Sony's Global Business Strategy

This assignment examines Sony's global business strategy, particularly its product diversification and international expansion from 1987 to 2003. Students need to analyze how Sony implemented various strategies, such as internationalization and diversification, to achieve growth and success in the market. The assignment emphasizes the role of corporate culture in driving innovation and achieving business goals.

Presentation and Essay

Table of Contents
INTRODUCTION...........................................................................................................................1
1........................................................................................................................................................1
2........................................................................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
International management is considered as the practice of managing business operations
within one or more country. However, it is essential for the business professionals to be familiar
with the language, culture, economic and political environment so that MNC's can actively carry
out their trade related activities (Forces driving globalization. 2015). The current study
emphasizes upon Sony case study and thus identifies that Sony Corporation which is one of the
world's successful consumer electronics company. Firm also enables to focus upon creating a
strong sustainable competitive advantage and maintain effective culture and internationalisation
strategy so that best results can be attained.
1.
As per the case of Sony In The New Millennium, Sony possess varied resources,
capabilities and competencies in regard to grow the business successfully in the competitive
consumer electronics industry. However, being a non-typical Japanese corporation Sony's
possess an effective culture within its firm that attract worldwide market (Eshun, 2009). Business
does not limit its growth till Japan but entered US market and attain growth in different markets
as well. Following are the different resources, capabilities and competencies such as-
Resources
Resources are considered as the factors that firm own's controls and uses for the aim of
creating value. Sony's different tangible and intangible resources assists in determining its
distinctive competency and lead to maintain competitive advantage. Tangible resources of Sony
possess its assets which are financial in nature or have physical properties. It also involves land,
building, machinery and equipment in order to attain high profits and sales. Further, intangible
resources involves non-physical assets which Sony could use to produce products or services that
are demanded by consumers in market (Benett, 2002). Sony brand is linked with superior
quality, innovation and style. Business also launches effective products and for that they carry
out effective marketing efforts and product launches. Sony manages to create several successful
sub brands and launched numerous of products to attract consumers towards the business.
Throuygh referring to the case study it can be evaluiated that Sony possess large number
of skilled employees who have expertise and knowledge to employ best resources in worldwide
market. Management of firm effectively coordinate with the employees and help them in
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exchanging the ideas so that culture of the firm could be maintained effectively. However,
business utilises the human resources effectively in regard to deliver quality consumer products
and services. There are different competitors available in market that give tough competition to
Sony and impacts the business to attain desired results. Hence, business aims to grow alliance
and develop innovative Sony PlayStation and other consumer electronics goods (Fahey and
Narayanan, 2013). However, it also contributes to Sony's different tangible and intangible
resources and help firm to sustain and maintain distinctive competency among rivals that in turn
helps to attain sustainable competitive advantage.
Capabilities
Evaluaitng from the case it cna be referred that capabilities can be stated as the terms of
the types of activity that helps firm to perform its activities and create value. Therefore, Sony
performs a wide range of different products or services to create variety of actions in order to
create value for its customers. Capabilities helps in creating value for its customers and in turn
contributes to its competitive advantage. However, business capabilities possess an effective
hierarchy of knowledge integration so that best results can be attained in market (Cuyvers and
et.al., 2011). Further, at the lowest level, Sony's workers are required to maintain individual
capabilities so that specialised knowledge of the market can be attained and provide best
products or services accordingly. Thus, it assists Sony to utilise this knowledge and the skills of
workers in regard to manufacture and market its products or services and create value for its
clients.
Sony has high market share in consumers goods market and attract worldwide consumers
by segmenting the target market into different categories. It comprises of televisions, video and
audio products. However, business faces varied issues at the starting and then gradually increases
the product capability by improving its technology so that worldwide consumers can be attracted
towards firm. Through referring the case, business introduces its first product that was transistor
radio and television, VCR, Walkman, video camera etc. Since then business enhances its market
share and launches various innovative products in market so that sales and market share of firm
can be enhanced. Sony that launches its computer market with its launch of the VAIO and thus
entered into mobile phone industry combining with several products to enhance capabilities
(Forces driving globalization. 2015).
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However, the core capability of Sony lays in its inventiveness and creativity manifested
in the succession of such products that are into existence. Main significance of Sony is its
intellectual property and the number of patents its possess as a fundamental issues exists within
the poor patent protection according to the complex consumer electronic products industry.
Further, Sony also plans to enter into gaming industry and launched Sony PlayStation which
proves to be one of the its strong capabilities (Yeung, 2005). It helps in attracting wide range of
consumers and enhance the market share of firm. Sony continuously upgraded its technology
with latest development so that best results can be attained.
Another capability of Sony is to expand its operations in entertainment industry i.e. music
and film industry. Such division helps Sony to attain success and enter into worldwide market.
However, business also continuously upgraded its technology in relation to enhance latest
development and achieve success. Business also enters into Hollywood industry and enhance its
profitability. Combination of Sony's different capabilities with its different resources assists in
creating its sustainable advantage so that best results can be attained. It allows firm to maintain
its distinctive competency and provide value to its customers (Wang and et.al., 2010).
