In 1980, SRA was a small and autonomous subsidiary of Ericsson whose president was Ake Lundqvist. Ericsson was one of the biggest public telecommunications company at that time when Bjorn Lundvall was the CEO. The text focuses on the entry of Ericsson in the mobile telephone market. Indeed, it raises several problems, and the major one can be the role played by the centre and the peripheral divisions. How to drive innovation in such a case? How to deal with risk-taking? How to manage increasing tensions and cultural conflicts between divisions? One can answer these strategic issues through the provided questions. First of all, we will identify the statement of Ericsson's CEO about the development of his own business and about the development of SRA's business. Then, we will focus on the future of the potential market for mobile telephones. In 1980, what was the opinion of Ericsson's CEO about both his company and about SRA's vision? Finally, we will highlight the capabilities and the competences of Ericsson and of SRA.
[...] We may thus conclude that the business development of Ericsson is based on its core business (switching technology) whereas the business development of SRA is based on intuition. What expectations did they have from the future, of the potential market for mobile telephony? A company's environment always influences its choices. It must be ready to face any situation. This uncertainty does help companies predict exactly where technologies, especially digital technologies, are headed, with too much clarity. This may be termed the pace of change. [...]
[...] The role of renewing of the top management was played by the future CEO of Ericsson, Lars Ramqvist, who had a different perception of mobile technology, probably because he was from a different background. He proposed new ways of doing things and was the first person at Ericsson to recognize the admissibility of the potential development of the mobile technology. To conclude, one can say that the strategy lenses refer to an efficient balance between each of these three views (design, experience and ideas). It involves all structures evolving around the core entity. In deciding the strategy development, top management should manage [...]
[...] The different opinions on the mobile telephony business had raised tension between SRA and Ericsson. The real potential of mobile telephony became more accepted at Ericsson when it became a profitable market. However, the tensions between SRA and the Public Telecommunications division abated only during the 1990s. The mobile phone business was only then recognized as a legitimate part of Ericsson's core businesses. In 1986 and in 1993, the sales revenues of the mobile phone business overwhelmed the sales revenues of the Public Telecommunications division. [...]
[...] Thus, SRA's business development is not based on strategies but on observations and intuitions (e.g. entering a market without capabilities, or trying hard to convince and influence people). SRA has an aggressive and ambitious way of doing business. The business development strategy of SRA is to be the first player in the mobile telephony market. However, they have little or no knowledge in this area. To sum up, one may say that they rely on intuition to create their axis of business development. [...]
[...] They invested a lot of resources in developing the Ericsson Information Systems (EIS) division, instead of pursuing the idea of SRA, and developing mobile phone systems. Nevertheless, they did what the powerful division wanted and what the surveys and consultancies were advising. Experience The experience lens views strategy development, first of all, as the outcome of individual and collective experiences, and secondly as the cultural influences of the taken-for-granted assumptions. Ericsson was undergoing the historical influence of the switching technology competencies. [...]
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