Type of paper: Essay

Topic: Sony, Business, Company, Japan, Brand, Customers, Products, Technology

Pages: 7

Words: 1925

Published: 2021/02/09

Introduction

Sony Corporation is part of the leading business conglomerate Sony Group, which is engaged in the business of electronic manufacturing, music, motion picture and financial services (Morita, 2000). With its headquarters in Japan, it is spread across the entire globe and it ranks 105th in the Fortune500 list. Sony started its journey from a simple shop with eight employees in a conventional departmental store with a name, Tokyo Tsushin Kogyo. They got their first achievement through the development of Japan’s first tape recorder, which the owners named as Sony. The company changed its original Japanese name as the Americans had difficulty in pronouncing the Japanese name. Under the leadership of its founder, Akio Morita, Sony played a vital role in creating brand image of Japanese products in the minds of American customers.

SWOT Analysis

Last year there was a downward trend in the net profit of the Sony Corporation; therefore, a detailed SWOT Analysis will help us discover the reason behind this. SWOT Analysis is significant strategic management tool that assist organization organizations to evaluate their strengths, weaknesses, opportunities and threats. Due to the technological advances, the world has globalized. The companies now not only compete with the domestic competitors but also completes with international competitors. It is only the case with large conglomerate, but it is the same case with small companies (Holt, 2004). To win the cutthroat competition amongst thousands of competitors, the organizations need to evaluate the way it works. It must evaluate the things in which it has a competitive advantage over the competitors. This analysis does not only highlight the positive things, but it also evaluates the weaknesses. The organizations will never ever be able to improve its position until it embraces its weaknesses and work on to convert them to strengths.
While the strengths and weaknesses are all the internal part of organizations, few external things effect an organization. There are numerous things, which are beyond the internal control of organizations like the rising oil prices, electricity shortages, rising crime rate and more. These situations develop threats for the company to operate in an environment. It is impossible that a company will have a no or negligible threat. Different kind of threats for different kind of companies will continue to be there and the organizations need to balance it through the internal strengths and the external opportunities. While the external environment gives threats to organizations, numerous times opportunities in the market create a favorable condition for businesses. For example, decrease in oil prices, changes in exchange rates, business friendly policies, rising demand of company’s product in other markets and more.

Strength

The first and foremost significant strengths of Sony Corporation are its valuable brand image. The name of Sony is synonymous with high quality. A 2011 survey revealed that Sony Corporation is a leading brand in the Asian market. Strong brand equity creates long-term customer loyalty. Sony was one of those brands that created the value for the “Made in Japan” tag amongst the American customers (King, 2008)
Sony is recognized as an organization that is in the forefront of innovation. The company’s first mover advantage in the development of VCR, Trinitron color television, Walkman, Compact disc, and magnetic recording tape has revolutionized the technological landscape
Sony Pictures and Sony Music are the most profitable business and it has helped many times to offset the losses on consumer-related products

Weaknesses

The high cost incurred on media production, especially in the business of television has greatly influenced its pricing strategy. The company has lost more than $6 billion in the last eight years. The company needs to lookout at various innovative ways to shrink down its cost without any compromise on quality.

Opportunities

The company has acquired the entire business of Sony Ericson, which gives it ample of opportunities in the booming Tablet and Smartphone market
There are myriad avenues of earning high profits in the healthcare-imaging sector for Sony. The company can acquire up to 30% revenue in Olympus
With company’s experience in gaming space and its business interest in music and movie, Sony can greatly benefit by its integration. They have developed such a equation through the four-screen strategy, which can turnaround things for Sony

Threats

The major threat to the company is from the fierce price competition from brands like Samsung and LG, which are offering products at low prices with better quality. Other brands are getting the traction especially on the television and cell phone market
There is news in the market that Apple Inc will be launching their entire business line of television, which can be a huge threat to Sony. According to the Interbrand ranking, Apple is much higher in term of brand perception; therefore, Sony will have tough time
There are multiple threats from hackers in the online medium. Recently, there was news that entire data of Play station customers was hacked. These treats from hackers can greatly affect its business operations (Wesley & Barczak, 2010)
Sony needs to create a balance by offsetting the weaknesses from their strengths and offsetting their threats from opportunities. There a number of brands, which have successfully turnaround their business even from position with low brand reception. On the contrary, Sony still has a magnificent brand perception amongst the masses and enhancing the profitability can be ensured by effective strategic planning and its implementation.