Core Competencies
Core competency of business can be stated and the central set of knowledge within firm
at he time when allows the firm to create superior value than other competitors. It may be either
internal or external but needs to be unique and apply wide range of products to consumers.
Sony's core competency consists partly of its ability to innovate and come up with the
revolutionary products and its ability to achieve product differentiation. Main competency of
firm is its ability to improve its size of products and attract worldwide customers in regard to
provide them convenience and creates value (Lehner and Wurzenberger, 2013). Improving
business performance in market helps in creating sustainable competitive advantage so that Sony
can outperform its rivals and measures the goals so that set results can be attained. It is essential
for firm to combine of the superior efficiency, superior quality, innovation and customer
responsiveness that influences firm to attain the ability and build a sustainable competitive
advantage in market.
Overall, it can be stated that as per the reference of case study, Sony possess effective
quality in regard to manage the combination of its resources, capabilities and core competencies
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to attain sustainable competitive advantage in regard to provide value to its customers. Further, it
can be stated that business successfully helps in attaining competitive consumer electronics
industry in regard to develop effective corporate culture in market (Bradly, 2005). Through such
way it benefits firm to enhance its sales and proficiency so that success can be attained. Further,
it is essential for Sony to improve its corporate culture which results into expanding the business
operations in consumer electronics market. Therefore, Sony's resources, capabilities and
competencies depicts the business to attain success in the competitive market and business
focuses upon attracting worldwide market instead of only Japan. Hence, it is essential for Sony
to maintain its effective corporate culture as there are different human resources employed in
regard to deliver best services to consumers (Peng, 2013). Therefore, it is essential for enterprise
to focus upon improving culture and attain desired results.
2.
As per the case of Sony, Internationalisation strategy focuses upon going global and
entering into different businesses so that best results can be attained. With the help of such
strategy it aids in obtaining revolutionary changes and introduce innovative products in market
which attracts consumers towards firm. In 1957 Sony undergoes a five year contract with US
company Delmonico in regard to act as the sole US distributor for its products i.e. transistor
radios (Alon, 2003). However, the relationship between the firm and distributor proves to be
ineffective as Delmonico affects the operations of firm in market. Sony also establishes its
overseas sales room in luxurious locations such Paris, New York etc, in order to develop brand
image in market. Internationalisation strategy directly leads firm to improve its business and
consumer culture. In the year 1970, Sony became the first Japanese company to be listed in New
York Stock Exchange market (Benett, 2002). Through adopting diversification strategy it aids in
implementing various process so that Sony launches different products in market which includes
a range of items such as television, PlayStation, CD's etc. However, in the early 1990's Sony had
over 600 subsidiaries with around 70 manufacturing plans all around European and East Asian
countries including China as well as US (Bradly, 2005).
Sony also carries out international joint ventures and alliances in order to achieve number
of its purposes. Further, business also thinks to enter into diversification and enter into life
insurance industry through joint venture that creates Sony-Prudential Life Insurance Company in
the year 1976. eventually acquiring CBS records which started as a joint venture in 1968 in the
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recording business (Cuyvers and et.al., 2011). Sony also formed alliances with Texas
Instruments in semi-conductors and with Philips to promote CD players and compact disk format
within music industry. All these strategies helps Sony to evolve them as an internationalisation
firm and attain high market share. While, it is not considered as a dramatic paradigm shift in
terms of Sony. Business eventually enters into different operations and develop
internationalisation strategy so that they can improve their operations in market. However, it can
be stated that internationalisation strategy helps Sony to attain desired results (Fisher and Bonn,
2007). Thus, all such factors leads Japanese firm to attain success within different sectors such as
motor cycles, automobiles, consumer electronics and cameras. Up to a great extent, it is essential
for business to adopt ethnically heterogeneous products and possess little contact with foreigners.
Thus, due to all such reasons, business enters into international market and thus carry out the
operations effectively. Diversification strategy adopted by Sony is useful in expansion which
helps firm to expand its operations in worldwide market. Through adopting internationalisation
and diversification strategy within the period of 1987-2003 it helps firm to improve its
evolutionary changes and does not mark its dramatic presence which affects business in
international market (Jones 2010).
It can be evaluated from the case that, within the year 1987, Sony launches its business
into Hollywood industry as Japanese corporate culture has generally preferred organic wholly
owned foreign direct investment to the use of international mergers and acquisitions. With regard
to this, Sony stunned Japan with its 1987 acquisition of CBS it helps business to become worlds
largest record company for $US 2 billion and 1989 purchase of Columbian Pictures (Lehner and
Wurzenberger, 2013). It also helps in increases the US market and Sony planning to establish its
market in America and attain desired results. Further, in 1990 Panasonic acquisition of MCA
appeared to validate Sony's move and argued that Sony's Hollywood adventure but Sony got
bankrupt in 1995. Not only Sony found $US 3.4 billion excessive but there are different other
problems lead firm to reduce its accounting value in entertainment market (Peng, 2013).
