The Sony Strategy Article Marketing Essay

Introduction

The Sony Corporation is an established global organisation operating in over 200 countries. The company has primarily aimed at the next business sections;

Imaging Products and Alternatives -

Gaming consoles and software

Mobile Products and Communication

Home Entertainment and Sound

Devices - semi-conductor component's for use in Sound/visual or Information Technology products

Pictures

Music

Financial services

(Sony, 2012)

Report Targets and scope

Each of the above Business Segments Includes a Number of Strategic Business Units (SBU's). These SBU's that might not exactly necessarily be strongly related in conditions of the market segments they are aimed at or the resources they use, compared to other products in the same portion. For example it seems sensible for the video games segment to protect both software and hardware, but also for analysis purposes they should be viewed as independent SBU's because of their inherently different creation process's (Haberberg & Rieple, 2008, p. 212).

As there are over forty SBU's within the Sony Organization it would be beyond the opportunity of this are accountable to analyse each one singularly, therefore the focus will be on the key issues of corporate strategy, competitive and useful factors will be resolved in a far more generic fashion. On top of that you will see an additional evaluation and evaluation of Sony's strategic options according of the TV market.

Vision and objective statement

Although Sony's various activities are diverse for the reason that they could be viewed or managed as individual business in their own right, they have synergies between them that allow Sony to follow its ' convergence strategy ' produced from the Sony Eyesight and Mission statement (appendix A) (Sony Europe, 2012). By diversifying and using synergies to make a range of products and services that work seamlessly collectively Sony intends to get back its competitive border through differentiation of a broad product range. On top of that this competitive advantage may be suffered by benefits gained from the posting of tangible and intangible resources (Haberberg & Rieple, 2008, p. 218).

Strategies are a means to a finish, they help achieve goals that enable the company to retain route and fore complete its purpose, therefore It is essential that the mission is clear, articulate and realized throughout the company (Thompson, 2001, p. 8).

Strategic issues derived from analysis

Future market forces

Porters and pestle research can be used together to get insight into potential future marketplaces. Although certain markets may be contracting due to the economic crisis, the position on the market life circuit or strong competition, there will be other emerging marketplaces that are in their infancy with a prospect of progress. Future market pushes may also be predicted by following tendencies in demographic styles, culture, government authorities and global economies. Circumstance planning is a method for forecasting multiple possible future happenings and formulating strategies that could manage such occasions. (Haberberg & Rieple, 2008, p. 477).

The market segments Sony focuses on are sure to be dynamic, to compete Sony's framework, culture and operations should be flexible and able to adjust to change speedily.

Current competitive position (research models)

The right market and the right product is just the beginning of building a successful strategy. For a business to reach your goals it must have that something extra that its competition haven't got. There are established universal frameworks for analysing and formulating a small business strategy such as Bowmens strategy that compares a products price with regards to the customers recognized value of the merchandise. Treacy and Wiersema's framework identifies 3 ways in which competitive edge may be obtained: Operational quality, Customer intimacy or product management. This gives the client three alternatives and value chains. You will discover two generic strategies that have a tendency to dominate, Porters five makes and the reference based mostly view (Haberberg & Rieple, 2008, pp. 174-179). Porters model supports that an company gains competitive advantages by differentiation, cost management or market emphasis. Conversely the source based view talks about the organisations distinctive resources it uses to make its product unique. Both theories seem to be antagonistic, nonetheless they are generally used together to check each other. Sony would benefit from this dual examination as it has specific unique resources such as scientific functions, whilst it keeps well in the market with a varied product range

Sony's issue at present is the brutal competition from multiple organisations, each supplying a alternative product at a lesser price, in a set market.

Value chain analysis

Value chain analysis is an instrument used to identify strength's or weaknesses in either the organisations principal activities from inbound logistics though to customer service, or its support activities that such as procurement, HRM, technology and organisation structure. When compared to competitors would show that Sony's production costs are one of the major factors that contribute to Sony's higher product prices tags, this can be due to competitors such as Apple outsourcing their creation and assemblage to firms which have cutting edge development facilities and/or much cheaper labour cost. Although Sony is apparently capable in the areas of its primary activities, there could be issues in the support functions. The company composition is hierarchical and seems to have a culture that cannot respond to a modern active market place, as this function make a difference all main activities it can be an issue that needs urgently dealing with.

Organisational culture and architecture

Japanese organisational culture is very ideological Mintzberg et al (1999, p. 367) lists some typical characteristics as consensual decision making, collective responsibility and slow evaluation and promotion. In this era of globalisation and quick changes in technology, an organisation that adopts such a culture will surely get left out.

Organisational composition at Sony is very hierarchical, therefore communication and decision making is slow-moving and fragmented.

SBU's at Sony share very little synergy, each administrator safeguarding his own site and treating members of the same organisation as if they are the competition

Financial analysis

Financial ratios are a way of examining the financial health of a business. A percentage simply relates one body on the financial record to another, for example the ratio of current possessions to liabilities would give an indication of the business's capacity to pay its debt. . There are various classifications of ratios such as success, liquidity and activity.

