Current Strategies of SONY
The major strategic problem which Sony Corporation faced was inefficient and ineffective structures of manufacturing which led to a decrease in the quality of the company’s products. However, currently the Japanese management has taken full control in order to improve the productivity through use of quality control and total quality control. Application of total quality control has been a good strategy for the company which is intended to help Sony Corporation create a way of thinking which is process oriented and thus help the company in developing those strategies that gives a promise of a continuous enhancement.
The qualities of SONY’s product lead to a serious damage to the company. However, the company has tried to improve its strategies currently in order to improve on all these issues and retain a higher market share. Currently the company’s intentions is to create and maintain a position that will make them the leaders in electronics such as digital imaging, mobile phones, TV’s and has thus put more focus in its expansion on the PC, products which are disk related and others. The company introduced a strategy called “Trillion yen businesses” which has helped improve on their market share. This strategy is all about improving the quality of their goods and services and ensuring they take leadership in the electronic industry and other areas where they are involved in business.
Another current strategy by SONY Corporation is implementation of cost reduction measures. This has been intended in order to improve significant operations in the business of TV’s and also to restore profitability in their business in the following years. Their major objective with this strategy is to acquire a number one market position in LCD TV’s. The company allocated 1.8 trillion in order to strengthen areas which are of core interest within semiconductors and mechanisms including batteries, image sensors and devices of display. This strategy has also been meant to acquire a larger market share and penetrate deeper into the market compared to the company’s competitors.
Open motivation is another strategy that SONY has applied currently which looks not only in the company internally but also externally most especially in the innovation which is highly fostered by technology. Combination of the company’s powerful inbuilt technology with the expertise externally, SONY major aim is to hasten the efficiency of Research and Development in order to enable the company respond effectively to immediate changes in the preferences and needs of consumers in the era of network. Sony will then succeed in increasing the volumes of sales and sustain growth in profits through strengthening the core business, experience of new users, minimizing the effect of environmental operations and driving innovation.
Adapted Strategies after SONY Market Share Loss
After SONY applied the Kaizen strategies (Total Quality Control, Quality Control and Company Wide Quality Control) and failed to sustain an effective structure in manufacturing thus leading to damaging the company’s strong brand and the reputation and losing the competitiveness of their products, proper and effective marketing and product quality strategies had to be applied in order to save the company. It is essential to insist on the importance of meeting the needs of the customers and also their expectations if an organization requires building a competitive advantage. SONY swiped away its reputation towards the market after they failed to meet the expectations of their customers and thus decreased the customer’s confidence in them. Good reputation has created SONY’s positive prejudice in the customer’s minds and has thus helped the company in terms of improving their market share since most of them prefer their brands. In order for SONY to improve on their market share, they are currently developing emergent strategies from both the views of inside out and outside in process of positioning. This is being done in order to secure the market currently and is also called market based view. It is evident that in order to maximize organizational capabilities and sustain more competitive advantage an integrated approach is essential most especially that of positioning view and resource based approach.
Therefore, SONY Corporation is exploiting the internal and external capabilities which have been in existence and also creating new ones in order to acquire a competitive strategy after losing the market share towards the competitors. Through the use of company’s capabilities and resources, SONY has learned on how to cope with the external changes and also in the correct ways to deal with them and this so far has helped the company make some improvements. The company has taken the theory of holistic big picture approach which helps them currently design their activities and thus their efforts seem to be working. Inside out approach is also called competence based view and SONY has been using this strategic approach by green lighting its sales on assets in order to make the cash free and thus restructure the company around a core of business which is tighter and powerful.
In 2007 December, SONY Corporation sold stake of about forty seven percent to the Style Life Holdings group of investors in order to maximize the organization’s long term cash generation and this a way of also managing the value strategy. The company has taken the approach of assets disposal in order to acquire more funds and reinvest again into other business areas such as production and Research and Development which will help SONY make their core competences more powerful. So far the company is finding its advantage sources in the ability of management to consolidate the skills in production and wide technologies consolidation into competences that give more power towards the business of individuals in the ability to change opportunities abruptly.
Currently, SONY has focused its mission into new markets after the loss of the market share. This is because the company believes that higher opportunities in growth are currently found in the external areas of its traditional markets of North America, Europe and Japan. The new markets where they have established businesses include Russia, India, China and Brazil whereby the businesses are quickly developing and the business of SONY is rapidly growing thus enabling the Company to acquire a larger market share just as they set out to do. Currently, SONY Corporation is planning to create and enhance more growth through adapting strategies such as integration and collaboration throughout the SONY group production and not only in electronics and Games. In its quest to help create proper chemical substances management, prevent recycle resources and prevent global warming, SONY group is being guided by a series of environmental target known as the Green Management 2010.
Sony has currently acknowledged an operating margin of five percent as a profitability baseline in order to create more funds which they will use so as to continue growing and innovating. The company is also launching a capital for return on investment as a significant framework which will help enhance potential acquisition and proper capital investment evaluation across the company in order to make sure the resources are in optimum use. The investment which is targeted will put the Company in a proper position which will help them gain further innovation and growth for the next coming years. Currently the company has acquired a return on equity of ten percent just as they have targeted since the company has been working to produce high profitability level, stability and also facilitating the value of shareholders since the loss of market share.
The world of business is rapidly changing in terms of broadband networks and digital technology. SONY’s environment is innovating technology in a pace that has never before been experienced. Due to this SONY Corporation is currently targeting to become the leading company in the age of digital and its major aim is to control its exclusive advantage of producing both substance and hardware while in the long run it still continues to offer products of cutting edge with superior services and contents in which will enable the company to meet the needs and expectations of their customers. Stringer’s effort to revive the company started to bear fruits in the end of the year 2007.
