Competitive Advantage of SONY Corporation
Competitive Advantage of Sony Sony’s incredible rise
in the field of electronics is due to their innovation and high technology
products. Sony prides itself on its history of “imagination and innovation” in
the industry. After World War II, Sony was the company that took transistor
technology and made the ever popular transistor radio. Under Akio Morita Sony
kept looking for advances in technology and ways in which they could
innovatively improve lives of the people who use them. With a passion for
creating new markets, Sony was an early creator and leader in the sector we now
call “consumer electronics”. Some examples are:
·
Sony improved solid state transistor
radios until they surpassed the quality of tubes, making good quality sound
available very reliably, and inexpensively
·
Sony developed the solid state
television, replacing tubes to make TVs more reliable, better working and use
less energy. Also, Sony developed the Triniton television tube, which improved the
quality of color and enticed an entire generation to switch.
·
Sony was an early developer of videotape
technology, pioneering the market with Betamax.
·
Sony pioneered the development of
independent mobile entertainment by creating the “Sony Walkman”, which allowed
consumers to take their own recorded music with them, via cassette tapes
New Business Model Idea:
·
Key
Partners: content providers, simm card
manufacturers, hardware manufacturers, cloud operators, wireless or satellite
network operators (of course including Sony itself).
·
Key
Activities:
a) Manufacture of hardware (players and game
consoles). The hardware would not have a CD or DVD player, would not also offer
possibility to record. It would have to have networking capability (satellite
or wireless).
b) Management of content (obtaining of content from
artists, studios etc.)
c) Storage of content on cloud
d) Management of
membership through simm card (which would be inserted to device in order to
identify a member). Each member would receive a number of cards for his players
at home, plus one to carry about. Each player would accept any simm
card of any member, making related content playable or accessible everywhere
you go.
e) Management of networks.
·
Key
Resources: all related to above, such as
technicians, computers, cloud structure, etc.
·
Value
Proposition:
a) Revenue stream: through purchase of content
access from cloud and through purchase of hardware and simm cards.
b) Customers can access and play their cloud content
anywhere. No need to save playlists or songs, no need for backup etc. No
download, only acces to a content (unlimited or limited in terms of how many
times I can access it).
c) Artists would provide only one original artwork
stored on cloud only - this would no longer be available on CDs or DVDs in
stores. Limit on IP infringements.
· Customer
Relationships: through memberships and purchases.
·
Channels:
only through enabled devices.
·
Customer
Segments: everyone, businesses and individual
customers.
·
Cost
Structure: network, hardware and content related
costs (with overhead).
·
Revenue
Streams: through corporate (such as radio
stations) and individual customers.
·
Strengthening
core businesses (Digital Imaging, Game, Mobile):
Sony management team decided to focus on three core business areas such as digital
imaging, game and mobile that they tend to invest more and use company resources
more effective than other business areas.
·
Turning
around the television business: Sony faced the loss of
profitability on television business in last few years. For reducing
plan-related costs, Sony disolved a partnership with Samsung and changed its
structure by giving importance to designs of televisions and lowering product
range on television business. Then their engineering team will be focusing to
improve sound and picture quality of Bravia range of LCD televisions for being
able to answer customer needs. Lastly, investments of OLED and LED television
will continue until the end of fiscal year in 2013 and become profitable for
company.1.3. Expanding business in emerging markets Sony needs an expansion in
rapidly growing markets like India and Mexico. While doing this, strengthening
supply chain management and operations will be a key initiative for sustainable
and secure position. Also products must be suitable to local needs.
Furthermore, company can join some promotions with its subsidiaries in
thesemarkets.1.4. Creating new businesses and accelerating innovation Sony will
never stop to continue innovation intended for achieving mid- to long-term
growth, as well as the improvement of differentiating technologies that enhance
core product value. 4K technology for LCD televisions and medical technologies
are the specific examples of new business areas for Sony to target first.
Corporate Level Strategy Explanation
of Sony’s mobile business through
Ansoff‟s Growth Vector Matrix
·
Ansoff‟s matrix is quite feasible for Sony’s mobile
business strategies.
. Market Penetraton:
Sony Group has a strong market share in India with 270 stores and good customer
service. Because of these advantages, they have to defend their market share
and try to increase sales with advertising, bundling and penetration pricing.
. Market Development:
With market development, company need to expand their geographic areas and must
find new markets other than Europe, America and Japan. At this point, marketing
and sales team focus on researching possible and available areas that Sony can
launch their existing products. On the other hand, if Sony can discover a new
segment, it will positively cause new business areas for Sony (Sony annual
report 2012, 2013).
. Product Development:
As seem from the Ansoff’s matrix, product development means that developing new
products to sell in the existing markets. This philosophy fits with Sony’s new smartphone
Xperia Z. Sony launched the Xperia Z in CES 2013. According to feedbacks about
the phone, it will impact its users with innovative features. The new NFC
product series is led by the Xperia Z, Sony's new water resistant, premium
Android smartphone. It comes out with a 5-inch full HD 1080p screen,
13megapixel camera, a Snapdragon S4 Pro quad-core processor, and 4G LTE. A smaller
version of the phone, the Xperia ZL has also been promoted.
. Diversification:
Sony currently produces medical peripherals such as printer, camera, monitor
and recorders. Next to their new strategy, they want to grow medical equipment
business by leveraging image sensor, lens and other Sony technologies.
Furthermore, Sony will enter the medical diagnostics area which is called life
science businesses, will be launching its new products. Therefore company
acquired iCyt, maker of cellular analysis equipment, and purchased Micronics,
maker of medical and diagnostics equipment.
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