Strategic analysis on sony assignment sample

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Strategic Analysis on Sony

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STRATEGIC ANALYSIS ON SONY

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Table of Contents

Introduction...................................................................................................................................................1

Strategic Analysis .........................................................................................................................................2

External Analysis..........................................................................................................................................2

PEST Analysis...............................................................................................................................................2

PORTER’s Five Force Analysis..................................................................................................................4

Internal Analysis ..........................................................................................................................................5

Value Chain Analysis...................................................................................................................................7

Conclusion ..................................................................................................................................................10





Figure 1: Five Force Analysis of Sony .........................................................................................................4

Figure 2: Value Chain Analysis....................................................................................................................7





INTRODUCTION

The significance of strategic planning for organizations in current highly competitive business

environment is evident and systematic and strategic planning is required must for companies that

aspire to become a major player in the respective industry. Strategic analysis is considered as the

objective assessment and understanding the existing market condition of a company and the costs

and capabilities that forms a foundation for the development of strategic process (Graham, 2008). This

analysis helps in applying creativity with numerous opportunities that can be used to build and enforce a

strong strategic plan in a new or existing market. Strategic analysis begins with a vast description of

different strategic goals of an organization and its enforcement is then assessed in terms of the

company’s functional and operational abilities and the consequential competitive and financial

performance. For the accomplishment of organizational vision and missions an effective business

strategy is required to succeed. Featuring from this fact the present research report gives attention on

carrying out a strategic analysis of a firm (McDonald, 1996). In this respect an assessment would be

carried out on Sony and the various strategies adopted by this organization would be analyzed.

Strategic analysis in a business organization is one of the most important tools for enforcing a

proper planning process in the business. A strategic analysis mainly includes the SWOT analysis,

PEST analysis of company etc. These areas define the position of organization relative to the

competition and operational external and internal environment. Strategic analysis if properly implemented

a productive result could be derived by the organization in different levels of an organization. Sony is

a Japanese multinational conglomerate organization which is having it’s headquarter in Konan

Minato, Tokyo, Japan. The company is one of the leading manufacturing units of electronic goods for

professional and consumer markets (Henry, 2008). The diversified business Sony is mainly focused

towards games, entertainment, electronic and financial service sectors. This organization has been ranked

at 87th position in electronic goods in the 2012 list of

Fortune Global 500. Sony has been rated has one of the most comprehensive entertainment firm in the

world. It is the third largest television manufacturing company and is among the worldwide top

20 semiconductor sales leaders. Numerous strategies has been adopted by Sony from time to time with

an aim to acquire a outstanding position in the international market.

Strategic Analysis

Strategic analysis is the process through which mangers make a set of choice of different strategies for the

organization that will help in to attain better performance. Strategic analysis is comprised up of a set

framework that is utilized for accomplishing out an internal and external business environment analysis of

an organization (Powell, 1995). It is mainly done to develop a beneficial strategy and assess the factors

that could affect in the functioning of a business. Strategic analysis is used for the entire firm and is

conducted from time to time and mainly puts emphasis on distinguished factors that are external to the

business and impacts on the organization. The framework mainly includes three major assessment i.e.

industrial analysis, business strategy analysis and strategic evaluation.





External Analysis

It is defined as the technique which involves analyzing the market factors that could impact on the

organization. External analysis is designed to provide an idea to the organization in respect to the intricacy

and measures for a specific industry (Boulton, 2010). The main factors that are being analyzed in it are

political, economical, social and technological issues.

PEST Analysis

The major decision of an organization is influenced by many external environmental factors. In

order to present assistance to managers in making an effective decision PEST analysis is conducted. The

analysis for Sony is as follows;





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Threat of Market Entrants – It defines the factors that act as a barrier for the organization in new entrants.

In this industry threat from market entrants are large economies of scale and high requirement of capital to

enter into this market. None of the competitors could beat Sony in this respect because of strong brand

loyalty and various barriers through patents (Suttle, n.d).

Threats From Substitutes – The major threat for Sony in this area are due to short product life cycle and

high cost involved in research and development activities. Other factors could be lack of differentiation

in the product and introduction of all in one device in which every application could be found

(Crossan and et. al., 2011).

Bargaining Power of Buyers – It reflects on the advantage that the customers possess, in this area factors

that acts as barrier for firm are high rate of price sensitivity, large number of customers and low

switching costs.

Bargaining Power of Suppliers – It focuses on issues that act as hindrance for firm in terms of suppliers.

Sony faces low concentration of suppliers on technological products, numerous joint ventures and

in house production of high valuable components.

Degree of Rivalry – It reflects the points that are responsible for rivalry in the industry itself, in respect to

Sony Corporation the degree of rivalry it faces are due to oligopolistic market, decreasing market sales

growth, high innovation required in the industry and price competition (Sony Corp. Info, 2011).

