Strategic Audit of a Corporation - Swot Analysis of Sony Playstation - Assignment Example

SONY PLAYSTATION: SWOT ANALYSIS Company Background Sony Corporation is one of the oldest electronic companies that was founded in 1954 by Akio Morita and Masaru Ibuka in Tokyo, Japan. The corporation was initially named Tokyo Telecommunications Engineering Corporation. The company operated in electronic and electrical devices with its first product being Tape G tape recorders which was produced by 1950s. Afterwards, the company got the license that allowed permitted it to move to a more technologically integrated production of electronic devices including radios and televisions. In 1955, Sony successful released its first commercial transistor radios that dominated both domestic and international market, hence building international recognition in the field of electronics (Nagle 45). In 1958, TTK was changed to Sony, a Latin word which means sound. This was in line with the fact that the company initially opted to specialize in sound and electronic gadgets before undertaking a massive restructure in the line of its products. Given the increasing competition and market dominance, the company was forced to advance from mere production of digital and analogue electronic and communication devices. After conductive a comprehensive market search, Sony invested in advanced technology in the production of electronic with the latest innovation being the discovery of computer video gaming consoles. Besides, Sony has heavily invested its resources on technological integration and innovation that has made the company be successful in producing modern technology devices including laptops, video recorders, and PlayStations (Sony 92). The modern computer gaming is considered as one of the most successful technological innovation ever made by Sony. The popular PlayStation games have attracted interest from a large number of youths and from the sales of these games, Sony has made a great progress in terms of profitability and financial performance. PlayStations among others are examples of consumer revolutionary products launched by Sony. Sony ventured into console computer games in 1994 through Sony Computer Entertainment department (Nagle 51). This department is charged with the responsibility of developing, publishing, marketing, and distributing PlayStation software. SWOT Analysis of Sony PlayStation This involves investing internal and external factors and how these environmental factors impacts on the market performance of Sony. Strengths Having established itself as one of the most successful companies, Sony has since then developed a strong positive reputation and brand name among its potential customers internationally (Nagle 65-9). Sony is a multinational corporation that has emerged as one of the most respectful and successful firm in the field of electronics. Besides, Sony has therefore developed strong customer base and loyalty owing to the quality of its other products such as T.V, DVD and other electronic devices. For this reason, the introduction of PlayStation will heavily attract a good number of consumers from the current customer base of Sony. A survey conducted among the consumers in 2011 tagged Sony as being the most value corporation especially in Asia. Secondly, having been in this field for decades, Sony boasts of strong skills and expertise production techniques that are essential in developing quality computer gaming consoles. This implies that the company is associated with quality products that make it more preferred by the consumer. Through its technical and professional experts, Sony’s console games are very quality and diversified depending on the needs of the consumers. The company therefore produces games of high definition quality to match the taste of the consumers. Sony Company is synonymous for its technological excellence and rich heritage of technological expertise that is has made in successful in this competitive market for decades. Through such skills, Sony has managed to guarantee its customers quality gaming products. Sony Company always ensures that its customers are provided with the latest and the greatest gaming software and hardware taking care of the diverse needs of the computer users. These hardware and software are of high quality standards, thus outlasting the software and hardware of their competitors (Chandler and Rafael 76). Finally, the company (through its planning and marketing department) is committed to meeting the dynamic needs and demands of their potential consumers. Weaknesses The company was not the first company to advance in the field of computer gaming and console. Sony was the third company to introduce computer entertainment through gamming and therefore, it loss the opportunity to be first firm to venture in the field or gain the advantages that accrue from being the first-mover of the a product in the market. The PlayStations manufactured by Sony are the most expensive software and hardware in the entire market (Sony 89-90). This chases away most willing customers because of the prices are unaffordable for these group of consumers. The third weakness of Sony PlayStation is that the system