Management
Part V. Business Strategy
Sony has differentiated its products and services. The company has used differentiation as its business level strategy. The basis of this differentiation in case of Sony is its core competence of product miniaturization. Miniaturized televisions, radios, cassette recorder, camcorder, and walkman cassette recorder are all examples of differentiated products that Sony has developed by using its core competence. Furthermore, the company has also used miniaturization competence in order to manufacture laptops so that the company become capable of maintain its competitive position in the market place, and to face competition as there is intensity of rivalry among the competitors. Further, uniqueness and creativity are also basis of differentiation in Sony. An example of this fact is digital camera, in which differentiated features are offered to customers that pave the way to satisfaction of customers.
Sony is maintaining cost leadership position in its business by facilitating customers with low cost products. In order to achieve cost leadership, the company has moved production of some electronic products to low wage counties. Additionally, the company is imposing cost leadership by acquiring core competency of its cost effective service excellence. Further, it is also standardizing its offering for managing costs in an effective manner. Management of cost, however, implies that the exceptions that are requested by potential customers should be limited or they should be excluded for reducing the cost.
Sony has adopted an approach of market segmentation. It has divided target market in different segments such as business focused segment, entertainment lover, heavy user, fashion oriented, family user, and teach enthusiast. The company is, however, serving most profitable segment in which it is facing intense competition. The company is serving this segment in order to attract more customers towards low priced and high quality products.
The company is using differentiation and cost leadership as business level strategies. They are allowing the company to ensure competitive success on long term basis, and is also allowing the firm to invest on continuous basis for providing differentiated features that facilitate customers with value. The firm is leveraging adequate cost and value drivers for differentiation strategy and cost leadership strategy, which can be considered from the fact that the company has continued to increase industry growth via sales of quality and innovative products such as VAIO notebooks that has raised bar in form as well as function, and digital cameras that permit capturing of pictures on the floppy disk. These products are allowing the company to reap profits and maintain competitive position in the marketplace. These strategies have allowed the company to take more steps in order to ensure more entertainment for customers.
Part VI. Corporate Strategy
The corporate strategy of Sony can be analyzed with the help of value chain analysis. Value chain analysis comprises of primary activities and supporting activities. The primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and services. The supporting activities of chain are firm infrastructure, HR management, technology development, and procurement. The major objective of these activities is to provide level of value to customers in such a way that value level exceed the cost associated with activities, giving rise to profit margin.
Figure Value Chain of Sony
In order to ensure conduction of smooth operations, Sony has ensured takeovers and mergers. These mergers and takeovers have allowed the company to become vertically integrated company. The company has off shored its operations. It has off shored in pan Asia, Europe and North America (Dobson and Chia, 59). Off shoring has enabled the company to carry out its operations in more effective manner. Off shoring is allowing the company to take advantage of skilled labor force, and is also making it easy for the company to ensure control and transparency in operations. Further, it is assisting the company in finding new business models in order to maintain competitive position in the market. But, there are also some disadvantages of off shoring in case of Sony as the company has to rely heavily on onsite resources in order to solve the issues and handle problems. Time differences exist because of which it becomes difficult to ensure proper communication and project management. Customer focus is also lost because of off shoring, which is because; off shoring companies does not face end customers on daily basis.
The products offered by Sony can be categorized as consumer and professional electronic equipment, communication and information related equipment, semi conductor, electronic devices and components, battery, and chemicals. Sony is offering variety of products such as home video, television and projectors, Smartphones, home theatre system, digital photography, video camera, digital camera, hand cam, computer peripheral, fame, memory media, portable audio, in car entertainment, mobile phones, recording and storage media, chargers, batteries, and laptops. Sony is, however, highly diversified company, as it is providing latest technology, and up to date products to the customers. It has introduced several new products such as LCD, TVs, and provided variety in them in order to facilitate customers in most effectual manner. The company is providing those products to consumers that are easy to use. The core product division of Sony is electronics, which include television and laptops, especially Vaio Laptops. They are allowing the company to achieve maximum profitability.
Sony is using related diversification strategy by focusing on R & D, electronic, and investment in new technology. The company has also adopted this strategy in order to facilitate customers with low price and best quality. This strategy has allowed the company to reduce its cost structure, and also helped in increasing technological edge, which has in turn allowed the company to maintain competitive edge (Hill and Jones, 312). Sony is using this strategy with the help of its low cost skills in order to get maximum benefits from vertical integration.
