Environmental Challenges that Sony Faces - Essay Example

A. Environmental challenges that Sony faces Sony continuously conducts product researches making its s constantly in wait for whatever new development it has and these activities primarily help it to be positively pushed to its competitive advantage. However, there should be other major important information that should be clearly elaborated in order to understand the prevailing challenges that the company faces. This primarily includes the various changes in the marketplace which particularly should always involve political, economic, social, technological, environmental and legal factors and more. Politics Under political factor, it is always common to look at the government’s conservatism when it comes to dealing with business. One perfect example would be the case of privitisation. In every government, there is always a strong stand on controlling the rise of certain organisation. In Japan for instance, various organisations are faced with remarkable challenges because the government is trying to protect the interest of small organisations in their respective industry. However, the ability of Sony to leverage its core competencies together with other organisation is a proof that there is always the right timing in politics. For instance, Sony’s intent to leverage its core competencies with a Swedish telecommunication company in order to beat Nokia resulted to the birth of Sony Ericsson. This joint venture is a remarkable proof that finding the right place for each organisation is needed in order to enhance its core competencies. This at some point has specifically involved the prevailing political stand of a nation which basically has great impact on the entire business process of an organisation. For instance, a government saying no to privatisation may significantly create an impact to those organisations planning to leverage their core competencies through it. With this, it is important to understand politics as a major thing that affects how the entire business should be conducted primarily because of the prevailing government’s stand. However, it is not only in this broad and general illustration how politics essentially affects Sony. In modern situation, politics itself could stand between competitors or even within an organisation (Knopper, 2009). This is a proven trend in the whole business industry of electronics. For instance, every profit organisation in this industry is simply trying to be a cut above the other by reaching its competitive advantage. Competitive advantage is something that needs to be worked out because it serves as something that will enhance core competencies (Porter, 1998). The Sony Ericsson merging is an act of enhancing the core competencies of the companies involved. However, the main point is to actually consider having a high level of competitive advantage. In the same way, politics is involved in here and this is the reality, to beat the opponents and be the market leader in a specific industry. Sony Ericsson is attempting to beat Nokia and many other market leaders n the mobile phone industry. In reality, Sony is highly affected by the ever changing trends and the market share of its competitors. Sony is a diversified company covering different market segments for its diversified products. Its diversification from purely an electronic firm reminds its potential to grow. However, all of these are fueled by the ever changing strategies conducted by its competitors who have certain focus in their respective industry. For example, the varying strategic moves of Nokia, Samsung, LG Electronics and Apple Incorporated triggered Sony to do more and try its best much even harder. This is due to the fact that each competing organisation tries to create their own competitive advantage in order to become the key player in its industry (Porter, 1990; Porter, 1998). Each of these competing organisations has specific core competencies that differentiate it from the other. For example, Nokia remained unharmed with the 2008 economic downturn due to its effective implementation of strategic acquisitions, partnerships and its being the leader in research and development in its industry. Apple Incorporated is also known as the leading market leader because of its ability to differentiate its product offerings through its leading innovative strategies for product development and creating a need for them. On the other hand, LG is always anticipating customers’ needs allowing them to provide the best value for their consumers. Finally, Samsung is very aggressive in its expansion program into developing markets while also trying to enhance strong brand awareness for its high-end products. Economic The health of the nation includes its economic condition and this would mean that each organisation that tries to invest their time and financial capacity in a certain country needs to understand the nation’s entire economic activity. It is important to detect simple hints of economic downturn and other related threats to an ongoing investment so that the entire business will not be affected. The effective implementation of strategic acquisitions, partnerships and its being the leader in research and development in its industry, made Nokia irresistible in the midst of economic downturn. In the same way with Sony, its best effort to merge with other companies enhances its economic core competencies in the process. On the other hand, in the age of modern economy and the whole process of marketing activity, achieving certain market share becomes an ultimate measure of an organisation’s dominance in its industry. At some point, a firm’s primarily goal must be its market share (Grant, 2005). Market share therefore can become the measure of economic success of an organisation. It is through this basis that most organisations are able to evaluate their level of achievement in a certain market where they belong. Due to this market share, Sony is able to evaluate its effort and its needed strength to be acquired in order to compete more. Social Furthermore, in the case of products like that carried by Sony must all require social acceptance. At any time, Sony needs to face the fact that consumers have various options to choose from due to increasing competition. Each competing product has something remarkable components that are offered in the market based on a target market segment. Thus, competitors