The case in which hackers invaded Sony Corporation suggests that businesses should consider including strategic plans to deal with any internet-dependency risk, as well as protect private data that might interfere with their images in the market. In the 2011 issue, fraudsters targeted Sony because it had removed Linux from the Playstation 3. The company had no specific strategy to deal with the problem given the fact it took it over seven days to respond. The organization had to stop the hackers and ensure information did not flow freely but it was unfortunate, as the company sought the services of the California court because it had no capacity to deal with the hackers. The court invoked Digital Millennium Copyright Act, as well as the Fraud and Abuse Act to resolve the problem where users had lost money through fraudulent activities. Analysts noted that the company was never keen on security issues when designing the product.
Sony had to inform its clients that cyber criminals had stolen their personal data and credit card information after several days of scrutiny and evaluation. It was unfortunate because the organization could not establish the extent of theft after six days because it only claimed that customers birth dates, their email addresses, their nationalities, and user names were unsafe. This raised political temperatures in the United States, with a number of experts questioning the capability of the company to safeguard the interests of customers (Won-Kim and Jeong 11). Intruding into peoples private information is illegal under the US constitution because the act entails intruding into peoples privacy and secrecy. The company ought to have prevented the occurrence of crime where people lost their money to online fraudsters who exploited the weaknesses in the organizations structures to steal from people. The hackers made sensational claims that the company conducts communication between the server and the console through a non-secure web protocol, which is further unencrypted.
In May 2011, the company guaranteed its customers that it would restore network on the play station and promised to improve customer security by developing superior technologies, augmenting supervision on the software, carrying out susceptibility testing, increasing encryption, applying additional firewalls, and adding an early-warning system for normal prototypes to facilitate detection of the violations before they occur. The company made another mistake while addressing the disaster when it responded six days later. This means the fraudsters had access to peoples information for more days given the fact thieves continued to access their purchase histories, billing information and credit card information. The company made a decision to hand over the role of detecting the extent of crime to an independent firm, but it lost loyal customers, as many of them were concerned with their safety. The organizational structures failed to prevent the interests of the company because they should have safeguarded customer data, including the credit card numbers and account passwords.
The solution to this problem is hiring the best workers that have the capability of detecting the problem early enough and dealing with it before customers lose their resources (Schermerhorn 89). For instance, the organization had to seek the services of another company to detect and stop the menace. If Sony had a security team that constantly situated at the company, it could have solved the problem earlier because their role would be to monitor security on the databases and carryout the usual maintenance exercise while updating them to prevent hackers from causing destruction. The reporting and communication structures in the company are defective as well because the management was never truthful. Adoption of corporate governance principles, such as engaging stakeholders and working closely with concerned authorities, would have solved the problem. The case of Sony surprised many people because the company was operating in the most risky industry yet it never had a security strategy to protect clients from incurring losses.
Sony came up with far-reaching measures to prevent a repeat of what happened by increasing and renovating the gaming cloud to improve customer safety, as well as detecting irregular cases. In October 2011, the hackers tried accessing the accounts of 93,000 users unsuccessfully. It went on to disable the accounts before the fraudsters could do anything harmful to them. The company had set up an effective security system that played a role in early detection. The company could have averted the 2011 situation could it have adopted the system earlier. Having appointed the chief information security officer in September 2011, the account of each client was monitored frequently. The company worked closely with the Department of Homeland Security and other industry players, such as Microsoft to help in checking the activities of hackers and shutting them before succeeding in carrying out their heinous acts. The company has taken substantial initiatives to help customers enjoy the services it offers. Sony should consider updating the security systems to avoid conflicts with the government, as it was heavily criticized of facilitating the loss of resources and interfering with personal privacy. The company lost considerable capital in terms of payment of fines and penalties for allowing loss of personal data.
Works Cited
Schermerhorn, John. Organizational Behaviour. Mississauga: John Wiley & Sons Canada, 2005. Print.
Won-Kim, Ok-Ran, and Jeong, Chulyun. The dark side of the Internet: Attacks, costs and responses . Information Systems 36.3 (2011):5-19. Print.
In 2014, Sony Pictures Entertainment faced a cyber attack from North Korea prior to the release of The Interview, a film that discusses the personality of North Koreas dictator, Kim Jong Un. In addition to the cyberattack that caused millions of losses for the company, Sony also faced a threat from the terrorists that several theaters that will show the film will be attacked. Sonys response to the threats included canceling the films release and switching to video-on-demand outlets. Some suggested that canceling the films release creates a dangerous precedent of a large company submitting to terrorist orders. However, while the companys solution partially allowed them to disobey the terrorists order, it also displayed how terrorists plans can be prevented through technological development.
In my opinion, Sonys response was appropriate for the situation, as it could be acknowledged as the use of the opponents weapon against him. Therefore, while the terrorists used cyberattacks to steal the companys information and destroy their equipment, Sony switched the release to on-demand platforms and streaming services, allowing a speedy and widespread release of the film. As on-demand videos are easier to pirate, the films pirate copies quickly spread across the internet, making film easier to access and more discussed across different countries and segments of the population. In addition, the films plot turned out to be more appealing to comedy than satire, influencing the publics opinion about the earlier threats from North Korea. In my opinion, Sonys response to the attack was appropriate for the situation and politicly addressed several concerns.
Furthermore, while the case is complicated by presenting a real terrorist threat to the population, there are certain things that Sony and the U.S. government could have done differently to discourage future such attacks on other U.S. organizations. Firstly, Sony never publicly acknowledged that The Interview is a satire that has no connection with reality and does not threaten North Koreas political regime. Instead, it seemed that the company used unexpected publicity to market a relatively insignificant comedy film. Therefore, by initially canceling the films release date, the company set a negative precedent of a major company submitting to terrorist demands.
Next, considering the governments role in Sonys case, the issue should have raised attention to the cyber security problem in both governmental structures and large business corporations. Instead of acknowledging that the issue was Sonys problem, analyzing the breach and constructing new cyber security policies for the governmental organizations could have helped prevent other attacks in the future. For example, it could have prevented the 2016 controversy with foreign interference in the presidential election (Stengel). Therefore, by focusing on Sonys financial losses instead of similar potential threats in the future, the U.S. government exposed the cyber security issues that contributed to future cyberattacks.
In conclusion, the case of Sonys response to the cyberattack demonstrates the importance of prompt identification of the issue and its consequences. The case also displays how a creative approach to a problem that simultaneously addresses several concerns is not always the right choice. Furthermore, preventing both real-world terrorist violence and cyberattacks requires a collective effort of the U.S. government and business organizations. The possible measures include regulation of governmental and private organizations cyber security to achieve higher data protection standards. Through collective efforts and sufficient budgeting, organizations can develop more advanced cyber security and supervision systems and implement them in a short period of time, preventing future real-world terrorist violence and cyberattacks.
The brand chosen for the marketing creative strategy is Sony PlayStation. The new product from the brand is a new model of Sony PlayStation home video game console that is going to be advertised among teenagers and young adults.
