Market Structures in Sony Corporation - Essay Example

Market Structures in Sony Corporation Electronics manufacturing industry provides the largest percentage of entertainment devices to individuals all over the world, which is affected by the level of technology and the market strategy implemented to deliver to the customers. Measure taken to implement the strategic planning towards a competitive strategy of an organization in the music industry determines the profitability and lifetime of the organization. The organization has to ensure that the competitive plan puts out other emerging companies as much as possible through the various marketing plans implemented. A Sony corporation is a leading manufacturer of electric electronic gadgets all over the world such as music, online business, motion pictures, television, and computer entertainment. The organization has gained recognition throughout the world following its high awareness of products to the customers. Electronics devices manufacturers such as Sony corporation offer unique quality of various television sets, music systems, and laptops and computers that appeal the customers; hence, with the effective update in technology, management style , the market plan strategies towards existing competition and the corporate goals ensures that the organization is successful and distinguish the company from other similar competitive companies. The process of determining a market structure comprises the research on the rival companies by efficiently exploring their differences and relationships. The features of the market structure affect the routine of the business in the specific market, which has to be appealing to the customer’s needs. There are different market structures used by various organizations, which are based on the number of business participants in the industry and the extent of market control of the involved participants. The market structures include monopolistic competition, perfect competition, and oligopoly and monopoly market structures (O'Connor, 2004). The choice of the market structures in an organization depends on the different characteristics of each type as explained below . Perfect Competition Market Structure Perfect competition is an ultimate market structure that is characterized by many market participants or organizations. The products produced by each of the business are similar to each other; hence, this gives the sellers and buyers the full liberty of joining or leaving the organization. In addition, the buyers and sellers are aware of the prices and technology in use despite the product being produced by a number of companies. Practically, perfect competition does not exist but only forms a benchmark used in the analysis of the real world market structures. The equalization of price and marginal cost through the exchange of quantity goods contributes to efficient allocation of resources (O'Connor, 2004). Monopoly Market Structure Monopoly market structure has a single seller and competitor, who control the supply side of the market. The product sold is unique with no similar substitutes. The demand of the monopoly product translates directly to the market demand hence the need of government regulation because of the insufficiency on market selling side. Monopolistic Competition The feature that distinguishes monopolistic market structure from others is the fact that it has a large number of relatively small competitors with each having a modest degree to control the market on the supply side. The products in the market are close for each firm but are not identical in terms of the production technology involved. Consequently, this structure diversifies the needs of the consumer. Oligopoly Market Structure A small number of comparatively large competitors with each having a considerable market control characterize the oligopoly market structure. Sellers under oligopoly have interdependent decision-making leading to high competition, which necessities the cooperation through collusion and mergers. The oligopoly structure has benefits such that it encourages innovation and large-scale goods production. The different characteristics of marketing structures identify the specific companies’ market structure that it competes. Subsequently, Sony Corporation Company competes in the oligopoly market structure following that only a few electronic industries are able to operate on the selling side of the electronics products. Sony has a substantial control over the electronics product and eventually produces unique products to compete with other electronic firm such as Samsung, Toshiba, etc. Sony choose the oligopoly market structure because of the high demand of high quality modern electronics products; hence, large production of the products. In addition, the organization focused on the oligopoly structure because of the potential to engage in the price competition and enlarge its market in the industry dominated by a small number of competitors. This structure differs from others in such a way that although the few firms are run independently, they share an interdependent decision-making and produce close goods that are not identical. For example, a Sony plasma television is not identical to a Samsung television though all are televisions, which differ in technological innovations. Competitive Strategies Sony is prone to a potentially high competition from other electronic manufacturing companies because of the oligopoly market structure, which demands for use of effective competitive strategies to maximize profits. The market Based view strategy is key to increasing the company’s profits. This integrated tactic or resources-based can maximize both the exploitation of existing internal and external company-specific competences and developing new ones. Competence based strategy is another approach to maximize the company’s profits. Sony can use the process of maximizing long-term cash generation through the disposal of the assets to gain more funds and reinvest back into o various business such as R & D, which will help Sony to strengthen its main competences. Another strategy that Sony can implement to boost the competiveness is the miniaturization. To convey miniaturization to the products, Sony should ensure that the technologists, engineers and the marketers have a common understanding on the customers’ needs to become customer-oriented with an aim to increase competitive advantage and create more value added tasks (Valdani & Arbore, 2013). The generic and differentiation strategy can be very effective in Sony firm because it positions the company as being a cost –leadership and seeks to provide products offering benefits that are different from other competitors and have a wide scope valuation by buyers. Considering that Sony operates under an oligopoly market structure, the three suggested strategies are very effective to maximize the company’s profits because they identify the firm as unique wit premium prices on its goods compared to the other producers (Valdani & Arbore, 2013). Recommendation The success of maximizing profit for Sony relies on the integrated competitive strategies as it is projected that other electronics manufacturers are enlarging a considerable pace. Some of the assets owned by Sony should be disposed to increase its funding to invest in modern and high quality products that will increase the profits over the long run. The company should implement differentiation strategy that will highly contribute to the company uniqueness; hence attract more customers. The company should also recruit technologists, engineers, and marketers familiar with customer needs. Bibliography O'Connor, D. E. (2004). The Basics of Economics. New York, NY: Greenwood Publishing Group. Valdani, E. & Arbore, A. (2013). Competitive Strategies: Managing the Present, Imagining Future. New York, NY: Palgrave Macmillan. Read More