Sony Corporation Analysis Report

This assignment presents a detailed report analyzing Sony Corporation. It examines Sony's diverse product range, including consumer electronics, telecom devices, and computer hardware, as well as its service offerings like insurance and banking. The report highlights Sony's core competencies and integration of resources that contribute to its success in the market, comparing its performance to rivals.

ESSAY
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Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK ...................................................................................................................................................3
1 Analysing Sony resources, capabilities and competence as per the case study. Explaining the
success of entity in competitive customer electronic industry. ......................................................3
CONCLUSION....................................................................................................................................6
References............................................................................................................................................7
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INTRODUCTION
The international management is the practice of managing business functions in more than
one nation. With the integration of economies by globalization, it has become crucial for
organization to expand in overseas market. This further help company in assuring growth and
success. In order to facilitate international management experts must have proper knowledge of
business practices, culture, language and economic, political environment etc. of nations in which
multinational corporations actively trade (Tessler, 2016).
In this report, various aspects of international management will be studied in the context of
provided case study of Sony Corporations. It is a Japanese multinational conglomerate company
that was founded in 1946 and headquartered in Tokyo. It is renowned company that is positioned
116th on the 2015 list of Fortune Global 500 (About us. 2016). In this report, learning will be shown
regarding the resources, capabilities and competencies as showcased in case . Thereafter, discussion
will be provided on the role played by corporate culture of Sony.
TASK
Overview of the case study
From the detailed analysis of the provided case study , it has been identified that Sony is
famous company founded by Masaru Ibuka and Akio Morita. On 1967 entity launched successful
product the ultra sharp Trinitron colour Tv system. However, there were products that dramatically
failed in the market like Betamax home video recorder. Later in 1980s company launchged another
successful products like Walkman (Ernst and O'CONNOR, 2014). The prosperity of organization
was further followed by the launch of unique products like PlayStation which was sold across the
globe and added to 10% of the total revenues of Sony Corporation. The company diversified
through US acquisitions into music and film production industries. In the financial year 1995,
company faced massive loss of US$3.29bilion while the sales was US$44.75 billion (History of
Sony Corporation. 2016). One of the reason for loss was write off of goodwill and acquisitions of
film production industry. By the year 2000, Sony was having operating income of 6.6 trillion yen
and holder second leading position in consumer electronics market. By 2001 the Sony merged with
Ericsson company to meet the demand of telecommunication cation equipments.
1 Analysing Sony resources, capabilities and competence as per the case study. Explaining the
success of entity in competitive customer electronic industry.
From the provided case study, it has been identified that core competence of Sony
Corporation lies in the efficiency of company to innovate and use creative ability. The key strategy
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of company is differentiate its products in market on the basis of innovation,high-tech products .
The another competitive benefits of Sony Corporation is use of superior technology. In this respect
significant amount is invested by entity every year in Research and Development area so that
upgraded techniques can be introduced in market which further increase the core competence of
business (Lee, Kim, Choi. and Bien, 2012). This further provided opportunity to company to charge
premium prices for the high quality and unique products supplied by it. With the help of
differentiated strategy,company can easily enhance the customer loyalty and brand value among
them. Thereafter, another core competence is in terms of miniaturization. The entity is recognized
for making tiny products which are compatible for various users (Ambos and Håkanson, 2014).
However, there are certain limitations of the brand that impact the growth and development of
company in present competitive world. The weakness of firm is poor patent protection in complex
consumer electronic products etc. In addition to this,entity faced tough and rigorous competition
with rivals like Matsushita, Panasonic, Toshiba and Hitachi etc. In addition to this other
manufacturers in the industry also added to the competition level for Sony Corporation like,
Samsung.
Sony corporation is regarded as the globe leading entity, functioning in diversified sector.
The company is renowned for developing products that touch on the cognizance and brush up the
spirit of customers (Goetsch and Davis, 2014). The main reason for the fruitful progress of brand
lies in its efficiency to manage a aggregation of its capabilities, resources and core competencies,
which further permits the brand to develop a powerful sustainable competitive benefits in market.
The description of which is as follows:
Resources: It can be defined as component that are possessed,controlled and exercised by the
company for building worth to its stakeholders. There are large number of tangible and intangible
assets are used by company for creating value. The tangible resources refers fixed assets like, plant
machinery, building, land and current assets etc. The fiscal resources are important part of tangible
assets. According to assessment based on business reports, as result of financial resources it has
been identified that there was hike by 10.5% in operating cash flow of year 2007 of Sony as
compared to 2006 (About us. 2016). On the other hand, intangible resources involve those assets
that does not have physical properties but are used to enhance the forthcoming sales and revenue.
