Strategic Analysis of Sony - Case Study Example

Strategic Analysis of Sony Name: University: Course Title: Instructor: Date: Executive Summary Strategic management has become such an important aspect when it comes to the success of any organisation. It is through having the right strategy that a company can compete with its rivals in a level playground. This paper explores strategic management in Sony Inc. It looks at how the company has been able to lose its competitive advantage in its field of operation by use of strategic analysis. This paper is outline in five sections. The emerging issues under first section are that from 2006, the firm has been on downward spiral. One of the areas that have performed poorly is the electronic section with the main culprit being television manufacturing. In the last 8 years this section has continually produced losses. This means that they need restructuring. The losses are associated with cut throat completion from Samsung, LG and other electronics which have been bold and first movers in innovation thus. Also some have undercut Sony in terms of pricing. The third section analyses the macro environment that Sony operates in global perspectives. The analysis shows that all factors play the same for all players and as one of the first movers, the firm should try to lock in the customers and create barriers to entry. However, with expanding economies and with disposable income increasing new players are emerging to challenge Sony. Moreover, with knowledge based manufacturing other competitors are able to invest even more than Sony. The essence is to engage in continual improvement and aggressive marketing. The fourth section examines the industry in which the firm operates by using SWOT analysis. The section shows the firm has various strengths, weaknesses, opportunities and threats. Out of this analysis the strategic gap that emerges is that after attaining market leadership the firm rested its laurels in mid 1990s. This allowed competitors to engage her in innovation, pricing, and distribution making her lose market share. The essence is not to dispose non performing business segments, but to engage in aggressive value creation so as to regain its position. The last section covers cover brief conclusion giving the strategic gaps noted from the analysis. The strategic gap facing Sony is the stiff competition leading to reduction of market share. Thus, there is need to churn out demand driven products through innovation and being adaptive to change. Table of Contents Executive Summary ii Table of Contents iv Acronyms vi 1.0 Introduction 1 2.0 Customer and Market 1 3.0 Macro Environment Analysis 2 3.1 Political Factors 2 3.2 Economic Factors 3 3.3 Social Factors 3 3.4 Technological Factors 3 3.5 Legal Factors 4 4.0 Industry Analysis 4 4.1 Porter’s Framework 4 4.2 SWOT Analysis 5 5.0 Conclusion 6 References 7 Appendices 8 Appendix 1: Issues Affecting Sony 8 Sony will cut costs to challenge Samsung's market share 8 Appendix 2: PESTLE Analysis of Macro Environment 11 Appendix 3: Porter and Millar’s Five Forces Model 14 Porter’s Five Forces 14 Appendix 4: SWOT Analysis 17 Success Factors/ Core Competencies/ Strengths 17 Weaknesses 19 Opportunities 19 Threats 20 Acronyms SWOT- Strength, Weakness, Opportunities and Threats PESTEL- Political, Economic, Social, Technological and Legal Analysis Strategic Analysis of Sony 1.0 Introduction The linchpin of any successful business organization such as Sony is the ability of its top management to craft and boldly execute strategies. It is through well crafted and boldly executed business strategies that business organizations are able to achieve their corporate missions (Ireland & Hitt, 2005, p.68). Kim (2007, p.133) posit that a crucial approach for business companies to achieve global competitive advantage is to build layers of advantages. Sony was founded in 1945 and has been one of the dominant players in the electronic industry. In the recent years due stiff completion from Samsung and LG, the firm has lost significant market share and had a dwindling brand value. From 2006, the firm has been on downward spiral. One of the areas that have performed poorly is the electronic section with the main culprit being television manufacturing. In the last 8 years this section has continually produced losses. Moreover, they have had 3 continued years of companywide losses (See Appendix 1). Consequently, this means that the firm has not managed certain parameters well and hence, unable to attain profitability. This paper examines the failing performance of Sony. 2.0 Customer and Market Sony has a wide range of customers and target market due to their product diversification. The firm with its global subsidiaries have product and services segments that focus on electronics, pictures, games and financial services with both focus on low end and upmarket segments worldwide. Apart from income and social status, the company targets different segments of the population based on age parameters. They have wide range of products for all of their customers and engage in marketing mix. Currently, Sony Inc. is involved in the designing, manufacture, as well as