Competitive Strategy for Sony Australia | Report

C M T T T TO PE I IVE S RA EGY
T T TS UDEN DE AILS
T T TS UDEN DE AILS

COMPETITIVE STRATEGY 1
Executive Summary
In this report, competitive strategy for the Sony Australia will be discussed. The company is
facing a strategic issue in the Australian market because of its major competitors. In
Australia, the entertainment industry is moving towards the utilization of AI and ML in
Television, gaming console, music systems, etc. Corporate strategy is the suggested
competitive strategy in this report. This strategy will help the company to gain major
competitors advantage by outperforming its competitors. Apart from this, the corporate
strategy also involves the four hypotheses such as Ansoff’s matric, Porter’s strategic matrix,
The Boston matrix and the distinctive capabilities model.

COMPETITIVE STRATEGY 2
Table of Contents
Introduction................................................................................................................................3
Summary of the Case.................................................................................................................4
Identification of strategic issues.................................................................................................5
Application of the strategy model..............................................................................................6
Theoretical concepts...................................................................................................................9
Level 1: Architecture............................................................................................................10
Level 2: Reputation..............................................................................................................10
Level 3: Innovation..............................................................................................................10
Conclusion................................................................................................................................12
References................................................................................................................................13

COMPETITIVE STRATEGY 3
Introduction
Competitive strategy is the long-term action plan of the company to gain a competitive
advantage over other competitors in an effective and efficient way. The competitive strategy
helps the firm to achieve a superior return on investment (ROI). For this report, “Sony
Australia” is the selected company. Sony Australia is the subsidiary company of the Sony
Corporation of Japan, the company is operating in the Australian market too with over 40
years of presence. The company offers a wide range of portfolio which includes electronic
consumer products, music system, gaming system, professional broadcast, etc. According to
the Sony Interactive Entertainment Australia Pty Limited – Financial Ratios, the company
acquires a 1.76% ROI in 2019 and 1.51% ROI in 2018 (Austrade.gov.au, 2020). In this
report, the selected competitive strategy is "Corporate Strategy". This report will focus on the
utilization of this strategy over the competitors so that the company can gain a competitive
advantage in the Australian market. This strategy will be explained through the relevant
theoretical concepts, application of strategy model, etc.

COMPETITIVE STRATEGY 4
Summary of the Case
Sony has diverse interests in Australia and the management of the company is successfully
running its operations in the country for over 40 years. In this time span, the company has
brought generations of consumer electronics to the country that has positively impacted
Australia’s entertainment industry to a global audience. In the Australian market, the
company acts as a local manufacturer, financial services provider and philanthropist
(Brainscape.com, 2020). Sony Music is marked as the major promotor of Australian music,
they also have signed local brands such as Justice Crew, Hi-5, Timomatic, The Veronicas,
The Strangers, etc. In the past 5 years, the company also has started looking over the vibrant
TV production industry in Australia. David Maher, co-founder of Playmaker Media has
announced in December 2014 that Sony Pictures Television is going to opt-in the local
Australian market for increasing their market shares. Sony pictures distribute approximately
20 films year each with more than 4,000 titles in Australia for ruling the entertainment
industry with effective and efficient efforts (Austrade.gov.au, 2020).
Major competitors of the company in Australia are Samsung, LG, Apple, Dell, Panasonic,
Huawei, HP, Asus and Microsoft. All these competitors process strong competition for the
company. The company always engages in the price war with all its competitors, as these
competitors are also the big market players and they also hold the majority of market shares
in the Australian entertainment industry. After 2018, the competitors of the company are
moving towards the utilization of Artificial Intelligence (AI) and Machine Learning (ML) to
gain a competitive advantage by enhancing their market shares. In the Australian
entertainment industry, Sony holds 22% market shares, Samsung holds 21% and so on. All
these major competitors indulge in the war to gain a better competitive advantage than others
(Ibisworld.com.au, 2019). For gaining furthermore competitive advantage, the suggested

