(Hofer and Schendel, 1984) cited in Schneider, (1998). This indicates that an organisation must perform a SWOT (strengths, weaknesses, opportunities and threats) analysis prior to formulating corporate strategy. A number of factors have been identified as having an effect on corporate strategy formulation: for example, Kets de Vries and Miller (1984) suggest that managerial personality and experience is an important determinant of the strategy formulation process; Janis (1972) considers group dynamics as an important factor affecting the formulation of corporate strategy while Frederickson (1984); Lyles and Mitroff (1985) suggest that organisational structure plays an important role in strategy formulation.
Within the context of today's global competition, businesses and firms no-longer compete as individual companies but try to corporate with other businesses in their activities (Wu & Chien 2007:2). These researchers went further to argue that, this strategy has become quite common in many businesses including the retail clothing chain stores. The conventional vertical integrated company based business model is gradually being replaced by collaborative relationship between many fragmented, but complementary and specialized value stars and constellation (Wu & Chien:1). The next section provides a brief history of Sony Ericsson and its activities.
1.1.1 Overview of Sony Ericsson and History
According to the company annual review report, Sony-Ericsson emerge from the merger of two entity, in October 2001, Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. This was due to expected synergistic gains likely to arise from such a joint venture. Thus expected benefit were likely to accrue from the combination of consumer electronics expertise with Ericsson's technological leadership in the communications sector (Company Review 2007).
Though after the joint venture, the company hoped for an increase profit, in the earlier part of 2002, profit of the company begins to drop. Ericsson's market share actually fell and in August 2002, Ericsson said it would stop making mobile phones and end its partnership with Sony if the business continues to disappoint though Sony said it was fully committed to the joint venture and was prepared to make it a success. To Sony, the joint venture provided an opportunity for it to improve on its market share of the cell phone which was about 1% in 2000. In all, the objective for the venture was to combine Sony's consumer electron