Ericsson in China
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Case Code: BSTR127 Case Length: 11 Pages Period: 1985 - 2004 Pub Date: 2004 Teaching Note: Available |
Price: Rs.400 Organization: Ericsson China Industry: Telecom Countries: China Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background
In 1985, Ericsson set up its first office in Beijing, China's capital. In 1994, Ericsson (China) Co. Ltd., was established. In 2002, China developed into one of Ericsson's three global supply hubs with full-line production capacity located in Beijing, Nanjing and Chongqing.
Ericsson's largest joint venture in China, the Nanjing Ericsson Panda Communication Company Ltd. (ENC), assumed the role of Ericsson's Flow Control Centre5 for the Asia Pacific Region. Ericsson Mobility World China6 provided a development and testing platform and toolkit for local Chinese developers who wanted to engage in mobile applications. In May 2002, the company launched the China Development and Research Institute to consolidate and strengthen R&D activities. Around the same time, Ericsson also started its technology licensing business in China. The company entered into a license agreement for 2.5G7 mobile phone technology with TCL, China's largest mobile phone producer.
The same year, it also signed a worldwide WCMDA/UMTS8 patent license agreement with Huawei Technologies, a leading Chinese telecom vendor. In August 2002, it was among two companies to be awarded the MMS9 contract from China mobile.
Ericsson was well positioned to support China's evolution into the third generation of mobile communications (For details on Ericsson's product offerings, please refer Exhibit II). The company made efforts to integrate China's excellent production facilities and human resources into its global production and R&D programme. In the first quarter of 2004, China accounted for about 9% of Ericsson's global revenues. The country became the Swedish giant's second largest market worldwide, trailing only behind the United States. Ericsson's success in China was a result of well-planned strategy by the company. To optimally utilize the vast resources in China, the company adopted an extensive localization strategy...
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