Best-in-France Case Study 10th January 2005

Résumé du document

Ericsson is an interesting company for the Best-in-France project, at least for the following reasons: It has a long history of international business around the world, and the Swedes are especially successful in adapting to cultures and developing business relationships abroad. The company faces difficulties in France, for several reasons that we will discuss in the course of the presentation. Despite these problems France remains a business priority for Ericsson. We will analyze these facts with the results of three interviews conducted in Paris, presenting the viewpoints of: A corporate Business Manager responsible for France, a corporate Human Resources expert located in France and responsible for top executive programs, and a French top executive of the French subsidiary.

Extraits

[...] Ericsson France has shrunk over time No R&D or manufacturing done anymore in France Factory in Longuenesse sold to Solectron in January 2000 R&D workforce taken over by Teleca in 2002 (188 employees) 580 people made redundant over the four last years Ericsson France's customers Main customers: French mobile operators (Orange, SFR, Bouygues Telecom) 75 to 80% of sales Wireline operators (France Telecom, LDCom, other ) Regional administrations (Public wireless networks, ) Distributors (Indirect sales channel to private companies) What are customer's expectations? End-to-end solutions with good service at lowest price Importance of presence in France Major customers (e.g. [...]

[...] Both parties have had to adapt somewhat to the other's style. Adaptation to France Adaptation to the French market Adapt to lower margins on equipment by increasing share of services in sales: Management by service sales objectives Service results of Ericsson France turned out to be very good French service manager has been appointed corporate manager to leverage on his expertise Adaptation to relationship barriers to entry: Acquisition of Audilog in 2004 Audilog is already well established in integration services with French operators Key Costs What are the key costs of operating in France that are more or less than operating in other locations? [...]

[...] Ericsson is a major Telecom vendor Originally a manufacturing business for communications equipment founded in Stockholm in 1876 Today an international market leader in the development and supply of end-to-end solutions to network operators for mobile and fixed line communications Offers a range of mobile handsets through the Sony Ericsson Mobile Communications joint venture Offers a variety of technology, equipment and services for private enterprise networks as well as for special applications such as military radars. Ericsson's subsidiary in France Ericsson came to France in 1911 (factory in Colombes) Created a joint-venture with Matra (M.E.T) in 1987 Created Ericsson France (100% owned) in 1998 Business: Telecommunication equipment & services 2004 Ericsson key figures worldwide for 9 months: Sales of 10.3 billion Euros increase from 2003 Net income of 1.4 billion Euros increase from Ericsson France key figures Relatively small sales of 81 million Euros . [...]

[...] Key Benefits What are the key benefits of being in France? Location benefits Quality of life in France is very well perceived in Sweden Swedish support to the French subsidiary is often enthusiastic Market Potential Proximity to major customers like Orange is a must French market is growing, and the telecommunication industry is recovering after four difficult years France represents a huge potential for Ericsson: to date no major contracts have been signed in France Essential Advice Advice to other companies in the telecommunication industry sector about France as a location? [...]

[...] Nortel has chosen France as the Development center for Europe Ericsson France could also create an R&D center close to a French customer to gain a major European infrastructure contract. [...]