Watters, 2004).

Marketing a band for instance, has been known and practiced by the industry.

Nonetheless, internet marketing had simplified this role. Music marketers should

then consider the establishment of a relationship between digital media with

other forms of communication.

Consumer behavior is perhaps one of the most interesting

aspects of marketing because it deals with the individual
characteristics of consumers. It is basically the buying behavior of
the final consumers which are the individuals and households who
buy the goods and services offered in the market for their personal
consumption (Kotler & Armstrong, 2001). The main concern in
marketing in relation to this aspect is whether consumers actually
respond to the marketing strategies employed for the product (Best,
2004) which also gives rise to the model of consumer behavior within
which most market researches circle around.
A good consumer behavior model was introduced by Kotler &
Armstrong (2001) which discusses the process with which the
consumers respond to the different product features, prices and
advertising. Figure 1 shows that the starting point consists of the
stimulus-response model wherein marketing-focused factors which
involve product, price, place and promotion and other stimuli which
include outside factors in the market environment enter the “black
box”. This contains the individual buyer characteristics and decision
processes. The third component of the model involves the actual
responses to the marketing efforts which can translate into product
choice, brand choice, dealer choice, purchase timing and purchase
amount among others. It is fitting the end goal of marketing which is
to gain consumer loyalty (Chow & Holden, 1997; Ducques & Gaske,
1997; Levitt, 1986).

Figure 1
Model of Consumer Behavior
 Piracy of Intellectual Property Right (IPR) works music, audio-visual works

and computer software for both business and entertainment purposes is

continuing to have a significant impact on the interest of both the IPR owners and

the legitimate intellectual property industry as huge demands for pirated CDs

hinder IPR protection. Software piracy refers to the copying of software,

producing it usually in bulk for sale through unauthorized shops, unlike the

purchase of original disc copies from official distributors. Further, pirated CDs

involve larger volumes and dollar value compared to the manufactured clothing,

medicines, watches or beverages as these generally only appear as counterfeits

and in much smaller volumes.

Implication of Internet to Music Industry

In the Music industry, increased market competition identifies continuous

adjustment and improvement in the production lines, outsourcing and supply

chain management of companies. Interdependence and participation of suppliers

and manufacturers in product design, innovation, as well as research and

development characterize the current international business environment

resulting to market volatility (Sobrero & Roberts, 2001; Appleyard, 2003). These

organizations usually share proprietary corporate data with external suppliers

and partners while ensuring maximum security to enhance efficiency across the

product lifecycle by streamlining procurement, production, fulfillment, and

distribution processes (Katsikeas, Schlegelmilch & Skarmeas, 2002) which

requires integration of applications and data across multiple geographically

dispersed supply chain partners, as well as internal integration with legacy

systems (Katsikeas, Schlegelmilch & Skarmeas, 2002; Appleyard, 2003).

Recently, Rabinovich and Carter, (2003) illustrated the efficiency of e-

based transactions in an internet retailing supply chain in the music CD industry.

However, they also emphasized that e-based transactions may also affect

negatively the music industry. Recent technological and market forces have

profoundly impacted the music industry. Emphasizing threats from peer-to-peer

(P2P) technologies, the industry continues to seek sanctions against individuals

who offer significant number of songs for others to copy (Rabinovich, E et. al.

2003). Yet, Rabinovich, E et.al. (2003) suggested that there should be a little

rigorous empirical analysis of the impacts of online sharing on the success of

music products.