Sony Corporation
Sony Corporation
A Sony Xperia Z3
(White). Sony Corporation’s operations management effectively addresses the
objectives in the 10 strategic decision areas to optimize productivity. (Photo: Public
Domain)
Sony Corporation’s operations in the consumer electronics, gaming, entertainment and
financial services markets are guided through proactive productivity approaches in the
10 strategic decision areas of operations management (OM). These 10 strategic
decisions pertain to the main areas of concern to operations managers, with the aim of
ensuring a streamlined business. Sony’s operations management is based on time-
tested approaches that support high efficiency in these main business areas. As a major
player in the global market, the company must maintain high productivity and
operational performance. Considering the dynamism of markets worldwide, Sony must
maintain flexible operations management practices in these 10 strategic decision areas.
5. Layout Design and Strategy. The objective in this strategic decision area is to
optimize the flow of resources, such as human resources, materials and information.
For this purpose, Sony Corporation’s operations managers monitor requirements for
operational capacity, resources, and inventory. Highly productive flow of resources is
achieved through an annual review of layout designs and strategies. For example,
Sony’s operations management employs expert opinion and employee feedback to
make decisions on current productivity issues linked to layout designs and strategies.
6. Job Design and Human Resources. The company’s objective in this strategic
decision area is to develop adequate and high-performance human resources to
support business operations and growth. Operations managers use Sony’s
organizational structure to facilitate HR development. For example, the corporate
structure defines job designs that are specific to the main business areas of the
company, such as the consumer electronics business and the gaming business. On the
other hand, Sony’s organizational culture promotes high productivity and operational
efficiency. For instance, the corporate culture’s emphasis on reliability requires job
designs and HR programs that continually develop employees’ knowledge and skills.
Comprehensive support for this organizational culture is included in Sony’s operations
management for this strategic decision area.
10. Maintenance. Organizational reliability and operational stability are the objectives in
this strategic decision area of operations management. Sony attains reliability in
combination with sustainability. Sustainability is a core factor in the company’s efforts to
improve the business (Read: Sony’s Corporate Social Responsibility & Stakeholders).
Sustainability initiatives contribute to the reliability of the firm’s operations and
productivity. For example, such initiatives require maximizing efficiency, such as waste
minimization. The resulting efficiency makes Sony Corporation reliable in terms of
productive capacity. In relation, the company’s operations managers ensure stability
through regular maintenance evaluation of resources, such as technologies and human
resources. Corresponding changes are applied to Sony’s operations management
activities in this strategic decision area.
This corporate social responsibility (CSR) analysis of Sony Corporation shows the
importance of achieving business sustainability. The company considers sustainability
as the primary goal in its efforts for satisfying stakeholders’ interests and for corporate
citizenship.
Employees. Sony Corporation achieves its high performance through the support of
employees. The company views employees as a major stakeholder group. Employees
are significant because they influence Sony’s organizational performance. For example,
workers’ productivity directly affects overall organizational productivity. These
stakeholders’ interests include competitive compensation and managerial support. To
address these interests, Sony’s organizational culture is maintained as support for
optimizing employee performance. In addition, the company applies competitive
compensation programs to compete in the labor market, where technology firms
continually search for the most talented and skilled workers. Sony’s sustainability
programs also help optimize employees’ morale. Such programs contribute to employee
satisfaction in the company’s employment and corporate citizenship practices. These
factors show that Sony’s efforts to fulfill its corporate responsibility satisfy the interests
of employees as a major stakeholder group.
Suppliers. Suppliers are stakeholders that influence Sony’s business and corporate
social responsibility strategy. The company recognizes these stakeholders’ significance
in influencing business operations through adequate supply. Continuing and growing
business relations with Sony are the main interests of suppliers. The company
addresses these interests through managerial efforts to maximize operational efficiency
while supporting suppliers’ effectiveness (Read: Sony’s Operations Management, 10
Strategic Decision Areas & Productivity). These CSR initiatives are designed to help
suppliers grow alongside Sony’s growth. Such simultaneous growth is necessary in
ensuring the adequacy of supply to support the company’s global growth and
expansion. In addition, sustainability programs are applied not just at Sony, but also in
suppliers’ operations. For example, the company requires suppliers to satisfy a number
of environmental impact requirements. These corporate responsibility requirements
benefit the stakeholder group in terms of facilitating suppliers’ improvement in fulfilling
their respective corporate social responsibilities. Thus, Sony’s corporate social
responsibility programs satisfy the interests of suppliers as a stakeholder group in terms
of corporate citizenship and sustainability in the supply chain.
