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Unit 43 Pass 2
a) Identify and describe the type of market in which Sony Ericsson operates
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c) Outline the impact of government regulation and intervention
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Sony Ericsson, a 50:50 joint venture of Sony Corporation and Telefonaktiebolaget LM
Ericsson, was established in October 2001
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Sony Ericsson's press room
section contains recent press releases, the press release archive and the photo library with images of
mobile phones and accessories
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The market in which Sony Ericsson operates is regarding electronics, mainly mobile phones
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In addition there
is mobile broadband, and campaigns like cybershot, fanwalk and world view
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In order to please their customers, Sony Ericsson needs to find out
which device would suite them best
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Oligopoly is when a market has only a few leading businesses existing and are each independent in
their performances
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This can lead to an avoidance of price competition because
there are limited rivals to have it
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Key features of businesses within an oligopoly market would include them producing branded
products, the consideration of rival organisations making investment and pricing decisions and how
they will react, which often leads to the uncertainty of assorted markets, and game theories, where
the decision maker of the company takes into account the investigation of other decision makers
within the business, in order to find out the best prices to provide goods and services and to discover

the behaviour of other businesses that are finding difficulty with profits
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The main suppliers within this market are Motorola, LG, Nokia and of course Sony Ericsson, and they
are all in oligopoly
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One would be that
there are only a few organisations selling their products
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Since every generation wish to use the same devices
within a phone, such as MSN, video messaging, camera, Bluetooth, etc, each organisation is going to
supply the same technology to their phones as Sony Ericsson, which is why their products are so
similar
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Which is why they each have a diverse unique selling point, which enables their
products to be sold differently
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The second element concerns significant barrier entries for other organisations to enter the oligopoly
market
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An
example of a barrier would be popularity, where people would have heard of Sony Ericsson while
newer organisations will have trouble gaining recognition and a difficulty to start – up
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Any new rivals
entering the market will not be so easily accepted as SE because Sony Ericsson use their advertising
to separate their products from everyone else’s, making them more unique, and so, cannot be
replaced by any new organisational goods
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Customers would already know about Sony Ericsson before they even made their own
market
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This will be useful as people will already consider purchasing
their phones from Sony Ericsson before knowing more about the product
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The fourth element is the economies of scale, which involves the cost of production compared to the
organisations performances
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No matter what size, a firm increasing its scale of operation can use economy of scale
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Sony
Ericsson use advertising to help gain stronger branding , which attracts patents and gain high profit
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) Outline how the business responds to consumer demand [including its use of pricing and
non-pricing strategies]
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SE are always trying to
establish where their place is in the market by ensuring that the quality of their phone products are
high so that they can uphold their unique selling point
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But either way, they need make
certain that their goods and prices are both better than their competitors, and if they are they can
gain higher demand from more customers
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It is clear that it
would be more beneficial to Sony Ericsson to respond because not only will there be higher sales and
greater customer loyalty, but they could also come back to SE in the future and purchase more from
now on, leaving less business for competitors
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First they would have to discover what it is
that staff would have to offer such as combined packages like headphones being bought with a
phone, staff providing more information, or speakers being cut down in price
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In order to respond to customers, SE would need to provide better
prices and offers for them, such as reduced costs, offer packages and better contracts
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Pricing strategies will give customers a
reason to purchase, depending on what they prefer
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Examples of pricing strategies would include penetration pricing, where the business can attempt to
gain market share by giving a new product a low price, which will attract more customers for the
good price and leading them to demand for more
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Skimming the market is a popular strategy, where Sony can give one of
their newest phones an initially high price so that quick income can be made
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There are also non – pricing strategies Sony Ericsson could perform to expand demand
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Another non – pricing strategy is
promotional campaigns where methods are performed to increase people’s awareness of any new
products or performances initialising
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The increasing amount of demand leads Sony
Ericsson to have choice performances affecting the worth of goods which many people and

businesses are interested in
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The duration of the company can last if
the performance is well anticipated by judging the size of other sales on previous dates
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c
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Now I will be discussing the impact of government regulation and intervention, which can leave a
great impact upon markets such as Sony Ericsson’s
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SE is
especially involved in this because they are positive about fair competition
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The government causes
regulations and interventions in markets such as buffer stocks, income guarantee schemes and
income stabilisation schemes
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The impact this leaves on Sony Ericsson can
result in higher opposition as they are encouraged to free and fair competition so that monopoly and
cartel are prevented, so S
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Another impact
would be providing consumer rights and protection, by providing a series of acts (e
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consumer
protection act, consumer credit act) to safe guard customers against certain problems which
shouldn’t be allowed such as over – charging prices
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An added
impact would be employment protection, where the staff themselves are given rights of their own
acts to avoid exploitation from employers, so the manager will have to be aware of how to keep staff
satisfied and working by ensuring acts such as the race relations act, sex discrimination act and the
disability discrimination act
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If accidents occur within Sony Ericsson, their business could be harmed
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A reason for oligopoly would be barriers
to entry, which are those reasons that stop other organisations from taking control of an
organisation
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Demand can be easily settled with customers through
changes of prices and offers, and pricing strategies affect products in a positive way as anything that
deduct a phone’s pricing can result in higher sales
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