Question

Sony Corporation – Since its founding in 1960, Sony was always known for innovation and market leadership. But in the last 20 years, troubling issues have emerged to partially counter the many successes along the way. Research Sony and its subsidiaries, and answer the following questions:

1. What competitive threats does Sony face? From which companies and geographic regions? How does Sony stack up against these competitors?
2. Is it possible for a diversified company like Sony to be an innovation leader and stay profitable? How?

Thank you!

Answer 1

Name of Company : Sony Corporation

History of Sony Corporation : Sony corporation is a Japanese multinational company founded in 1960 and has its headquarter in Tokyo,Japan.Sony group comprises of three main businesses : Electronics,Entertainment and Financial services.Masaru Ibuka founded Sony with limited capital on the third floor of a department store and started making radios,shortwave converters etc.Slowly and gradually Sony began to grow and invent various products to mark its presence in the market.In 1961 Sony became the first Japanese company to offer shares in U.S stock market.Sony then began to grow worldwide and had its subsidiaries in many countries.

Company Vision : To create a memorable experience for the consumers in the feild of entertainment & electronics with the help of innovation and latest technology.

Subsidiaries of Sony :

• Sony Records Inc. (1968 )
• Sony Pictures Entertainment Inc. ( 1989 )
• Sony Prudential Life Insurance Co. Ltd. ( 1979 )
• Sony Bank (2001 )
• Sony Financial Holdings Inc (2004 )

Question 1.

Competitive threats faced by Sony :

1. High costs: The prices of Sony products are usually high as compared to other market players.Company lost about an equivalent of $6.3 billion for eight years in a row of television market because of high prices.this is one of the biggest threat for Sony.
2. Too much diversification : Sony has always been a market leader when it comes to electronics but over the years company has diversified into many businesses which has led to shift in focus from there core business.Competetors like Apple Inc has used this drawback and managed to eat Sony's electronics market share.
3. Hacking : Company is facing security threat in its segment like Playstation.Company's PlayStation network was hacked and many customer's data was leaked therein.
4. Incompetency in Mobile market : Company has failed miserably in this segment of electronics market.In each and every country Smartphone is the big new thing and many companies are making most out of it. Sony do offer a Experia line in mobile business but in comparison to other brands it fails to meet the expectations.
5. Foreign exchange fluctuations : Sony is a Japanese brand and has its operation across the globe. Severe lossess are to bear by Sony sometimes because of these fluctuations in foreign exchange.
6. Less investment in research and development compared to other fastest growing market players.
7. Lack of choice in some segments.

Sony's competitors:

1. Samsung   : South Korea..
2. LG ELECTRONICS: South Korea.
3. Apple : USA
4. Dell : USA
5. Panasonic : Japan
6. Philips : Netherlands
7. Huawei : CHINA
8. ASUS : Taiwan
9. HP : USA
10. Microsoft : USA
11. Canon : Japan

Sony stacking up against competition :

As we know Sony has been the leader of innovation in the market and has continued the legacy of success from last so many decades. With presence in so many countries across the globe Sony has dealt with competition in a very strong manner. Lets understand how :

• Strong distribution network
• Strong free cash flow
• Strong dealer community
• Superb performance in key markets
• Good returns on capital expenditure
• Consumer's trust and Loyalty
• Highly skilled workforce with proper trainings and development programs.
• Prolonging history of success.

These are some key factors which has helped Sony to resist and survive in the market from decades.

Question 2.

Being Innovative and profitable :

We strongly believe that Sony can be a innovation leader and stay profitable also at the same time .Being innovative brings in various challenges for a diversified company like Sony. Innovation is a continuous process of creating something unique and new. It sometimes solves real life or complex problems or it add ons to the overall experience of the consumer. Innovation has a cost and sometimes the loss of profit also but in case of Sony innovation is that ladder which will help them to climb up the success once again and reach that position where they were. Disruptive technology is the need of the hour, creating something new will help them to stay profitable in this ongoing crisis situation. Sony being one of the market leader has to spent a good amount of money in Innovation as this will help them to rebuild their falling structure.Profit is definitely a must for the survival of the company and innovation does not eats up your profit rather it helps you to enhance that. Sony is facing the strongest competition of its whole life and Innovation will make them stand out and give them an edge over the competitors.