PT Ericsson Indonesia mobile phone business plan for year 1999-2000
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Institusion
Sekolah Tinggi Manajemen Ipmi
Author
Utama, Philip M
Hermono, Hermono
Wiguna, Yosafat A.
Kurniadi, Wibisono
Sharif, Ade S.B.
Hermono, Hermono
Wiguna, Yosafat A.
Kurniadi, Wibisono
Sharif, Ade S.B.
Subject
H Social Sciences (General)
Datestamp
2022-09-29 08:36:15
Abstract :
Ericsson is a global Swedish company with a very strong development in mobile phones and the leading supplier in digital mobile phones. 1997 worldwide net sales were $20,968 millions and total expenses for R&D accounted to $2,614 millions, or 12% of net sales. Ericsson entered the Indonesian market in 1995 with GSM 900 system and became the market leader in the industry with a market share of 43% in 1997. The market growth has been on average of 60% per year since 1986 and Ericsson was expecting to keep its position as market leader. Unfortunately, the Indonesian economic turmoil has made all the expectation gone away. During the first six months of 1998, rupiah has been experiencing huge depreciation against US dollar, interest rate has been going very high, inflation rate has achieved about 50% and GDP was falling down. This macroeconomic condition has caused the mobile phone market in Indonesia shrink significantly. Ericsson, as the market leader, has suffered most since it was losing its market. This unfavorable condition was worsened by the Jakarta riot, which happened in mid may, which destroyed the distribution network of Ericsson. But, despite the unfavorable macroeconomic condition, Nokia, is launching new products: Nokia 6110 and Nokia 5110. With its aggressive sales and marketing actions, Nokia has taken over the market leadership position from Ericsson. Facing this situation, Ericsson should re-formulate its business strategy to regain its leading position in the industry.
Ericsson is a global Swedish company with a very strong development in mobile phones and the leading supplier in digital mobile phones. 1997 worldwide net sales were $20,968 millions and total expenses for R&D accounted to $2,614 millions, or 12% of net sales. Ericsson entered the Indonesian market in 1995 with GSM 900 system and became the market leader in the industry with a market share of 43% in 1997. The market growth has been on average of 60% per year since 1986 and Ericsson was expecting to keep its position as market leader. Unfortunately, the Indonesian economic turmoil has made all the expectation gone away. During the first six months of 1998, rupiah has been experiencing huge depreciation against US dollar, interest rate has been going very high, inflation rate has achieved about 50% and GDP was falling down. This macroeconomic condition has caused the mobile phone market in Indonesia shrink significantly. Ericsson, as the market leader, has suffered most since it was losing its market. This unfavorable condition was worsened by the Jakarta riot, which happened in mid may, which destroyed the distribution network of Ericsson. But, despite the unfavorable macroeconomic condition, Nokia, is launching new products: Nokia 6110 and Nokia 5110. With its aggressive sales and marketing actions, Nokia has taken over the market leadership position from Ericsson. Facing this situation, Ericsson should re-formulate its business strategy to regain its leading position in the industry.
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