situation analysis

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Published on August 1, 2010

Author: swang

Source: authorstream.com

Situation AnalysisSony Ericsson UK Market : 1 Situation AnalysisSony Ericsson UK Market Submitted by: S. Wang (A4012042 - MBA -3 (C)) Submitted to: John Kitto Data: 2-Aug-2010 Introduction : 2 Introduction Sony Ericsson is a 50:50 joint venture by Sony and Ericsson established in October 2001, with global corporate functions located in London and operations in all major markets.  An entire range of handsets, accessories, applications and value-added services available Introduction (con’d) : 3 Introduction (con’d) loss of €836 m in the FY2009 in the whole world market During 2009, Sony Ericsson secured external funding of € 455 m to improve liquidity, out of which € 350 m has been guaranteed by the parent. € 255 m was drawn by the end of 2009, but the remaining € 200 m, a two-year committed back-up facility, has not been utilised Introduction (con’d) : 4 Introduction (con’d) The transformation program started in mid-2008, is now in its final stages Focus on the value market and the success of new smartphones e.g. Xperia™ X10 , Vivaz™ Fought back and made a profit of €18m for Q1 of 2010 Macro Environment - UK Market : 5 Macro Environment - UK Market It affects all the companies in the whole industry. Can be analysed using PESTEL framework Complicated, dynamic Macro Environment - UK Market (con’d) : 6 Macro Environment - UK Market (con’d) Source: http://www.businessmate.org Macro Environment - UK Market (con’d) : 7 Macro Environment - UK Market (con’d) Political Government is relative stable Good social Policies – education, a welfare safety etc. Trade regulations e.g. EU Consumer protection policy - The Competition Commission in the UK (market share < 25%) Macro Environment - UK Market (con’d) : 8 Macro Environment - UK Market (con’d) Economic Disposable income of buyers is getting recoverable Credit accessibility Unemployment rates - stands at 7.8% http://www.hrmguide.co.uk/jobmarket/unemployment.htm Interest rates is low – 0.5% (current) Inflation rate is stable – 3.2% (about) Macro Environment - UK Market (con’d) : 9 Macro Environment - UK Market (con’d) Social Education level is getting higher More people like using smarphone Large amount of international young people in the UK Rising standards of living leads to luxury consumer goods People live longer Macro Environment - UK Market (con’d) : 10 Macro Environment - UK Market (con’d) Technological Developing rapidly -technological innovations and advances e.g. Google Android operation system, 3G → smartphone -technological obsolescence – old models of mobile phones go out of market quicker than before Macro Environment - UK Market (con’d) : 11 Macro Environment - UK Market (con’d) Environmental On packaging → Green Government law/influence e.g. on battery disposal Physical environment – e.g. disasters affects infrastructure Employee increase pressure on business e.g. safety Green pressure group Macro Environment - UK Market (con’d) : 12 Macro Environment - UK Market (con’d) Legal Criminal law – bribery, insider dealing, deception, industrial espionage Government health and safety regulations Employment regulations – unfair dismissal, redundancy etc. Completion law Products regulation - Specific absorption rate (SAR) Tax law – VAT @ 20% Data protection on employees and customers Micro Environment - UK Market : 13 Micro Environment - UK Market It can be analysed using Porter’s five competitive forces. Micro Environment - UK Market (con’d) : 14 Micro Environment - UK Market (con’d) The threat of new entrants - relative low Barriers to entry by: - economic of scale - product differentiations (Sony features) - capital requirement - knowledge requirement (R&D) - cost advantage e.g. manufacturing in China →labour cost is low - branding Micro Environment - UK Market (con’d) : 15 Micro Environment - UK Market (con’d) The threat from substitute products – medium People talk on internet – skpe Mobile phone has more features – game, camera, internet, googlemap etc. Micro Environment - UK Market (con’d) : 16 Micro Environment - UK Market (con’d) The bargaining power of customers intermediaries –mobile phone operators (high) as ●they