Moreover, it could be assessed that Sony's diversification strategy was na innovative
rethinking of traditional industry boundaries and thus help firm to attain competitive edge in
market. Diversification strategy adopted by business into the entertainment industry could be
seen strategically as a vision of multimedia future in which Sony controlled the high value
software products (Wang and et.al., 2010). Further, Sony adopts diversification from consumer
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electronics industry to film production was an highly risky step and thus another problem faced
was due to cultural distance among corporate culture of Japan and California movie making
business. In the year 1990's Sony's products portfolio ranges from industrial products and
enhances the market share of firm.
In the year 1980 Sony launches its Walkman success and in 1900's PlayStation was
another successful year in Sony's history. All this businesses helps firm to improve extraordinary
achievements and thus improve the business in worldwide market. Further, company also
enhances its business development and launches VAIO laptop so that consumers can be attracted
towards firm. All the identified changes within the strategy carries out evolution and helps firm
to improve its market performance and thus set results can be attained. However, it is not any
dramatic changes but a serious step towards internationalisation and diversification which helps
in evaluating changes so that best results can be attained. It is also crucial for enterprise to focus
upon the business success in future and thus undertake effective fields in regard to invest and
thus better results can be attained (Yeung, 2005).
As per the case, Sony diversifies its business products from electronics consumer goods
to entertainment and music industry. Thus, it would benefit firm to improve the market
performance and achieve desired results. Therefore, it would help firm in enhancing the business
operations towards international market. Such strategy is useful which would help firm to enter
into global market so that wide range of products or services can be delivered to consumers in
regard to enhance the market share of firm (Englyst and Acur, 2006). With the help of this Sony
aims to attain competitive edge in market and thus provide value to its customers. Management
of Sony aims to identify the diversification strategy and invest into different businesses such as
Life Insurance, Entertainment, Music etc.
Through reviewing the Sony's strategies in market it involves different
internationalisation and diversification strategy so that in the period of 1987-2003 business aims
to consider specific strategic changes and attain revolutionary business so that tough competition
to be given to rivals (Eshun, 2009). It also helps firm to become the first Japanese company to be
listed in New York Stock Exchange. Sony started its business from preparing radio transistors
which was not that much successful in market. Later it prepares television and gradually
increases the product line in order to attain international market. Thus, it helps business to
enhance its brand image in market. Further, diversification strategy is also being adopted by
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business that helps Sony to change its product line from consumer electronics industry and
entering into entertainment, life insurance and music industry. Through diversifying the product
line it aids business to enhance the brand image and popularity so that large number of
consumers can be attracted and attain desired results (Fahey and Narayanan, 2013).
CONCLUSION
It can be concluded from the report that Sony adopts various resources, competencies and
capabilities in regard to attain success within the competitive consumer electronics industry.
However, it is significant for enterprise to develop innovative corporate culture so that they can
produce varied range of products or services which results in improving business performance in
market. Also, identifying business strategies such as internationalisation and diversification and
attain evolution and growth in the market. Within the period of 1987 to 2003, Sony attains
different innovative range of products or services so that business goals could be attained.
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REFERENCES
Books and Journals
Alon, I., 2003. Chinese Economic Transition and International Marketing Strategy. Greenwood
Publishing Group.
Benett, R., 2002. International Marketing: Strategy Planning, Market Entry & Implementation.
Kogan Page.
Bradly, F., 2005. International Marketing Strategy. Financial Times/Prentice Hall.
Cuyvers, L. and et.al., 2011. The labour market consequences of globalisation and
regionalization. International Journal of Manpower. 32(3). pp. 252–256.
Englyst, L. and Acur, N., 2006. Assessment of strategy formulation: how to ensure quality in
process and outcome. International Journal of Operations & Production Management.
26(1). pp.69–91.
Eshun, P. J., 2009. Business incubation as strategy. Business Strategy Series. 10(3). pp.156–166.
Fahey, L. and Narayanan, V. K., 2013. Seven management follies that threaten strategic success.
Strategy & Leadership. 41(4). pp.24–29.
Fisher, J. and Bonn, I., 2007. International strategies and ethics: Exploring the tensions between
head office and subsidiaries. Management Decision. 45(10). pp. 1560–1572.
Jones A., 2010. Globalization: Key Thinkers. Polity.
Lehner, D. and Wurzenberger, J., 2013. Global Education – an educational perspective to cope
with globalisation?. Campus-Wide Information Systems. 30(5). pp.358–368.
Peng, M., 2013. Global Strategy. Cengage Learning.
Wang, G. and et.al., 2010. Globalisation in construction management education. Journal of
Applied Research in Higher Education. 2(2). pp. 52–62.
Yeung, H., 2005. Organizational space: a new frontier in international business strategy?. critical
perspectives on international business. 1(4). pp. 219–240.
Online
Forces driving globalization. 2015. [Online]. Available through:
<http://www.preservearticles.com/2012012821959/what-are-the-driving-forces-of-
globalisation.html>. [Accessed on 12th November 2016].
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