the marketing of electronics and home appliances like televisions, CD players, digital cameras, speakers and mobile communication gadgets. The firm has various direct customers under the arrangement of business to business distribution. One of the clients under this arrangement includes Google who buys Google TV. The other competitors who are also Sony’s client include Dell Inc., Sony Inc. and Lenovo, Inc. these firms mostly buy lithium ion batteries manufactured by Sony as a component of their note books (Sony, 2012). In addition, most of the semi conductors used in their notebooks is manufactured by Sony. In addition, the company has adopted business to business approach whereby they have distribution channels and also they have adopted business to consumer market through online trading portal. The company has direct sales force, as well as third party resellers to help in distributing Sony products. The presence of wholesalers and value added resellers assist in marketing Sony’s products. Along with its subsidiaries, designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players. In order to reach its target market, the company uses different distribution channels to sell its products. There are online stores, as well as physical retail stores where consumers can acquire the company’s products (Sony, 2012). 3.0 Macro Environment Analysis The strategies crafted and implemented business organization determines their strategic positions in the marketplace The strategic position of a business organization is also influenced by how business organization interact with the key external factors impacting on their operations and business activities. According to Kristandl and Bontis (2007, p.943), PEST analysis relies on an organization past events and experience but plays crucial roles in determining the future of a business organization. Enz (2009, p.53) notes that PESTLE analysis is an audit a business organization can undertake to determine environmental influences affecting the business and use the findings to develop strategic decision-making. These factors do affect an organisation either positively, negatively, directly or indirectly. A closer look at how these factors affect Sony is found in the table (See Appendix 2). 3.1 Political Factors Most of the countries that Sony operates in are stable. The combined North America, EU, some parts of Asia and Africa business environment provides strict policies that ensure businesses are protected through a well setup legislative system. Political factors can be impacted through labour laws, tax policies trade restrictions and the environmental law. These legal frameworks offers level playing field. This is good for business development. Apart from few countries, in political view most countries are suitable for doing business. This enabling political environment has opened space and new competitors are giving Sony a run for their money and even overtaking it in television industry which was one of its dominant domain. On the other hand, it has also allowed Sony to have subsidiaries all over the world trading in various stock exchanges and selling their products. 3.2 Economic Factors The prevailing economic situations and trends both at the local and international levels impact on the performance of business organization in all industries. Developed nations like Europe and US, parts of Asia and other emerging economies provide market since their populations are able to afford Sony’s products if they create value, competitively priced. This stable economic situation is healthy for electronic industry. The only dent that has been which affected all players was the recession. This affected the industries, financial institutions and consumers’ purchasing power. With economic growth individuals and businesses are likely to demand electronic products to support their operations as they will be able to afford. 3.3 Social Factors People have become technologically savvy and would wish to leave a comfortable life and at par with current social trends. Moreover, consumers are well informed about the products they want and are able to access lots of information from the media, TV, Radio and the internet, which offers resourceful information. Customers are able to determine the type of products they want, the manufacturer and even the supplier as all the information is available to them (Barney, 2007, p.13). This makes it easier to convince customers as they know what they want and want to go with trends. Social dynamics has created a mass consumer population that keeps with trends. 