Marketing Perspective

Strategic Marketing Plan: A case study of Ericsson AB

Sunday Orjingene
School of Management Online Programmes,
University of Liverpool,
Liverpool, United Kingdom.
E-mail: sunday.orjingene@online.liverpool.ac.uk

Abstract: Ericsson AB plays a vital role in shaping the way people communicate through
innovation, and champions the next generation technologies for more efficient and better
quality deliveries. This strategic marketing plan report provides a critical market
perspective analysis on Ericsson’s AB situation analysis, marketing strategy, financials,
and controls. It further presents concise and integrated information with insights about
the organization’s marketing objectives of its products and services of “IP Networks and
Transports” towards the Network Society. These products are routing and switching
products that are simple, smart and scalable that allow mobile operators to handle
broadband growth and ensure a smooth evolution to all-IP in the Information and
Communication Technology (ICT) industry.
The paper presents an analysis of the telecoms market that described the rapid evolution
of the Internet during the recent years that has shaken the foundations of the industry, and
catalyzed social and economic change. Further highlights were given in the areas of
market summary that captured evolutionary transitioning shift from just a product-
dominant focus to a service-dominant focus with focus on market analysis, trends, and
needs. SWOT Analysis of the company was also highlighted to show the strengths,
weakness, opportunities and threats. Market competition from its competitors such as
Huawei, ZTE, and Cisco was also discussed. Furthermore, product offerings in the area
of IP Networks and Transport with key successes and critical issues were highlighted as
well.
While target markets in terms of Ericsson’s business were discussed with positioning,
strategies, marketing mix (4 Ps) and marketing research; analysis of the organization’s
financials with insights on the financial results of first quarter 2015 showing profit
margins, net sales and operating income were highlighted. Finally, a control mechanism
that need to be enforced by the organization to remain sustainable competitive,
recommendation, and implementation strategy scheduled for over 2 years were presented.

Keywords: Strategy; market plan; technological change; competitive; network; financial;

industry; Ericsson.

Biographical notes: Sunday Orjingene, is an astute, experienced, enthusiastic and

innovative ICT expert in the areas of IP technologies. He has a proven track records
integrated with leadership skills in driving, growing and delivering organizational core
values while exceeding customer's expectations. He has an MBA from the University of
Liverpool online programmes, UK, and a BEng (Hons) in Computer Engineering from
the University of Maiduguri, Nigeria. His vast background in the ICT industry possess
him an excellent technical know-how to provide technical solutions and strategic
management towards operations and service delivery. Orjingene has over 6 years of

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industrial work experience with proficient skills in Networking and Data Management
across multi-vendor products. Overall, Orjingene is result driven.

1 Introduction

Following the turbulent, complexity and uncertainties of today’s ever changing business
dynamics, organizations are forced to operate in a business climate of breakneck speed and
continuous evolution (Daft, 2013; Nandakumar, et al., 2010). Ericsson AB possesses good
information about the telecommunications market with a hatful knowledge and background
about the common attributes of customer requirements. This solid market position has enabled it
handles over forty (40) percent of the world’s mobile traffic flows through its provided network
products and services. The rapid evolution of the Internet during the recent years has shaken the
foundations of industries, and catalyzed social and economic change (Blau and Rooth, 1998). As
a leading provider for telecoms operators, government, media industry, and transport with
telecommunication equipment, Ericsson AB is using its IP Network and Transport infrastructures
to transform the third-generation network. Currently the use of mobile devices and digital
systems are on the rise, hence, more data accessibility is required while leveraging on IP
products and services. Amongst the products it offers in the area of IP Network and Transport
include routing and switching products, optical and microwave networks, and packet core which
ensure a smooth evolution to an all-IP network (Ericsson, 2015).
Kotler & Keller (2012) highlighted how understanding the core marketing concepts in relation to
consumers’ needs, wants and demands can help organizations target the markets through
positioning and segmentation. This strategic approach uniquely enables Ericsson to offer true
end-to-end networks solution to its customers based on the integrated mobile and fixed
products/solutions of the IP Networks and Transport. That said and in conformity with Vargo &
Lusch (2008), it is transitioning into the evolutionary shift from just a product-dominant focus to
a service-dominant focus. This aspect would help draw out the strategic considerations to better
understand the market perspective towards a successful plan.