The Purpose of the Project
The purpose of the project is to advertise the new PlayStation console among the target market with the help of the Internet, i.e. social media, and draw the consumers attention to the product by means of creative advertising and viral videos/promo-campaigns. Such an approach will allow the team to address the target market correctly and through such means that are used by the target market on a daily basis. The main tool of the promo-campaign is the social media as they allow reaching out to creative consumers and target market and improve the presence and recognition of the brand in the Web 2.0.
The target markets of the project are the teenagers (approx. 10-19 y.o.) and young adults (approx. 20-28) who are active users of social media and the Web. As it was stated in one of the studies devoted to blogs as marketing tools, the social media, and its users can be a perfect tool for a successful campaign of a product (Maurya 76). Nevertheless, any promo campaigns online need to be implemented with caution as inefficient planning will most likely result in a catastrophe.
Thus, to advertise the new PlayStation console creatively and successfully, it is necessary to understand our target market and its wishes. The target market of the product belongs to the millennial generation whose social interaction heavily relies on social media and other online resources.
What Are We Going to Tell Our Target?
The target market of Sony PlayStation can vary; although it does target younger generations, PlayStation users that are older than 30, 40, 50, etc. also exist and their number is not small. Thus, it is important to understand what the representatives of the target market want to hear. Hard-core gamers, predominantly male and between 18-25 years, are interested in innovations and the gaming process itself, while mainstream players do not seek the truth gaming process but rather entertainment.
Thus, the brand needs to address both types of consumers but with different messages. As it was done with PS 4, to address the hardcore gamers and their wishes, the campaign must be launched at websites and in magazines that this target market uses, i.e. games.com. As hardcore gamers are already familiar with the brand, it is not necessary to provide an advertisement that will explain what Sony PlayStation is and how it can be used. As proficient gamers stay focused on gamers news, it seems reasonable to provide an intriguing message, possibly in the form of a trailer, about the new console. Thus, rebuilding and refreshing of the gaming experience is what these customers want (Hou et al. 617).
As to mainstream gamers, these often can be represented by parents of children who like to play console games or individuals who are not fans of gaming but regard it as entertainment. For this target market, Sony PS can be presented as entertainment for the whole family that maybe even better than films and TV series.
Interaction Goals
It has now become clear that modern advertisement is transforming into an interactive online tool that allows the consumers to experience the product and not simply consume its description in the form of videos, pictures, or music. As some of the consumers spend almost half of their day on such social networks as Facebook, Twitter, Tumblr, YouTube, Instagram, etc., it seems reasonable to try engaging the consumers in the interaction with the brand (Jothi 237).
According to Jothi, 32% of social networks users have come across web banner advertisements while they were using the network (238). However, this type of interaction through ads on social networks is only useful when we want to approach people who are not familiar with the product. Another strategy called word-of-mouth can be used to increase the number of individuals that can be interested in the product. The goals of all these interactions are to raise awareness of the new upcoming product in the social networks and attract as many newcomers as possible by advertising the product through video bloggers, video advertisements, trailers, and teaser trailers.
However, one of the biggest advantages of such advertisement and interaction is the companys ability to evaluate the positive and negative feedback from the users (Gregurec, Tomaa, and ori 232). Word-of-mouth strategy allows the brand to build trust between the brand and consumers who tend to approach the advertisement from their friends and relatives more attentively as the one on the TV.
The development of apps that are presented to the customers prior to the launch of the product advertisement campaign is also one of the key marketing strategies that shape the modern, so-called viral advertisement. Some of the gaming platforms (e.g. Steam) provide a free limited trial of games. Such interaction would also be helpful in promoting the product: the consumers who purchase the PlayStation also receive free trials to several games. This approach is called co-branding and is possible when another brand that offers console games is interested in working with our brand.
What Impact or Role Do We Want Users to Have with the Message?
The brand message plays a crucial role in advertising the product to the consumer. Thus, the consumers need to feel that the message was designed for them and not to simply promote the product. As Ekhlassi, Maghsoodi, and Mehrmanesh argue, personal selling is one of the most effective means of promoting the product (762). However, it is also rather expensive. Thus, to combine users interaction with the message and personal selling, it seems reasonable to suggest parasocial interaction in advertising that allows the user to engage with the brand message more directly than through other types of advertising.
A teaser trailer will awake interest, while parasocial interaction with a celebrity or game characters during the next trailer will help the user connect with the message and brand more actively. Although employees who communicate with users through social networks on behalf of the brand often use prescribed scripts and standardized forms, such interaction fosters users loyalty to the brand and boosts the feeling of connection to it (Labrecque 135). Another form of connecting the users to the brand message is developing an application that will allow users to create an online avatar and explore the brands features (see Marvels Contest of Champions app). Exploration of the brands personality and history can significantly increase consumers willingness to purchase the product.
What Kind of Social Currency Does Our Target Have?
The social currency of our target depends on the representatives of the target market that we discussed above. For example, two parents with an 8-year-old boy will discuss PlayStation console on their Facebook walls or on Twitter not as frequently as serious gamers who have been engaged in the video gaming industry for more than five or six years. The first type of target market may mention the console as a gift for the child or as an interesting hobby that made the family laugh and spend time together.
However, serious gamers will devote much of their time discussing the advantages and disadvantages of the new product, no matter if they are big fans of the brand or prefer Xbox to PlayStation. It is necessary to understand that while mainstream gamers will possibly post pictures on Instagram discussing the new hobby or purchase in short, but emotional sentences, serious gamers are expected to share their opinions on gaming portals, on each others walls, on the brands social networks pages, on their blogs, and in comment sections of magazines that will discuss the product.
Hence, the brand should take into account the experienced gamers opinion because playing a PlayStation console has become a part of their everyday life a long time ago. However, it does not mean that mainstream gamers opinion does not matter.
These users are able to promote the product to other users of social networks that were not interested in buying a console initially. It is advisable to look through the hashtag #PlayStation on Instagram and other social networks to understand what type of consumers prefer sharing their experience with the brand. However, as the popularity of console games increases and geeky activities become synonyms to cool activities, it is possible to assume that both types of gamers will appreciate the product.
How Will We Measure the Effectiveness of the Creative Strategy?
Evaluating the efficiency of marketing strategies is important for the future companys projects and its budget. New tendencies in marketing require original approaches and concentration on the integrated comprehension of marketing practice. There are several methods we may employ while measuring the effectiveness of our creative strategy.
The first approach is advanced planning and creating a response-attribution framework (Krishnamurthy and Ewald par. 4). To successfully implement this method, we shall need to identify the kinds of campaigns which will be tracked, find which data is accessible to correspond to the feedback, and decide whether the response statistics can be improved (Krishnamurthy and Ewald par. 4).
Another method is designing control groups for a precise assessment of the campaign rise (Krishnamurthy and Ewald par. 7). This approach is especially vital for our project as the digital media advancement requires competent determining of the control groups which provides the correct accounting of the cumulative outcomes.
Delineating the appropriate evaluation metrics also is essential when measuring the strategys effectiveness. A strong metrics structure will help to see the interaction between the companys corporate targets and the marketing strategies (Krishnamurthy and Ewald par. 9-10).