COMPETITIVE STRATEGY 5
competitive strategy for the management is “Corporate Strategy”. This competitive strategy
will help the management in gaining the major competitive advantage as compared to its
other competitors (Foucault and Frésard, 2019).
Identification of strategic issues
The identified strategic issue is that Sony corporation is indulging in gaining market shares in
the entertainment industry of Australia by outperforming their competitors. The major
competitors of the company are Microsoft, Apple, Samsung, etc. all these competitors are
focusing on indulging in the utilization of AI and ML in Televisions, music systems, gaming
console, etc. In order to gain a competitive advantage, the company has to incorporate the
norms of corporate strategy (Ajdovec, Kovacic Batista and Vidmar, 2017). This corporate
strategy is part of competitive strategies. This strategy provides a structural context that will
help the company to develop a long-term action plan to gain a competitive advantage over the
other rivals in the industry (Arasti, Khaleghi and Noori, 2017).
Other rivals companies are moving towards AI and ML because these two systems belong
from the future generation technology which will help the company to implement
customization, packaging and transmission content in real-time in the media and
entertainment industry of Australia. AI and ML have the capacity to enhance better customer
experience and it is forecasted that these two systems will increase the revenue of the
company by 6 times. Nowadays, mobile phones and car GPS system has also included the
automation systems through AI in terms of the voice recognizing and another system. The
media and entertainment industry will be reached to a valuation of $30billion in the next 5
years (Ibisworld.com.au, 2019). Since 2017, the companies are turning their system into AI
technologies to fascinate a large number of audiences with effective and immediate efforts
(Galpin, 2019).

COMPETITIVE STRATEGY 6
The corporate strategy suggests that in order to gain a competitive advantage with major
market shares, the company has to take breakthrough advantages in machine learning
technology. Even people also show a highly positive response when they utilize the voice
recognizing technology in their smartphones. This implies that the targeted audience is also
becoming attracted to the norms of AI and they are also curious to experience the AI in their
entertainment systems (Johnson, 2016). It is observed that the biggest reason that increases
the expectation of the people about AI is that nowadays superhero movies show that
superhero movies take the help of advantage robotics and AI for many activities. For
example: Avengers shows that Iron Man has made the advantage AI technology called Jarvis
which helps the Iron Man in their day to day operations with high reliability in an effective
and efficient way (Goode, Hoehle, Venkatesh and Brown, 2017).
Through the corporate strategy, the company will gain a competitive advantage in the
Australian entertainment industry. As per this strategy, marketing and advertising is an
important part of this strategy because for right now Sony has already launched the
Television with voice recognition and motion technology. The targeted audience has shown a
positive response to the amazing future technology norms and the entertainment industry has
effectively noticed the hugely positive response from the audience. Thus, the big companies
which have all the essential resources like capital, R&D, huge market shares, etc. are
planning to incorporate the norms of AI in their system to fascinate a large number of
audiences (Kunz, 2016).
Application of the strategy model
Now, in this part, there will be a discussion about the framework of the corporate strategy
model that will help the company to gain a competitive advantage.
Structural process

COMPETITIVE STRATEGY 7
Under this, the management of the company has to judge the fundamental of its strategic
issues. Here, the fundamental of this strategic issue lies in the parameter to incorporate the
norms of AI and ML in the entertainment industry (Puranam and Vanneste, 2016). After that
the management has to make the necessary adjustment for arranging all the requires resources
that will help them in establishing this new process. It is suggested that the company already
holds a 22% market share and the global valuation of the Sony company is USD63Billion.
This indicates that the company has huge market shares with large financial resources.
However, establishing AI and ML is the long-term process and this also requires efforts from
the R&D department of the company (Marketwatch.com, 2019).
Continuously offer AI and ML technology system to enhance the customer experience
and to gain competitive advantage
After making the effective long-term plan for the implementation of these two systems, the
company should continue to launch new products with better advancement of AI technology
and ML. From the perspective of corporate strategy, there are two primary reasons behind it,
first, it will help the corporate to generate more revenue (Rugman and Verbeke, 2017).
Second, it will keep the expectations and interests of the audience at the peak of using these
future generation technologies. Both of these cases will provide the major benefit to the
company because from the point of view of the first case it will bring more profitability in the
company and from the point of view of the second point people will effectively welcome the
innovation made by the company in future in the field of media and entertainment (Mazzei
and Noble, 2017).
Apart from this, the company also have to closely examine the products or moves made by
the other competitors in the market. For example: Samsung 4k UHD Smart TV has a voice
control system that helps the user to give instructions through voice and it's very user-friendly

