Analysis of the Sony Ericsson Joint Venture in International Business

This report provides an in-depth analysis of the Sony Ericsson joint venture, examining the factors that contributed to its success and eventual dissolution. It begins by outlining the background of Sony and Ericsson, highlighting their distinct corporate cultures and approaches to business. The report then delves into the formation of the joint venture, detailing its initial goals and achievements in the mobile phone market, including the development of innovative multimedia phones. The analysis explores the reasons for the venture's success, such as market entry opportunities and strategic goals. The report also examines the factors leading to its eventual failure, including increased competition from companies like Apple, and the impact of global economic shifts. Furthermore, the report contrasts the Sony Ericsson case with the unsuccessful joint venture between Walmart and Bharti Enterprises in India, analyzing the reasons behind their failure. The report offers recommendations for successful international joint ventures, emphasizing the importance of understanding cultural differences, developing stable strategies, and fostering strong working relationships. The report concludes with a summary of key findings and insights into the complexities of international business ventures.

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International Management

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The successful companies
SONY: The company was established in the year 1946 in Japan. Sony has been considered as
one of the best electronics producing company globally. The employees work in a
collectivism culture in the company as the Japanese had a aim towards a unbending social
frameworks. The major quality that the businessman of Japan always possessed dealt with
hiding emotions while carrying out a business treaty.
ERICSSON: The company was established in the year 1876 that was much before the
discovery of Sony. The company was established in Sweden and it was one of the
outstanding communication technology as well as service manufacturing brand. The working
culture that was followed in the company involved individualism that was regarded opposite
to the culture that was followed in Japan. But the negotiation culture has always been calm as
well as polite that gave importance to thoughtful decisions. The businessman working in this
company also had the quality of hiding their emotions.
The Success Story
The success story started when the two companies initiated a joint venture thus introducing
them as Sony Ericsson. The joint venture took place in the year 2001 with the collaboration
of the Sweden as well as the Japan brand. The venture turned out to be very profitable but the
introduction of Apple in the year 2007 became their major competitor. It was researched that
until 2013, Sony Ericsson witnessed a retention rate of 24 percent. The aim to create the joint
venture was to initiate a clear aim of inventing a transparent combination of innovative brand
in terms of multimedia phones. They aimed to provide equal benefit to the world by
providing hi-tech mobiles.
It has been found that Sony Ericsson has been able to accomplish trust of the customers thus
turning out to be one of the trusted multimedia phones. The most modern mobile phones with
top music application has been created by the brand. The hi-tech applications also included
imaging, designing as well as other features. It has been found that Sony Ericsson is the only
brand that dealt with diverse market level entry. As a result, it was named as one of the best
entertainment as well as communication brand post the joint venture.

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The Success Reasons
Market Entry Opportunities: The advantage that has been accomplished by both the
companies has been the well recognition of Sony. In other words, Sony had an alternative to
enter the mobile market by signing an agreement with Ericsson. This would fetch Ericsson
more advantages as they would be able to access the new technologies as well as
communication tools. This in turn has proved to be advantageous for both the companies in
terms of competitive advantage. The well intended strategic goals of Sony Ericsson made it
successful.
Working Styles: The working culture of both the companies were bound to diverse based on
Hofstede’s culture as both the companies belonged to two different countries. In other words,
Japan dealt with collectivist culture whereas, Sweden involved an individual culture. But the
success lied in the fact that both the companies had similar negotiation qualities that involved
thoughtful as well as politeness as the common culture in both he countries. This in turn
made it easier for both the countries to have a successful run.
ST strategies initiated by Sony Ericsson: Due to increase in threats, the company required to
reinforce their standards to deal with the threats. As a result, the strategy that has been
developed by the company involved a green hearted strategy. This strategy aimed to reduce
the impact that is related to health, environment as well as phones. The company turned out
to be very conscious regarding their eco-friendly as well as re-cycling techniques in order to
decrease the bio-plastic household, initiate environmental packaging as well as recycle plastic
key pads. The impact of unemployment reduced the workforce strength as well as the overall
operating costs of the company. As a result, the company initiated recycling as well as
product take back thus collecting points globally.
Unsuccessful Joint Venture
The major aspects of the successful joint venture require the companies to foresee as well as
propose to remain successful. The aspect that makes a company successful includes
communication as well as realizing opportunities that makes a company successful. The
unsuccessful joint venture takes place due to the major contributors that includes non-
awareness as well as political aspects.