BCG Matrix for Sony
BCG matrix is effectual for management as it provides base for deciding and preparing for future actions. It helps the company to ensure balance in current portfolio of company. The portfolio comprises of Stars, Question Marks, Cash Cows, and Dogs.
Figure BCG Matrix for Sony
As it is evident from matrix, that LED Televisions, PlayStations, and Vaio Laptops are included in stars. Stars, however, generate more cash and they have more market share. Televisions play stations, and laptops are a source of revenue for the company, and they are occupying increased market share. Smart watches and smart sensors are included in question mark as they have low market share and are not generating much revenue. Question mark represents a situation in which products do not generate large amount of revenue, and market share is low in this situation. Smart phones and projectors are included in cash cows as they have mature market, and are generating more cash. CD players and walkman are included in Dogs as they have low growth and low market share. They also do not generate large amount of cash.
Sony has focused on diversification of LED television, play stations, and Vaio laptops, which are included in stars. The company is getting profits from these products, and is focusing on introducing these products in all the countries of the world, so that it can maintain its competitive position in present and in future.
Sony has, however, participated in mergers and acquisitions, and these mergers and acquisitions proved successful. The mergers and acquisition has allowed the company to fight successfully with the competitors and prevented consolidation of competitors. For example, merger of Sony with MGM in the year 2005 proved successful, and it has paved the way to the growth of company. The strategic alliances have achieved original intent because it allows both the companies to achieve their strategic objective, and also allow the companies to generate more revenues.
The mission, goal, and corporate strategy of Sony is in alignment, as all are meant for satisfying customers and achieving sustainable as well as profitable growth. There is no conflict in these three elements of Sony, because the major objective of these elements is to achieve growth in the market. As far as objective is same, there is no conflict.
Part VII. Key Elements of the Firm’s overall Strategy
The key elements of overall strategy of Sony are to facilitate customers with quality products, and to achieve sustainable as well as profitable growth. The company wants to create new and unique culture as well as new experience. The company is, however, moving customers emotionally, and is using sophisticated technology in order to facilitate customers with innovative products. It is creating value for the customers, so that they can enjoy quality and innovative products at affordable price. Further, it is taking necessary steps in order to invest in technology so that further innovation can be ensured.
Part VIII. SWOT Matrix
SWOT analysis of a company helps in considering Strengths, weaknesses, opportunities, and threats. With the help of SWOT analysis, company can effectively, analyze its weaknesses and take necessary steps for converting them into strengths. SO strategies are meant for pursuing the opportunities that are well fitted in strengths of organization. WO strategies help in overcoming weaknesses for pursuing opportunities. ST strategies help in identifying ways that an organization can utilize its strengths in order to reduce exposure to external threats. WT strategies help a company in making defensive plan in order to prevent weaknesses of firm and from making it exposed to external threats.
I would recommend SO strategy in which there is combination of S1 and O3, because of the fact that Sony has already established its name and achieved remarkable market share in Television, and it can earn more popularity, and can achieve more success by increasing its market share by increasing supply of Android Televisions. It can capture market by facilitating customers with latest features in Android television, so that customers are not attracted towards the offerings of competitors, and remain strict to Sony brand. In this regard, the company should learn from past experiences in order to produce improved quality and better product. Provision of more Andriod televisions helps the company in becoming more competitive.
In conclusion, Sony is a reputable organization, and this is a company with which I like to work with. This is because of the fact that the company is maintaining good repute in the marketplace. It is effectively conducting its operations in an effectual manner, and is satisfying its customers with creative products. I would like to make investment in stock of the company because it will help in getting more return, and also my investment is safe because overall performance of the company is satisfactory. Though other electronic companies are also gaining profits and market shares, yet the quest and spirit for innovation, creativity, and excellence of Sony cannot be copied. Major task of Sony is to ensure integration of talent for achieving common goal in order to compete in the market of emerging needs and demands. With effective strategy as well as with luck, Sony could emerge as a leading firm as it was before, and it will be in future.
References
Hill, Charles W. L., and Gareth R. Jones. Strategic Management Theory: An Integrated Approach. Boston, MA: Houghton Mifflin, 1998
Dobson, Wendy, and Siow Yue. Chia. Multinationals and East Asian Integration. Ottawa, ON, Canada: International Development Research Centre and Institute of Southeast Asian Studies, Singapore, 1997.