3.4 Technological Factors Innovation is great factor as it allows firms to produce wonderful products that captivate imaginations of consumers in terms of functionality and aesthetics hence making them relevant to the market. Innovation cal allow a firm to gain market leadership if well utilised with other marketing strategies as seen in early 1990s with innovation of walkman and Sony triton. Innovation works in two ways and thus can be productive or hindrance especially if competitors technology is above the rival firm and hence reduction of brand value due to irrelevance. A case example is how LG and Samsung have overtaken Sony in the television sector especially the LCD ones. On the other hand technological platforms allow firms to interact with clients directly and create new channels of distribution. The introduction of e-commerce in the mid 1990s has enabled Sony to pioneer in implementing the internet technology in its online business. This has enhanced sales, sharing of information and advertisements. In a nutshell, technological advancements has been phenomenal in this industry as exhibited by Sony, Samsung, Nokia, Google, LG, Apple and Dell. 3.5 Legal Factors The legal framework for conducting business activities in the most parts of the world is well structured and encourages the growth of the market, business security, as well as sustainable profitability of most business organization across many business industries. Business laws that govern electronic industry are well structured and defined, hence promoting both local and cross boarder business ventures. 4.0 Industry Analysis 4.1 Porter’s Framework A micro economic analysis is undertaken by use of the Porter’s Five Forces of competition in an industry. According to Thomson and Martin (2010), these five vital factors are a threat to new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and rivalry amongst existing firms in the industry. As such, these factors play an important role in the success of an organisation because of the impact they have on a number of things within an organisation. All these factors ultimately combine to have a huge impact on the profitability of the company (See Appendix 3). The first concern here is the threats of new entrants. Currently with expanding economies and technologies new firms are coming up to have a share of electronic industry thus, eating into Sony’s market share. In addition, established players are also entering into these segments. For Sony to overcome this, they have to create barrier to entry by locking in customers, creating high switching cost, enhance promotion and creating value to customers. The next is bargaining power of customers. This factor is real as customers will buy products that are fairly priced. To overcome this, the firm should engage in segmentation and product diversification. The third factor is suppliers’ power. This should not worry them because there are many suppliers in the industry. The essence should be to build collaborative approach so as to lock out other buyers. The serious aspects that have worked Sony down is threats of substitutes and competitive rivalry. The electronic industry is awash with various firms producing goods doing similar services. Some of these firms product have grown powerful as result of their innovation and marketing strategies. This has actually contributed to the loss making of Sony in the electronic sector especially TVs. The reason was their inability not to be innovative enough when the trends were going towards LCD they were still stuck on Cathode Ray Tubes. This was made tough when new entrants and competitors like Samsung and LG took the initiative. Other like apple has taken leadership in smart phone and portable digital entertainment. For instance, it has been noted that Samsung value is greater than Panasonic, Toshiba and Sony combined (Kelly, 2012). 4.2 SWOT Analysis SWOT analysis of an organization involves evaluating both internal and external factors which have either beneficial or detrimental impact on the ability of an organization to effectively compete in the market place. Organizations strengths are internal resources and capabilities and regarded as an organization’s core competencies. It is these strengths that enable Sony Corporation to create and maintain competitive advantage against competitors in the market place. Weaknesses on the other hand are those factors internal to an organization that jeopardize business performance and competitiveness in the market place (Ireland & Hitt, 2005, p.68). Every organisation needs to thrive and grow in its business operations. This is realized through its ability to meet the demands and expectations of the customers by dingo things better than its rivals (Thompson & Martin, 2010). In order to achieve a competitive advantage, companies locate in strategic sites for easy accessibility for its goods and services. Other success factors for an organisation include: store size, technology, purchasing power, and its customer care services (Sadler, 2003). A strategy has to be viewed from perspectives of opportunity, capability and competitiveness. These three, plus the company aspirations and values are what drives an organisation to succeed and reach greater heights (Thompson & Martin, 2010). The greatest factor/ strategic gap/ drift that emerge that have led to Sony’s market share decline and profitability is inadequate innovation in television sector. They seem to wait and follow others when they have made innovations. One aspect is noted is fear of investing in LCD Plasma TVs that Samsung took advantage of this. In the mid 1990’s Samsung Electronics Company ventured on producing larger LCDs which other competitors such as Phillips and Japan’s Sony were reluctant to venture into (Kim, 2007, p.134). 