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The unsuccessful companies
WALMART: The company was established in the year 1962 and was headquartered in the
USA. In the year 2015, the company possessed almost 11453 stores globally with 6290 stores
in international countries. In the year 2014, the net sales were almost $473 billion as it was
operated by the best modern price wholesale. In India, there has been almost 20 sales stores.
BHARTI Groups: The Bharti groups were established in the year 1976. This group is an
Indian based company headquartered in New Delhi. The company had almost 30,000
employees during the year between 2010 to 2014. As a result, the net profit of the company
was $16.5 billion in USD. The additional subsidiaries of the company included Bharti AXA
General Insurance, Bharti Airtel, Bharti Realty as well as Bharti Retail. The company at
present has 220 retailing stores that is operated under the name Easy day in diverse parts of
India.
Unsuccessful story of joint venture
Wal-Mart became u8nsuccessful in India due to uncertainty as well as legal restrictions that
remained at both state as well as central level. In the year 2006, the contract to carry out a
wholesale was signed. The joint venture was of 50-50 partnership under the name Bharti
Walmart Private Ltd. Both the companies proved reinforcement to the joint venture. Wal-
Mart involved a powerful global support thus getting financial support from both global as
well as national retail management. The organizational brands became popular to provide
retail information as well as just-in-time inventory management. The Bharti enterprise
involved a familiarity table with all types of culture, Indian economy as well as labour.
Wal-Mart also withdrew their entire entity from western European countries due to large
losses. On the other hand, Wal-Mart in India did not aim to o alone with challenges as well as
uncertainties.
The unsuccessful reasons
Corruption and Politics: The legal aspects that are followed in India are mostly uncertain as
well as indistinct. India witnessed a slow flow in terms of FDI due to implementation of
delays, corruption as well as grafts. The country witnessed bribes that are taken as well as
given to accomplish multi-brand retailing.

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Sourcing non-requirement laws: The local firms provided almost 30 percent source to the
Indian FDI of retailing sector. The companies followed a critical stumbling block that was
named scott price. This did not involved the capacity to provide space to a large scale
requirement for retail. China provides 80 percent of commodities to China which are dumped
in India.
Corruption and Impropriety Allegation by Wal-Mart: It was found that the company carried
out corrupted practices in Brazil, Mexico, India as well as China. India was marked to have
the highest corruption index globally after the global review of Wal-Mart was carried out by
the US Foreign Corrupt Practices Act.
Reasons of Bharti Enterprise: The company had to quit the joint business venture in spite of
aiming to make their individual formats of involving business. The company already
possessed a strong foothold in the business with its Easy day stores. The low growth in the
modern wholesale stores made the company disappointed. The company witnessed a loss of
20 units in the wholesale stores. The total loss was almost Rs. 372 crores in the year 2012. As
a result, the company witnessed financial crisis after purchasing the telecom management.
Recommendations
Understanding: In order to initiate a successful venture, it is imperative for both the
companies to initiate a proper comprehension. The major thing that is required to involve in
understanding is honesty as well as integrity. In order to bring about a successful venture, it is
imperative to establish short as well as long term strategies that will initiate positive business
results. The partnership owners are required to go through the countries culture as well as
regulations from the local residents.
A proper relationship and culture: It is imperative to have a proper working relationship in
order to become successful. The unsuccessful joint venture of Bharti and Wal-Mart reflects
on the fact that corruption and politics played a major role.
Development of a Stable Strategy: The joint venture of Bharti and Wal-Mart became
unsuccessful as they did not follow a proper strategy as well as struct rules and regulations.
This led to financial loss for both the companies thus creating disappointment in the company
development. It is recommended to initiate well advanced R&D as well as good production
facilities. This will lead towards the improvement in technology. This will also increase the

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availability of local commodities as well as increase the prospect to take a proper decision
with standard law as well as regulations. The global supply chain operations would also be
supported thus influencing globalization in order to lead to a successful joint venture.
Conclusion
It could be concluded that it is required to make sure about certain requirements to present a
successful joint venture. It is decisive to operate the ventures at the multinational level with a
wide-ranging human capital. The unsuccessful joint venture takes place if it is not guided in
the proper way. A successful venture takes place when the companies are able to overlook the
negative falls. This avoids the suffer of a company during the formation of ventures. This
initiates accomplishment of more competitive advantage.