External and Internal environment analysis: SONY - Speech or Presentation Example

External and Internal Environment Analysis: SONY A. External Environment (Opportunities and Threats) a) Industrial environment (Micro-business environment) Porter's Five-Force Model Porter’s five model was established by Michael Porter’s whose aim was to enlighten company managers on the influence external factors have in any business. The five forces include rivalry as a result of existing competitors, bargaining power of buyers and suppliers, threat of substitutes and treat of new entrants into the market. Rivalry; Sony is facing high competition from its competitors in the market for example Apple which recently announced the release of an improved iPad device has captured the attention of many customers hence Sony experiences reduction in its consumer base. Competition is also influenced by quality, price and modification. The technological improvement Apple has adopted in its iPad products forces Sony to compete for it to remain relevant in the market (Stadtler 3). New entrants; entry into the market is determined by the barriers to entry and the level of new competitors to enter into the market. Sony initiated the creation of some electronic products which has attracted companies like Apple to high compete in the sector. The band names so of Sony and Apple are highly recognised and respected globally which may hinder the success of new firms. Supplier bargaining power; suppliers are associated with the price, distribution and payment terms. Their force suppliers have in an electronic industry is not high. Suppliers give specifications to companies before the manufacture of a product which may influence the cost of the resources used making them dominate the market. Electronics producing companies can easily switch suppliers (Stadtler 4). Power of the buyers; buyers have a greater influence in the prices and quality of products in the market. Their sensitivity to prices can lead to them switching to other companies (Stadtler 4). In the electronic industry, customers are limited to few brands since alternatives are not so many, for instance Apple, Amazon and Sony have globally recognised brands which limits the ability of their customers to influence their product and service prices. Substitutes; availability of substitutes in the market can influence the rate at which customers switch from one product to the next one as long as the product serve the same purpose. Sony and Apple manufacture mini computers but their prices vary; Apple offers them at lower prices as compared to Sony hence their customers can quit. Life Cycle Model Inception stage; here the managers and project team put together ideas towards development of a product. Requirements; it is the main focus of the project which involves determination of the end users, how the object is going to be used, the kind of data that can be keyed in and the kind of data that is going to be received as output. The materials that are involved in manufacturing the project are identified and cost evaluated, for instance in the case of a phone. Design; this is where the outcome of the experimentation stage is utilized. The designers are left with all the responsibility, to develop the product by putting together the software and hardware. Implementation; code production is at this stage which acts as their main focus of the product lifecycle. The code is automated using the data and information that was collected and generated during design stage. Testing; the product is experimented before it is released into the market to ensure that the product is viable enough and satisfies the customers’ needs. b) National and international environment (Macro-Business environment) Different countries have their own different rules and regulations governing labour, some may be higher than the sale’s of Sony making the company record losses. Political influence on international trade hinders Sony’s expansion to different regions. Sony has ensured that it meets the entire legal requirement by the law associated with manufacturing and producing companies (Stadtler 9). Sony’s products are a source of entertainment and education. People get entertained and at the same time get informed hence literacy level are raised. Sony is environmental conscious as it produces products that are eco-friendly. Sony offer loans at their Banks at low interest rate. The economic crisis which has led to inflation has negatively impacted on the Sony’s operations in the market (Stadtler 10). c) Summary of Opportunities and threats Sony’s partnership with highly recognised companies like Google and FIFA (world cups) has increased their scope in the market and consumer base. The company recently reorganised its business operations resulting into high production. Their innovativeness is likely to increase its sales because its customers are loyal and have trusted their products. Sony is facing a lot of threats for example high exchange rates in the foreign world might negatively impact on its scope. The economic crisis in the world is a threat to Sony’s operations. Imitation of its products is likely to hinder their sales and productions (Stadtler 6). The power of its competitors like Apple, Samsung and LG is likely to affect its performance. B. Internal Environment (Strengths and Weaknesses) a)      Resources: Tangible and Intangible Resources are those aspects or features that a company possesses, manages and put into use. Tangible resources are those that are physical in nature. SONY owns several buildings, large track of land, machinery as well as equipment which are valued at about $ 15 million. Its financial resources due to sales increase each year. Intangible resources are those assets that cannot be felt physically but the company uses while producing goods and in service provision (Stadtler 8).  Sony has been rated one of the worlds most recognised and reliable brand. Sony’s customers associate it with high quality products, innovative and a unique method of operation. b) Generic capabilities Sony has high financial services which include insurance and assurance services, Sony bank and financial holdings. These services generate a lot of financial assistance for the company. Credit cards and let out operations are provided by Sony Finance International, Inc (REF). Sony has invested in technological advancement in terms of research and innovations. Their products are of good quality; therefore their capability to develop improved products is high. Sony has been in the fore front ensuring that their employees have the required experience and exposure to conduct its activities. The organisation organises seminars, workshops and short training for their employees (Stadtler 8). The management has strong strategic plan which aims at innovation and adopting new technology. The company has put in place measures that aim at achieving their mission which include customer satisfaction as well as profit maximization. c) Core competencies (Firm resources and sustainable competitive advantage) Sony’s products are valued because of its durability and efficiency. Almost all their products are engineered with the aim of satisfying their customers need. The mobile phones and other electronic materials are known to last for a longer time if the user follows the manufacturer’s instructions of usage carefully. Most of Sony’s products are rare in the market because they have not established offices in most parts of the world. Imitation is a common phenomenon; Sony has not been spared (Stadtler 7). Although its products are unique, some companies have produced the same products like Sony’s. Substitutes are available in the market, for instance, many people who rarely find Sony’s products opt to buy products manufactured by Samsung and LG. d) Summary of strengths and weaknesses Sony’s strengths come about as a result of its brand name which is easily recognisable; this has enabled it to capture a high consumer base. Diversification of products and services has enabled Sony increase its annual revenue. The products range from home appliances to office equipment, hence cutting across all sectors. Their innovativeness places the company highly competitive in the market. Its products are of high quality hence satisfying their customers. Their ability t expand their market across all continents is a great advantage. Their employees are qualified and experienced. On the other hand, Sony has weaknesses; the cost of manufacturing is high which has made the company reduce its amount of productions. Sony has diversified into a wider range of products and services, an indication that their strategic focal point is weak (Stadtler 5). Frequent retrenchment of staff has led to reduction in the amount of electronic product sales. Promotion of products by Sony is very rare which gives way for their competitors to outdo them. Work Cited Stadtler, Raphael. Strategy Coursework – Sony Corporation. GRIN Verlag publishing, 2011. Print. Read More