Business Partners. Sony Corporation has business partnerships around the world. For
example, the company has deals with telecommunications companies to distribute and
promote Xperia smartphones. The significance of such business partners as
stakeholders is based on their contribution to Sony’s competitiveness in the global
consumer electronics, gaming, entertainment and financial services markets. The
interests of these stakeholders include strong and profitable relations with the company.
As part of its corporate social responsibility strategy, Sony enters mutually beneficial
agreements with these partners. In addition, the company’s corporate citizenship and
sustainability status have a positive impact on the corporate image of these business
partners. Thus, Sony satisfies the interests of business partners as a stakeholder group
through effective corporate social responsibility programs.
A Sony Store in
Christchurch, New Zealand. Sony Corporation’s marketing mix (4Ps) addresses the
variations among the consumer electronics, gaming, entertainment and financial
services markets. (Photo: Public Domain)
Sony Corporation’s Marketing mix or 4P (Product, Place, Promotion & Price) effectively
support global business operations. The marketing mix defines how a firm executes its
marketing plan and specifies strategies and tactics specific to the business. In the case
of Sony’s marketing mix, these strategies and tactics are based on the conditions of the
global consumer electronics, gaming, entertainment and financial services markets. The
company’s diverse business operations require complex considerations in developing
the marketing mix. Nonetheless, Sony maintains a marketing mix that comprehensively
satisfies the organization’s needs in reaching its target customers.
Sony’s marketing mix (4Ps) is based on the varying conditions of the consumer
electronics, gaming, entertainment and financial services markets. The company
effectively implements strategies and tactics to maintain a satisfactory share of target
markets around the world.
1. Mobile communications
2. Game and network services
3. Imaging products and solutions
4. Home entertainment and sound
5. Devices
6. Pictures
7. Music
8. Financial services
9. Others
Sony’s Pictures products include motion pictures, television productions, and media
networks. PlayStation units and related content are grouped under Game and Network
Services. The company’s batteries, semiconductors and recording media are included
in Devices. Disc manufacturing is included in Others. This element of Sony’s marketing
mix shows considerable diversification of the business, in line with the business-type
divisions in the company’s corporate structure (Read: Sony’s Organizational Structure
Pros & Cons). Such diversification limits the effects of market-based risks.
1. Sony Stores
2. Authorized sellers
3. Cinemas and media networks
4. Official websites
Sony Stores sell genuine products and accessories, including Cyber-Shot digital
cameras, batteries and television units. These stores are also significant in promoting
the brand, considering their name. The company also earns through authorized sellers,
such as computer stores and smartphone stores. Motion picture products (movies) are
delivered to target customers through cinemas and media networks. Sony also has
official websites for devices, PlayStation content and other products. In this element of
the marketing mix, Sony maintains a variety of places to distribute its products
effectively and to have a wider market reach.
Advertising is the most significant promotion method in Sony’s business. For example,
the company advertises its products through online media and print media. In addition,
public relations are used as a way to build brand awareness and enhance corporate
image. For example, the company sponsors sports events, music festivals, and other
events. Direct marketing is applied to establish deals with organizations that use Sony
products. On the other hand, sales promotions are used to attract customers based on
discounts. For instance, the company implements discounts for its PlayStation gaming
products for Black Friday. Employees use personal selling at Sony Stores to persuade
target customers to purchase the company’s products. This element of the marketing
mix highlights activities that support the company’s market penetration efforts
(Read: Sony’s Generic Strategy & Intensive Growth Strategies).
The premium pricing strategy involves high prices. Sony’s products are typically priced
higher than the market average. The high prices support a premium brand image, which
aligns with the company’s differentiation generic strategy. On the other hand, the
company applies market-oriented pricing for some of its products. This pricing strategy
ensures competitiveness, based on the prices of competing products. Sony also
implements value-based pricing to determine the appropriateness of some premium
prices, based on actual product value and customers’ perceived value of the products.