The next approach is to outline the precise attribution standards. This method involves creating the rules for the projects channels, concentrating on more-generalized rules, and checking the standards for each project as they may have various outcomes in different circumstances (Krishnamurthy and Ewald par. 11).
Finally, we can employ the analytic and visual reporting instruments for measuring the strategys efficiency. These tools allow the systematic checking of the metrics and help create the reports of the projects cusses (Krishnamurthy and Ewald par. 13).
Employing these approaches will make it possible to check the effectiveness of the strategy and to design a further action plan.
Works Cited
Ekhlassi, Amir, Vahid Maghsoodi, and Shiva Mehrmanesh. Determining the Integrated Marketing Communication Tools for Different Stages of Customer Relationship in Digital Era. International Journal of Information and Electronics Engineering, vol. 2, no. 5, 2012, pp. 761-765.
Gregurec, Iva, Boris Tomaa, and Ana ori. Word-of-Mouth Marketing within Social Networking Sites. Proceedings of the 22nd Central European Conference on Information and Intelligent Systems, vol. 2, no. 2, 2011, pp. 227-233.
Hou, Jinghui, Yujung Nam, Wei Peng, and Kwan Min Lee. Effects of Screen Size, Viewing Angle, and Players Immersion Tendencies on Game Experience. Computers in Human Behavior, vol. 28, no. 2, 2012, pp. 617-623.
Jothi, P. Analysis of Social Networking Sites: A Study on Effective Communication Strategy in Developing Brand Communication. Journal of Media and Communication Studies, vol. 3, no.7, 2011, pp. 234-242.
Labrecque, Lauren I. Fostering ConsumerBrand Relationships in Social Media Environments: The Role of Parasocial Interaction. Journal of Interactive Marketing, vol. 28, no. 2, 2014, pp. 134-148.
Maurya, Mohit. Evolution of Blogs as a Credible Marketing Communication Tool. Journal of Case Research, vol. 2, no.1, 2011, pp. 71-90.
Sony is willing to promote its TV products as a partner of the Texas Rangers Club. The company emphasizes on the fact that if TVs produced by Sony are to be installed at the Rangers Ballpark, then they can be easily fixed up in houses as well. This will ultimately raise the awareness of the brand.
Marketing tactics
Pre-event strategies
Sony will raise awareness among people in order to remind the public of the partnership it has had with the Rangers (Kurtz 37). The public awareness will involve ads; commercials will account for about 60% of the total budget set for ads during the pre-event period.
The purpose of the pre-season advertisement is to instill a notion in the minds of the public that the coming season is a fully entertaining event; by its advertising Sony highlights the fact that thanks to the digital TV any person has the chance to watch their team perform and play. Therefore, if Sony can provide such an entertainment at the ballpark, then the product will appear even more entertaining in homes.
During the sporting period
During the sporting season, Sony will take the advantage of the massive number of fans visiting the stadium to watch their team performing on the pitch (Koekemoer and Bird 21). The company has weighed the advantages of advertising its product during the sporting season.
The estimated number of fans attending every sporting event at the Ballpark is around 42,719. During the season, Rangers plays about 162 games, 81 of which are home events. This means that every season around 3.4 million fans attend home events. By placing the advertisements in the Ballpark, the company will make sure that about 3 million fans see the ads 81 times in the Ballpark and 162 times on TV screens.
The marketing tactics during the season will also involve television advertising during out matches. In this case, Sony will seek to advertise itself in the leading sporting media the Fox Sports TV that reaches approximately 6.5 million homes in the five southwestern states. The Sony product and its name, consequently, will appear every time Rangers Club appears on the television with additional ads to remind people about their partnership with the club.
Finally, during the season, Sony will communicate the role it plays in sponsoring the club by placing its ads free in the clubs print magazine, on social media pages and the internet (Kress 231). Rangers has an estimated number of 3 million visitors of their website every season, most of whom are looking for daily updates about the club, its events and performances.
Visitors to the website will gain awareness that Sony is the sole sponsor of the club, and the one that organizes the events they enjoy watching. Graphics, pictorial representatives and videos on Sony products about their importance in homes will appear on every page at Rangers official website and on social media pages. (Koekemoer and Bird 21).
Post-event
Every post event will involve an analysis of the clubs performance, its strengths, weaknesses, threats and opportunities. The analysis will be fully a project of the Sony Company and the Club. Airing the analysis of the team performance on TVs is likely to attract a large number of viewers, especially men who are Sonys main target group.
Promotion mix
Sonys completive advantage will largely rely on its strategy of sponsoring the big club. Competitors sponsor only a few sports events or clubs in the region. The promotion of the Sony product will rely on the contract between the company and the club. Television ads will take up 60% of the total budget; they will attract attention of most fans, who check on the updates about the club and its events on television.
TV commercials will run throughout the season during games, and will frequently appear on television during the pre and post-game analysis. Secondly, fans may buy and read print media, including the official yearbook, the clubs magazines and its pocket schedule.
In each of these kinds of media, Sonys product and name will appear as a part of the game and the team. Its name and pictures of the products, including their benefits, technology and favorable prices will appear on several pages. Print media will take up 20% of the total budget.
Fans like visiting the club website for updates on its events and other information. In addition, the club has some accounts with leading social media. The agreement with the club will allow Sony to place its ads on both the website and the social media pages. The internet takes 10% of the total budget. Finally, billboards, most of which being digital technologies created by Sony, will appear around the stadium as well as in the lounges, cafeterias, inside the stadium and on the way to it.
Creative brief
The TV ads will reach the largest number of customers. The internet and print media ensure that every fan seeking information about the club sees Sony products quite often, while billboards seek to create an impression that Sony is the only partner to the fans club (Charan, Bossidy and Burck 122).
Men, mostly those between 35 and 50 years, are the target group of the advertising company. Most of them work earning between $50,000 and $100,000 a year. They have the capacity to recognize the brand in the shops, and choose it based on its involvement in sponsoring the clubs they like.
Execution plan sample
Promotion channel
Target audience
Pre-season
In-session
Post-session
TV
2,000,000
5,4000,000
1,300,000
Print
120,000
2,00,000
Internet
400,000
1,900,000
200,000
Billboards
3,400,000
Works Cited
Charan, Ram, Larry Bossidy and Charles Burck. Execution: The Discipline of Getting Things Done. New York: Springer, 2010. Print.
Koekemoer, Ludi and Steve Bird. Marketing Communications. Mason, OH: South-Western Cengage Learning, 2004. Print
Kress, Markus. Intelligent business process optimization for the service industry. New York: Springer, 2009. Print
A business report is meant to provide investors and other stakeholders with information that is important in running a particular business. Specifically, business reports give the stakeholders an idea on the status of their investment. These reports also highlight problems encountered by the business. They also contain the strategic plans that will be put in place to solve the problems in the future.
This paper is an evaluation of two companies annual reports. The paper takes into consideration all factors in business reporting, such as services, products, the environment, and the internal and external stakeholders. The paper will be based on the annual reports of Mitsubishi and Sony companies.