Profitability ratios are a measure of a business success in its main aim of generating prosperity for the owner. They express earnings made in regards to other key figures on the financial statement.

The liquidity of your business is only its ability to meet its short term financial obligations. . The existing ratio which can be involved with the organisations liquid assets in relation to its current liabilities. As (Atrill & McLaney, 2008, p. 222) argues although there's a belief of a satisfactory 2:1 proportion, a manufacturing company will maintain materials and products whilst looking forward to invoices to be paid, producing a higher ratio when compared to a supermarket that has high turnover and cash sales. A higher ratio, although good for ability to pay bills, may indicate that money is not being put to fruitful use. Sony's current percentage for the last 2 yrs has been below one, indicating there were not enough resources to pay short-term bills. The leverage proportion shows how much debt Sony is wearing its balance sheet, this body has been increasing since 2006. Increased leverage can be considered a signal of borrowing to expand or improve the business or it could be dealing with more debt for its incapability to meet short term liabilities whilst sales are low.

Operating efficiency actions what sort of company uses its resources to generate revenue. Sony's inventory turnover has progressively decreased over the last ten years; a low figure may signify it includes too much stock, possibly anticipated to lowering demand.

The accounts receivable proportion has progressively increased, demonstrating that Sony has no problems in collecting money from customers, or that it is not providing credit to attract customers.

In conclusion and look at the limitations of ratios, it's important to understand that analysis of the ratio or group of ratios may emphasize a power or weakness in a business, but you won't let you know why these conditions can be found, further plus more thorough inspection would be required. . (Jones, 2008, p. 246) Shows that performance indicators would be a useful option to ratios; it could however become more accurate to make use of performance indications in addition to ratios to truly have a clearer image of a firm's position.

Correct analysis of financial information would help decisions about the future direction of the business. By comparing the performance of the business enterprise with historical data or benchmarks from similar companies, decisions can be produced if action must be taken regarding the performance or direction of the business and the opportunities open to it. If Sony is considering an alteration in product platform, the financial information would be critical in evaluating and comparing the firm's capacity to compete and become profitable in a fresh marketplace.

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Summary of main tactical issues

Future market forces

Dynamic industry

Emerging markets

Current competitive stance (analysis models)

Focused on competitive markets

Value chain

Production costs are higher than competitors

Organisational culture and architecture

Slow to respond to changes in industry and environment

Financial analysis

. Low sales

Poor liquidity

Increased borrowing used ineffectively

Strategic options available

Retrenchment or a recovery strategy would be a choice for it market as it is economically unattractive on the whole, yet divestment or a complete leave would be damaging to the organisations quest and reputation.

Diversification, acquisition, tactical alliances or joint projects are strategies that Sony has used efficiently before.

Limited expansion strategies offer Sony the safest way to re-establish itself and develop. By using existing core capabilities to access new marketplaces Sony can slowly but surely re-build its position and financial affairs

Substantive growth can be achieved through horizontal integration of competition or vertical integration such as alliances with suppliers.

Recommendations

Focus on appearing market segments for existing center capacities and competencies in order to gain competitive benefit.

Explore joint projects or sub agreement creation, of low value products such as standard consumer TV's and mature life cycle products.

Using ground breaking technology improve existing product runs to be able to enter high end consumer and professional marketplaces.

Explore leverage of Sony solutions into other establishments.

Delayer the management hierarchy to a flatter composition to permit clearer lines of communication and operational efficiency. Assign business units managers clear roles and define individual responsibilities for decision making, in order to improve vibrant capabilities. Establish corporate and business moderated discussion boards to enable business units to achieve synergies and change culture.

TV market

Strategic options available

Business failing and leave from the TV market is an option, a final resort that that would not only harmed the companies satisfaction and reputation it could remove a significant element of its vision affecting interconnected consumer devices

Substantive development strategies would require integrating horizontally with competitors or vertically with suppliers to gain competitive advantage. This is not a nice-looking option for Sony in such a competitive section. However, the TV's role in the eye-sight of product and service synergy provides substantive expansion probable by integrating with its internal SBU's.

Limited expansion proposes that the strategy is concerned with market penetration, market development or product development. Although the TV is an founded product, the networking and interconnectivity features makes it unique in comparison to standard products made available from nearly all competitors.

TV market strategy recommendations

Exit production and offer of mainstream consumer TV's as the forex market segment is losing money. Other proper options would require Sony to remain involved with a competitive, mass development, low income market segment that will not fit with its organisational DNA or eye-sight.

Retain the Sony TV legacy by keeping capability to supply high end Television set models by convergence of technologies such as connection and networking with existing products and services.

Focus investment on research and development of display solutions and related production techniques. Although research and development activities have associated hazards such as cost and time scales for profits on return, the differentiation benefits of a new display technology could be leveraged across a variety of existing products such as notebook computers, mobiles and hand held devices. These Inventions can also accomplish other expansion strategies such as alliances and the benefits of intellectual privileges allowing businesses to manufacture under licence.

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