2 Market Analysis
As innovation, collaboration and new business models unlock value of networks, Ericsson AB is
currently leveraging on the following market trends to offer its IP Network and Transport
products and solutions.
• Increase in subscriber base,
• Smartphone uptake acceleration,
• Data traffic growth, and
• Increase in mobile broadband adoption
However, with the new era of IP-based communications, the public IP network and transport
infrastructure will transform the communications industry and enable the convergence of a
variety of services to an IPcentric model. It will require powerful and sophisticated "core routers"
for IP backbones and a new class of IP aggregation routers for consolidating subscribers and the
delivery of services (Blau and Rooth, 1998).

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Ericsson's total network equipment market will show a compound annual growth rate (CAGR) of
3-5% from 2012 to 2015. While its fundamental equipment market segments in the area of radio,
IP Networks and transport, core is expected to be 4-6% CAGR. The market for IP Network and
Transport alone is projected at CAGR of 6-8%. "This development will naturally imply a future
business mix for Ericsson with more recurring software and services revenues. However,
hardware will always be part of the mix and a key differentiator for Ericsson," said Hans
Vestberg, Ericsson's CEO (Ericsson, 2012).

2.1 Market Needs

To both end-users (consumers) or operators value maximization has become the order of the day
(Jensen, Michael C., 2001). The telecommunication and networking market is dominated by
vendors and operators whose aim is to create values to end-users while making profits. The
advent of smart phones clearly eroded the separation between mobile and internet, using radio
signal as against the traditional cable or Wifi system. Hence, this is an opportunity Ericsson can
leverage on its IP Network and Transport product through converged network solution to
holistically solve the consumer requirements with respect to value satisfaction and co-creation.
In view of the above mentioned requirements, Ericsson through its product area will help solve
the following:
• Addresses the market for high-speed fixed access and point-of-presence (PoP)
aggregation.
• The inherent scalability of the smart infrastructure architecture to addresses the
requirement for long-term growth.
• Deliver advanced IP services

2.2 Market Trends

With the conceptualization of the network society, where 20 billion devices are projected to be
connected by year 2020 (Ericsson, 2015), the trend remains device digitization. This means that
everything (phones, laptops, TV, microwave, refrigerator, in fact anything machine) is going IP
with the intention to interconnect with each other on an IP platform. Hence, for the above trend
to be realistic, a scalable, resilient, efficient, and robust network system is needed to transport the
required data and capacity operators and end users. This concept explains how important the IP
Network and Transport product area and services offerings are.
Furthermore, with the widespread adoption of mobile communications for voice and text
messaging, a decrease in the impulse to grow more voice subscribers is becoming visible.
However, in the upcoming years, growth will continue with more than two billion new mobile
voice subscriptions. These trends will mainly come from low usage customers in developing
areas or users with multiple subscriptions. That said the main growth drivers for operators and
equipment suppliers globally will remain the "Mobile broadband". This trend will in turn
influence consumer’s behavior prompting innovation in a number of areas and driving the need
for ever greater bandwidth and data speeds. Below is a graphic representation of market
projections and trends come 2020 with the comparison of before network architecture and the
now transformation concept.

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Thus in summary, the major market trend for Ericsson according to Ericsson (2015) source
would be:
• On a weekly basis, more people will watch streamed on-demand video than broadcast TV
• Half of mobile data traffic would be generated by video
• LTE subscriptions growth will exceed 80 percent, exceeding 800 million
• World mobile broadband coverage will be above 70 percent

2.3 SWOT Analysis

According to Grundy (2006) SWOT analysis helps organizations to segment markets to examine
the variations within the competitive landscape. The following SWOT analysis captures the key
strengths and weaknesses within the organization, and describes the opportunities and threats
facing Ericsson AB.
Strengths
• In-depth industry experience and insight in information and communication technology
(ICT).
• Telecoms market share and footprint for over 120 years
• Strong management and innovative culture
• Economies of scale (Daft, 2013)
• Clearly defined service descriptions and service level agreement (SLA) with customers
• Financial and Assets leverage
• Easy access to customer information (NETQB and Stats)
• Well defined delivery methodology and guidelines
• Understanding of telecoms hardware products & feature roadmaps
• Competent resources for differentiated service deliveries
• Creative and functional product designs.
• Prime driver of network society and in vogue technologies such as 3G, 4G LTE and 5G
Weaknesses
• High delivery cost structure
• Stringent processes affecting lead-time
• Challenges with customer from lack of proper projects planning and deliveries
• Lead times to deliver sometimes take too long due to resource availability
• Poor Add-On Sales
Opportunities
• Participation within a growing industry – telecoms.
• The ability to leverage other industry participants marketing efforts to help grow the
general market.
• Acquisition synergies
• New technologies such as LTE (4G), 5G, and the cloud
• Emerging markets
• Core and transmission access network optimization opportunities
• Strategic End-to-End services
• Audit opportunities for IP core networks and fibre optic networks