The battle for market share across vast range of product of Sony is mainly based on continuous

launching of innovative products and changes in price. However, Sony has a major advantage over its

competitors by having the chance to achieve synergy affects across its business units like music and

films.

Internal Analysis

A strategic analysis is required to conduct to identify the strengths and weaknesses of business by

analyzing the various competencies of organization. It includes highlighting the competitive

advantage that an organization possesses and which will help in achieving profitability for

business. In this respect SWOT and Value Chain analysis of Sony would be conducted as follows;






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Ericson joint venture as it will give opportunity to perform its work actively and innovate in the tablet and

smart phone market. Sony can also enter into the health care imaging sector in a important way through a

possibility to attain 30%share in Olympus (Strategic analysis, 2010).

Threats – The organization faces stiff competition from firms like LG and Samsung which is

attaining grip with low cost products such as TV and mobile apps. Apple could also give Sony a

tough competition by bringing its all new version in TV. Sony also faces threats from online hackers

recently the play station of firm was hacked that resulted into leakage of various customer information.

Value Chain Analysis

The value chain analysis is defined as a set of framework that aids in understanding the various activities

through which a firm could attain competitive advantage over its competitors in the same market. It also

aids in creating value for shareholders and main aim of it is to provide value to customers. It is divided

into primary and supporting activities. The primary activities include factors like inbound and

outbound logistics, operations, marketing, sales and services.

The supporting functions include human resource management, firm’s structure, technology and

procurement.

Figure 2: Value Chain Analysis

(Source: The value chain, 2010).

Sony’s financial position which is a supporting activity in for the management is considered as

the major factor for future success. The credit ratings of Sony outs the organization in a long term rating

and helps to earn a recovery in the electronic segment. Sony has adopted a multidivisional firm structure

and each of its division is divided into smaller specialized units.

The organization focuses to serve its customers with a range of distinguished products; one of the chief

factors for success of this organations is its employees (Fatakia, 2012).





It offers a range of training programs for its workforce and provides them a career building

program. In addition to this the corporation also established a Sony University in Singapore in

2000 that is especially designed to grow managers globally. In the area of technology Sony is the

beginner of Walkman, Trinitron and Camcorder. The mangers of Sony focuses on in and outbound

logistics efficiently and they chose only those suppliers who obey the laws, financially strong and are

innovative and safeguard the environment.

The organization also introduced a green procurement and implemented various policies to protect the

nature. Other than all these in order to lower down the production costs, Sony is producing in low income

nations like China, Thailand and Indonesia. The firm has programmed out bound logistics activities i.e.

efficiently managed and is distributed in all networks. Hence, Sony is recognized as one of the best known

and valuable company in the world of innovation and technology development (The value chain, 2010).






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Conclusion

By analyzing the above report it could be said that Sony has been successful in maintaining a

strong position in the market and plans to develop it in future as well. The different external and internal

analysis has shown the current market position of firm and the way through which it could build

competitive advantage in the market place. Strategic analysis aid in attaining several benefits for an

organization as it assists in maintaining a clear idea of organizational vision and where does it

seeks to go (Business Strategy Analysis, n.d). It encourages a benchmark of the firm’s current

operations strategy against the desired goals and gives priority to projects and process to most effectively

allocate resources.

Sony is a corporate brand whose identity is deeply embraced and very well established in the minds of its

customers. The brand is still healthy in-spite of drooping of some of its market share (Sony Corp. Info,

2011). The goods and services of Sony are available all around the world in nearly 200 countries and

different territories. The market of US accounts for 17.9% of the profit, UK 13.9% and others 25%, Japan

consists of its largest number of shares. Therefore, it could be said that the corporation should focus on its

core business areas as it is having range of customers in this sector and the consumer electronic market is

anticipated to grow at a rate of 7.2% yearly in order to reach into a value of $136,700 million

in 2014. The organization is exclusively positioned in large global market and maximizes the

potential seen in growth probabilities.





References Books, Journals and Articles

Crossan, M. M., and et. al., 2011. Strategic Analysis and Action. 8th ed. Pearson Education Canada.

Graham, H., 2008. Marketing Strategy and Competitive Positioning. 4th ed. Pearson Education India.

Henry, A., 2008. Understanding Strategic Management. Oxford University Press.

Kumar, R., 2010. Human Resource Management: Strategic Analysis Text and Cases. I. K.

International Pvt Ltd.

McDonald, M., 1996. Strategic marketing planning: Theory, practice and research agendas. Journal

of Marketing Management, 12(1), pp.4-27.

Simons, R., 2011. Operations Management: A Modern Approach. CRC Press.


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