and hardware for the program lacks adequate security measures coupled with the succession problems following the changes in the leadership structure of the corporation. The other weakness of the introduction of PlayStation computer console is the shift of focus from core competence that resulted into brand distortion. Finally, increased resource investment in PlayStation was not profitable as the profitability index of Sony significantly declined. Opportunities Video and computer console games are increasingly become popular among the youthful generation. Over the last one decade, the demand for video and PlayStation has significantly been on the rise. For this reason, the increasing interest in consoles presents a great opportunity for Sony to increase its marketing share and gain dominance of both hardware and software industry of PlayStations. Sony Corporation therefore takes advantage of this rise in the demand for the music and movie industry to advance its production technologies and integrate its production line. Besides, this industry still presents a potential of growth and development that gives hope for Sony Corporation (Chandler and Rafael 77). The significant rise in the level of consumer income is another great opportunity for Sony to market its new computer technologies. Through increased income of the potential customer, there is a possibility of exploring this market of console games. The other opportunity for Sony PlayStation is founded on the technological integration of Sony. Sony extensively invested console hardware and software technologies that give it the advantage over its competitors. Threats The major threat to the success of Sony PlayStation is the possibility of product duplication. The technology that Sony uses in the production of its video and computer console may be duplicated by the competitors. Competitors are other threat to the Sony’s bright idea of computer games. Technological integration comes with new idea and concepts that makes the old idea irrelevant. This implies that old consoles becomes obsolete and hence need for increased investment in new technology. Another external factor that affects the performance of the firm is the economic and financial instability (Sony 89-95). The changes in the global economic conditions characterized by inflation and financial crisis significantly impact on the sales volume of PlayStations of Sony. Therefore, the sales of gamers are highly hurt by the economic conditions of the market. Strengths Strong expertise and skills and technological integration International positive brand image High quality software and hardware for the video and computer gamming Meeting the interest and demands of the consumers Weaknesses Loss of the first-mover advantage The PlayStation are very expensive for the potential consumers Inadequate security measures and succession problem Shift of focus and brand distortion Declining in the returns from investments Opportunity Increasing demand for video console games High consumer income Technology leadership and price differentiation Establishing strong partnership with other companies including Nintendo Threats Product duplication and competition Technological obsoleting and depletion Financial and Economic crisis and contagions Strategic Factor Analysis Summary (SFAS) for Sony PlayStation Strategic Factors Weight Rating Weighted scores Duration Comments Short Medium long Strength Quality of products 0.50 4.00 2.00 Medium objective weakness Expensive products 0.10 1.00 0.10 Short-term objective Opportunity Increase in demand 0.25 3.00 0.75 Moderate duration Threat Technological oblation 0.15 2.00 0.30 Long-term objective TOTAL SCORES 1.00 3.15 Assigning of weight is based on a scale reading where 1.00 represents the important while 0.00 represents the least important factor. From this analysis, it is evidenced that quality of the play station is the most important variable at 0.50 while the cost of the products is the least important factor to consider. In rating the variables, the most outstanding variable is ranked higher with the least rated last. Using a scale of four (where 4 – outstanding, 3 – good, 2 – average, 1 - poor), quality of the Sony PlayStation is rated at 4 – outstanding, while the cost of the consoles are rated as being 1 – poor. From the weighted scores, it is established that the quality of the products must be accorded highest weight at 2.00, followed by increase in the demand for the products (0.75), technological oblation (0.30) weights third while the cost factors had the least weighted cluster of 0.10. Works Cited CNN. “Fortune 500 2007.” CNN. 2008. 13 April 2008. Nagle, Mike. “Sony PS3 Powers Alzheimer's Research.” Labtechnologist.com. 20 March 2007. 13 April 2008. www.labtechnologist.com Sony: Corporation. 2008. Sony Entertainment. 13 April 2008. Chandler, Heather M, and Rafael Chandler. Fundamentals of Game Development. Sudbury, MA: Jones and Bartlett Learning, 2011. Print. Learning by Playing: Game-based Education System Design and Development ; 4th International Conference on E-Learning and Games, Edutainment 2009, Banff, Canada, August 9-11, 2009 ; Proceedings. Berlin: Springer, 2009. Print Read More