In order to boost the company’s core competence after the loss of market share, SONY Corporation has been implementing miniaturization. In order to bring this process towards its product the company has been ensuring that the engineers, marketers and the technologists have a shared and clear understanding of the needs of customers. SONY Corporation has also implemented a diversification strategy which consists of business adding whose significance chains contain competitively valuable strategic fits with the company’s value chain current business. Diversification strategies which are related among various businesses give SONY Corporation a sharper focus for diversification management and it is known as a degree which is seen useful in unity strategy across different business opportunities of the company. In order for a company to deliver a proper and effective competitive advantage, combination of resources is essential since it takes a long time to develop and it cannot be imitated by others.
Hiring Howard Stringer was also a strategy that SONY Corporation used with the objective that an outsider will help the company to think outside the box. The company also did this with the aim of acquiring a competitive advantage and increasing the market share that had been seriously affected by the loss of market share due to poor quality of the company’s products which led to a bad company’s reputation by the public. The company’s public image was highly affected in 2006 and therefore SONY had to take initiative and develop proper marketing strategies which will bring back their customers and restore back the lost confidence. The company therefore appointed a foreign chairman with the belief that he had intellectual leadership which is said to be very important in creating and developing the foresight of the industry and would thus help the company shape up the industry by building the company’s core competence.
Porter Diamond Model
According to Porter, strategy is all about making choices regarding the positioning of the organization in the competitive market and also putting more emphasis on the significance of positioning. Porter claims that in order for a company to obtain and sustain competitive advantage, it should implement the generic strategies through positioning itself in focus, cost leadership and differentiation. Therefore, it is evident that SONY Corporation has differentiated itself with a strategy of differentiation which tries to provide services and products which give benefit termed different from those of competitors and those which buyers value a lot. Sony has therefore been rewarded with a price which is premium due to its current uniqueness which has enabled them to gain a more competitive advantage.
However, application of Porter’s diamond model will give SONY Corporation a bigger opportunity to acquire a larger market share both in the local and international and domestic market. Through Porters diamond model, the leaders and the management will have a good idea of where or which countries to invest in and will also get a clear concept of the countries which are likely to uphold growth and development. At this point in life, SONY Corporation require proper and strategic measures which will help enhance the company’s growth and also help the company to survive in the competitive global world. Diamond model also promises SONY Corporation on the knowledge of analyzing of competitive factors which are likely to survive in the local market and also get a clear understanding of the factors which can be exploited in order to fit in the global market.
Use of Porters diamond model will also help SONY Corporation correct the error that lead to loss of market share and tarnish their brand name. The reason behind this is because Porters diamond model will help the company to recruit competent and skilful personnel who contain full knowledge of their work environment and those who will work together to achieve the organizational goal. Porters Diamond model will give SONY Corporation a competitive edge towards the competitors in terms of quality and customers services since the employers will work towards the satisfaction of the customers and will also have a clear understanding of the changes in their tastes and preferences. Organizational structure of SONY Corporation has been competent currently thus giving the company an opportunity to be served by competent leaders who contain proper understanding of the digital technological market and also full understanding of the global competitive market. This model gives the company a chance to show the world that to slip is not to fall and so far they are doing well. The company may not have acquired full market share completely as they are intending, but according to their market pace currently they are doing well.
Porters Diamond model will give the company feasibility in the areas of creativeness and innovation. Take for instance in application of related and supporting industries. This will enhance healthy competition among various local companies. However, since SONY Corporation major aim is to acquire a larger market share compared to the competitors, the company will continue applying more innovative strategies so as to meet most of the customer’s needs and increase their sales in the long run. The company will also acquire more new customers while effectively maintaining the existing ones since they are meeting the expectations of these customers and since the customers have their confidence in them.
When it comes to factor conditions in the diamond model, SONY will have linguistic abilities to work force, employ highly skilled workforce, lack shortage of employees and have a rich amount of raw materials. These are proper strategic measures from the porter’s diamond model which will enable manufacturing of unique and quality structures compared to those of competitors in order to meet the expectations of their clients. SONY Corporation will acquire more customers and in the long run achieve a competitive edge towards their competitors due to the proper and efficient services the company is offering to the customers and all this is due to proper and well trained employees.
Concentration of SONY into the local market will give the company more opportunities locally compared to the international market. It is evident that if the company’s products seem to acquire more demand locally, then people tend to become less interested with the foreign products and concentrate on the locally available. Therefore, SONY can turn out very powerful locally if they take porters advice and concentrate more on the demands of the local market. The demand locally for SONY products will also give the company a national advantage. Local competition will force firms to move far more to basic advantages and this will give SONY Corporation an opportunity to conquer the local market thus a competitive edge to go international. Also, due to high rivalry, SONY group will be able to think outside the box and thus come up with powerful strategic marketing measures which will help them combat competition. Application of this model can be a very powerful and effective step to the company. The company can thus be able to recover from the earlier crisis that led to loss of a large market share. Since the company has already started picking, this model will be an advantage to boost the company’s name.
Works Cited
IBS. SONY Corporation. 2010. 06 May 2012
M.E.Porter. "Your Place: How to access the attractiveness of your Industry and your Company Position ." Business Sources Premier (1991): Vol.13,No.9.
P.Finlay. Strategic Management: An Introduction to Business and Corporate Strategy. Prentice Hall, 2000.
P.Kotler and K.L.Keller. Marketing Management. Prentice Hall, 2006.
