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A Look at Ericsson’s Business Strategy

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Focus on customers and service providers

Ericsson’s (ERIC) CEO, Börje Ekholm, stated that the company’s top strategy includes a focus on customers and service providers. Ericsson has outlined three main challenges affecting the company: decreasing cost per gigabit, finding new avenues for revenue growth, and the transition toward digital platforms.

Ericsson also aims to achieve technology leadership with product-led solutions sold at a global scale. The company has repeatedly stated that product innovation is integral for technology and cost leadership as well as increasing market share.

In 2017, Ericsson increased its investments in R&D (research and development) by 6 billion Swedish kronor and recruited 2,000 new engineers. These investments target the company’s Networks business with a focus on leading the 5G market and optimizing 4G technology.

Ekholm stated, “We are confident that the strategic choices we have made will create a strong and successful Ericsson over time. But as you know, we are not there yet.”

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Reduced carbon footprint

Perhaps taking a cue from tech giants Microsoft (MSFT), Facebook (FB), and Cisco (CSCO), Ericsson reduced its carbon footprint by 14% in 2017. The reduction is close to 50% over the last six years. Ericsson wants to further reduce carbon footprint within its own operations as well as decrease energy consumption in its products.

Ericsson has taken measures to strengthen anti-corruption programs and compliance by increasing resources. This move has focused on anti-corruption, safety, sourcing, and health.

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