The strategies in this element of the marketing mix show the importance of high prices
to ensure high profit margins and to support a premium brand image.
A Sony PlayStation
video game console (PSone model). A PESTEL/PESTLE analysis of Sony Corporation
shows many opportunities based on external factors in the remote or macro-
environment of the electronics, gaming, entertainment and financial services business.
(Photo: Public Domain)
Sony Corporation continues its global success by addressing the external factors and
related issues in the remote or macro-environment of its business. The
PESTEL/PESTLE analysis identifies such external factors in the political, economic,
sociocultural, technological, ecological and legal aspects. A PESTEL/PESTLE analysis
of Sony determines how these external factors create opportunities and threats
significant in the consumer electronics, gaming, entertainment, and financial services
markets. The company must effectively consider these factors in its strategic decision-
making. Including the results of the PESTEL/PESTLE analysis can increase the
suitability of Sony’s strategies with regard to the remote or macro-environment of the
business.
Sony Corporation benefits from the political stability in majority of the biggest markets.
This stability corresponds to the minimization of political barriers in the remote or macro-
environment, thereby presenting opportunities for business expansion. In addition, Sony
has the opportunity to grow based on the increased governmental support for data
security. Governments are now increasing their efforts for data security, which supports
the growth of businesses with online operations. In relation, governments are
developing additional measures to support online business. This external factor creates
opportunities for Sony to enhance its online operations. For example, the company can
expand its online services in relation to its gaming products. In this aspect of the
PESTEL/PESTLE analysis, Sony has growth opportunities based on the political
stability of the biggest markets.
Sony has the opportunity to grow alongside the economic growth in developing markets.
These markets have the highest growth rates, which can boost the company’s overall
revenues. In addition, the economic stability of developed markets presents
opportunities for Sony to enhance its operations, while experiencing minimal market-
based risks. Another consideration is the increasing level of disposable income
worldwide. This external factor creates opportunities for Sony to grow its revenues. For
example, the company can market the PlayStation more aggressively, based on the
expectation that customers are increasingly capable of buying the product. Based on
this aspect of the PESTEL/PESTLE analysis of Sony, economic conditions present
opportunities in the remote or macro-environment.
The increasing adoption of online gaming and the improving wealth distribution create
more opportunities for Sony to increase its revenues from the sale of its gaming
products. For example, the company can expect potential increases in PlayStation sales
revenues, as more people are likely to purchase the product. In addition, Sony can
boost its sales revenues based on increasing openness toward leisure. This external
factor highlights the benefit of marketing gaming and entertainment products to address
the leisure needs of target customers. This aspect of the PESTEL/PESTLE analysis
shows that sociocultural conditions lead to significant growth opportunities in Sony’s
remote or macro-environment.
Ecological/Environmental Factors
The conditions of the natural environment affect Sony and its markets. This aspect of
the PESTEL/PESTLE analysis covers the effects of ecological trends and conditions on
firms’ remote or macro-environment. In Sony’s case, the following ecological external
factors are significant:
Legal Factors
Sony Corporation must satisfy legal requirements appropriate to its remote or macro-
environment. This aspect of the PESTEL/PESTLE analysis determines the effects of
regulations on firms. Sony must consider the following legal external factors:
A Porter’s Five Forces analysis of Sony shows that competition and the bargaining
power of buyers have the highest intensities among the five forces in the industry
environment. Strategic solutions are necessary to address the external factors that
create such strong influences on Sony’s business.
The high aggressiveness of firms is the main external factor responsible for the strong
force of competition that Sony experiences. However, low switching costs are also a
major contributor. With low switching costs, customers can easily transfer from one
provider to another. For example, customers can easily transfer from Sony Xperia to
Samsung Galaxy phones. The moderate number of firms makes a moderate
contribution to the force of competitive rivalry. In this aspect of the Five Forces analysis,
Sony’s management must remain cautious of the effects of competitive rivalry and low
switching costs on the business and its industry environment.