The two companies have come up with reports to create awareness among all the stakeholders. This is as far as corporate social responsibility (herein referred to as CSR) in the two companies is concerned. The reports also address the CSR strategies that the companies are planning to undertake
The Report
Scope and Limitations of the Report
This paper will focus on the differences between the reports of the two companies. This is in terms of the range of issues dealt with in the reports and how these issues are addressed. Specifically, the report will cover the following issues:
Explain the differences between the reports of the two companies in terms of such factors as country and industry of focus.
Assess the quality of reporting in the two companies based on Zadeks 1997 criteria (Zhong 2009).
Evaluate the appropriateness of using standardised reporting procedures in the two companies.
Make recommendations on how each of the two reports can be improved. The need for such improvements will also be highlighted.
These are addressed below:
Identifying the Differences between the Reports of the Two Companies in Terms of the Range of Issues Dealt with and how the Issues are Addressed
In this section, the author will try to identify the issues addressed by the two companies in their respective reports. The author will also try to analyse how each of the two companies address these issues.
Mitsubishi Materials CSR Report for the Year 2011
A critical analysis of the report reveals that it was intended to provide information to investors and other parties interested in Mitsubishi Materials Group. It was also formulated to create awareness on Corporate Social Responsibility (CSR) activities undertaken by the Mitsubishi Materials Group.
The report was structured using clear, precise, and simple language. This is to make it easier for the stakeholders to understand (Mitsubishi Corporation 2010). It is also noted that the report covers nine different areas that were selected to highlight the best strategies to acquire materials in the 2008 fiscal year.
The report has gone a step further to elaborate on the companys medium-term management plan, which was put in place on August 2011. Additionally, it addresses the initiatives taken by the group to deal with the damage caused by the infamous Great East Japan Earthquake and its devastating effects.
The report is not a mere summary of the companys CSR initiatives. On the contrary, the report is aimed at improving and diversifying these initiatives. To this end, the report is presented in a precise and accurate way to provide the reader with relevant and meaningful information that is significant for the growth of the company. The report meets the requirements of the Global Reporting Initiative (herein referred to as GRI). This is required given that the company is affiliated to CCMM (Mitsubishi Corporation 2010).
The disclosure of information touching on the companys operations is not limited to the report on material CSR. It is noted that information about the company can also be found in the CSR section of the companys website. This is all aimed at effectively reporting on the companys extensive CSR activities.
An undiscerning reader may form the opinion that the report focuses more on 2011 fiscal year than on any other period. This is not the case, given that the report has incorporated information related to activities before and after that time.
Being a member of the ICMM, Mitsubishi has assumed the responsibility of publishing the Metals Company Supplementary Data Book, which is a significant online report that extensively reviews the undertakings of various metal companies. This is all aimed at enhancing full disclosure of information in the industry (Mitsubishi Corporation 2010).
The review also addresses the actions taken by the companys three smelting subsidiaries. These are Hosokura Metal Mining Co. Ltd., Onahama Smelting and Refining Co. Ltd. (Sony Global 2012), and PT Smelting in Indonesia.
The company has adhered to version 3.0 of the Global Reporting Initiatives (GRI) Sustainability Reporting Guidelines. The report contains a disclaimer to the effect that any individual wishing to invest in the company on the basis of the information provided in the report will be held liable to any damage or losses accruing thereof. This is given that such a decision should be personal.
Sonys Annual Report for the Year 2012- Business and CSR Review
The report is structured in such a way that it provides the reader with information on the companys activities during the 2011 fiscal year. The report addresses the companys corporate social responsibility initiatives, as well as the business and investment initiatives taken. The report also introduces the new CEO and president of the company, Kazuo Hirai.
The company provides information on the three major businesses that it is running. These are electronics, financial services, and entertainment. The financial and entertainment sectors recorded a positive growth. It is also noted that the two sectors are expected to grow further in the future (Sony Global 2012).
However, the electronics market is unpredictable. The proceeds from the electronics sector were relatively low as a result of the effects of product commoditisation. This is in addition to the effects of the deteriorating foreign exchange rates. It is for this reason that the biggest task for the incoming CEO should be to reposition and reconstruct the electronics business. It is a matter of urgency as far as the stakeholders are concerned.
Sony Corporation has a reputation for ground breaking innovations and products, as well as high quality entertainment services. The company has over the years inspired many investors. Its scope of operations and methodology has made various stakeholders very curious.
However, it is noted that the group now aims at revolutionising its most valuable resource, which is the Sonys DNA. This is the strong will, ability, and desire to come up with high quality products and services. This has been in place since the inception of the company. The group now aims at ensuring that every employee owns and expresses the Sony DNA individually so as to enhance growth of the company (Sony Global 2012).
In the fiscal year 2011, the companys operations, especially in the electronics field, were adversely affected by the earlier mentioned Great East Japan Earthquake. This is together with the infamous Thailand floods of 2011. The situation was made worse by the economic crisis that negatively affected many foreign currencies.
This in turn led to a decrease in the prices of the goods and services offered by the company. The company recorded an operations loss of approximately 67.3 billion Yen. This is in comparison to the 199.8 billion Yen in the previous fiscal year. This was as a result of the decline in the net sales.
The company also reported on the measures put in place to address such situations in the future. This is especially so the measures put in place to revamp the electronics business. The directors expressed the need to act fast and decisively to restore the companys lost glory and improve its performance.
Included in the report was the corporate strategy adopted by the company. This is in efforts to restore the entity. The company identified various core areas of operation. The main pillars that were identified included digital imaging, games, and mobile business. These were identified as the key areas in restructuring the electronics business.
The business highlights was another significant area that was addressed by the report. It was noted that consolidated sales were decreasing from one year to the other due to the unfavourable effects of the deteriorating foreign exchange rates.
This is in addition to the shrinking of the markets in developed countries, as well as the Great East Japan Earthquake and the floods in Thailand among other catastrophes (Sony Global 2012). There were also the operation losses incurred during that period. This led to a huge net loss on the part of the Sony Corporations stockholders.
As part of the companys CSR initiatives, the management entered into an agreement with Stefani Joanne Angelina Germanotta, stage name Lady Gaga, a singer and song writer. It is noted that this artist had performed really well in the past. She received financial assistance from the company. The report also provides the reader with information on the performance of the companys shares in the market. The figure below is an excerpt from the report:
Figure 1: Sony Globals Stock Information
Adapted from: Sony Global 2012
An Analysis of the Differences between the Two Reports in Terms of Country and Industry Based Factors
Mitsubishi Report
The company mainly focuses on the manufacture and distribution of products that address the social aspects of the community. It aims at providing the most basic needs for individuals in the society. This is to help them survive or make their life better (Mobile Reference 2010). It is for this reason that the company has invested heavily by assisting the victims of the earthquake.
There is also the copper mining business that the company is involved in. The Copper Mountain Mine rejuvenation project was initiated in 2009. However, actual mining has been taking place since 1996. The corporation is aiming at mining as many minerals as possible. It has invested heavily in the sector (Mitsubishi Corporation 2010).