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• Remote design and tuning deliveries

• Mobile broadband
• All-IP and convergence
• TV and Multimedia
Threats
• Potential competition from already established market participants.
• Substitute products from new players in the market – CISCO, IBM, NS etc. (Porter, M.E.
(2008)
• Price slash pressure & strong competition from Huawei and ZTE
• Reliance on ARPs because of reduced cost instead of internal competence
• Talent capability due to internal structural changes
• Economic instability, market turbulence, complexity, and uncertainties (Daft, 2013)
• Political risks

2.4 Competition

While Ericsson might be doing well based on its market share and footprints, it is not without
threats from competitors. Portfier (2008) highlighted threats of new market entrants and products
substitution as one of the five forces that shape industry competition. Huawei remains it major
competitor in the mobile systems, Cisco for fixed networks and Alcatel-Lucent in the area of
services. Ericsson’s global market share was 33 percent when Huawei began to emerge as a
competitor, however, today it is 43 percent. This means that even though Huawei has won
business, Ericsson has been become stronger. Thus, while Ericsson is constantly innovating and
investing in its research and development (R&D) domain, I think it has got more work to do
given the rapid market dynamics, turbulence, uncertainties, and complexity (Daft, 2013).
More so, given the evolution of the marketing mix with respect to marketing in society, creating
brand loyalty and co-creating long-term value relationship becomes pertinent for it to remain
sustainable competitive amidst its competitors. For this reason, I would advise Ericsson to
strongly embark or continue in cutting-edge technological expertise and technological
leadership. The reason for this approach is because; only product and services differentiation can
undeniably carve you a niche from other enterprises.
Finally, looking at the future competition between Ericsson and Huawei for instance, I would
suggest Ericsson to begin strategizing on issues raised by the internet world, service-based deals,
soft wares, and increased network transformation.

2.5 Product Offering

Ericsson’s IP Networks and Transport offering according to its external website
(www.ericsson.com) include:

IP Edge – high end users demanding systems with the functions that deliver a high QoE
for services.

Virtual Router – a high performance system that offers service and infrastructure
deployment agility to operators

Evolved Packet Core – a high end infrastructure that provides the capacity, functionality
and superior performance needed for next-generation broadband

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Multiservice Switches – this is a product area that through network consolidation, offers
unprecedented revenue and profit potential for service providers. It also reduces
networking costs for enterprises while supporting simultaneously, several networking
technologies such as Frame Relay, ATM, IP and voice on a unified platform.

IP Metro and Backhaul – cost effective routers with high delivering capacity.

Microwave Networks – this is an Ericsson's Microwave & Packet Aggregation offering
that provide lowest cost of ownership for new mobile network rollouts, mobile networks
evolution, or fixed broadband over microwave.

Optical Transport – this is another product area that provides operator needs (now and in
the future) with cost-effective, scalable and flexible solutions. And last but not the least,

Fixed Access – which Ericsson partners with Calix a US-based carrier-grade system, for
the purpose of built fixed access solutions.

2.6 Keys to Success

The key success of Ericsson’s business today is its business strategy and investment in its R&D
program to adequately provide and meet the market demands. This strategy has kept the
company sustainable for over 120 years. However, with the recent market turbulence and
technology change, I would recommend it revisit the holistic marketing concept as discussed in
Kotler & Keller (2012). More so, since market positioning and target is critical for segmentation,
it should target to penetrate more on the emerging markets in order to competitively grow its
profitability. In addition, it should leverage on building dynamic capabilities and strategic
management as highlighted in Teece, Pisano, & Shuen, (1997).