5.0 Conclusion Currently, the company has managed to stay competitive. However, other firms are increasingly eating into its market share. For a company to stay afloat, it is important for the top level managers to churn out products that are in line with market trends. Sony has been consistent with this trend. However, of late, the company has faced stiff competition from other players and new entrants leading to reduced market share. However, due to changing market and industry dynamics the company has faced stiff competition from competitors like LG, Dell and Samsung among others leading to reduction of its market share. This paper found out that Sony has had declined market share as a result of stiff competition. To claim this there is need to be responsive change either at industrial level or the larger macroeconomic environment by producing demand driven products through innovation. Companies like Apple, Samsung and IBM have proven that demand driven innovation is the best way to go and thus, Sony should embrace the same. References Enz, A.C. (2009). Hospitality Strategic Management. New York: John Wiley & Sons, Inc Global Expansion. Problems and Perspectives in Management, 5(3): 131-137. Ireland, R. D. & Hitt, M. A. (2005). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Executive, 19 (4): 63-77. Hill, C. & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. Ohio: Cengage Learning. Kim, R. (2007). Samsung’s Competitive Innovation and Strategic Intent for Kristandl, G. & Bontis, N. (2007). Constructing a definition for intangibles using the resource based view of the firm. Management Decision, 45(9): 1510-1524. Pinegar. (2002). Dell Computer Corporation: Market Trends and SWOT Analysis. Retrieved from: http://www.pinegars.com/PDF_Files/Paper%202a.pdf. Sadler, P. (2003). Strategic Management. London: Kogan Page Publishers. Thomson, A., Strickland A. J. and Gamble, J. (2007). Crafting & Executing Strategy. NY: McGraw-Hill/Irwin. Sony Corporation (2012). Corporate strategy meeting. Sony. Tung, R. L. (2001). Learning from world class companies. London: Cengage Learning. Appendices Appendix 1: Issues Affecting Sony Sony will cut costs to challenge Samsung's market share Published: Tuesday, August 02, 2011, 5:43 PM     Updated: Tuesday, August 02, 2011, 6:03 PM By Bloomberg News Kiyoshi Ota/BloombergThe maker of Bravia TVs cut its sales and profit estimates last week, citing sluggish sales of TVs in the U.S. and Europe. Tokyo-based Sony, reeling from three consecutive years of company-wide losses, also slashed its full-year TV sales target by 19 percent to 22 million units Sony Corp., facing an eighth straight year of losses from its main television operations, is preparing to overhaul the business to reduce costs and compete against Samsung Electronics Co. The plans may include partnerships as well as reorganizing the procurement, product development and sales operations, Mami Imada, a Tokyo-based spokeswoman, said in response to queries about a Nikkei newspaper report. Details of the reorganization may be decided this month, she said. Chairman Howard Stringer, who’s farmed out production to Foxconn Technology Group and eliminated thousands of jobs, may be returning his focus toward cost cuts after 3-D TVs and Internet-centered sets failed to stem Sony’s slide in market share against Samsung and LG. The Japanese company last week replaced its TV head and said it won’t sell as many units as it had anticipated. “Sony needs to make deeper changes in the structure of its TV business,” said Kota Ezawa, a Tokyo-based analyst at Citigroup Inc. “Selling its factories can only be the first step.” Sony closed 0.7 percent higher at 1,973 yen in Tokyo trading today, narrowing its loss this year to 33 percent. That compares with the 3.8 percent decline by Japan’s benchmark Nikkei 225 Stock Average. The Nikkei newspaper reported earlier today Sony will outline plans for its TV operations, citing Chief Financial Officer Masaru Kato. Back-to-Back-to-Back Losses The maker of Bravia TVs cut its sales and profit estimates last week, citing sluggish sales of TVs in the U.S. and Europe. Tokyo-based Sony, reeling from three consecutive years of companywide losses, also slashed its full-year TV sales target by 19 percent to 22 million units. Sony also announced at the time that Yoshihisa Ishida, president of the home-entertainment unit that makes TVs, will be replaced by Masashi Imamura, president of the personal imaging group that produces cameras. Ishida will become a deputy CEO at SonyEricsson Mobile Communications AB. In the past two years, Sony has sold three factories, reducing its number of TV plants worldwide to four, as part of the company’s efforts to reduce costs. Sony agreed last year to sell 90 percent of a TV factory in Nitra, Slovakia, to Foxconn’s Hon Hai Precision Industry Co., after disposing of 90 percent of its largest North American TV- making assets to Taipei-based Hon Hai. Sony also agreed to sell a TV facility in Barcelona in September. Dwindling Brand Edmund Ding, spokesman for Hon Hai, didn’t answer calls to his mobile and office phones. Once worth more than $100 billion, Sony has lost half its