Longitudinal Strategic Development of Sony Corporation - Case Study Example

Strategic Planning Intake 5 Course Work Assignment TABLE OF CONTENT Sony Corporation in the Recent Past.............................................................................................1 Current State of Sony Corporation................................................................................................3 Sony - Strategic Direction for the Future.......................................................................................5 REFERENCE LIST………………………………………………………………………………7 Sony Corporation in the Recent Past There is no denying fact that Sony Electronics is one of the giant electronics corporations around the world today. For any company to see the kind of successes that Sony Electronics has seen there must be certain pragmatic and workable corporate strategies in place. A corporate strategy “is concerned with the overall purpose and scope of the business to meet stakeholder expectations” (Tutor2u 2010). This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. It must be emphasised that having a corporate strategy in place is not enough but then, the corporate strategy must be result oriented one. Most of these strategies were put in place and implemented not more than twenty (25) years ago. Among other things, Sony has seen results from strategies such corporate restructuring, recreation of products, and invention of new technology. Corporate restructuring is an important component to determine the success of any company. It is more of a managerial strategy than a marketing strategy. In the view of Trevor (2011), “Corporate restructuring is a term used to denote a company's reorganisation at the highest corporate level. This can also include legal status, ownership, operational, and financial restructuring to improve profitability and provide better organisation for the present and/or prepared for market changes.” Tatum (2011) posits that “Restructuring a corporate entity is often a necessity when the company has grown to the point that the original structure can no longer efficiently manage the output and general interests of the company.” To buttress the advantages are the procedure and reason for undertaking such corporate restructuring. In the case of Sony consumer electronics, restructuring has been going on every now and then for the past 25 years. The focus has mostly been to shake up the working staff and executives of the company to ensure that the right people are at the right place, doing the right thing. For instance in 1995, the company under a major restructuring in it topmost position by naming a new president, Nobuyuki Idei, a man who was only 34-years at the time. This move saw a lot of growth in Sony because Idei had served in the company for a very long time. Another massive corporate restructuring that took place in the company took place in the year 2003. This restructuring started with the laying off of staff – another bitter decision to take in corporate government. In all, Christman & Spahr (2003) observe that about 1,000 positions were to be eliminated worldwide. Though such a move was to be seen by analysists as harsh and inhumane, the action was actually taken with a plan in mind. Andy Lack, who was taking over from Tommy Mottola at that time as the chairman of the company reported that "strategic structural changes are necessary to position the company for future growth" (Christman & Spahr, 2003). This of course is a mark of excellent leadership. The resulting outcome of the restructuring move was that Sony had less expenditure at hand. This saved the company a lot of money that would have gone out of its coffers. So though criticised, these restructuring moves worked perfectly for Sony Consumer Electronics. One other strategic move used by Sony Consumer Electronics in the past was the recreation or reinvention of market products. This is more of a marketing strategy than a managerial strategy. The practice of reinvention is a very powerful marketing tool. This is because it gives the company the chance to build on existing models of electronic equipment with features that market survey has suggested will appeal to customers. In March 1997, Sony introduced its first DVD when there were existing video DVDs on the market. This was a perfect marketing strategy because Sony had the opportunity to analyse all existing video games and was convinced about features that it could introduce to make the product an improved version. As a movie playback format, it meets the specific and detailed requests of the motion picture industry's Studio Advisory Committee. No other product has enjoyed such broad international support across so many industries prior to launch (DTV Group, 1996). This marketing move yielded positive results for Sony. Sony has also had a good history of new inventions unto the market. Notable among Sony’s new inventions in the past 25 years is the introduction of the 32-bit play station introduced in 1994. The strategy used was to look for an aspect of electronics that did not exist at all and would be seen as an entirely new innovation for the market. After the first PlayStation was invented, Sony went ahead to introduce a new PlayStation it called PlayStation 2. Emulator Zone (2010) describes some of the specs of PlayStation as having high qualities of CPU, graphics, sound and data. This was of course a tool that made the act of gaming more and more interesting, attracting more and more market base. Current State of Sony Corporation Having realised the immense authority that mobile phone industry is taking in recent time, Sony has revamped its operations in the mobile phone sector of the company. This has been done by expanding the market share of Sony Ericsson Mobile Communication AB, helping it achieve number 3 share of the global mobile handset market in terms of quarterly sales (Sony Fact Book, 2006, p. 2). With almost every function of technology including television viewing, e-mail service, internet browsing, money transfer system, car security system and recently health delivery system becoming integrated into mobile handsets, Sony has strategized itself to be part of this revolution. This strategy can be termed as ‘changing to suit the market’. According to Kotelnikov (2006), “Companies, like any living organism, must become learning organizations that change and adapt to suit their changing business environment.” The company has also brought technology right into the homes of customers by introducing into the market, more portable electronic devices that makes the use of electronics easier and simpler. Entertainment and technology is becoming home based and as per Sony’s 2006 research and development plan which is in place today, Sony has strategically joined home and mobile electronics. Today, Sony has products that support high definition (HD) content with particular emphasis on venturing into accelerated product development by gaining efficiencies in designing system large-scale integrated circuits (Sony Fact Book, 2006, P.3). On the use of semiconductor technology, the Sony Fact Book, (2006), Sony has in the past being the leader in use manufacture of charged-coupled device, CCD image sensor (p.3). Currently, the company has taken up the challenge into the finding marketing and administrative strategies that reinforce its electronic application for cells in CMOS images sensor (CISs) so that it will be a leader in that field of operation also (Sony Fact Book, 2006, p.3). Sony’s CISs has in no small way come to set the pace for digital technology behind cameras as the system is used in camera phones and digital cameras. The new technology and market entrant has not failed Sony at all. Even though the concept of CISs has been there since the 1960s, it is now that it has been brought to full use. The uniqueness of the function of the semiconductor technology ensures that cameras that uses the CISs run on low energy and that pictures captured are of high image quality. What is more, Sony has strategically placed itself well in the area of device technology. This is also a dream that emanated from the 2006 research and development plan and also a build on to its strategy to reinvent and improve existing electronic components as it did in the case of DVD. In this direction, Sony has since introduced new products onto the market that are competing so well because of their technological innovations. Some of these new devices are Digital High-Definition Handycam, Personal Communicator “mylo” COM-1 and VA1O Extension Line. This move has earned Sony some good money. Statistics show an impressive performance by the corporation in year 2011 in the Box Office Performance for Sony Pictures where currently the company has a whooping 21.05% of market share (The Numbers, 2011). Finally, the Sony Consumer Electronics and Media has strategically ventured into software technology with the aim of boosting its Digital Rights Management (DRM) software. With this software, consumers are assured of a high performance choice for electronic products as compared with those already on the market. This is because the software has a special capacity that makes it give out a superb user interface because the middlewave it contains which enhances interconnectivity of electrical components. Sony - Strategic Direction for the Future Castro (2007) posits that Strategic planning is the “continuous and systematic process of guiding members of an organization to make decisions about its future, develop the necessary procedures and operations to achieve that future, and determine how success will be achieved.” Strategic planning for the future requires sober assessment of a company’s immediate performance and its environment by all who have a stake in it. The following strategic plans are recommended for Sony. In the first place, Sony Electronics prides itself as innovation masters. Sony’s Boss Hirai is said to have accepted the accolade attributed to the company and taken pride in the fact that his company came first in an opinion poll as to which is the most innovative company. According to Lytle (2008), Hirai admitted the poll saying “We recently came out number one in a poll by Incite on innovative companies, just ahead of Apple. I rest my case." The call for innovative creativity means Sony should continue to introduce to the market, devices and equipment that will not just meet the current technological era but run ahead of it. It is only by running ahead of today’s technology that Sony can be assured of running ahead of all other companies it is in business competition with. For this reason, Sony should think of innovative creativity that will make it live ahead of today’s generation. By this, there can be practical innovations in advancing its television, mobile handset, games and digital imaging in such as way that they will contain features that have never lived before. Secondly, it is recommended for Sony to spend more in investing in specific areas of their corporation. It is excellent and as already looked at, advantageous that Sony has several components. However, for Sony to devote a specific area of all their components to invest more to make that component a brand identity would do Sony a lot of good. It is clear that companies like Toyota, AGI, Citigroup, BP oil and General Electricals who are rated as some of the world’s richest companies ahead of Sony (Forbes, 2007) all deal in specified commodities. Creating a brand identity would not mean Sony would sell off other components of the corporation but such a brand will make Sony more identifiable with the market – and customers for that matter. To this end, it is advised that Sony concentrates on Computer Entertainment (movie theme). As a matter of fact, as computers and mobile devices become more and complex, there is no way they will do without movies. Sony can therefore take advantage of the complexity of computers, internet and mobile phones to trade produce and trade movies more innovatively. Finally, innovative marketing is suggested to keep Sony ahead in the electronics industry. This suggestion is especially useful as it is suggested that they focus on movies. Sony can take great advantage of the power of the internet and mobile downloads to widen its elasticity in terms of customer reach. Already, Sony has seen success with online distribution of blockbusters like Hancock, which it made available exclusively to all internet-connect Bravia televisions in the US before its DVD release (Lytle 2008). In the time being, Sony can its film download service reach online PlayStation Network. Consumer accessibility to other products of the company should be made easier via internet and mobile phone. It is clear that shop marketing is no more. Sony should therefore expand its e-business base. REFERENCE LIST 7 Britannica Concise Encyclopedia 2011, ‘Sony Corporation’, accessed 15 February 2011, Lytle M J 2008, ‘Revealed: Sony's future plans for PS3, PSP and TV’ accessed 19 February 2011 Castro G C 2007, ‘Strategic Planning, Facilitation And Sony Corp.’ Oppapers, accessed 19 February 2011, Christman E & Spahr W 2003, ‘Sony Restructuring Plan Begins With Layoffs’ accessed 20 February 2011, DTV Group 1996, ‘Sony DVD A Single Standard for the World’ accessed 18 February 2011 Emulator Zone 2010, ‘PlayStation 2 Emulator’ accessed 20 February 2011 Entrepreneur.Com 2011, ‘What is Market Survey?’ accessed 19 February 2011 Forbes 2007, ‘World Top 10 Richest Companies’ accessed 21 February 2011 Kotelnikov V 2006, ‘Continuous Innovation’ accessed 20 February 2011 Sony Fact Book 2006, ‘Research and Development: Supporting Sony’s Growth Strategies’ Sony Corporation, accessed 18 February 2011 Tatum M 2011, ‘What is Corporate Restructuring’ Wise Geeks, accessed 20 February 2011 The Numbers 2011, ‘Box Office History for Distributor - Sony Pictures’ accessed 20 February 2011 Trevor B 2011, ‘What is Corporate Restructuring?’ Ezine Articles, accessed 16 February 2011 Tutor2u 2010, ‘Corporate Strategies’ accessed 18 February 2011 Read More