2.7 Critical Issues

The major critical issue for Ericsson today is market competition. As telecoms and ICT market is
getting saturated with new entrants, the battle for market share is becoming more competitive.
One way forward to this challenge is to absolutely understands the market needs and
requirement, involve customers in value co-creation, and offer value satisfaction through service-
dominant logic (SDL) (Vargo, and Lusch, 2008).
Another issue is in the area of cost. Pressure of cost reduction is a critical issue in Ericsson,
because it forces it cut down its key assets (employees) through headcounts to minimize
operational cost and overheads. While headcount might be a good strategy to restructure and cut
cost, it endangers the company’s capability of competent resources. This further stretches to
customers pricing and offering cost. My recommendation would be to build technological cross
competence among its employees, so that even when headcounts are unavoidably necessary, it
can still boast of its competent resource.
Finally, the stringent and its bureaucratic processes should be re-considered; as customers are not
interested in the traditional product offer but service offerings with value satisfaction.

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3 Marketing Strategy
Ericsson's long term market strategy has always been in the direction to use innovation to
empower people, business and society (Kotler & Keller 2012) while being the prime driver in an
all-communicating world. This strategy is achievable through its global scale, technology
leadership, and services leadership. However, since its strategy is directly built on its vision of a
connected world relating to broadband, mobility and the cloud to produce the "Networked
Society", I will further suggest its market strategy be based on the following four pillars below:
• To excel in networks
• To expand in services
• To extend in support solutions
• To establish a leading position in Networked Society enablers (Ericsson, 2013).
The competitive advantage from its go-to-market approach through business units across the
regions can be leveraged upon together with the skills and expertise of its employees to drive
these strategies. The reason for this assertion is because its business units can develop value
satisfied products and solutions (Vargo and Lusch, 2008) such as the “IP Networks and
Transport” for specific business areas, while the regions build strong relationships with its
customers (Dall’Olmo Riley & De Chernatony, 2000).

3.1 Mission
Ericsson's mission is strategically positioned towards transformation. It intends to lead
transformation through mobility, so as to provide opportunity while owning the responsibility to
aid address urgent global challenges such as poverty, climate change, and human rights
(Ericsson, 2015). These strategic objectives will go a long way shaping the way people live their
life and accomplish their daily tasks. More so, as it offers "IP Networks and Transports" products
and services, this area will tremendously affect how information is shared in terms of - speed,
quality, and capacity, business transacted and human’s creativity.

3.2 Marketing Objectives

The fundamental marketing objectives of Ericsson are to maintain customer satisfaction while
increasing its market share, revenue, and profitability. According to Kotler & keller (2012, p.15)
successful marketing management includes developing marketing strategies and plans, capturing
marketing insights, connecting with customers, building strong brands, shaping the market
offerings, delivering and communicating value, and creating long-term growth. These objectives
would however require exquisite understanding of the customer’s business in terms of
requirements, operations, objectives and the challenges they confront. Thus, with its
professionals in Sales, Strategy, Marketing and Commercial Management; it can significantly
contribute to the success of the organization.
That said, the following list include Ericsson’s marketing objectives:
• To provide its esteemed customers (telecoms operators and the vertical segment) with
valuable products, services, and solutions.
• To maintain positive and strong profitability growth each quarter, in anticipation to a
greater annual financial position with increased net profit.
• To further dominate the market share by increasing its footprint and market penetration.

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• Invest more in its Research and Development (R&D) for innovative products and
solutions that will help it achieve its vision for Network Society.
• Reduce operational cost (OPEX) in order to decrease cost of sales while delivering
projects.
• To retain the number one position in providing telecommunications equipment, while
increasing the percentage of world’s mobile traffic passing through its equipment
(currently it is over 40%).
Overall, its marketing objectives remain to increase its awareness of the “Networked Society”
through state-of-the-art infrastructures such as IP Network and Transport, Application
Enablement, Cloud System, Communication Core, and others. Thereby increasing wealth
generation, meeting both shareholders and stakeholder’s expectations, and be socially
responsible (Atrill & McLaney, 2014).