The company has also made initiatives to recycle waste materials and come up with products that are useful to the community (Tsimhoni et al. 2005a). At the companys Kyushu cement plant, plans are underway to start recycling incinerated ash from the waste generated by the municipal council. The project was supposed to begin on April 2012.
This will solve the environmental crisis that is likely to result from the process of melting ash into slag. The company is also involved in the metal smelting business. It is currently putting in place plans to recycle scrap metal.
The company has also put in place measures to safeguard and protect the environment. It is committed to the creation of a self sustaining community. It is as a result of this that the company initiated the Eco Contest award scheme, which aims at recognising and awarding the most efficient and outstanding ideas and contributions in the development of a low carbon or recycling-oriented society. In the first Eco Contest Award Ceremony held in April 2011, there were a total of ten award categories (Mitsubishi Corporation 2010).
Sony Report
The Sony Company is known for its ability to manufacture and distribute high quality products. Moreover, the company is well known for the high quality entertainment services. The company has diversified its operations by coming up with innovative hardware. As a result, the company has a remarkable collection of film, games content, and music (Lyons 2006).
The Sony Group has vast interests in the electronics business. However, during the 2011 fiscal year, the business was facing many challenges. As such, the profits declined. This was largely instigated by the deteriorating foreign exchange rates and the competition brought about by product commoditisation. It is for this reason that the group finds it very important to act swiftly and restore the lost glory.
The group is also trying to put in place measures that will revamp the industry. The company has identified several key areas in the electronics business. These are digital imaging, gaming (Andresen 2002), and mobile operations. As a result of this, the company will focus its investments in these areas.
Sony is going a step higher by engaging in activities that are more innovative than those undertaken by the various competitors. The activities are likely to improve the performance of the company. This is through the growth of set apart technology, which is better placed to improve the quality of the products.
One of the companys major undertakings is in the medical field. Currently, this involves the production and supply of printers, cameras, monitors, and other peripheral products specifically designed for the medical field (Hockerts 2008).
The Sony Group is also engaged in the provision of financial services. This sector is expected to record a positive growth. This is considering the performance of this sector in the recent past. In an effort to uphold high standards of operations and maintain a sound financial standing, the various companies under the groups umbrella have continued to provide high quality financial products. This is through the adoption of an inventive business model.
The companies include Sony Financial Holdings, Sony Life Insurance Co. (Zhong 2009), Sony Bank Inc., and Sony Assurance (Tsimhoni et al. 2005b). Sony Life, for instance, has maintained its successful operations with a lot of ease. As a result, it has recorded an increase in its policy sum in force (Ohga 2008).
The company has attained this through its enhanced interaction with the customers. It is also able to design and sell customised life insurance products that appeal to the clientele. According to Guerrier (1999), Sony Assurance enjoys a broad spectrum of customers as a result of its reasonable premiums. This is in addition to its segmented risk and high quality services that have led to increased market share.
Discussion
Inclusivity
An inclusive report focuses on all aspects of a given agenda. For instance, an inclusive report will take into consideration such factors as services, products, and the environment within which the company is operating. It will also take into consideration both internal and external stakeholders (Mitsubishi Zaidan 2009).
To this end, Mitsubishi has designed its report to create awareness among all stakeholders in an inclusive manner. This is especially so with respect to the CSR initiatives that the company is planning to take (Mitsubishi Corporation 2010).
In the report, the management talks about the employees and their overall approach to CSR. Moreover, the report highlights the framework used by the company to promote CSR and corporate governance.
In addition, the report talks about the companys medium term management plan, which runs from 2012 to 2014 (Mitsubishi Corporation 2010). This adequately informs all stakeholders on what to expect (Mitsubishi Motors 1985).
The company has highlighted other issues in its report. The report addresses the important role played by the society in providing resources. In addition, the report highlights the importance of the environment. It also mentions the companys efforts in combating global warming, as well as the companys promotion of eco- friendly products and technology. At the end of the day, Mitsubishi report can be considered as inclusive, given that it mentions and takes into consideration almost all the aspects of an annual report (Mishima 2009).
However, Sonys report is more inclusive than that of Mitsubishi. It starts by introducing the companys envisaged corporate strategy. Though this can be compared to the strategic management plan adopted by Mitsubishi, Sonys corporate strategy stands out. This is given that it features some of the companys products. In addition to this, Sony addresses the issue of management and its overall approach to CSR.
This is under the internal stakeholders section. The report also highlights the major areas in the corporate strategy, which will transform the companys future. Moreover, the report highlights the framework that will be adopted to promote CSR and corporate governance. This adequately informs all stakeholders. It also helps them appreciate the efforts made by the management (Choquette & Turnbull 2002).
Just like in the case of Mitsubishi, Sony highlights other issues in its report. The report takes into consideration the important role played by the society in enhancing the performance of the company. In addition, the report highlights the importance of the environment. It also addresses the efforts made by the company to improve resource management and address issues pertaining to climate change.
This is in addition to the companys promotion of eco- friendly products and technology, as well as effective chemical- substance management (Barney & Griffith 2002). This being the case, Sony Companys annual report can be considered to be more inclusive as compared to that of Mitsubishi (Wray 2004).
Comparability
In reporting, comparability can be conceptualised as the fair and balanced presentation of issues. It is important for a companys report to be as comparative as possible by addressing all the concerns (Stout 2010). For example, it is important to mention the companys corporate strategy, future management plan, and other issues affecting the company directly or indirectly. All of this should be covered adequately (Andresen 2002).
For instance, apart from providing information on the losses incurred by the company as a result of the Great North Japan Earthquake, the reports of the two companies are optimistic about the future. The reports also express support for environmental conservation. This is through the promotion of eco-friendly products and technology.
Sony has outdone Mitsubishi in comparativeness. As mentioned above, the report highlights the importance of the environment. It also addresses the efforts made by the company in improving resource management, as well as issues pertaining to climate change (Pfarrer 2010). This is in addition to the companys promotion of eco-friendly products and technology, as well as effective chemical- substance management. In addition, the report takes into consideration the importance of the society in providing resources.
Completeness
In report writing, completeness is achieved through detailed description of the subjects addressed. Specifically, completeness describes the exhaustiveness of the subjects in question (Poitras 2011). Generally, it is not easy to ascertain the completeness of a particular report. This is given that such an analysis addresses the exhaustiveness of the subjects highlighted in the report (Sony 2000).
It is also important to note that completeness is different from inclusivity and comparability (Hays 1999). The Sony Companys annual report may be ahead of Mitsubishis as far as inclusivity and comparability are concerned. However, both companies have effectively and exhaustively tackled the issues mentioned in their reports.
Evolution, Continuous Improvement, Management Policies, and Systems
It is important to mention the companys vision and the strategic plans that have been put in place to cope with the changes in the world in the annual report (Thoreau 2007). On the one hand, Mitsubishi has put in place a solid management plan that runs up to 2014 (Cosans 2012).
The plan aims at reconstructing the company and improving its products by making them friendly to the environment. On the other hand, Sony reports on the measures put in place to address future issues and to revamp the electronics business. The management expresses the need to act fast and decisively in order to restore the companys lost glory.
