The Future Success of Sony - Essay Example

Sony Shock – Case Study 1. Discuss the importance of product innovation to the future success of Sony with regard to the changing marketing environment. Product innovation is critical to the future success of Sony. Product development is best defined as “the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products” (White, 1988). There are numerous areas in the Sony’s business that needs product innovation.

Sony not only needs to come up with new products and services but also needs to make drastic changes to its existing products and services that will help to regain its dropping market share in several segments. One of the main market segments where Sony is still the market leader is the gaming market. But competitors are soon catching up and it needs to innovate and make its PlayStation better as competitors. Microsoft and Nintendo have already released their next generation consoles and it is high time that Sony releases its and makes the experience far better than the previous ones.

Portable music player is another segment that the company has lost its market share, mainly to competitor Apple. In order to regain its market share, it has to come up with a new and innovative product that is more than just a music player. Instead of competing directly with iPod, Sony must try coming up with a product that is going to shake up the segment, like it has done with Walkman years ago or for matter for of fact Apple has done with iPod. It needs to reinvent itself in the television market as dominance in this market will result in increase in demand for other products also.

As it failed to identify the potential in the LCD market, it is now trying to play catch up. Instead it must try coming up with next generation televisions which is better than the LCDs. There are other segments to where the company needs to implement product innovation if it has to justice to the brand name it has achieved and replicate the success of the past. 2. Conduct a SWOT analysis of Sony Strengths One of the major strengths of Sony us that it is considered to be a premium brand by consumers as it has gained the reputation of producing high quality, technically superior, innovative and reliable products.

Hence, products coming out of it are generally considered by the consumers to be among the best. Like Apple, it is also a life style brand which means that consumers take pride in owning Sony products. This is a great platform for the company to market and sell its products. Weaknesses Main weakness of the company is the brand image that it has acquired in the recent past. It is now seen as the shadow of its past successes. It has been criticised for not tapping new opportunities and failing to innovate.

The company was once a market leader/innovator but now has become a follower. Its overall financial performance has not been encouraging to shareholders. Opportunities Sony has its presence in numerous industries and this gives it an opportunity to build products and services that can be bundled. That is, a sale of one product can be linked to the sale of another and hence driving the business. The phone industry is going to take off and the next generation phones are still not been explored.

This is a great opportunity for the company as its mobile phone business is doing relatively well. Threats Due to company’s presence in numerous diverse industries it faces competition from a number of companies that all are giving Sony a run for its money. Apple and Samsung have come up with new products and services that have challenged Sony in the areas where it was once the leader. In other markets too company is facing intense competition, such as in gaming market by Microsoft and Nintendo. 3. What are the strategic options available to Sony in the wake of Sony Shock?

Recommend a course of action for Sony giving reasons for your answer. First and foremost, Sony needs to bring back the innovative culture that its founders had incorporated into it. Until and unless these can be done, it will be very difficult for the company to recover. This can be achieved by doing what its founders had done. By finding where the next big opportunity is and then coming with products and services that will address that opportunity. Company needs to regain “focus” and in order to do this it needs to limit the number of products and services in each market and focus on one a few products and services that will change the industry.

This will guarantee success for the company. Small teams must be formed and these teams must have the best employees working on the best products. Employees must be encouraged to take risks and make decisions as this fosters innovation. References White, M.R.M. (1988). Small firms' innovation: why regions differ. London: Policy Studies Institute.