market value since Stringer became its first non-Japanese chief executive officer in 2005. The company that invented the Trinitron cathode-ray tube TV in the 1960s is now valued at about $25 billion, less than a quarter the size of Samsung. Sony may no longer rely on its brand for an edge. Since Samsung passed Sony in terms of brand value in 2005, the Korean company has extended its lead, ranking 19th in Interbrand’s latest annual survey of global brands, or 15 places above Sony. Clinging to the television business may be costing shareholders. While analysts say Sony shares may climb as sales of its PlayStation game consoles and Cyber-shot digital cameras bolster profit this year, stripping out losses at the TV business from the rest of the company would boost its equity to $43 billion, according to data compiled by Bloomberg. Biggest Division By selling the TV division, Sony would exit a business that is forecast to lose almost a billion dollars this year as consumers unwilling to pay for its Bravia flat-screen TVs turn to cheaper brands. The TV unit had 1.2 trillion yen ($15.5 billion) in sales last year, making it the biggest source of Sony’s revenue, data compiled by Bloomberg show. Shiro Kambe, Sony’s chief spokesman in Tokyo, said yesterday the company has never considered walking out from the TV business because of its importance to the company. The company lagged behind Samsung and Seoul-based LG Electronics Inc. in the global TV market last year, with 12.4 percent of sales, according to DisplaySearch. Sony’s share slipped to 11.4 percent in the first quarter. A strengthening yen versus the dollar and euro is also exacerbating Sony’s losses by making its exports less competitive overseas and reducing the yen value of foreign- currency denominated sales. Google TV Sony, which began offering Internet-enabled TVs in the U.S. in October that use Google Inc.’s software and also introduced 3-D Bravia models last year, said last week it expects the loss from its TV business to be as large as the 75 billion yen deficit it reported in the fiscal year ended March. That would push losses at Sony’s TV division past a half- trillion yen since 2004, or more than $5 billion based on historical exchange rates, data compiled by Bloomberg show. Stringer has already eliminated 30,000 jobs, sold factories and moved production overseas in an effort to revive earnings. “The reorganization plan should be big enough to surprise the market,” said Keita Wakabayashi, an analyst at Mito Securities Co. “It may not be easy for Sony to come up with something very new to investors after promoting cost reductions.” Appendix 2: PESTLE Analysis of Macro Environment Factor Issue Political Political institutions offers regulatory framework by giving permits and restriction. The policy of the day can affect business environment at global and national level. In cases where there is political instability, there is a likelihood of insecurity in a country. Essentially, a global brand like Sony is affected because it cannot conduct business in an unstable environment. Instability could be in form of terrorism activities. On the other hand, government regulations affect the company profits. For instance in China where the internet is closely controlled by the government. The current global environment in most countries has allowed multi international firms to venture into markets outside their home countries. Economic Economic environment affects purchasing power which consequently creates demand. As countries recover from the global financial crisis and new economies like China India and Brazil emerge, there is hope that people will have some disposal incomes to spend on luxuries like computers. This is good news to Sony as its sales will increase. Developing economies also offers new frontiers outside the saturating developed nations. Additionally, uniqueness of Sony products will attract customers to get its products. In addition, quality, dependable products and good customer care services would attract customers after the global crisis. Lastly, with globalisation and reduction of trade barriers, Sony has opportunity to expand, but also their market share can be eaten into. The expanded economic space means new players in electronic industry have emerged. These contribute to stiff competition and product diversity. Social As the population increases, it means more people will need computers, televisions and other personal entertainment service. The current young population will also increase the demand as the lifestyle changes. Most people even in developing world are appreciating digital development to enhance and ease their lives. The trends are moving towards smart phones, online music portals and portable entertainment gadgets among others. Technological Electronic industry is a dynamic sector. Various competitors have invested in technology so as to produce wonderful products that creates value to customers. Companies like Samsung were pioneers in LCD TVs which are the current in thing. Moreover, Apple has invested in smart phones which are also in-thing. Sony has given innovation priority in all its activities. This can be seen from the fact