Introduction To Sony Corporation Commerce Essay Example

to intense competition. To address these challenges, Sony's top management team took a conservative approach that led to a decline in technological innovation and competitive advantage. In summary, Sony Corporation focused on restructuring strategies but suffered significant ongoing losses.

An Overview of Sony Corporation's Strategies and Their Consequences

Sony Corporation is a major player in its industry with established core competencies. It benefits from economies of scale and has extensive production and research capabilities through its network spanning Japan, the United States, and other countries worldwide. In addition to its unique quality, technology, and differentiated products, Sony has also undergone multiple restructurings over the past two decades. However, despite these efforts, unrelated diversification and a lack of innovation caused the company to experience a loss of A? 293.36b in 1995.
In the digital age, rivals can quickly copy new products using readily available parts, leading to price wars. To mitigate this risk, Sony must adapt swiftly in a way that outpaces its competitors. Sony's previous attempts at corporate restructuring and implementing various organizational structures such as an eight-company structure in 1994 and a ten-company structure in 1996 did not yield the desired results due to unrelated diversifications, extensive decentralization, and limited boardroom involvement in major decisions. Additionally, the company's focus on internet-based products after 1999 exacerbated the situation and resulted in significant sales declines. The economic downturn in the US also played a significant role. To counter these challenges, Sony refocused on its core competencies and experienced a slight recovery in profits. Currently, prioritizing immediate sales growth for short-term objectives while restructuring product lines to ensure stability and profitability is crucial for Sony's long-term success.

Over recent years, Sony has successfully reduced costs and should continue doing so to improve its long-term gross margin. It is also vital for the company to efficiently utilize its increased resources to enhance sales while minimizing or eliminating macroeconomic risks that have previously caused unexpected losses. However, achieving these goals under the "One Sony" scheme faces two critical challenges: fierce industry competition and macroeconomic risks.Sony Corporation needs to rebuild its competitive advantage, prioritize product quality, and minimize the impact of external factors on performance and profitability. The CEO has acknowledged the need for change by presenting a revival plan that involves reducing 10,000 jobs and discontinuing unprofitable television operations. The new strategy focuses on mobile devices, cameras, camcorders, and gaming. Since its establishment in 1946 as a telecommunications company, Sony has successfully diversified into various business segments including Electronics, Game, Pictures, Music, and Financial Services. While this diversification has brought growth opportunities for Sony, it has also weakened their specialized capabilities and competitive advantage in different sectors. To address this issue, Sony must concentrate on a specific section or sector and restructure accordingly. By discontinuing or integrating its least profitable sections, Sony is taking steps towards specialization. This restructuring will result in a unique collection of products and specialized hardware/software offerings that can compete with highly specialized competitors like Apple. Given that no other company currently operates in as many sectors as Sony does, they have a long-term advantage due to their unparalleled experience in this area.
Sony is implementing a strategy to reverse its recent unprofitability. Restructuring the company will send a positive signal to the market and boost confidence among consumers and investors.

It is important for Sony to prioritize specific sectors that have desired characteristics. The main sections that Sony should focus on are consumer, professional, devices, networked products, and services. These sectors should also be able to integrate with each other for resource optimization.

Moderate competition in this market segment is crucial, which Sony can achieve by implementing strategies where it has a larger market share. The highly desirable sector of mobile devices, specifically Xperia smartphones launched under the Sony Ericsson brand in 2011, have gained significant market share and potential. Integrating Xperia smartphones with tablets, personal computers, and game consoles would be beneficial.

Sony aims to decrease costs and increase demand in competitive markets such as smartphones and tablets. They also plan to focus on their gaming sector which holds a significant market share and can create synergies among product lines. Unlike other segments, competition in the gaming industry is not as intense.Sony's strategic move to expand their PlayStation game network to include music and video content is seen as a smart decision. However, their focus on prioritizing the digital imaging business, which includes cameras and camcorders, may not be suitable due to strong competition from Canon, Nikon, and Olympus. Additionally, they will face substitutes such as advanced tablets with digital imaging capabilities. This integration of their digital imaging sectors with other businesses could pose challenges for Sony.

On the other hand, reducing the importance of the Television division in their new strategy can be advantageous. This is because they face tough competition from Samsung and LG in that sector and lack synergistic opportunities. Moreover, their market share in television is relatively small.