The companys corporate strategy was also included in the report. This is the strategy aimed at rehabilitating the company. As already indicated in this paper, the company identified the core areas of operation. Digital imaging, games, and mobile operations were identified as core businesses in the company. These were identified as the major ingredients of the plan to restructure the electronic business.
Disclosure
Disclosure is important in report writing. It is meant to inclusively create awareness among all the stakeholders (Wilcke 2012) as far as CSR initiatives are concerned. In the case of disclosure, information provided by the company is not restricted to the corporate social responsibility section of the report. This is given the fact that more information can be found in the CSR section in the companys website. This is an indication of the fact that the company has embraced technology in a bid to effectively report on the various CSR initiatives taken (Atkin 2004).
The Need for a Standardised Method of Reporting
As earlier mentioned in this paper, a business report is meant to provide information that is crucial in making decisions in a given company. The management provides a highlight of the problems that were faced within a given period and how such problems were addressed. Recommendations for future operations are also provided.
However, it is important to note that it is difficult to compare investments made by different companies. This is given the different reporting strategies adopted by different companies (Frisch 2004). Therefore, a standardised reporting model will make it easier to determine the operational procedures (Chang 2008), commercial objectives, business management models, as well as the perceived enterprise viability in different companies (Fukasaku 2002).
Recommendations and Conclusion
In this section of the report, the author will make recommendations on how to improve the future operations of the two companies. The weaknesses and strengths will be identified. This is in addition to the strategies that can be adopted to address the weaknesses and exploit the strengths.
Recommendations for Sony
Repetition is very common in advertising. However, it is not wise to keep repeating information about products when writing a report (Barnett 2009a). Instead, the company should try to provide investors with information that is more important to them, such as cash flow strategy, debt market conditions, and acquisitions.
Recommendations for Mitsubishi
Mitsubishi should note that the compilation of annual reports needs inputs from various stakeholders. These are contributions and inputs from a wide range of stakeholders with varying reporting and operating preferences (Barnett 2009b). This being the case, Mitsubishi should make deliberate efforts to combine the contributions from both internal and external stakeholders. This is in order to come up with a comprehensive and highly integrated document.
References
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Atkin, D 2004, Sony clie for dummies. Web.
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Barney, JB & Griffin, RW 2002, The management of organizations, Houghton Mifflin Company, Boston.
Chang, SJ 2008, Sony vs. Samsung: the inside story of the electronics giants battle for global supremacy, Wiley, Singapore.
Choquette, M & Turnbull, PL 2002, Emerging practices in CSR management, Conference Board of Canada, Ottawa.
Cosans, HW 2012, Business reports, McGraw-Hill, London.
Frisch, A 2004, The story of Sony, Smart Apple Media, North Mankato, Minn.
Fukasaku, Y 2002, Technology and industrial development in pre-war Japan Mitsubishi Nagasaki Shipyard, 1884-1934, Routledge, London.
Mobile Reference 2010, Sony reader daily edition survival guide step-by-step user guide for Sony reader; using hidden features and downloading free ebooks, Mobile Reference, Boston.
Ohga, N 2008, Doing it our way: a Sony memoir, International House of Japan, Tokyo.
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Poitras, NE 2011, Business reporting in western nations, Lee-Gee, London.
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Wray, WD 2004, Mitsubishi and the N.Y.K., 1870-1914: business strategy in the Japanese shipping industry, Council on East Asian Studies Harvard University, Cambridge, Mass.
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Growth opportunities for the brand using product/market expansion grid to increase sales
For the new Sony Watch for monitoring blood pressure and sugar for diabetes in individuals, the best product/market expansion grid is diversification. When the company develops and launches a new product in a new market, it will find good opportunities that are not available in its current business. Thus, Sony Watch could be a game changer for revenue growth and profitability for the company. In this case, the company will be launching a new product in a new market of the UAE. To grow, the company will focus on conglomerate diversification strategy. It is noted that Sony Watch, which is a wearable technology for individuals with diabetes, is a vibrant product for new markets not explored before (Armstrong et al. 45).
Potential new market segments
Although the company already has existing clients, Sony Watch is meant to target new market segments to create more opportunities for growth and profitability. The wearable technology perhaps has not penetrated the market as expected. In the UAE market, Sony Watch is a product that will specifically appeal to new group of consumers who are considered to be living with diabetes. By focusing on this market segment, the company will go beyond its traditional market segments.
Although there are smart wrist technologies for diabetics, they have not gained grounds in the UAE markets. Given the number of rising middle class in the target, individuals with chronic diabetes and other lifestyle conditions is most likely to rise. This situation presents an opportunity for the company target new markets. For instance, in the UK, the wearable device has gained attention from many diabetics who initially had problems monitoring their glucose levels and blood pressure (Kirsch 1). While these products can be found in the UAE, they are not common in the mainstream target market. In fact, only well travelled, wealthy individuals possess them.
Application of the marketing mix
Sony Watch is specified as consumer product. In this regard, the company will market the Watch to mass market, just as it markets and promotes smartphones, tablets and others. Thus, the company must ensure that Sony Watch meets the needs of the new target market segment in the UAE.
Proposed Product
Sony Watch will present major benefits to potential customers. The Watch is designed to measure glucose levels and change the way in which about 20 percent of the UAE diabetics manage their conditions. It is estimated that the number is most likely to rise because of growing cases of obesity and lack of physical activities (Chaudhary 1). New cases of diabetes in the UAE will present even more opportunities for Sony Watch.
The product is worn on the arm to gauge the level of glucose in the wearers blood via the skin after specified period. As a result, diabetics can obtain vital real time information about their glucose levels and adopt best practices to keep the levels management or stable. Patients will therefore be able to avoid chronic challenges that arise from elevated blood sugar using Sony Watch.
Sony Watch is most likely to rely on minimal electric current to draw blood sugar via the skin. Through complicated processes based on positive and negative ions, the Watch would be able to collect glucose for analysis.
Sony Watch will be designed for convenience as the major product specification and benefit. It has been observed that several people with diabetes often fail to test their blood sugar levels due to inconvenience and pain associated with the process. While diabetics recognised that it is imperative to gauge their levels of blood sugar based on physicians recommendation, they usually fail to do so because of poor management of daily activities related to sustained levels.
In fact, diabetics understand that chronic complications may result in loss of kidney, heart diseases, stroke and even blindness. By portraying Sony Watch as a simple gadget that could prevent these adverse outcomes due to lack of measurement of blood glucose levels, consumers are most likely to realise these benefits and purchase it. That is, frequent measure of blood sugar levels would ensure that patients understand their conditions and take appropriate interventions to control the levels. Thus, they can avoid long-term advance outcomes.
It is expected that Sony Watch will have a chip to store all data collected regarding blood sugar and pressure for analysis and reference. In addition, it will be possible to warn diabetics when their blood sugar levels and blood pressure are too high, too low, rising steadily or dropping faster.
Proposed Price
Many analysts have associated diabetics with changes in lifestyles supported by increased earnings. That is, the disease affects mainly the middle class and other affluent people. In this regard, Sony Watch should be a premium product, but the company should also develop other models for mass markets.