that a lot of financial resources are set aside for research and development (Minato-ku, 2012). By use of technology, the company has developed state-of-the-art products such as LCD TVs, phones and cameras. In case of technological failures, the operations of Sony are greatly affected. A case example of this was the recalled laptops that were overheating (Sony, Corporation, 2012). Sony should engage in innovation that adds value, demand driven and not easy to copy. Legal Companies do engage in contracts, licensing, franchise, market completion, employee safety, and environment use, employee poaching and copyright issues. These illicit various legal tussles between firms, firms and consumers, firms and employees or firms and community/ government. Over years, the company has had various legal tussles with its competitors for quite some time. This tarnishes the reputation of the company. Environmental Globally, there are undergoing strategies aimed at ensuring production of environmentally-friendly products. As such, Sony has tried to formulate policies ensuring that it complies with these regulations. Thus, products are not supposed to have any adverse effects on the global environment. Sustainability reporting and reduction of environmental foot prints are new concepts that are focused on reducing industrial impact on environment. Summary of PESTLE Analysis of Macro Environment Factor Issues Political Political instability affects Sony’s activities worldwide Government regulation like in China affect Sony’s marketing processes Economic Global economy has recovered after the global financial crisis hence customers would invest in electronic meaning better performance for Sony Competition is getting tougher with many players coming in Social An increasing world population will provide a market for Sony products Changing lifestyles creates more opportunities to be tapped Technological Company has given innovation priority Increased research and development in the company Using technology to design state-of-the-art products Uniqueness of Sony products would attract customers seeking to buy luxury goods Other players are likely to imitate Sony and produce counterfeits and others are likely to engage in reverse engineering Legal The company has had various legal tussles with its competitors for quite some time. This tarnishes the reputation of the company Environmental Environmental laws in various countries where Sony has subsidiaries require the company’s products to comply with regulations Source: Author’s own work Appendix 3: Porter and Millar’s Five Forces Model Source: Hill & Jones, 2007 Porter’s Five Forces Threat of New Entrants Technology has meant that other companies can also enter a market initially dominated by Sony. An example is Samsung and LG that has been able to do everything done by Sony. To overcome this firm has to create barrier to entry and be low cost producer so as to lock in customers Buyer power With changing economic times, buyers are likely to resort to illegal means of sharing content without paying for it like music, buy counterfeit products If consumers reduce their spending on electronics, then Sony suffers Consumers may choose to use previous versions of products rather than upgrade to new releases Firm should create switching cost to allow customers to switch to their products. Threat of Substitutes There are various means through which consumers can acquire electronics like TVs, notebooks, Cameras and memory sticks from other firms meaning Sony product sales will reduce. Given that Some Sony products are expensive, consumers could resort to substitutes from rivals Firm should be low cost producer, diversify, innovate so as to lock in customers Supply power There are many firms involved in supply of raw materials in this industry. Moreover, at a time competitor turns to be a supplier to another competitor. This then means equation is balanced and so no need to wary about bargain power as it is geared along supply chain theory of collaboration. Firm should engage in collaborative effort and keep those who only contribute to their success Competitive Rivalry There are competitors to Sony in its industry. For instance Microsoft Dell and HP in computer hardware. You Tube.com offer online videos. Samsung and LG on personal entertainment gadgets Firm should engage in strategic partnership, acquisition, creation of brand value so as to lock in customers. Moreover create switching cost Source: Author’s own work Summary Table of Porter’s Five Forces for Apple Force Issue Threat of New Entrants New companies from emerging economies from China and India Buyer power Hard times, less luxuries Less consumer spending Consumer behaviour not to upgrade Threat of Substitutes More competitors meaning reduced share Expensive products Supply power Processors and hardware supplied by other competitors and the same suppliers also supply Sony competitors Competitive Rivalry More companies e.g Toshiba, Panasonic, Samsung, LG Source: Author’s own work Appendix 4: SWOT Analysis Success Factors/ Core Competencies/ Strengths Factor Issue Extensive research and development Sony has invested heavily in research and