“Strategic Management CIA 3: Company Analysis of SONY”

By

SOURAV HUTHAASH K

REGISTER NUMBER

2028114

Under the Guidance of

Professor Laxminarayanan G

School of Business and Management

CHRIST (Deemed to be) University, Bangalore

School of Business and Management

Christ (Deemed to be University), Bangalore- September 2021
SONY

Introduction to the brand

The founders of Sony were Masaru Ibuka and Akio
Morita on 7th May 1946.The Sony Corporation was
founded and grew to become a global corporation
worth more than $60 billion. For more than 50 years,
Sony has always been at the forefront of technology,
and they have had a good impact on the environment.
Furthermore, few enterprises are better positioned to
reign in the digital revolution in homes and
businesses all around the world for the next 50 years
and beyond. The headquarters of Sony Corporation
are in Tokyo, Japan. With a revenue of almost US$40
billion in 2011 and over 200,000 people globally, it
is one of the world's largest media businesses. It is a major producer of video gaming consoles,
electronics, telecommunication, video, and informatics.

Mission and Vision

Mission: Sony’s mission is to fill the world with emotion, through the power of creativity and
technology, and to nurture innovation to enrich and improve people's lives.

Vision: Sony’s vision is to use our passion for technology, content and services to deliver kando,
in ways that only Sony can.”
Product portfolio.

Televisions LCD Digital Semiconductors Data Audio/ Video

Televisions Imaging Recording
Systems

Blu-Ray Home Audio PC’s and PC & Mobile Sensors & Video
Disc & Car Audio other Audio Other camera/
Players / networked Semiconduct Digital still
Recorders, products ors Camera etc.
DVD
players

Image Electronic Batteries Audio/Video Data Media and

Senroe Components Recording Data
Recording
Professional
Systems

GLOBALIZATION.
As a result of globalization, companies are encouraged to internationalize and significantly
increase the volume and types of cross-border transactions in products, services, and capital. Also,
regardless of origin, globalization leads to the rapid spread and diffusion of products, technology,
and information throughout the world.

Strategies and approaches of Sony towards globalization

● United states: Sony established a sales subsidiary in the United States in 1960, but it was
not until 1971 that the corporation decided to establish a production unit after becoming
more knowledgeable of market trends and consumer preferences in the United States.
 ● Europe: Sony opted to modify their products based on user preferences in order to be
successful in European markets. Sony had to create a television set that could accept any
of Europe's four current standards. Despite this, there was a lot of opposition to Sony's
plans and designs in Europe, Sony kept insisting on its unique design and offerings.
● London: Sony followed the policy of starting with only a sales office and that too on a
small scale in London. This helped the company to deeply analyze and understand the
consumer choice market before going for great investments in the country.
● Germany: Sony's goal was to focus on delivering a high-quality image. It began selling
its items solely through some of the best electronic stores, which helped to raise awareness
of the company's products. Sony, on the other hand, continued to push its pricey, high-
quality image in German markets even after acquiring a significant amount of awareness
and orders.

CHALLENGES FACED BY SONY

Sony's main problems/issues are declining sales and revenues, cost-cutting, transferring plants to
Asia, divisional cooperation, and effective management. Greater planning and application of
strategies should be pursued with such a major international organization. Sony may begin by
implementing a new strategy, with the company's profit and benefits related more closely to day-
to-day operations.

● Lack of innovation - Sony is losing its consumer-oriented new ideas on a regular basis,
which is directly harming the company's brand. The development of the Walkman made
him a leader in the industry of portable music players, but they didn't stick with it and didn't
modify it enough to maintain its initial success. When Sony fails to innovate, it loses its
primary competency. We can discover the main cause of problems and find the best
methods to solve them with the aid of problem-solving and decision-making skills. Sony
gains a competitive advantage over its competitors by using the greatest solutions and
theories.
● Lack of core competencies: Another factor contributing to Sony's decline is the company's
failure to enhance its core business of producing breakthrough ideas. They jumped right
into their new multi-business ventures, which included financial services, music
 publishing, an online music store, an advertising agency, movies, and video games. Due to
a lack of concentration and fundamental expertise, Sony is falling behind in product
positioning and branding.
● High competition: The increase in competition from brands that cater to wider segments
of the market affects the entire performance of Sony as a brand which is a bit weaker in the
innovation part where they understand the customer’s need and produce relevant products.
● Brand-line compatibility: Sony’s products are not in-line with the compatibility. The
product line areas should also be made more compatible with one another which is lacking
in Sony.
● Resistance to change: Even though the company decided to implement various changes
in cost cutting and other proactive measures to compete in the market, the organization had
a resistance to change which is still pulling the company downwards from ruling the entire
technology market.