The intangible resource include the brand value, goodwill of company in market. Notably, Sony
Corporation is regarded among the most established and trusted brand. The enterprise is also listed
on 21st position in the Interbrand list of the Globe 100 most worthy brands. It has been identified
that brand worth of Sony is approximately is upto Us$14 billion. According to the customers, they
prefer Sony brand for its premium quality, creativity and style (Al Ariss, 2014). The corporation
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holds human inventory of around 125,300 employees having effective skills, expertise, knowledge
and calibre that support entity in attaining its overall aims and objectives. Thereafter, innovative
ideas are provided by employees which help in developing competitive advantages. The
effectiveness of the human resources help Sony Corporation in offering prime quality products and
services in market. Thereafter, company make optimum utilization of its financial resources by
investing in growth and profit generating activities. The brand is also involved in soft alliance with
renowned entity like Philips to develop compact disc (Kraimer, Shaffer, Bolino, 2015). Similarly,
organization is part of varied alliance with hardware developers which facilitate Sony in designing
innovative game software etc. Therefore,collection of different tangible and intangible resources of
Sony facilitate it to maintain its leading position and developing competency among its rivals which
further increase its competitive benefits in market.
Capabilities: It can be outlined as kinds of functions that organization use to develop value and so
as to add to its competitive benefits. In this respect, company can use creativity and other skills of it
employees along with this expert knowledge of their field to deliver values to its buyers. Sony is
leading enterprise in consumer electronic market by offering televisions, Play stations and various
other gadgets. The entity also excel in in insurance industry which provide major share to the
revenues of business (About us. 2016). Thereafter, Sony laptops and personal computers are also
sold on high range. Therefore, company have strong capability in terms of offering unique products
and services . The company effectively expanded into t he music and film sector with the
establishment of Sony Picture and Music Entertainment. The Sony Corporation was part of
blockbuster film Spiderman. Hence, establishment enjoy efficiency in aggregating it different
capabilities with the different resources which assist to develop its competitive benefits which
cannot be copied easily by its rivals.
Core Competencies: The term core competence can be refereed as advantages available to firm
that enable it to perform better than its counterparts and maximize its proficiency. The key core
competence of company lies in miniaturization. such as,it has developed HD mini Camps, Cam
recorder etc (About us. 2016). In addition to this aspect, entity use creative designs products
ranging from handsets, Television, etc. The organization ha showcased premium quality in terms of
reliability of its offerings and distinction as per rivalry. Thereafter, to sustain competitive benefits
company also focus on improved and strong marketing aspects. This help in maintaining brand
loyalty of customers by assuring proper information among them (Core Competence of Sony. 2016).
The another most important core competence of brand is it high quality of products. In this respect,
organization keep upgrading its techniques and processes which help it in superior class products
and services. Sony corporation is only entity to take part in the total high definition value chain
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from the lens to the screen. The organisation constantly develop new and innovative products to
surprise customer every time and create value for them. Also, Sony Corporation has showcased
responsiveness towards buyers by assuring proper feedback from them and assuring their issues are
resolved to maintain their satisfaction level. Such as, after knowing customers are not buying
PlayStation 3 console, due to its high price, brand later reduced its prices. Overall, it can be stated
that, Corporation has properly managed the aggregation of its capabilities, core competence and
resources to attain competitive benefits and render worth to its buyers.
2. Outlining and critically evaluating Sony strategies
In order to become global leader, there were wide range of strategies and tactics used by
Sony Corporation. The first and foremost strategy used by entity was related to its decision to
expand in foreign market. Therefore internationalisation strategy was used by entity to enhance
customer base and overall market share of firm. The brand was first Japanese entity to be listed on
NewYork stock exchange. In 1972, Sony started is production in US by setting plant In San Diego.
f The company wanted to make use of its production capacity to fullest by developing products for
wide range of customers around the globe (Kraimer, Shaffer, Bolino, 2015).. For example,Sony
best selling product PlayStation was sold in international market. Other than this, diversification
strategy was used which enable entity to expand in entirely new market with new offerings. The
Sony started its business through consumer electronics but with the time it diversified into other
sectors as well. Such as, it entered into complete new industry, entertainment industry. It was
further connected with the vision of having multimedia future as company controlled the high worth
software offerings operating in its lower margin hardware offerings (Lee, Kim, Choi. and Bien,
2012). The other remarkable move of Sony was its entry into life insurance with joint venture in
1976 which developed the Sony prudential Life insurance. Thereafter, Sony acquired CBS in 1987
which is globe largest record company . The company also hold Sony Life which provide financial
services to different customers.
In the my opinion, Sony strategy changes include to be evolutionary. It further helped entity
in becoming the giant conglomerate that cater needs of wide audience.
3. Evaluating the strategic position of Sony
By shedding the light on the case study,it has been identified that Sony has gone through
many ups and downs in its corporate life. From the financial data, it has been ascertained that there
is significant alteration in ratio, percentage change in sales from 2000-2012, from 13% to -9.6%.
Thereafter, return on shareholder equity is also dropped from 12% in year 2000, to 0.9% in 2009
and -4.1% in 2012. therefore,it has been identified that company is not able to maintain interest of
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its shareholders. Further, investment of company in research and development areas was maximum
between 2006-2008 and positive outcomes of which were reflect in % change in sales,18%.
Furthermore, video equipments, televisions are some products whose sales are increasing over time.
The information and communication are performing outstanding way in market. The total
electronic business is generating more profit to Sony. The music and picture sector are not doing as
expect.
On the basis of the analysis, recommendation can be given to the company.