It is expected that the pricing strategy would accounts for product costs, costs associated with shipment, distribution, advertisement and promotion among others. It is however recommended that the premium pricing strategy should be considered once the market research has been done in the UAE to determine the most suitable price for the local market.
It is also imperative to recognise that Sony Watch will not be retailed at prices that reflect that it is a luxury brand. This implies that the pricing strategy would tout the product as convenient for consumers rather than a luxurious brand for the few.
Price skimming would be the best approach for Sony Watch. Through this approach, Sony Watch will maximise the profit for the company by retailing at a premium price for early adopters. Later on, the price of the product will gradually drop to attract a large number of middle class consumers. The innovative technology and wearable device fad will drive sales among target consumers who will be willing to pay high prices for the gadget. Once the sales drop or a new competitor enters the UAE market, the company will gradually reduce the price, skimming every segment until all segments of the target market are exploited.
By adopting price skimming strategy to launch Sony Watch, the company is most likely to derive four main advantages. The company will learn about what its target market segment is ready to pay for the Watch. Sony Watch will also enjoy prestige status associated with the product classification and pricing strategy. In addition, if the company learns that the entry pricing is far beyond many target consumers, it will be willing to lower it gradually.
Lastly, other potential customers will be enthralled to acquire Sony Watch at relatively lower price and, therefore, the company will be able to establish goodwill in the local market. One major drawback is that Sony Watch is most likely to attract multiple competitors because of its premium pricing strategy and large profits. On this note, the company must continuously introduce advanced watch through innovation to create competitive advantage.
Overall, the pricing strategy would be guided by specific factors in the UAE market, the companys image, brand feature such as competitive intensity, market pioneering, brand reputation, and experience effects (Spann, Fischer and Tellis 235).
Proposed Place
Given the premium classification of Sony Watch, the company will adopt selective distribution strategy. Through this approach, the company will be able to select specific dealers in the UAE market to resell the Watch. It will assist the company to ensure that all selected dealers comply with the strict criteria that reflect its brand and premium classification of Sony Watch. Thus, the companys strategies will influence resellers strategies.
The company will use the Internet as a means of distributing its Watch to target online shoppers. At the same time, it will encourage the channel members to share distribution activities to ensure that practices are consistent. The company must coordinate the supply chain to position the brand as premium. This strategy would create premium value to support the product classification and the intended brand image, as well as justify the premium pricing strategy for Sony Watch (Parment 250). The company should be careful to ensure anchorage in the UAE market because it is significant for encouraging resellers and creating competitive edge. When the company identifies its distribution places, which will be high-end locations in the UAE market, it will be able to design appropriate strategies for distribution.
It is imperative for the company to recognise that a premium Sony Watch may not appeal to the local UAE market because of loose relations. On this note, the company must create competitive advantage through its supply chain, which will ensure strong brand recognition, identification and appeal to consumers. According to Parment, consumer is likely to be attracted by the image of the premium brand than by the local dealer and thus creating a consistent brand experience is decisive for premium brands whose content to a great extent is global and goes beyond the influence of local dealers and cultures (250).
The company should adopt a pull strategy to create demands and encourage consumers to buy premium Sony Watch. The pull strategy would ensure that the company appeals to the end user of its product. In this regard, the distribution strategy must create a strong, visible brand for the successful strategy. The company will adopt various ways in its pull strategy to promote Sony Watch. First, the advertisement would involve traditional media and the Internet to promote Sony Watch. Second, the company will focus on developing customer relationships to ensure that customers will always come back and create awareness about Sony Watch to meet specific needs of diabetics. Finally, sales promotion would drive the pull strategy.
Through the pull strategy, the company will create new demands for Sony Watch. The increased demands will ensure that distributors are active to serve the target market segment. For example, the company will adopt strategies used by premium smartphone firms to launch their products. The Internet and social media would also be instrumental in enhancing the pull strategy of the company.
Proposed Promotion
A mix of promotional elements would be used for Sony Watch. On this note, the company would only focus on the most popular promotional strategies. Sales promotion would involve the use of incentives such as gifts to encourage the customer to purchase Sony Watch. For instance, customers will get gift voucher of specific amount to purchase any other products of their choice after purchasing Sony Watch. Through sales promotion, the company would realise immediate, short effects on sales volumes. It will allow the company to clear available stock. The sales promotion methods used such as stock clearance would motivate the distribution channels and consumers to purchase Sony Watch. At the same time, they would give the company a competitive edge against competitors.
The company will also use advertisement. Both traditional and modern media will be used to communicate merits of Sony Watch, its price and retail outlets in the UAE market. Through advertisement, the company aims to advance its pull strategy and create an impact by directly targeting and appealing to the target market of Sony Watch.
Personal selling will also be used as a promotional strategy to appeal directly to people with diabetics and explain how the product can assist them to manage their conditions. The face-to-face interaction with consumers will create a strong bond between sellers and consumers (Perner 1). The company will however not use this strategy to entice consumers and create unnecessary demands among consumers. Instead, it will act as an opportunity to establish good customer relations and enhance customer experience.
In addition, to the abovementioned marketing mix, the company will also use public relations by visiting some individuals with the condition and providing free Sony Watches to create goodwill in the local market.
Works Cited
Armstrong, Gary, Stewart Adam, Sara Denize and Philip Kotler. Principles of Marketing. 6th ed. Australia: Pearson Australia, 2014. Print.
Chaudhary, Suchitra Bajpai. National diabetes registry by end of 2015 in UAE. Gulf News. 2015. Web.
Kirsch, Michele. A wristwatch to ease diabetes. Daily Mail. n.d. Web.
Parment, Anders. Distribution strategies for volume and premium brands in highly competitive consumer markets. Journal of Retailing and Consumer Services 15 (2008): 250265. Print.
Spann, Martin, Marc Fischer and Gerard J. Tellis. Skimming or Penetration? Strategic Dynamic Pricing for New Products. Marketing Science 34.2 (2015): 235 249. Print.
The stories of the companies and the people who managed to find their own formulas for rapid success belong to the number of the most popular topics for discussion among people connected to media. Anyway, opposite situations when companies lose money and power in a short period of time should also be discussed. Their negative experience is as important because it may help to make necessary conclusions. Furthermore, analyzing this experience will allow developing recommendations for the companies that attempt at reclaiming their authority. Sony belongs to the number of companies facing a series of issues that have had quite a negative influence on its business and the popularity of its products among the consumers. According to the case that we were supposed to study, Sonys popularity has significantly decreased during the last decade.
There are a few factors that contributed to the present situation and affected Sonys performance in that period. At first, there was a high level of competition in the market, and a lot of newer brands appeared. It was extremely important for the brands to prioritize the activities that would help them to attract and keep the attention of their prospective buyers. Other companies were developing devices that could become popular among young people presenting the most important group of customers for such brands. At the same time, Sony was wasting money on the development of products that had already been launched in the market by other brands. Macroeconomic factors that have influenced this situation also include growing economic competition between Japan and other Asian countries such as China, South Korea, and Taiwan. Furthermore, there was a series of accidents that seriously disrupted the companys activities and caused a substantial financial loss. For instance, the hacking attack in 2011 and fire in London that destroyed the companys warehouse added to the situation that was constantly deteriorating.
