The relocation to the US was not a benefit from a mobile phone perspective, wrote Christian Berggren and Staffan Laestadius, professors of industrial organization and industrial development, in an article in 2000.
America was admittedly the largest single market but the development dynamics were to be found in Sweden. Europe was several years ahead of the US in mobile phones and this gave Nordic companies a unique opportunity. Ericsson was shifting its focus, while Nokia was taking action. “When Ericsson began to move its mobile phone management back to Sweden in 1994, the Finns had established a virtually unassailable lead,” wrote Berggren and Laestadius.
Ørneholm refers to a lack of understanding among ERA’s executives of the demands on a consumer-products company. “For instance no resources were earmarked for attempts to launch telephones in AMPS and TACS markets. We had our successes with NMT phones in countries like Malaysia, Indonesia and Thailand, and could have repeated them in other markets where we had enjoyed a strong position for many years and had local offices to base the work on.”
He feels it was grave mistake to phase out the HotLine brand. “A Gammel Dansk is always a Gammel Dansk and nobody cares who owns the brand.”
'NONE HAD A BACKGROUND IN MARKETING'
And on top of this was design. Ørneholm describes how in 1993 he visited Rydbeck at Triangle Park in North Carolina on behalf of Europolitan to say that he was not overly keen on the “design element” in ERA’s pending GSM phone. “From the front it looked small enough but it was very thick. Nils resentfully took a small aluminum case out of his pocket. That was the kind of thing Nils would have liked to produce: a broader phone with a better keyboard and display and also much, much thinner. It did not make Nils any happier to hear me say that that was the kind of telephone I would choose as well.
“None of ERA’s managers, apart from my successor Olle Ulvenholm, had a background in marketing,” Ørneholm’s says.
In 1993, McKinsey consultants were called in and identified problems with ERA’s mobile phone operations in America: unclear strategy, hordes of products with short production runs, and cultural differences (which can be read here to mean GE’s hierarchical organization). The result was a “death wish”.
By this time, GE had already lost interest as a partner in the operation and finally Ericsson decided to move the head office back to Sweden. Uddenfeldt says: “In practice, Lund was always the center, and Nils took care of Lund and the US.” The company was renamed Ericsson Mobile Communications and was from then on to operate as a Swedish company.
Author: Svenolof Karlsson & Anders Lugn