learn to understand the value of creating focus or in a highly accepted marketing term is called product differentiation strategy. This significantly triggered and influenced the various choices of consumers. However, above than this, there is a strong consideration of social factors. For example, it is important to understand customer’s prevailing needs as mostly influenced by friends, relatives and most especially by marketers. In today’s modern marketing activity, marketers are able to successfully create a need for their product and service offerings in the marketplace (Boone and Kurtz, 2006). As a result, various social activities of humans are used by different organisations in the hope to create a significant demand for their product and service offerings. Technology One of the most important reasons why until today Sony has remarkably created a significant impact in the marketplace is because of its ability to feature its cutting-edge technology. In the same way, this strategy is also used by various competitors leading the customers to have various choices for something new in the market. For instance, Apple Incorporated is known to be the leading innovative organisation in its industry because of its being always on the go to feature something new with a cutting-edge technology to the customers. Its iPod has remarkably gained acceptance in the market. Apple Incorporated is good at enhancing its product portfolio and in a way each of them has to gain considerable market share. The same strategy is used by Samsung, LG and other key players. Their goal is to entice their target market with their products in a highly advanced technology. The key is innovation with technology. Environment Another important consideration in the product innovation is the environment. It is in line with this that various specifications have been added to different products just to be able to respond to varying environmental conditions. As a result, customers are faced with various innovative products that will answer their needs and at the same time will be able to address different environmental conditions. Legal Sony for instance is busy with its fight against piracy. As a result, it integrates into its product development the support to advocacy of the entire entertainment industry. For instance, its Blue-Ray front technology integrated into its DVD discs is somehow aimed at fighting for the advocacy of the entire entertainment industry against piracy. However, this might not be enough, but the value of product innovation proves to be a significant solution to its prevailing problem with piracy. In the end, Sony will be able to remarkably use whatever available legal consideration in order to find a substantial opportunity for its business. Porters 5 Forces Competitive rivalry Considering that each organisation in the industry where Sony belongs has remarkable competitive advantage or core competencies, it can be said that they all almost covered what is the essential and have available solutions to the needs of consumers. It can be said therefore that a new entrant’s entry into the industry may be easy due to various options and the industry remains to be always open for possibility. Thus, competitive rivalry at some point can become so high. However, Sony together with its industry is faced with varying key players with little differentiation between the products sold between customers. From time to time, almost the same features can be observed from their products in the marketplace. This can remarkably prove that competitive rivalry is high among Sony and its competitors in their industry. Power of suppliers Suppliers do have power, but this can only be realised if the whole industry is dependent on only few of them. Due to innovation, producers or the key players are able to find ways and means in order to find substitutes. However, the common trend is to look for various suppliers so as to save on cost and later Power of buyers In the case of electronic industry and mobile phone industry, Sony is faced with the fact that buyers have the influence and control in it. This is due to the fact that as stated earlier there is a little differentiation over the offered products and so customers can directly find substitutes. Customers are becoming sensitive to price and this can be remarkably observed by how the key players market their products with substantial emphasis on pricing. Furthermore, it does not incur additional cost to switch to another product on the part of the customers. Threat of substitutes There are various substitutes for products created by Sony. This is due to the fact that it enters into different markets with existing competitors that are widely well versed in their industry. For example, its high portable digital music device has readily available substitute from Aple’s iPod. In the industry where Sony belongs, a strong competition remarkably results to fall of price, thus, there is always a strong threat of substitute. Threat of new entrant The threat of new entrant is eventually not high because it is hard to convinced existing and loyal customers to existing products. This is true in the case of Sony and other big international companies who only remain to be the key players in the industry. These companies have remarkably focused on certain market segment and this is the reason why they continue survive until now. The problem with Sony is that it is eventually losing its focus because of its ability to enter into varying markets for its products and service offerings. However, the point of this is that it wants to dominate in the varying markets. Until now, only few key players are dominating in the industry because major companies such as Sony are very clever to strengthen their core competencies. Thus, Sony Ericsson merging is a remarkable proof that Sony would really want to dominate and hold as much market share leaving no chance for the new entrants. Kotler model of the micro-environment A company’s micro-environment is composed of different key players such as suppliers, company, competitors, marketing intermediaries, customers and the publics (Kotler et al., 1999). As stated earlier, suppliers have the chance to dominate in the market if they are only few. Thus, it is important that in the case of Sony and so that it could substantially adjust the price of its final output is to look for various suppliers to ensure