provide the signal for mobile phones ●the number is low (Orange, O2, Vodafone, 3) ●the amount they buy is high ●too many mobile phone manufactures the end user – individual customers (low) Micro Environment - UK Market (con’d) : 17 Micro Environment - UK Market (con’d) The bargaining power of suppliers Software supplier like Google - (high) as the importance of suppliers’ products to Sony Ericsson Material and labour suppliers – (low) as ● large number can be chosen from ● low switching costs Micro Environment - UK Market (con’d) : 18 Micro Environment - UK Market (con’d) The rivalry amongst current competitors in the industry – (high) Mobile phone is at maturate stage Switching cost is low Market growth is low Exit barriers is high Micro Environment - UK Market (con’d) : 19 Micro Environment - UK Market (con’d) Main competitors (market share > Sony Ericsson) in the UK market Nokia -35% iphone Samsung – 21% LG – 9% Sony Ericsson – 3.1% Source: http://www.lightreading.com/document.asp?doc_id=194498 Stakeholder Analysis : 20 Stakeholder Analysis Stakeholder Analysis (con’d) : 21 Stakeholder Analysis (con’d) Key players –board of directors, local councils, industry regulations. (negotiation, compromise, and lobby ) Keep satisfied - parents companies, governments, suppliers, media, big customers (participation, integration, collaboration ) Stakeholder Analysis (con’d) : 22 Stakeholder Analysis (con’d) Keep informed – employees, small suppliers, non-government organisations (education, direction ) Minimal efford – individual customers (communicate friendly and helpfully) SWOT - strengths : 23 SWOT - strengths Synergy with SONY PSP go, BMG and other functions of Sony Good reputation of innovation and quality from other products including early models of mobile phone, other Sony products and innovation Worldwide, one-look brand-building SWOT - strengths (con’d) : 24 SWOT - strengths (con’d) Strong existing product portfolio which can generate profit and back up R&D expenditure Manufacturing in China reduces the cost, which can be passed to customers and also increase profitability Image of entertainment smartphone SWOT - weaknesses : 25 SWOT - weaknesses Primacy in the UK still has to translate to the “look of the leader” globally Time gap between two different models is small -- it cheaper the earlier models even some still have good market Competitors (e.g. Nokia / Apple) have a better complete distribution network. (e.g. display stores on high street). SWOT - opportunities : 26 SWOT - opportunities New technology like Google Android operation system, 3G More people in the UK like to use functional smartphone UK market is quite political stable SWOT – opportunities (con’d) : 27 SWOT – opportunities (con’d) Mobile phone industry is saturated but smartphone reported with growth market (guardian.co.uk, 23, Feb, 2010) People change mobile phones when new contract starts SWOT – Threats : 28 SWOT – Threats More people like iPhone - Microsoft’s Windows Mobile’s market share drop 11.8% to 8.7% in 2009, ( metro.co.uk, 23, Feb, 2010) Sony Ericsson is losing market share to Korean brands like LG, Samsung (metro.co.uk, 23, Feb, 2010) SWOT – Threats (con’d) : 29 SWOT – Threats (con’d) More mobile phone companies started to design mobile phones with entertainment features. Some software designer have down streamed their value chain and branded their own mobile phones e.g. HTC. Strategy Current Used to Market the Brand : 30 Strategy Current Used to Market the Brand Manufactures brand – Sony Ericsson Developing the brand slogan – make, believe ( meaning- innovation) Using marketing agency - iris Product extension (walkman phone, Smartphone, organisation phone etc.) Pull promotion Strategy Current Used to Market the Brand-(con’d) : 31 Strategy Current Used to Market the Brand-(con’d) The aim of the promotion Increase the brand awareness Increase the brand image Increase the brand preference Increase trial purchase and repurchase rate Penetrate the UK market to improve financial position of Sony Ericsson Strategy Current Used to Market the Brand-(con’d) : 32 Strategy Current Used to Market the Brand-(con’d) Advertising On line - website – Sony Ericsson official website and others (e.g. the advertorial feature on www.Vogue.com, The WTA Tour