Ericsson announces multiple strategical organizational and structural changes to drive growth and profitability. The Swedish Communication technology biggie reports to have made five business units and one dedicated customer group for Industry & Society to seamless the emphasis on core business and tap potential growth.
In the Core business domain, the company will fork into two network business units – Business Unit Network Products and Business Unit Networks Services focusing on incremental improvements in networks business performance, capturing opportunities in 4G and extending leadership into 5G.
The two business units are known to leverage the combined strength in products and services with BU Networks Services focusing on Managed Services, Network Roll-Out and Customer Support and BU Network Products combining Radio and Transport.
Tapping the targeted growth areas, the company will have two new IT & Cloud business units – Business Unit IT & Cloud Products and Business Unit IT & Cloud Services consolidated in a new Business Unit Media to mull on the profitable growth as a natural next step after a period of investment. This will involve a focus on software sales and recurring business to complement the already strong business in Consulting & Systems Integration and the Broadcast Services business. For the rapidly growing Industry & Society business a separate Customer Group will be introduced to improve scaling and time to market.
Lastly, Cost & efficiency – The company to primarily focus on cost-effectiveness and efficiency, including delivering on its SEK 9 b. net savings efficiency program during 2017. The new organization is designed to enhance efficiencies and cost structures through more end-to-end accountability and less duplication across portfolios and capabilities.
Commenting on the strategic development, Hans Vestberg, President and CEO, Ericsson said, “We are not satisfied with our overall growth and profitability development over past years. We are today announcing further actions to accelerate strategy execution and to drive efficiency and growth across the company even harder. We will create a leaner, more fit for purpose organization, to cater for the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things, and Cloud drive the next phase of industry development, the time is just right to make these changes.”
“The changes we are making will make it easier for our customers to do business with us, whether they are an operator, a media company or from another industry. The changes will also take into account the different characteristics, needs, and pace of each of the businesses we are in. I am convinced this will make us even more competitive and enable us to grow both our company and our earnings”, said Vestberg.
Effective from July 1, 2016, the Q1 of 2017 financial reports will also be inked according to the new structure.
Additionally, Ericsson has disseminated strategic incumbency to its leadership team on its web.
In recent few years, the company has undergone number of key strategic decisions to build new revenue areas including the exiting handsets and modems business, an enhanced partnership strategy on IP.