Saturday, November 29, 2014

                     
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

                                         
http://www.12manage.com/images/picture_ansoff_product_market_matrix.gif


·        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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