The moderate size of Sony’ suppliers correspond to their moderate and limited influence
in the industry environment. For example, a strategic change in one supplier would have
a moderate and limited impact on the company. In addition, the moderate overall supply
has a corresponding moderate and limited impact on the availability of materials that
Sony needs. Another external factor that contributes to the moderate intensity of the
bargaining power of suppliers on Sony is the moderate level of forward integration.
Forward integration is the degree to which suppliers own or directly control the
distribution and sale of their goods and services. Based on this aspect of the Five
Forces analysis, the bargaining power of suppliers is a moderately significant issue in
Sony’s operations.
The low switching costs facilitate the movement of customers from the products of
established firms like Sony toward available substitutes. This external factor creates a
strong force in the company’s industry environment. However, the moderate variety of
substitutes limits this force. For example, customers find that they have many more
gaming options through Sony PlayStation compared to traditional non-online games.
The low availability of substitutes in many areas further limits the threat of substitutes
that Sony experiences. For instance, non-digital gaming products are not readily
available in brick-and-mortar stores in many localities. Based on this aspect of the Five
Forces analysis of Sony, such combination of external factors leads to the moderate
intensity of the threat of substitution.
The low switching costs empower new entrants to easily attract customers away from
established firms like Sony. However, a major barrier to new entry is the high cost of
brand development. For example, new firms must allocate sums that approach the
expenditure of large established firms to create and maintain a strong brand. This
external factor limits the influence of new entrants in Sony’s industry environment.
Similarly, the high cost of doing business prevents new firms from readily competing
head-to-head against established companies. Thus, the threat of new entry has a weak
intensity in affecting Sony, as shown in this aspect of the Five Forces analysis.
Sony Corporation is a major firm in the electronics, gaming, entertainment, and financial
services markets. The company has the necessary strengths to continue succeeding,
based on its SWOT analysis. The SWOT Analysis model is a managerial tool for
determining the internal strategic factors (strengths and weaknesses) and external
strategic factors (opportunities and threats) affecting the business. A SWOT analysis of
Sony reveals a number of global market issues that could reduce business
performance. Addressing these issues is crucial to the long-term viability of the
company. Sony must strengthen itself to overcome these challenges.
This SWOT analysis of Sony Corporation identifies key challenges that potentially limit
the company’s global growth and expansion. Maximizing the market performance of
Sony products requires solutions that adequately address the issues outlined in this
SWOT analysis.
Sony’s business strengths are outlined in this aspect of the SWOT analysis. Strengths
are internal strategic factors that support business growth and profitability. The following
strengths contribute to profitability in Sony’s case:
1. Strong brand
2. Diversified business
3. Popular profitable products
Sony Corporation has one of the strongest brands in the markets where it operates. A
strong brand enables the business to easily attract customers to new products and
current offerings. In addition, Sony has a diversified business. For example, the
company has electronics and gaming products, as well as financial services and
entertainment products. This diversification limits market-based risks and improves the
stability of Sony’s business. On the other hand, the company benefits from its popular
profitable products, such as the PlayStation. This is one of Sony’s strengths because it
ensures profits despite competitive rivalry. Based on this aspect of the SWOT analysis,
strengths ensure continuing business success. Still, Sony must improve these strengths
to remain effective against competitors.
This aspect of the SWOT analysis identifies Sony’s weaknesses or the internal strategic
factors that limit or reduce the company’s performance. Weaknesses create barriers to
business growth. Sony’s weaknesses are as follows:
The lack of dominant mobile devices is a major weakness in Sony’s business. The
company’s devices are low performers in the market, compared to those from
companies like Samsung and Apple (Read: SWOT Analysis of Apple, Inc.). Also, with
increasing reliance on online services, Sony’s must solve the vulnerability of its
databases and networks. This factor is a weakness because it is a concern for the
business and its customers in terms of data security. Another one of Sony’s
weaknesses is the imitability of some of its products. For example, competitors can
imitate the company’s cameras and home theater equipment. In this aspect of the
SWOT analysis of Sony Corporation, weaknesses pose significant barriers to growth.
Addressing these weaknesses can increase the company’s competitiveness and
profitability.
