Ericsson Company is global leader in the provision of telecommunications services and equipments. The company offers a variety of services to both fixed network operators and mobile operators in the world. Some of these services include; support, managed services, network roll out, network designs and optimization, learning services, consulting, systems integration and network design and optimization. As one of the top giants in telecommunications, Ericsson has identified appropriate strategies in order to preserve its prominent position in the highly competitive industry of telecommunications. The business level strategies identified for the company were mainly directed at promoting the company’s service delivery, competitiveness and maintaining a high level relationship with customers. Ericsson Company achieves these strategies in three main ways which are emphasized in their services. To begin with, the company strives to identify and enumerate innovative sources of revenue and ensuring efficiency in delivery of products so as to accrue profits much quickly. This ensures that the company would have better products than their competitors hence improving its competitiveness as well as ensuring customer satisfaction. Secondly, the company also identifies investments that are coherent with the business objectives bearing in mind the market opportunities and needs so as to improve its business value in the industry.
Lastly, Ericsson also aims at enhancing operational efficiency for the purpose of realizing cost reduction. The company also formulates methods of accruing potential savings by cutting back on its expenses. The study finds out that the choice of the strategies is influenced by their capacity to realize the long term objectives into the expected results (Aaker, 2008). The company also utilizes the strategy of product branding and corporate branding. This presents a position where the company uses sub brands to add value to its products and also help in meeting the variety of needs amongst different customers. Corporate branding influences the ability of the company to adopt fundamental values which are utilized in all the constituent companies all over the world. Corporate branding has been a better strategy of ensuring efficient management in the company as well as initiating innovative leadership amongst the management. Consequently, Ericsson realizes the dominance of leadership as a business strategy which can be significant in the accomplishment of its long term objectives. As a result, these strategies have helped the company to continue holding a leading position in the market share of the industry. This would be attributed to the ability of these strategies to propel the company’s long term objectives into the anticipated actions and results.
Ericsson Company formulates various strategies which play a crucial role in the realization of its corporate strategy that is aimed at achieving its long term goals. Firstly, the company carries out segmentation of market, targeting and positioning. Hence, market segmentation assists the company in developing value propositions for the various markets targeted by the company. Thus, this helps the company to have knowledge of the particular products and services to be offered in different market segments. The company formulates its services along the various market segments which include; consulting, network roll- out, systems integration and managed services. Therefore, the company is able to satisfy the differentiated needs of the customers through the segmentation of its services in their target markets. Hence, the company’s top brand continues to accrue its prestigious status due to the choice of this corporate strategy. Secondly, Ericsson also adopts a corporate policy that is aimed at improving its customer satisfaction and retention levels in the market. The company implements this strategy to ensure that it experiences a continued expansion of its client base in the global markets which would be significant in realizing its long term objectives.
Ericsson manages the policy of customer satisfaction through the provision of quality products and services to the clients by utilizing their highly proficient workforce. This makes it certain that the corporation would have sufficient clients to support its efforts in achieving its long term goals of success. Lastly, the corporate strategy that the corporation utilizes in the quest to achieve its long term objectives is performance management amongst the work force. This practice helps the company to assess the levels of efficiency in the operations of the company employees which helps to measure their performance (Krug, 2009). Thus, the policy ensures that employees of the company would sustain the desirable values of the corporation which is important in preserving the company’s brand. The company has, therefore, realized that customer satisfaction, market segmentation and performance management are essential policies to be adopted by companies in the telecommunications industry. As a result, Ericsson would be able to achieve its long term goals of success given these corporate strategies which are necessary for propelling the company’s growth. Hence, the corporate policies of the company portray the current levels of success that have been achieved by the company.
Ericsson experiences a competitive environment that is constituted by high performing companies which utilize devise innovative products and services in the market. The leading opponent of Ericsson in telecommunications is Huawei Technologies Co. which is a global corporation located in China. The two corporations have developed distinct strategies which are responsible for their high performance in the telecommunication industry. Ericsson has a business strategy which seeks at ensuring that the management abides to the core values of the company which make up the brand image and reputation of the corporation. Thus, the company is much concerned with the wellbeing of its employees due to the fact that they play an important role in sustaining the company’s brand and reputation. However, Huawei is believed to be ignorant of the employee’s wellbeing due to its strategy of relying more on employee performance without much emphasis on employee welfare. This presents a contrast between the business strategies adopted by the two companies which would also have an influence in their business outcomes. It is also evident that the two companies have equally utilized the policy of market segmentation and positioning as a mechanism of leveraging themselves from the tremendous competition that is present in the industry.
Ericsson greatly advocates for increased technology use and thus it has conducted sufficient research and development to ensure that its customer’s demands would be addressed by the various technology innovations such as broadband and cloud. However, the research and development carried out by Ericsson does not translate to its profit margins as opposed to the research and development programs carried out by Huawei which have accrued huge profits to the company. Ericsson has been using this strategy to achieve customer satisfaction as well as maintaining a higher market share in the industry (Williams, 2009). Consequently, Ericsson is believed to take advantage of its prestigious position in ensuring higher sales in the industry and this would explain the fact that its R &D does not realize an increase in its profit margins. Hence, the two companies exhibit differences in their corporate strategies which results to the uniqueness in their operations. Conversely, the company that would be most successful in this industry in the future would be Huawei. This is because this corporation has been able to accrue profits from their research and development programs in the industry which Ericsson has not been able to achieve over a long period of time.
Thus, we this emerging trend of Huawei, the company would be at an advantageous position to become the leading corporation in the telecommunications industry. The type of market that these corporations operate in would result to a difference in the choice of the most successful company in the future. In a slow cycle market, Ericsson would be more successful than Huawei. This is owing to the prominent status of the company in the industry which would thus facilitate its success in a slow cycle market. However, Huawei would not do very well in a slow cycle market due to its reliance on research and development which might not be effective in a slow cycle situation. In a fast cycle market, Huawei would be more successful than Ericsson since they would be in a position to develop new products from their research and development endeavors. The company would thus take advantage of the market to expand its production and thus improve on its profitability. However, Ericsson would not perform better in the fast cycle market due to its inability to make much out of its research and development programs.
Ericsson has developed appropriate strategies to drive the company to a higher notch in the telecommunications industry. Some of the business level strategies identified for the company are believed to be directed at enhancing the company’s service delivery, customer relations and competitiveness. The company achieves its strategies in different ways which include; diversifying the sources of revenues for the company through engaging in investments that are aligned to the business objectives, cost reduction to increase savings and improving operational efficiency. The company also incorporates product and corporate branding in the business level strategies so as to ensure proper management and leadership. The corporate strategies developed by the corporation include; market segmentation and positioning, customer satisfaction and retention and performance management for the employees. The company implements these strategies as way of achieving its long term goals. The major competitor of Ericsson is Huawei Technologies Co. which owns a considerable amount of the market share. The two companies have developed different strategies which drive their growth and performance indices. Both companies have differences in the strategies that are put with regards to employee welfare. Ericsson Company is believed to use its technological advancement and research and development to ensure customer satisfaction for its clients. However, given their strategies both companies would perform differently in differentiated markets. Ericsson would be the most successful in a slow cycle market while Huawei would do best in a fast cycle market.
Aaker, D.A. (2008). Strategic Market Management. New Jersey: Wiley.
Krug, J. (2009). Corporate Strategy. London: SAGE.
Williams, K. (2009). Strategic management. New York, N.Y: DK Pub.