Sony Shock
Presentation Group # 6
Made by:
George-Edouard Duriez, Morten Henriksen, Emma
Sjöblom, and Kristin Svenhed
Table of content
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History of Sony
Facts about Sony
Question 1:
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Micro and Macroenvironment
Importance of Innovation
Question 2:
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SWOT
Question 3:
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Strategy options
Strategy developments
Recommended course of action
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The History of Sony
• Founded during the WWII by Akito Morita & Masaru
Ibuka
• Transistor radio first major success
• Entrepreneurial & creative
• Pioneers and market leader in the electronic industry
Sony today
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One of the world’s most valuable brands.
Created products such as the Walkman & PlayStation.
Employs 158.500 people worldwide.
Annual sales exceed over 55 billion euro per year.
Offer highly innovative and reliable products possessing
high quality standards.
Sony’s main divisions
Sony
Electronics
Sony
Computer
Entertainment
Sony ATV
Music Publishing
SONY
Sony BMG
Music
Entertainment
Sony
DADC
Sony
Picture
Sony
Ericsson
Sony Shock
• Profit margin has dropped from 10% in the 90’s to 1,5%
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today.
Failing to take advantage of strategic windows
Lost focus on central business: Electronics
Question # 1
• Discuss the importance of product
innovation to the future success of Sony,
with regard to the changing marketing
environment?
Microenvironment
Competitors
• Increasing numbers of competitors
• Microsoft, Apple, Samsung etc.
• Facing high quality competitors offering lower prices
Customers
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High expectations
Lost brand loyalty
Higher consumer awareness
Homepage, target groups
Macroenvironment
Social and cultural
• High tech-lifestyle
• Technology as an identity
Technological
• A global phenomena
• Importance of R&D
Economic
• Globalization
• Upward tendency in spending
Importance of product innovation
• Focus on customer needs and satisfaction
• Specially important in the fast movement electronic
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industry
Importance in the entertainment industry can be
discussed
Not that important in the more slow moving insurance
and chemical industry
Competitive advantage
The brand Sony equals innovation?
• Conclusion; with Sony’s current strategy,
innovation is very important.
Question # 2
• Conduct a SWOT analysis of Sony
SWOT analysis of Sony
Strengths
Weaknesses
• Strong brand
• Big company
• Experience and knowledge
• High Quality
• Complementary goods
• Lost focus
• Loss profit margin
• High price
• Loosing market opportunities
• Too much bureaucracy
• First mover disadvantage
Opportunities
Threats
• Blue Ray
• Growing market potential
• Joint ventures and alliances
• Convergence
• Increasing number of competitors
• HD – DVD
• loosing brand loyalty
• Blue Ray & Play station
Question # 3
• What are the strategic options available to
Sony, in the wake of ‘Sony shock’ ?
• Recommend a course of action for Sony,
giving reasons for your answer.
Strategy options available to Sony
Retrenchment
• Focus on efficiency
¾ Not recommended
Gradual strategic repositioning
• Adaptation to the marketing environment
¾ Possible strategy. Importance of innovation and business identity
Radical strategic repositioning
• Changing the direction of the entire business
¾ Relevance depends on the degree of the changes.
¾ Selling the electronic department or sell other business activities.
Strategy development
Strengths
Weaknesses
• Strong brand
• Big company
• Experience and knowledge
• High Quality
• Complementary goods
• Lost focus
• Loss profit margin
• High price
• Loosing market opportunities
• Too much bureaucracy
• First mover disadvantage
Opportunities
Threats
• Blue Ray
• Growing market potential
• Joint ventures and alliances
• Convergence
• Increasing number of competitors
• HD – DVD
• loosing brand loyalty
• Blue Ray & Play station
Recommended course of action
Product development strategy
• New product innovations on the existing markets to keep position as
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premium brand, hence gain competitive advantage.
Develop new products by creating alliances or joint ventures (Sony
Ericsson)
Conclusion: invest more money in R&D and become more dynamic.
– Too big to change overnight and long process. Sony have to improve the existing
organisation
Conversion Strategies
• Use knowledge and technology from the company’s different divisions to
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create new products and enter new markets e.g. new convergence products
Use its position as a big company to create alliances with new entrants and
thereby eliminating future competitors.
List of References
• Jobber, D. (2007) Principles and Practice of Marketing,
5th edition. McGraw-Hill Education (UK)
• Corporate Homepage
http://www.sony.com