Abstract

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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Turnaround Strategy
• Restructuring.

Keywords

Case Ericsson, Mobile Handsets, Nokia, Motorola, Cisco Systems, Sony-Ericsson, 3-G Technology, Telecom Industry, Innovation, Ownership Structure, andelsbanken, Wallenberg family, LG, Samsung, Flextronics