Strategic Management Practice - Assignment Example

In the year 2012, Sony reported to its shareholders that the company experienced a substantial loss of over 67 billion Yen (Sony 2012). The year prior, in 2011, Sony had achieved another staggering loss of nearly 200 billion Yen which is a product of an inability to achieve revenue growth in a very saturated global competitive market with such companies as Samsung, Sharp, Sanyo and many other electronics producers. Sony, no longer sustaining a market position as pioneering and innovative company, faces substantial strategic problems in achieving growth and capturing the interests of very diverse global demographics to select Sony consumer electronics over that of competing product offerings.

This report analyses the current competitive position of Sony Corporation, focusing on the specific strategic issues facing the firm, the goals the organisation should be constructing based on analysed market conditions, recommends strategic direction for the firm, and describes a performance management system that should be viable for developing the recommended strategy. To address the firm’s main issues, there are several models that can assist in conducting a thorough analysis of Sony. The company, due to its inability to innovate revolutionary products and competitive presence worldwide in the consumer electronics industry, has been unable to achieve competitive advantage.

Barney (1991) provides the VRIO model, a strategy analysis that explores four dimensions of firm activity, these being rarity, value, inimitability and internal firm organisation. Value in this model is the extent to which a company has the capability of exploiting opportunities and to insulate itself from various competitive threats (Barney and Hesterly 2006). Value is measured on whether a firm’s total capital expenditures or labour investments are less expensive than the