PESTLE Analysis

In order to operate businesses internationally, companies need to evaluate the micro and macro environment analysis. In order to do so, companies do their pest and pestle analysis to get a clear picture of the market it is going to be operated. For this study, the pestle analysis is going to be done and the company selected for that is Sony. This study evaluates how the factors affect the international businesses, these factors include political, social, economical, technological and legislation and environmental. Before discussing these factors in detail, the concept and reason of operating businesses in the international market needs to be discussed. Businesses internalized their processes and integrate, interact among different people (Johnson, Scholes &Whittington, 2008).
The world markets connect with each other’s business operations in this process. However, the decision to internalize its operations utterly depends on evaluating the macro environment factors. Sony is one of the companies that internalize its operation in the all around the world after analyzing these macro environment factors. Due to which, it is considered as one of the best and biggest companies of the world. The company commenced in 1946 in Japan Tokyo by the joint efforts of two individuals. Initially, the company started with less advance technology and less specialized labors. After three years of its establishment, the company decided to use Sony logo on the Totsuko products and after that time, the name changed to Sony Corporation. Sony has vast product line, from cameras to TVs and computers products. These electronic products are not of top-notch quality but also have superlative products quality.

Political Factors

The political environment of the country has significant importance that affect Sony in operating its operations internationally. The political factors of Sony transform at any time so business can face continuous change accordingly. The country political instability is a key that affect business operations of Sony. When the recession rate and credit crunch decrease in the country then the Sony Company accelerates its operations, trade and businesses. Competitors of Sony face the similar situation, which may cause financial loss to Sony Corporation. The political factors affect the business operations; government makes those decisions that directly affect Sony’s daily operations. These decisions include the wages law and decisions regarding product costs. Sony profits and losses are totally depended on the government decisions. In order to be success in the host country, Sony has to adapt numerous strategies as per the political conditions of that country.

Legal Factors

The legal factor includes rules and regulations that affect directly and indirectly to the business. As Sony is, an international company so it has to change its business processes and operations as per the international laws or the laws exist in the host country. The trade restrictions vary from country to country and to comply with the regulation Sony follows those laws and regulations (Aaker, 2004).

Economic Factors

The economic factor is eminent for the economy growth of the country and the progression of the company that operates in that country. Sony studies such factors in order to implement, alter and adapt strategies accordingly. Sony evaluates the wage rates, employment rates, and consumer spending patterns. All these factors assist in properly assessing the economic growth of the country and as per the understanding, the expertise formulate strategies and implement in the business operations. The current economic situation of Sony Corporation is not very stable as the company faces economic downturn and economic shrunk. Exchange rate is the key factor which every business take into consider because this factor helps companies operate successfully in the international market. The appreciation of Yen also has direct impact on the international transactions. The exchange change is affected adversely due to economic shrunk and credit crunch which impacts the prices of the Sony products. Sony Japan faced major losses due to the natural disaster i.e. earthquake hit Japan. The offices were destroyed and around 110 of the employees were got injured (Nelson, 2005). Sony operations were slowed down and it could not secure successful relationship with the suppliers.

Technological Factors

Businesses are more and more focusing on technological advancement and up gradation in order to attain competitive advantage over others. Japan is considered as the country where latest and advance technologies are introduced and implemented among businesses. Sony is also a Japanese company so it is also using latest and advanced technologies, which not only saves its cost of production and manufacturing but also creates a competitive edge over its competitors. For consumer electronics, digital age is considered as the future prospects of development. Sony uses advanced technologies that not only help in its production, but also marketing and storage of the products. One of the best examples of Sony technological innovation is PS2, which includes advanced and improved graphics.

Social Factors

Social aspects play an eminent role in providing company lucrative returns, same goes for the Sony company. The company scrutinizes the social factors like customer demand, maintain clear communication, lifestyle changes, gender working status, working hours etc. these aspects help the company in producing best quality final products and deliver to the final consumers as their demand.
In Japan, Sony is considered as the largest market, which consists of 43% of the sales. The target population of Sony includes consumers who belong to the age group around 44 to 45 years. Sony has sustained and maintained the brand image but the incident of security attack has somehow affected Sony’s brand image. Consumers lost their trust on the company but the quality of its products has regained its goodwill among consumers.

Environmental Factors

Environment factor is another important factor, which needs to be taken care of while operating internationally. Sony takes care of the community up gradation by introducing different CSR activities and introduces eco friendly business operations (D. Rigby & Schefter, 2002).

Conclusion

Sony needs to focus on innovative methods to deal with competitor like Samsung and LG. The idea is to keep the cost at low side and focus on few products for product specialization. They should implement efficient methods to keep their security at high level, so the customer data is not compromised. Sony must focus on healthcare-imaging sector as it will give the company high avenues of earning decent profits.

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