3.3 Financial Objectives

Following Ericsson’s 2014 annual financial report, it showed stable sales development with solid
operating margin. Sales for the full year highlights were 228.0 (227.4) billion SEK, flat year-
over-year (YoY). More so, sales, adjusted for comparable units and currency, decreased by -2%
(Ericsson, 2014). Eight out of its ten regions showed growth with the Middle East, Western and
Central Europe and South East Asia as the main contributors. I think the aim for 2015 will be to
really strengthen its core business, and at the same time, make sure that it establishes a clear
leadership in the targeted areas. That means it will have growth in those areas, at the same time
see improved profitability.
Furthermore, it financial objectives while conducting business responsibly, are to achieve the
following:
• Maintain “Investment Grade” credit ratings;
• Increase its sales at a faster rate than the market growth. This will be possible from its
3G/4G/5G mobile systems market growth;
• Deliver best-in-class operating margin, i.e. better than the main competitors - Huawei.
Therefore, if it concentrates on its IP Networks and Transports products and solutions offerings
alongside others; the total network equipment market will show a compound annual growth rate
(CAGR) of 3-5%. The market for IP Network and Transport alone is projected at CAGR of 6-
8%. While its fundamental equipment market segments in the area of radio, IP Networks and
transport, core is expected to be 4-6% CAGR. Hence, through efficiency and scale of economy
gains, its profit margin would be increased at least by 6%. In addition, as mentioned above, more
investment should be done in the area of R&D for innovative products development. Finally, if it
improves its working capital days by reducing the number of days and being proactive to “order-
to-cash”, its cash flow would improve significantly.

3.4 Target Markets

With the aim of the Network Society to connect everything that can be connected (machine 2
machine, TV, fridge, cars, microwave, etc.), projected one billion by year 2020; Ericsson is a
driving force behind the Networked Society. However, this connection will not happen if there’s
no scalable, resilient, and enough capacity network platform and transport medium to support it.

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Thus, the criticality of marketing management concept as discussed in Kotler & keller (2012).
Ericsson should target the emerging technologies such as IP, Cloud, Virtualization, and SDN to
leverage on its “IP Networks and Transport” products for the provisioning of the Network
Society connectivity media. This strategy will boost its market and financial objectives, while
remaining sustainable competitive advantage (Nadler and Tushman 1999)
Webster (2002) and Goyat (2011) highlighted that market segmentation entail a strategic
planning embedded with market target and positioning, hence, the consideration of variables -
geographic, demographic, psychographic, and behavioral. As the developed market is in the
America and Europe, it can concentrate on its market readiness towards that region while
building the regional counterpart markets. In all, the concept of holistic marketing should not be
ignored (Kotler & keller, 2012).

3.5 Positioning

In order for Ericsson to remain the number one provider of world’s mobile telecommunication
equipment vendor, sustainable competitive market advantage is highly necessary. This further
highlight the relevance of dynamic capabilities and strategic management as discussed in Teece
et al., (1997). With its vast, skillful, and experienced employees and organizational structure, I
strongly believe it can strategically continue to carve a niche for itself with growth and brand
leadership.

3.6 Strategies

Ericsson’s strategies towards its strategic marketing plans should be market-oriented strategy to
navigate the fast-paced telecoms industry. And it must adopt an integrated communication
strategy that reinforces and complements the organization’s communication towards the shared
goals. More so, I suggest that its strategy should take into account changing global opportunities
and challenges while leveraging on its strengths and developing the right marketing strategy over
time to a blend discipline and flexibility.

3.7 Marketing Mix (4 Ps) and Research

According to Kotler & Keller (2012) the concepts of marketing mix with respect to the four Ps
(price, product, promotion, and place) are critical areas that have influenced and persuaded
organizations to establish its brand, differentiates its products and services, create long-term
business relationships with its customers and compete to remain sustainable advantage. While
these four Ps mix have evolved into other concepts such as the S.A.V.E (Solution, Access, Value
and Education), 7 Cs Compass Model, 4 Cs (Shimizu, 2014), and the evolved four Ps (people,
processes, programs, & performance) according to Kotler & Keller (2012); it is important to
reconcile it with the newer paradigms of marketing such as relationship marketing, SDL and
value co-creation (Vargo & Lusch, 2008).