Company Analysis
SWOT analysis

Strength Weakness

● Wide range of products in their product ● High pricing leading customers

portfolio switching to a different brand
● Sharp brand image and trust in the ultimately leading to a loss of
electronic segment customers
● High quality and Innovation products ● The products owned by Sony are not as
offered diversified as that of its competitors
● Global brand leading to a lesser global profit
● Technological excellence ● The brand does not engage in
● Good After sales services that an promotional activities as it believes that
individual can request for the services customers will recognize the products
from a different region for its quality and remain loyal to the
brand
 ● As mobiles are most used accessory,
this is a field in which sony has not
ventured into much

Opportunity Threat

● As customers are willing to buy new ● The market share of Sony has taken a
electronic gadgets, it opens new hit due to the low-cost competitors
markets for the brand ● Sony being a global company needs to
● Product variation can be an opportunity watch out for the foreign exchange rate
for brand as they would be entering a fluctuations as they would make a big
market that already has players such as difference
home appliances ● Sony has been developing innovations
● Being a multinational company, it can as responses to the innovations in the
expand into regions that it is currently market rather than being the pioneer of
not a part of the innovations making them lose the
● With the use of big data analytics Sony first mover’s advantage
can make use of the online channels of ● Software piracy seems to be the biggest
distribution that it has developed over threat that is eating at Sony’s revenue.
the years to serve the customers’ needs
more accurately.

BCG (Boston Consulting Group) Matrix

Stars Question Mark

● Music Releases ● Digital cameras

● Movies ● Vision-S (automobiles)
● Imaging and Sensing Solutions ● Consumer electronics
Due to the pandemic and social isolation ● Audio systems
movies and music releases have become stars These products have become question marks as
as they have the potential to become cash cows. there is a constant decline in their growth due
Image and sensing solutions have stellar to the strong competition prevalent in the
growth potential and with that potential has market. This competition has also shrunk the
helped the company grow even when other margins earned by Sony contributing further to
segments were going into losses which we the declining revenue made. For the above
believe will continue in the near future. products the two ways forward is to invest in
more research and development or liquidate
the unsuccessful businesses.

Cash Cows Dog

● Television ● Xperia Smartphones

● PlayStation Xperia smartphones face intense competitions
● Gaming Software’ and to add to this as it is a premium priced
These are the cash cows of the business but are product it is leading to lesser consumers
declining in their performance but even in that purchasing the product. The company either
decline are the largest sources of revenue for needs to invest in research and development for
the business. This decline is due to individuals smart phones or disinvest in the industry as it
having different gadgets that substitute is eating up the resources of the company.
televisions and in terms of gaming, a lot of
gaming software’ are being released by
Chinese at a lower price range making
customers switch to those software’.
Perceptual Mapping

Through the above perceptual map, we are able to see that the target audience of Sony products
tend to be those individuals who are fashion forward and focus on the style and design of the
product along with the features of the product and would prefer customization wherever possible.

Bowman’s Strategy Clock

In the above diagram we can see that Sony falls in the category of Focused Differentiation which
means that they follow a strategy that allows them to to provide customers with products that are
new or better than what is currently existing in the market, however to do this they are pricing their
products at a high price making it very difficult to get a hold of the market. This strategy has acted
as a factor leading to the failure of Sony.

Suggestions and Alternatives.

● Sony should consider setting up operations in other Asian countries in order to take
advantage of the cheap labor and the emerging markets. Diversification, instead of
pursuing the fast changing and easily imitated consumer goods market. Sony should use
its technological know-how for high-end business and office equipment.
● Sony should consider Blue Ocean Strategy rather than Red Ocean strategy, with which
the brand can create differentiation and low-cost product varieties to open up a new market
space and new demand wherein they can get a whole new set of market.
● Integration of all the product divisions of Sony and function in a systematic manner
● It's also a good idea to make the product line sections more compatible with one another.
This can be accomplished, most importantly, through communication between groups and
management. Rather than making frequent model modifications, products with higher
added value and longer life can be made. This is also a move from a manufacturer-oriented
mindset to a consumer-oriented mindset, which will help Sony conserve natural resources.
● Sony products which involve both hardware and software, should strive to achieve industry
wide standards. To win customers, Sony must completely support industry norms and rely
on the quality of its goods rather than lock in.

Conclusion
Sony has the ability to grow into a global organization with global operations and a global culture.
With strategy and luck, Sony will become a modern inventive firm by applying answers to current
problems/issues, such as cost reducing, making all parts of the company interact with each other,
changing proprietary interfaces, and integrating some innovations into the company's culture.
It is suggested that Sony examine its strategy, beginning with the renewal of company goals.
Management should provide the business with precise short- and long-term goals and plans.
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