development activities in order to have the best products on the market. The company has innovation as its driving strategy enabling it to make unique products. Creativity and Innovation Sony employs some of the highly talented and knowledgeable personnel in the industry. These people have brought in a lot of creativity and innovation when it comes to the products and services offered by the company. Additionally, CEOs have helped the company by cultivating a culture that promotes creativity and innovation Differentiation and Advertising The company has a wide array of products from musical systems, communication gadgets, home appliances and educational facilities. The company engages in personalised advertising to market its products and reach its target market. Over years, there have been various advertising campaigns by the company. Brand Loyalty The company has engaged in production of high quality and unique products. These help in maintaining customer loyalty. More so, through advertising, Sony has been made a household name world over. There is brand and customer satisfaction that comes with using Sony products. To people, it is prestigious to use unique Sony products Distribution channels Sony uses different distribution channels in selling its products. There are physical retail stores located in different countries worldwide. Customers can access Sony products from these stores. Moreover, there are online stores offering products from the company. Additionally, the company has direct sales force, as well as third party resellers to help in distributing Sony products. The presence of wholesalers and value added resellers assist in marketing Sony products Capturing new markets By use of the e-business initiative, Sony has been able to capture new markets. Here, the company has taken advantage of the fact that people have become technology savvy. As a result, it has opened online stores where people access its products. This means in countries with no physical stores, people can do their purchasing online. This increases sales. Customer centred marketing Sony has initiated customer centred policies. These policies ensure that products are geared towards meeting the unmet needs of the consumers. To ensure good service provision to the customers, there is a database that shows the customer preferences, as well as their buying patterns and behaviours. From this database, the company understands how well to meet the needs of these customers. This is through production of a wide range of products. Source: Author’s own work Weaknesses One of the weaknesses of Sony presently is the inability to respond to the massive undercut is has experienced from new entrants like Samsung, Apple and LG who have really eaten into their market share. This is especially evidence in portable entertainment gadgets, communication gadgets, TVs and other home appliances. This means that the firm should churn out products which are demand driven and not doing innovation for the sake of it. Tung (2001, p. 41) notes that organisation that survives is the one that is able to adapt to change and not the strongest one. The emergence of new entrants and upping of operations by existing competitors has eaten into the market share of Sony Electronics. The argument for this is because from the above observations, Sony has tried to be consistent with them. Opportunities The growing demand for electronics especially personal entertainment gadgets are an opportunity at the disposal of Sony Inc. people are buying and using electronics more than ever and as such, the market continues to expand. Another opportunity for Sony is that the Buyers of computers are increasingly becoming more educated in terms of what they really want. Sony due to its ability to customize personal entertainment gadgets and other electronics is in a position to cater for the need of this group of buyers. The expansion of communication and technological integration also provides an important for Sony to expand its business operations. Customers are able to make use of their personalized computers to make orders and enquiries about anything. This is efficient for both the customer and the business organization (Pinegar, 2002, p. 6). Threats Threat of New Entrants Technology has meant that other companies can also enter a market initially dominated by Sony. An example is Samsung and LG that has been able to do everything done by Sony. Buyer power With changing economic times, buyers are likely to resort to illegal means of sharing content without paying for it like music If consumers reduce their spending electronics, then Sony suffers Consumers may choose to use previous versions of products rather than upgrade to new releases Threat of Substitutes There are various means through which consumers can acquire music (CDs & DVDs) meaning Sony product sales will reduce. Given that Sony products are expensive, consumers could resort to substitutes from rivals Supply power There are other companies involved in supply of Sony products like LG and Samsung Competitive Rivalry There are competitors to Sony in its industry some producing fake and counterfeit imitations Source: author Read More