1. The organization must invest in research and development area as it will help in developing
creative and innovative products. This will further assist in increasing the sales of company
products and services.
2. The company must discontinue its loss generating business to prevent future loss.
3. It has been identified that major market for Sony are Japan, US and Europe.
Therefore,strong marketing can be used to maintain the competitive position within the
target market.
3.
In order to analyse the strategic capability of Sony, VRIO model can be adopted. By use of this
model, it can evaluate in internal ability of the business enterprise. Valuable- As per the previous discussion it has been ascertained that Sony is the world
largest brans which render the excellent quality of products to its customer. It has effective
brand image in the market ( Lee, Kim, Choi and Bien, 2012). Company offers a high range
of product differentiation to its customers. However its products prices are very high but
quality of product is excellent. Rare- Company have effective brand image in the market so as its brand loyalty is high. It
products are competitive and quality ascertained. It have high numbers of competitors in the
market. Costly to imitate- Company have major competitors of LG, Panasonic and Samsung which
have low market growth aspects. Further, cited venture adopted the effective strategy tht is
diversification.
 Organised to capture value-A firm must organise its management system, processes,
policies, organisational structure and culture to be able to fully realize the potencial of its
valuable, rare and costly imitate resources and capabilities (Al Ariss, 2014). Cited venture
product have high level quality which create loyal brand image in the market.
SWOT analysis of Sony
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Strength
High and excellent quality products
Effective and strong brand image in the market.
It have a wide range of innovative products.
Skilled and quality employees (Ambos and
Håkanson, 2014).
Weakness
Its prices are very high so lower income group
people can not consume.
Less promotional activities
Decrease in stock prices.
Sony profit level has decrease due to decline in
sales.
Opportunity
Its opportunity to become multinational
company so can easily expand its business in
future.
Another is to adopt cost efficient technology to
reduce high cost of production of goods.
Threats
Changing customers demand related to
electronic goods.
High advance technology and its continuous
development.
Threats of substitute products offer by its
competitors.
Ansoff Matrix
This model provide four different growth strategies by which company can seek to achieve growth
with its product in the market.
 Market penetration- In this strategy, company sale its existing product and services in the
existing market. This strategy gives a strategic position of company ion term of
internationalisation of business.
 Product development- In this strategy, company develop new product and services and sales
in existing market. By use of this strategy, company has attained a strategic position in term
of bring play station for children (Kraimer, Shaffer Bolino, 2015). Further it has developed a
wide range of product portfolio.
 Market development- In this stage, company sales its existing product in the new market.
Sony can expand its business activity by sales its product in the emerging new market.
 Diversification- In this strategy, company sale its new product in the new market.
Diversification has follows by Sony to achieve strategic positioning in terms of digital
imaging, games, mobile phones etc.
Recommendation
 Needs to adopt cost effective strategy to gain strategic position.
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 Significant diversification in product range will help the company to gain competitive
advantage.
 Results in decrease the overall cost of the production and gain competitive advantages.
 Focus on niche market needs such as low price products categories for young people may
help in attaining high market share.
CONCLUSION
From the above report, it can be state that Sony is leading organization at present that is
effectively rendering its high quality products and services. The entity deals in wide range of
consumer electronics, telecom devices, computer hardware, semi conductors etc. Sony Corporation
is also noted for its services like, insurance, banking, credit finance, advertising etc. From the
report, it has been identified that efficiency of company lies in its capability to integrate its core
competence,resources, capability etc. which help it is outperforming than its rivals.
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REFERENCES
Books and Journals
Lee, S., Kim, Y., Choi, Y. and Bien, F., 2012. An adaptive technique to improve wireless power
transfer for consumer electronics. IEEE Transactions on Consumer Electronics, 58(2),
pp.327-332.
Al Ariss, A., 2014. International Management. Springer International Publishing.
Ambos, B. and Håkanson, L., 2014. The concept of distance in international management
research. Journal of International Management, 20(1), pp.1-7.
Ernst, D. and O'CONNOR, D.A.V.I.D., 2014. Competing in the Electronics Industry. The
Experience of Newly Industrialising Economies.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Pearson.
Kraimer, M., Shaffer, M., Bolino, M.C. 2015, January. Toward a Better Understanding of Global
Work Demands and How They Relate to Global Competencies. In Academy of Management
Proceedings (Vol. 2015, No. 1, p. 10486). Academy of Management.
Tessler, H., 2016. 2. Back in black: rethinking core competencies of the recorded music
industry. Business Innovation and Disruption in the Music Industry, p.33.
Online
About us. 2016. [Online]. Available Through: <http://www.sony.co.in/>. [Accessed on 18th
November 2016].
Core Competence of Sony. 2016. [Online]. Available Through:
<https://www.dpreview.com/forums/post/4553674>. [Accessed on 18th November 2016].
History of Sony Corporation. 2016. [Online]. Available Through:
<https://www.sony.net/SonyInfo/CorporateInfo/History/sonyhistory.html>. [Accessed on 18th
November 2016].
International management. 2016. [Online]. Available Through:
<https://www.uleth.ca/ross/undergraduate-programs/majors/management/intl_mgt>.
[Accessed on 18th November 2016].
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