lower cost of raw materials. However, in reality this cannot be easy considering that there are existing competitors that could be served by the same existing suppliers. Thus, the result would be to have strong market power for the competitors. Today, various companies are relying on marketing intermediaries because they want to save cost. Most of this is through outsourcing of personnel for the reselling or physical redistribution of products (Kotler et al., 1999).As a result, customers are still faced with different products because of the existence of different suppliers. Thus, those who have high market share is eventually the market leader. For so long time, Sony is always expecting to be on top due to great opportunity it could experience. One of this is its ability to gain support from the publics with potential interests that could help fuel the achievement of an organisation’s objectives (Kotler et al., 1999). B. Recommendations Focus differentiation strategy Sony certainly needs a little bit of focus in order to sustain its competitive advantage in its industry. It is widely involved in various markets in the first place so it is hard to appreciate the fact that it should use the same strategy in all its businesses. However, there is one thing for sure that will be applicable in its case and that is the ultimate use of a focus differentiation strategy. The good thing about this strategy is that it helps the organisation assess its competitive risks while ensuring its competitive advantage (Schermerhorn, 2010; Hoskisson et al., 2008). Customers are eventually the very foundation of the existence of a certain organisation and its strategies (Hitt et al., 2009). By this, it is clear that Sony should be able to directly apply all its strategies to its customers. The need to undergo focus differentiation is to be able to appreciate the fact that there is a need to create a highly reliable product that is different from the other. This however, has to be integrated with strong support for research and development just like with the case of Apple Incorporated, Samsung and LG. However, the detailed focus is necessary. Sony should be able to rediscover its own market segments that it has to maintain with its highly differentiated product. The company has long-been established so it has to necessarily create certain move in order to have differentiation with its product and services among its competitors. At this point, Sony should not be hesitant to go back to the basic and this includes market exploration. Certainly there are many things to be discovered in the market and some of them need innovation. Thus, it is clear that an integral part of Sony’s focus differentiation strategy is to create a great focus on innovation. Anticipating customers’ needs Another important strategy that Sony should do is to create strong emphasis on anticipating customers’ needs. This is the same way as trying to identify and create a strong effort to place customers’ needs as priority (Heijden, 2002). There is a need to have a strong sense to evaluate customer’s needs because this will remarkably help achieve higher level of customer satisfaction. In reality, the perceived and received services by the customer should be well met (Parasuraman et al., 1990). This particularly increases the high level of customer satisfaction. Anticipating customer’s needs is also a way to rediscover new and innovative products for the customers. The end result of understanding customers’ needs is the creation of strong relationship between the buyers and the sellers (Fung et al., 2008). Customers are certainly will be delighted by this (Davis, 1994). Applying this in the context of consumers and marketers, the developed relationship usually results to high level of customer trust and loyalty (Sindell, 2000). This in particular increases the chance of Sony to maintain high level of satisfied customers and prevent customer erosion. Furthermore, this would also imply that the threat to substitute would become minimal on the part of Sony. Thus, it is important that Sony must be keen about identifying more information about their customers by meeting their tomorrow’s needs today (Schneier, 1994). Furthermore, this can also be found out through understanding prevailing social trends (Westcott, 2005). Even though Sony is one of the leading companies trying to improve its products and services, there is a strong and innovative effort needed in order to predict in advance the needs of the customers in the future. Marketing nowadays is moving into another level of direction. Marketers must substantially predict the future of prevailing customers’ needs. As a result, there is a need to know information in advance about the customers. Strategic acquisitions, partnerships and expansion Sony has already started its strategic acquisitions and partnerships. This is because it wants to enhance its core competencies. However, its main objective in doing this must not just about to obtain its competitive advantage, but the bottom line is to maximize its resources, expand its territory and prevent the new entrants from coming in. Its goal must be to reach the economies of scale. Sony is busy dealing with its businesses in different markets to the extent that it forgot to expand its business. The expansion would mean identifying different market segments for the delivery of various products and services that will suit to the needs of customers. The expansion through strategic acquisition can be possibly done and this can remarkably create effective results (Taillieu, 2001). This has become a big business as a result of integration of former competitors or alliances (Trompenaars et al., 2010). In particular, there are instances that it needs to discover new market segments that are not totally explored by competitors. This is to ensure further that its expansion would bring additional benefits for the company’s advantage. Clearly defined move for innovation Another important move that Sony should consider is its clear identification of its innovative activities. Innovation helps enhance the management performance and is totally connected with technology (Mol and Birkinshaw, 2009; Smith, 2007). Since Sony is in line with technological innovation, part of its strategy is to consider its consistent move to continuously improve what it has already started. 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