Ericsson in the New Millennium


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•Ericsson, enjoyed immense success until the 1990s.

•The company was amongst the pioneers in the telecom industry

•Yet, it could not adapt to the changes in consumer tastes and preferences in the late ’90s. Ericsson failed to adapt its mobile handsets to consumer tastes, and this led to a fall in sales of its handsets.

•Its competitors meanwhile took over Ericsson’s space in the market.

• As sales fell, Ericsson’s other businesses were also affected.

•Finally the company adopted some tough measures to restrict the downslide in its sales.

•Ericsson understood that it was a company that was good at manufacturing good quality and high technology equipment, but was not good at marketing its products to individual customers.

•Therefore Ericsson entered into a joint venture with Sony to form Sony Ericsson, as its new mobile handset unit.

•Ericsson also restructured itself.

•Unprofitable or unmanageable businesses were sold off and some new companies were acquired to fill in the gaps in its product range.

•Eventually, in 2003, the company once again registered profits.

Issues-

– Understand the factors that caused the slide of a successful company

– Understand how important it is even for a successful company to keep changing with changing times.

– Understand the importance for a company to be more customer-centric and less product-centric

– Understand  the strategies that a company has to use if it wants to be successful in competitive times


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