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4 Financials
The financial results for Ericsson first quarter of 2015 showed a continued good growth in its
Targeted Areas - IP networks, Cloud, OSS & BSS, TV & Media and Industry & Society.
Currency movements in the quarter have impacted its sales positively, which I think is a strategic
area for the organization to emphasize on for increased growth. Sales in the quarter increased by
13% reaching SEK 53.5 (47.5) billion. Significant currency movements impacted sales
positively. Sales, adjusted for comparable units and currency decreased by –6% YoY, driven by
slower mobile broadband activity in North America.
Furthermore, with current visibility, it is anticipated that the fast pace of 4G deployments in
Mainland China will continue to grow and the North American mobile broadband business to
remain slow in the short term. Professional Services had a strong quarter as well. Gross margin
decreased YoY to 35.4% (36.5%), due to lower capacity business in North America and
continued fast pace of 4G coverage deployments in Mainland China, increased restructuring
charges and a higher share of Global Services sales. The cost and efficiency program, announced
in November 2014, is progressing according to plan. Savings of SEK 9 billion is expected, with
full effect during 2017.
Operating income was SEK 2.1 (2.6) billion excluding restructuring charges of SEK –0.6 (–0.1)
billion, hence, the operating income was flat YoY. The net currency effect contributed positively
to the operating income, despite a negative currency hedge effect of SEK –1.4 (–0.1) billion.
Cash flow from operating activities was SEK –5.9 (9.4) billion mainly due to increased working
capital. Therefore, I believe with all employees’ active contribution towards the transformation
and the Group Initiatives, Ericsson will succeed even more. The above financials are from
Ericsson's business in terms of profitability, IPR revenues, cost and efficiency program, cash
flow, and targeted areas; all culled from Ericsson (2015)

4.1 Break-Even Analysis

Break-Even Point (BEP) as defined by Atrill & McLaney (2014, p.574) is "the level of activity,
measured either in units of output or in value of sales revenue, at which the sales revenue exactly
covers all of the costs, both fixed and variable." Ericsson always implements head count because
of its existence as a project based organization and also to mitigate overall OPEX costs. It
undertakes this restructuring program from time to time with focus to lowering BEP and
accelerating time-to-market. It is expected that a total of SEK 9 billion would be saved by 2017
if it completes its restructuring program (Ericsson, 2015).
More so, as regard Ericsson’s BEP on specific products and services, its key portfolio areas in
GSM/WCDMA/LTE services used for Circuit Switch (CS) and Packet Switch (PS) would be
discussed in the graph below. The graph showed different time frames – T1, T2, T3, and T4 that
depicts decision time to invest, improvement process time, break-even point, and return of
investment respectively. The BEP would help managers in Ericsson align future spending on the
above listed portfolio areas versus production with respect to the success or failure of the
organization. Normally, a higher margin of safety (MS) is advisable above BEP. Thus, if the
graph is interpreted with respect to marginal analysis and decision making, you would agree me
with that BEP can clearly show the business areas where fixed and variable costs can be avoided
in order to focus on growth and mitigate loss (Atrill & McLaney, 2014).

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Figure1: Break-Even Analysis

4.2 Sales Forecast and Expenses Forecast (projected over 2 years)

Telecoms voice and messaging revenues are in terminal decline due to the activities of the Over
the Top (OTT) players such as WhatsApp, Skype, Facebook, Facetime, etc. in the evolution of
increased data usage through content deliveries via its platforms. Big Data, the Internet of Things
(IoT) and Software Defined Networking (SDN) provide new revenue opportunities for telecoms
vendors and industry at large. Ericsson’s solutions in the above mentioned areas will boost its
sales as projected for the “Network Society” and network of things. Meanwhile, to visualize the
sales forecast and expenditure following next 2 years, the below representation and table would
be used for highlights:

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Figure2: Sales forecast, (source: 4-traders, 2015)

Figure3: Expenditure forecast, (source: 4-traders, 2015)

It indicates that while sales projected over next two years will grow from 9.5% to 12%, capital
expenditures will decrease from 6,476 MSEK to 6,083 MSEK. This could be mainly because of
reduced cost of chips production and converged networks and solutions.

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5 Controls
Irrespective of how well an organization is doing, it has to ensure proper measures and controls
in order to checkmate its success and mitigate failures or troughs. It is not enough to claim
market share or profitability without strategically controlling its plans and market approach to
remain sustainable and competitive advantage. Barney (1995) further suggested that a complete
analysis of a firm's internal strengths and weaknesses following SWOT analysis framework is
important to evaluate the sources of competitive advantage. In light of this premise, it is
important Ericsson continue to build its customer business relationships targeting long-term
approach, establish more brand loyalty, enable and support its customers to co-create value
through its provided services, products and solutions.
Therefore, I would suggest the following areas be controlled at all times to ensure Ericsson
maintains and achieve sustainable competitive advantage:
• Revenue Generation with respect to profitability: quarterly and annual.
• Expenditures (especially OPEX and CAPEX): monthly, quarterly and annual.
• Customer value satisfaction.
• R&D investment for innovative products and solutions.
• New product development areas.
• Employees’ retention.
• Costing control and pricing.