COMPETITIVE STRATEGY 8
to operate. ASUS Lyra Voice incorporates the AiMesh technology that combines all AiMesh
capable devices that can be used while driving a car or while listening to the music. The
management of the company has to keep their eyes on all such operations made by other
competitors because at this time all competitors are focusing on implementing the
applications of AI and ML in their operations. Thus, it is extremely important that the
management of the company should keep its action uphold and pay close attention to the new
product launches made by the other competitors (Silverman, 2016).
Coordination with their global R&D department
The management of the company should establish an effective ongoing process of
communication with its global R&D department. According to the corporate strategy, the
company should always maintain effective coordination with its department which is
ensuring them to gain competitive advantages over major competitors. In the revolution of AI
and ML era, technology keeps changes and AI belongs in the future generation technology.
Thus, the company should launch their products with the guidance of the R&D department.
Apart from this, from the perspective of the corporate strategy, it is very much important for
the company to closely obtain the move made by other competitive brands (Sull, Turconi,
Sull and Yoder, 2018).
Marketing and Advertising
Marketing and advertising are also a very important part of the corporate strategy taken up by
Sony. Marketing and advertising of the AI will include the visual design and algorithm
trained with data to improve efficiency. Now, marketing and advertising are part of the end
section because first, the company should focus on incorporating the technology reforms in
their products. However, in the short run, the company can advertise and market their new
products by specifically pointing out that they used the automation or machine control

COMPETITIVE STRATEGY 9
technology in this product. When they will market their product in this way then it will help
the management to attract a large audience and this will also develop more expectations in
customer's minds for using the entertainment system with automation technologies (Sull,
Turconi, Sull and Yoder, 2018).
Thus, from the view of gaining a competitive advantage, it can be said that right now the
company needs to focus on short term benefits of marketing and advertising. For example: In
2020, all the product launches of Sony in Australia will include AI and ML technology to
some extent like by including a voice control system in their launch or by including motion
technology, etc. So, it is suggested that the management of the company should market its
launch by focusing on the application of AI (like: voice control or motion technology)
because it will increase the expectations of the people to use a more advanced form of AI in
entertainment systems (Foucault and Frésard, 2019).
Theoretical concepts
The corporate strategy also involves the process of four hypotheses that are Ansoff’s matric,
Porter’s strategic matrix, The Boston matrix and the distinctive capabilities model. Each
hypothesis as different relevance. Among these hypotheses, it is suggested that Sony
Australian should incorporate the distinctive capabilities model. In this model, it will help the
corporation by suggesting different methods of growth. The management team of the
company has to conduct the external market analysis and they have a judge or forecast the
potential impact of external market analysis on the internal business performance in an
effective and efficient manner (Galpin, 2019).
Distinctive capabilities model involves the three-level strategy process by calculating the
associated risk and reward:

COMPETITIVE STRATEGY 10
Level 1: Architecture
Architecture level implies that the company should focus on selling more of its existing
products to its existing customers because it will be helpful for them for gaining market
shares and to gain a competitive advantage. As per this level, Sony Australia should continue
to sell its products which have the specification of AI application so that their targeted
audience will attach with the company. This market penetration has two major benefits in the
short run and long run. In the short run, this will enhance the market revenue of the company.
In the long run, the management will have the database of all such people that are
experiencing the AI applications involves in the company (Sony.net, 2019).
Level 2: Reputation
It implies that Sony Australia should deliver and implement AI norms in their products
ineffective way that do not create challenges for its user, instead, it should enhance the
experience of the user. In this way, the company will build a better reputation in the
entertainment industry as they are delivering the best AI experience to the customer as
compared to other competitors (Strategyblocks.com, 2019).
Level 3: Innovation
The ability of a business to relate well to its customers and provide them with new and
improved products. Technical skills and market orientation are important. Distinctive
capabilities lead to competitive advantages and the more distinctive capabilities a business
has, the more sustainable its competitive advantage (Sony.net, 2019). At the global level,
Sony is marked as the leader of innovation. Thus, the management of the company knows the
benefits of this level 3.
Apart from this, it is suggested that when the company will completely incorporate the norms
of Artificial Intelligence and Machine Learning in their operations then it can be estimated

COMPETITIVE STRATEGY 11
the work load from the human resources of the company will be reduced to the large extent.
There are various benefits of incorporating the AI such as it will enhance the customers, it
will reduce the work load from the employees, it will deliver from accurate results, etc.
However, incorporating AI and ML will be resultant in incurring huge cost because entirely
shifting on these future generation technologies requires huge capital so that R&D
department of the company can work systematically.