and Sony Ericsson jointly launched SuperFans (www.WTASuperFans.com) ) - social media (You Tube, Twitter, Facebook) - search engine e.g. google Strategy Current Used to Market the Brand-(con’d)) : 33 Strategy Current Used to Market the Brand-(con’d)) Advertising (con’d) Off line - magazines - TV - poster e.g. At bus stop - radio - newspapers Strategy Current Used to Market the Brand-(con’d) : 34 Strategy Current Used to Market the Brand-(con’d) Sales promotion Exhibition Events e.g. Golden ticket for the 2010 FIFA World Cup Sponsorship The Sony Ericsson Championships for WTA Strategy Current Used to Market the Brand-(con’d) : 35 Strategy Current Used to Market the Brand-(con’d) Pubic relation Sony Ericsson created a strategic global PR campaign with various consumer tactics and materials that all local markets could use to outreach to relevant media. Globally generated PR materials, including press releases, Q&As and toolkits, were developed, along with product factsheets,  a social media news release and a product tutorial Target Customers in the UK Market : 36 Target Customers in the UK Market Young people including - colleague students - young workers - people young at heart With passion in music, game, social networking, internet, being different, innovation Products Features : 37 Products Features As products designed for target segmentation With entertainment features in Low price comparing to other brand mobile phones More stylish Relating to Marketing Plan : 38 Relating to Marketing Plan Introducing new model – with features closing to Sony – Play station portable phone (PSPP) Marketing research techniques PSPP : 39 PSPP PSPP is the combination of smart mobile phone and PSP go designed for those game players. HD touchscreen with Full QWERTY keyboard making users fast words and fun messages Music intelligence with Track ID allowing users to get great background music for games Extremely portable size fitting in users pocket perfectly PSPP (con’d) : 40 PSPP (con’d) Access PS3 via remote play which allowing users to p.k. with other players Slides out to reveal the familiar PSP button layout and set with Bluetooth 2.0 technology. Objectives of Market Research : 41 Objectives of Market Research Who are the customers and potential customers What kind of people are they Where do they live Can and will they buy If Sony Ericsson offering the kinds of goods or services they want ( at the best place, time and in the right amounts) If prices consistent with what buyers view as the product's value If promotional programs is working What do customers think of my business How does Sony Ericsson compare with competitors Market research techniques : 42 Market research techniques Primary research techniques Survey (in-person surveys, telephone surveys , mail surveys, online surveys ) Focus groups Personal interviews Observation Market research techniques (con’d) : 43 Market research techniques (con’d) Secondary research Internal e.g. company annual report, production, accounting, sales records, purchase details etc. External e.g. customers, suppliers, channels of distribution, strategic alliance partners, independent third parties, commercial agencies, industry associations, CSO, Eurostat etc. Market research techniques used in marketing plan : 44 Market research techniques used in marketing plan Primary – In-person survey with questionnaires Secondary – Sony Ericsson annual and quarter reports and articles on websites Questionnaires : 45 Questionnaires City Code Date Interview No.: Please complete the following information: Male Female Age 10-15 yrs 16-20 yrs 21-25 yrs 26-30 yrs 31-35 yrs 36-40 yrs 41-45 yrs 46-50 yrs over 50 yrs Do you have a PSP? Do you ever play PSP? Do you play games on mobile phone? Is your current mobile phone Sony Ericsson? Have you ever had a Sony Ericsson mobile phone? Do you like the games already inputted in your Sony Ericsson mobile phone? Would you like to play a game using your mobile phone just like using PSP? If yes, what is the highest price would you like to pay for this kind of mobile phone? Pay as you go: £250-300 £301-350 £351-400 £401-450 £451-500 £over 500 Contract (when you can get it for free) £35 / month £40 / month £45/ month

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