5.1 Implementation (scheduled over 2 years)

Ericsson's implementation strategy scheduled over 2 years is to leverage on its present and large
business while emerging and evolving into the future. First, it will excel in its core businesses
(Radio, Core & Transmission and Telecom Services), establish leadership in targeted areas (IP
Networks, Cloud, OSS & BSS, TV & Media, Industry & Society), and finally expand its
business in new areas. However, to manage this transition, Ericsson will remain true to its core
values of professionalism, respect and perseverance. This strategy will enable it form the
foundation for the Networked Society amidst the convergence of telecom, IT and media market
transformation.
That said stringent evolutionary and developmental time plans should be adhered to in order not
to slide away from the strategic objectives and plans. This approach will involve key marketing
programs such as time management to save budget; adequate planning and controls;
effectiveness in go to market, and ethical and Corporate Social Responsibility (CSR) through
good governance to ensure the shared goals are achieved. Since Ericsson is a big organization, I
would not be able to capture and depict the mile stones for the scheduled 2 years, however, with
the above recommendations; the strategic marketing plans would be achieved.

5.2 Market Organization

Ericsson's marketing organization is structured in a way to facilitate innovation by leveraging on
globalism. It practices both centralized and decentralized decision-making process (Daft, 2013).
The former is seen from its global directives with a shared vision based on a TOP-DOWN
approach from the board of directors to employees. While the later empowers staff to take

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ownership of ideas. Therefore, Ericsson's market organizational culture is tailored for utilizing
global capabilities. This is further demonstrated by its cross-regional sub-networks that facilitate
information sharing.
In summary, the below picture depicts Ericsson’s organizational structure towards the customer,
with strategically positions of its business/market units in support of the regions for “Go to
Market” drive. The role of the Group Management Team towards organizational market is to:
• Create strategies and policies, while establishing long-term vision and Group objectives,
• Provide the essentialities to maximize the Group’s business, and finally
• To realize global synergies, and secure operational excellence.

Figure4: Organizational Structure, (source: Ericsson, 2015)

5.3 Contingency Planning

There are no investments plans or marketing strategy without risks. As Atrill & McLaney (2014,
p. 19) mentioned “Things may not turn out as planned and this risk should be carefully
considered when making financial decisions.” It is pertinent to consider all challenges, risks, and
work-case scenarios in order to better strategize the plans, execution and achievements. Below
sub-paragraphs will highlight the difficulties and risks as well as the worst-case scenario in case
the strategies planned are not achieved.

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 Marketing Perspective

5.3.1 Difficulties and risks

“The Five Competitive Forces That Shape Strategy” journal of Porter (2008) stressed on the
competitive forces - customers, suppliers, potential entrants, and substitute products that could
go beyond established industry rivals for profits competition. Ericsson’s strategic marketing
project could face difficulties from the following forces as highlighted in Porter (2008):
• Rivalry among existing competitors;
• Threat of New Entrants;
• Bargaining Power of Suppliers;
• Bargaining Power of Buyers; and
• Threat of Substitute Products or Services.
The risks to be considered are influence from consumers buying decisions (Kotler & Keller,
2012). This risk can affect planned products/services/solutions roll out, hence affect target
results. In addition, the emerging era of customer advocacy and growth of consumers power as
discussed in Urban (2004) are risks as well. This assertion is because new technologies such as
the internet and social media have tremendous advantage and influence both on the organization
and consumers. Furthermore, risks such as Maguire, availability of competent and capable
resources to deploy targeted areas services and solutions, and cash availability for project
sponsorship are critical to be considered.

6 Conclusion

The worst-case scenario risks from the above challenges are that should incase Ericsson is not
able to achieve its strategy of leading the industry transformation through mobility; its aim to
stay relevant in the future for Networked Society strategy will not be achieved. More so, it might
not be able to generate further shareholders and customer value, if it fails to successfully
implement its strategy. This failure would be more visible when it does not sale its products,
services and solutions from the targeted areas as mentioned above. Finally, I strongly
recommend it start an early market perspective plans with market projections and feasibility
studies, while strategically leveraging on its capabilities and opportunities from SWOT analysis.

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 Marketing Perspective

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