Ericsson in China

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR127 Electronic Format: Rs. 400;
Courier (within India):Rs. 25 Extra
Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Themes

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Case Length : 11 Pages
Period : 1985 - 2004
Organization : Ericsson China
Pub Date : 2004
Teaching Note : Available
Countries : China
Industry : Telecom

Abstract:

Ericsson's relationship with China dated back to the 1890s, when the first batch of Ericsson handsets was shipped to Shanghai. Since then, China has gradually developed into one of Ericsson's primary markets. The Chinese market presented huge opportunities in terms of volume and size. The telecom and IT industry in China was growing at the fastest rate in the world and Ericsson was determined to have a share of the pie. The company set up its first office in Beijing in 1985 and in 1994 Ericsson (China) Co. was established. Ericsson adopted a well laid out localization strategy to optimally exploit the Chinese market. Between the late 1990s to the early 2000s, Ericsson shifted the procurement and supply side of its wide range of business to China.

It also brought in its traditional partners. This offered huge employment opportunities for local Chinese and also contributed to the country's economic growth. Besides, huge investment in R&D by Ericsson and commitment to develop the country's 3G technology contributed to China's telecom and IT growth. However, in the early 2000s, the market for Ericsson products in China lost out to stiff local competition. Analysts observed that Ericsson needed to rethink its strategy on pricing and quality of its products.

Issues:

Understand the approach taken by multinationals to tap new markets

Determine various issues involved in the setting up of a new company in an international market

Appreciate localization strategies adopted by an MNC to expand its operations

Appreciate the complexity of a growing market like China

Evaluate the growth of a European telecommunications major in China

Understand the contribution of an MNC in the host country's economic development

Contents:

  Page No.
Introduction 1
Background 2
Localization Strategies 3
Competition 6
Entry of Sony Ericsson in the Chinese Market 6
The Future 7
Exhibits 8

Keywords:

Ericsson, Ericsson China, TCL, China Mobile, Localization Strategies, Joint Ventures, Elcoteq, Motorola, Ericsson China Academy, China Unicom, Nokia, Siemens, Samsung, Sony-Ericsson China, Distribution Channel

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