By focusing on specific sectors within

their overall strategy, Sony can benefit in various ways. Establishing a strong focus allows them to pursue acquisitions within related segments. This can lead to an increase in market share and economies of scale as well as cost reduction in manufacturing. It also grants them access to new technologies and patents.

Increasing market share provides Sony with more pricing power while economies of scale enhance productivity. Lowering manufacturing costs gives them an advantage in price competition.Furthermore, acquiring new technologies and patents facilitates innovation which has been slow thus far for Sony.Sony's strategy for initiating acquisitions in their targeted market segment involves considering the acquisition of smaller companies and being willing to pay higher premiums for expected synergies. The company's new focus is on managing product quality at the top level of management, with the goal of enhancing reliability and high quality. Over recent years, Sony has faced challenges with declining product quality, resulting in financial losses and damage to its reputation. Examples include recalling 535,000 VAIO laptops in 2010 due to temperature gauge errors and recalling eight models of digital cameras after image pickup issues following delays in launching PlayStation3.

To prevent similar incidents from occurring again, Sony is emphasizing specialization and taking a proactive approach. Additionally, they aim to expand their business in emerging markets through innovation, which will provide access to more markets and increase long-term sales and profits. However, one aspect that this strategy lacks is considering macroeconomic factors given Sony's international presence and sensitivity to exchange rates and local economies.

To mitigate risk exposure related to these factors, Sony can leverage its Financial Services division; however, it cannot directly control them. This can be

achieved by implementing derivative contracts such as currency and interest rate swaps or taking short positions in specific securities as long as these practices comply with laws and regulations.The most challenging aspect of this undertaking is ensuring alignment between the manager's incentives and the overall company goals. Failure to consider these factors could result in unexpected losses and render other efforts fruitless in the long run. To address this issue, Sony initially introduced the company system and implemented organizational improvements that were synchronized with changes in the surrounding environment. These organizational reforms and responsiveness to environmental changes after the burst of the economic bubble were significant.

Under the "One Sony" approach, a unified management system has been adopted to solve many issues and improve performance by enabling top management to make and implement major decisions. This new approach emphasizes leveraging the strengths of the entire Sony Group through a rapid decision-making process. The goal is to revive and expand its electronics business while strengthening its Entertainment and Financial Service divisions.

This simplified management structure is expected to enhance efficiency. To achieve Sony's goals, a more top-down leadership approach is necessary, involving creating visions, motivating employees, establishing direction, and aligning people. The focus is on developing six components for successful strategic leadership: defining the company's vision, maintaining core competencies, and building human capital.The aim of these aspects is to foster the development of new technology and benefit from a centralized decision-making system in the long term. In general, Sony has been addressing challenges with its latest strategy but there are still areas that require attention in this strategic change. Since it is no longer a market leader, Sony

lacks the influence it once had over market direction. Furthermore, supporting its own interests urgently proves critical. It's important to note that strategies do not always have to be premeditated; they can also emerge spontaneously (Mintzberg, 1980). However implemented, this strategy holds numerous advantages and has the potential to revitalize the Sony Corporation. Nonetheless, in order to survive and regain its leading position in the market, Sony still needs to work diligently. Unrelated business operations are often justified based on economies of scale and scope. However, this unrelated diversification can be more harmful than helpful in the long run. Therefore, it is important for Sony to conduct due diligence and evaluate the financials and brand value of its different business units, just like its competitor Samsung has done.Sony should focus on investing in developing and improving its core competency.This will help them reclaim brand leadership.In addition,it should rebuild their R ,design,and marketing departments.It is crucial for innovation to be integrated into both products and services,to enhance,the relationship between brandand consumersThis text emphasizes the importance of aligning innovation with consumer preferences in terms of branding. Sony is urged to reconsider its sales strategy and incorporate it into their overall business plan. It highlights that relying solely on marketing managers, who may not fully grasp the long-term vision, for selling and branding is insufficient. The market's high level of competition necessitates Sony's continuation of traditional branding techniques under brand-oriented leadership. It stresses that top management, including the CEO, should evaluate how customers perceive the brand during these dynamic times and strive to innovate and lead accordingly within their respective industries. To ensure survival in a competitive industry

with rivals such as Apple, Nokia, Samsung, and others, Sony must prioritize improving its designs and features in order to regain the "cool factor." The company's success hinges on achieving dominance in design and incorporating customer-centric features.