Sony has opportunities to further grow its business, as shown in this aspect of the
SWOT analysis. Opportunities are external strategic factors that can boost business
growth and profits. In this case, Sony has the following opportunities in the electronics,
gaming, entertainment, and financial services markets:
Further business diversification can increase Sony’s growth. For example, building on
its current competencies, the company can explore opportunities in related industries. In
addition, Sony has the opportunity to develop new products to create new income
streams. Furthermore, rapid innovation can boost the company’s competitive
advantage, especially when considering the high level of competitive rivalry in the
industry. This aspect of the SWOT analysis shows that the company faces opportunities
to raise its profitability in current and new industries.
Sony must overcome and solve threats to its electronics, gaming, entertainment, and
financial services businesses. Threats are external strategic factors that potentially bring
down business performance. Sony faces the following threats in its external
environment:
1. Cyber attacks
2. Competition
3. Software piracy
Cyber attacks are a major threat against Sony, especially because the company is
increasing its reliance on online databases and networks. Competitive rivalry is also a
threat that concerns the business, as other firms are aggressive in markets worldwide
(Read: Sony’s Five Forces Analysis). Software piracy presents challenges in terms of
maintaining profitability. For example, imitation can decrease revenues from Sony’s
gaming and related products. Thus, it is essential for the company to develop solutions
to protect its software products. As emphasized in this aspect of the SWOT analysis of
Sony, measures must be implemented to prevent or mitigate the effects of threats to the
business.
There are a number of key issues shown in this SWOT analysis of Sony Corporation.
The lack of dominant mobile devices is a significant weakness. While the company
already offers mobile devices, a recommendation is to apply aggressive marketing and
further enhancement of these products to help grow the business. These actions are
significant, especially when considering high profit potential in the global mobile devices
market. Also, Sony must address the vulnerability of its databases and networks, whose
security is a determinant of customer satisfaction. A recommendation is that the
company must apply continuous improvement to keep such security abreast of current
technologies. This recommendation also addresses the threat of cyber attacks. In
addition, it is recommended that Sony must implement rapid innovation alongside new
product development to expand the business. For example, rapid innovation can
increase the company’s market share and potential profits in the mobile devices market.
This SWOT analysis indicates a number of steps that Sony can take to overcome its
weaknesses and address the most significant threats in the electronics, gaming,
entertainment, and financial services markets.
In applying its organizational culture, Sony Corporation trains and maintains its human
resources to satisfy customers. Sony’s success is partly due to the effectiveness of the
characteristics of this corporate culture in connecting the company with its target
customers.
Credible. This feature of Sony’s organizational culture is based on knowledge and skills
necessary to satisfy customers. Customers’ viewpoint and the voice of customers are
factors that compel the company to ensure credibility in its human resources. For
example, based on customers’ perspectives and feedback, Sony develops training
programs to improve standards and procedures. HR training and development
programs reinforce the corporate culture through a credible workforce.
Cordial. Cordiality meets concerns at the intersection of two factors: the voice of
customers and customers’ expectations. This characteristic of Sony Corporation’s
organizational culture facilitates warm and friendly relations between employees and
customers. Higher customer satisfaction is a result of this cultural feature. For example,
personnel’s cordiality makes customers feel welcome at Sony Stores, thereby
increasing the probability of sales. Thus, Sony’s corporate culture is a way to retain
customers in the electronics, gaming, entertainment and financial services markets.
A Sony Cyber-shot
DSC-S600 camera. Sony Corporation’s organizational structure supports flexibility in the
electronics, gaming, entertainment and financial services markets. (Photo: Public Domain)
Changes in its organizational structure have increased Sony’s business resilience. The
new corporate structure ensures the company’s effectiveness in focusing on its key
business segments and the most profitable products.