COMPETITIVE STRATEGY 12
Conclusion
It has been concluded that Sony Australia should incorporate the norms of the Artificial
Intelligence (AL) and Machine Learning (ML). These two are the application of future
generation technology. The strategic issues the company is facing is that all other major
competitors of the company in Australia are moving towards the utilization of AI and ML in
their entertainment system. For overcoming with this strategic issue, selected competitive
strategy in this report is “Corporate Strategy”. This strategy incorporates four additional
hypothesis which are Ansoff’s matric, Porter’s strategic matrix, The Boston matrix and the
distinctive capabilities model. Among these, distinctive capabilities model is selected
hypothesis in this report because it will help the company to gain the major competitive
advantage.

COMPETITIVE STRATEGY 13
References
Ajdovec, P., Kovacic Batista, R. and Vidmar, M. (2017) Corporate strategy and Industry 4.0:
bibliometric analysis on factors of modernization. Dyn. Relat. Manage. J, 6(2), 89-99.
Arasti, M., Khaleghi, M. and Noori, J. (2017) Corporate-level technology strategy and its
linkage with corporate strategy in multi-business companies: IKCO case
study. Technological Forecasting and Social Change, 122, pp.243-252.
Austrade.gov.au. (2020) Promoting young, Australian talent on a global stage. [Online]
Available at:https://www.austrade.gov.au/international/invest/importance-of-foreign-direct-
investment/japanese-investment-in-australia/real-stories/sony [Accessed on: 27th January,
2020]
Brainscape.com. (2020) Theories of corporate strategy. [Online] Available at:
https://www.brainscape.com/flashcards/theories-of-corporate-strategy-6287996/packs/
9262514 [Accessed on: 27th January, 2020]
Foucault, T. and Frésard, L. (2019) Corporate strategy, conformism, and the stock
market. The Review of Financial Studies, 32(3), pp.905-950.
Galpin, T. (2019) Strategy beyond the business unit level: corporate parenting in focus.
London: Pearson Education.
Goode, S., Hoehle, H., Venkatesh, V. and Brown, S.A. (2017) User compensation as a data
breach recovery action: An investigation of the Sony Playstation network breach. MIS
Quarterly, 41(3), pp.703-727.
Ibisworld.com.au. (2019) Sony Australia Limited – Premium Company Report Australia.
[Online] Available at:

COMPETITIVE STRATEGY 14
https://www.ibisworld.com.au/australian-company-research-reports/wholesale-trade/sony-
australia-limited-company.html [Accessed on: 27th January, 2020]
Johnson, G. (2016) Exploring strategy: text and cases. London: Pearson Education.
Kunz, W. (2016) Sony Corporation. In Global Media Giants. Abingdon: Routledge.
Marketwatch.com. (2019) Home Entertainment Market 2019 Global Industry Share,
Demand, Top Players, Industry Size, Future Growth by 2025: Research Reports World.
[Online] Available at: https://www.marketwatch.com/press-release/home-entertainment-
market-2019-global-industry-share-demand-top-players-industry-size-future-growth-by-
2025-research-reports-world-2019-05-02 [Accessed on: 27th January, 2020]
Mazzei, M.J. and Noble, D. (2017) Big data dreams: A framework for corporate
strategy. Business Horizons, 60(3), pp.405-414.
Puranam, P. and Vanneste, B. (2016) Corporate strategy: Tools for analysis and decision-
making. Cambridge: Cambridge University Press.
Rugman, A.M. and Verbeke, A. (2017) Global corporate strategy and trade policy.
Abingdon: Routledge.
Silverman, B.S. (2016) Resource redeployment and corporate strategy. Bingley: Emerald
Group Publishing.
Sony.net. (2019) Sony corporate strategy meeting FY 2019. [Online] Available at:
https://www.sony.net/SonyInfo/News/Press/201905/19-045E/ [Accessed on: 27th January,
2020]

COMPETITIVE STRATEGY 15
Strategyblocks.com. (2019) Sony thinks big with corporate strategy. [Online] Available at:
https://www.strategyblocks.com/blog/sony-thinks-big-corporate-strategy/ [Accessed on: 27th
January, 2020]
Sull, D., Turconi, S., Sull, C. and Yoder, D. (2018) Four logics of corporate strategy. MIT
Sloan Management Review, 1(1), 34-98