1. Function-based groups
2. Business type divisions
3. Geographic divisions
1. CEO
2. Finance
3. Research & Development
4. Legal, Compliance, Corporate Communications, CSR, External Relations, Information Security
& Privacy
5. Manufacturing, Logistics, Procurement, Quality & Environment
6. Engineering
7. New Business (Strategy)
8. Sales & Marketing
9. Human Resources & General Affairs
1. Energy Business
2. Storage Media Business
3. Imaging Products and Solutions Business
4. Game & Network Services Business
5. Pictures Business
6. Music Business
7. Home Entertainment & Sound Business
8. Mobile Communications Business
1. Japan
2. United States
3. Europe
4. China
5. Asia-Pacific
6. Other Areas
A Sony Store in
Markville Shopping Centre, Markham, Ontario, Canada. Sony Corporation’s generic competitive
strategy (Porter’s model) and intensive growth strategies support bigger shares in the
electronics, gaming, entertainment and financial services markets. (Photo: Public Domain)
Sony Corporation applies its generic strategy (Porter’s model) for competitive
advantage and profitability in the electronics, gaming, entertainment and financial
services markets. An organization’s generic competitive strategy, based on Michael
Porter’s model, establishes how the business competes against other firms. Also, Sony
adjusts its intensive growth strategies to continually grow the business despite changes
in markets. An intensive strategy specifies the approaches used to ensure business
growth. As one of the biggest companies in the industry, Sony’s case is an example of
effective implementation of a generic strategy and intensive growth strategies
appropriately developed based on business needs and market conditions.
Sony Corporation uses differentiation as its generic strategy for competitive advantage.
Differentiation involves products that are unique in comparison to other products in the
market. In applying this generic strategy, Sony integrates features that make its
products attractive and profitable. For example, novelty and uniqueness were among
the factors that lead to the success of the PlayStation. In using the differentiation
generic strategy, Sony must continue innovating novel product features to maintain
competitive advantage against competitors like Nintendo.
With its vision statement and mission statement aligned with each other, Sony
Corporation develops profitable financial services, electronics, entertainment and
gaming products. The firm’s corporate mission and corporate vision effectively guide
organizational and employee performance to ensure business resilience in the industry.
With regard to its corporate vision, Sony states, “Our vision is to use our passion for
technology, content and services to deliver kando, in ways that only Sony can.” In
this vision, emphasis is on the concept of kando. The following components are present
in Sony Corporation’s vision statement:
1. Deliver kando
2. Use our passion for technology, content and services
3. Ways that only Sony can
Sony’s vision statement introduces the concept of kando, which CEO Kazuo Hirai
defines as “emotional involvement” or the “power to stimulate emotional response.” The
concept is integrated in product development and innovation processes. The
implementation of kando also supports Sony’s generic strategy and intensive growth
strategies. The second component of the vision statement indicates what the company
must do to deliver kando. For example, the firm’s employees must use their passion for
technology and content to design and develop new gaming products. The third
component of the corporate vision stresses the importance of the company’s
uniqueness. Such uniqueness is based on the nature and characteristics of
organizational resources. Sony capitalizes on its expertise, human resources and
successful business processes to support this uniqueness component in its vision
statement.
In its mission statement, Sony Corporation focuses on the concept of kando. Such focus
aligns the corporate mission to the vision statement. To effectively apply the concept,
the mission statement requires that Sony must develop products that evoke emotion
that moves customers. For example, the PlayStation attracts and retains customers
through an emotional bond based on gaming experience. In relation, the second
component of Sony’s mission statement focuses on what the business must do for
customers. In this case, the company must inspire and fulfill customers’ curiosity.
Sony’s vision statement only partly satisfies conventions and standards of good
practice. For instance, the corporate vision specifies how to deliver kando, but does not
provide information on a desired future condition of the business. An ideal vision
statement must contain details that describe the company’s target future situation. Thus,
a recommendation for Sony to improve its corporate vision statement is to add
information on a future business state achievable by delivering kando, such as
leadership in the electronics, gaming, entertainment, and financial services markets.
Sony’s mission statement gives a general description of what the business does for
customers. However, the corporate mission does not contain enough information to
guide strategic decision-making. An ideal mission statement must include sufficiently
specific details on what the company must do in order to achieve the corporate vision.
In the case of Sony, the mission statement is not specific enough to guide strategy
formulation. Thus, a recommendation is to modify the mission statement to include
information about the company’s approach to capturing a larger market share or
developing better electronics, gaming, and entertainment products and financial
services.