If I had to make recommendations for the managers of the discussed company, I would attract their attention to the importance of the customer-centric strategy discussed by many researchers such as Ritter and Henrik, who summarized its main points. The importance and positive outcomes of the use of such an approach are stated by many researchers, including Senn, Thoma, and Yip. Within the frame of this approach, it is important to pay more attention to developing the content that would present an interest for prospective buyers and encourage them to try new products. As has been stated, many specialists working for the brand tend to underestimate the importance of the content produced by the company.
It is clear from Sonys official website that the information located there is helpful from a technical point of view; at the same time, it is not enough to attract younger customers who may bring substantial profit to the company. To continue, I would recommend the managers of Sony company to revise their policy concerning the launch of new products. As it is clear from many printed publications devoted to business, the role of innovations should not be underestimated. For instance, Mahmoud et al. claim that innovations help to maintain the companys position in the market and gain interest in the customers. What is more, I suppose that it would be important for the company to take into consideration new ideas and hire more employees who would be able to bring positive changes to the relationships between the company and the entire community.
Works Cited
Mahmoud, Mahmoud Abdulai, et al. Market Orientation, Learning Orientation, and Business Performance: The Mediating Role of Innovation. International Journal of Bank Marketing, vol. 34, no. 5, 2016, pp. 623-648.
Ritter, Thomas, and Henrik Andersen. A Relationship Strategy Perspective on Relationship Portfolios: Linking Customer Profitability, Commitment, and Growth Potential to Relationship Strategy. Industrial Marketing Management, vol. 43, no. 6, 2014, pp. 1005-1011.
Senn, Christoph, Axel Thoma, and George S. Yip. Customer-Centric Leadership: How to Manage Strategic Customers as Assets in B2B Markets. California Management Review, vol. 55, no. 3, 2013, pp. 27-53.
The applicability of game theory in making decisions is an interesting aspect to observe. Game theory can be defined as a set of actions by particular decision makers, who are aware that their actions affect each other. Thus, for every case in which there are more than one decision maker player, and more than a single direction for action involved, there is a game that can be formed from such case. Thus, it can be stated that game theory can be applied to more than one context. Despite being associated mostly with economics, game theory is not restricted to such discipline. Nevertheless, financial aspects are always found in most decision making processes. One case that can be investigated using game theory can be seen through the issue of piracy in video gaming world. The most recent top story in such context is that Playstation 3 a video game console manufactured by Sony was jailbroken. A jailbreak is a hardware and/or software modification process that allows running unauthorized software on a particular device. In that regard, the present paper will attempt to describe the current story along with the preceding events as a game situation. Additionally, the solution to such situation will be provided and compared with the way it turned out in reality.
Game Description
A certain background might be required to explain the context of the current situation, regarding piracy and Sony Playstation 3 (PS3). Initially at the time of the release, PS3 had the ability to install any other operating system (OS) on the device. It is alleged that such option contributed to that PS3 could not be jailbroken for a record period of time, as opposed to other video gaming devices, as it gave hackers the opportunity to install their programs without the need to break the security of the system (Digital Foundry; Fahey). Once Sony discovered that the option of installing other OS might make their system vulnerable, it had two strategies to choose, either such option or to keep it. The payoffs of both strategies are not completely known for Sony at the time, as it did not know how it will turn out. The information at the time of making the decision was known to both parties, and thus, making the game of perfect information.
The second participant of the game can be seen through hackers community. They also had several decisions to make, which according to their statement in 27th Chaos Communication Conference (27c3) was largely based on the actions of Sony (Digital Foundry). Thus, their strategies can be divided between choosing to break the security of the system or not, i.e., cooperate with the manufacturer or not. The payoff for the hackers community can be seen in terms of satisfaction for the hackers community and avoiding losses for Sony. The best option, in that matter is ten, no losses incurred by Sony, and total satisfaction by the hackers community. The measurement can be estimated through the statement made, where the number five might mean moderate satisfaction, assuming that hackers will not be obliged to jailbreak a system that was already open, and moderate losses for Sony, as it will have the opportunity to patch the security for future games. The payoffs in this game are assumed, based on the common knowledge and rationality. Considering the Sony was the last platform that was not jailbroken by hackers, the worst pay off is that their games can be copied freely through the internet, incurring huge losses to the company. The worst payoff for the hackers community is the possibility for litigation, which might mean that in an ideal case they will have to stop their activities for the time of such litigation.
Representation
The game can be described as a sequential and with perfect information. The extensive representation of the game can be seen through the following graph. Considering that there are opportunities for both parties to gain in this game, such game can be described as a non-zero sum game.
In normal form, the game can be represented as follows:
Hacker Community
Sony
Keep other OS option
Remove other OS option
Cooperate
(10,10)
(0,10)
Break the System
(5,5)
(0,0)
The Solution
In order to solve the game which is of sequential order and perfect information subgame perfect Nash equilibrium (SPNE) method might be used. Such method is dependent on the characteristic of the game consisting of subgames, i.e. a subset of branches and decisions in a game tree (Rasmusen 256). The solution of such game can be seen through backward induction, where the determination of the path begins at the last node, and then moves backward. For the game described, the payoff for hacker community is chosen at the last node, where the outcomes providing maximum payoffs are chosen. Such nodes are the far left and far left nodes, each of which constitutes a ten; the rest of the nodes are ignored. Next, the payoff for the first player Sony, is determined between the two path chosen previously, which in this case is either to remove the other OS option or to keep it. The option providing maximum payoff to Sony is to keep the other OS option. Thus, the selected path represents the equilibrium in this case. An illustration of backward induction can be seen through the following graph.
Conclusion
In reality, Sony chose the other option, to remove the other OS feature, which turned to provide the least payoff. Such fact can be explained through making the wrong assumptions regarding the knowledge each player has about the other. In that regard, Sony sought to maximize its profit, but it turned out that the assumptions of rationality was wrong. Nevertheless, it should be stated that there were a certain indication for the company that removing the other OS option would no maximize its profits, when many customers complaint for the removal of an advertised option, and accordingly, as series of law suits were filed against the company (Conley). Thus, at this stage Sony should have been aware that choosing such strategy would not be clear in terms of payoff. Accordingly, once such option was removed, hackers made their determination to restore it (Kuchera). It can be concluded, that in the presented game, one of the players failed to determine the outcome of the strategies employed, which led to an outcome with the least payoff.
Sony Corporation was not afraid to embrace change. In fact, the company was proactive when it comes to implementing change, hoping to guide a successful organization into the 21st century.
The moves made were radical considering the fact that the companys core business was in manufacture of consumer electronics goods and yet it acquired Columbia Pictures and CBS Records.
From the point of view of change management, the company leadership did everything right in securing the cooperation of various stakeholders even when it was clear to many that Sony was in uncharted waters.
The acquisition of a movie company and a recording company was difficult to justify, however, Sony was able to pull it through.
Finally, change was implemented but at the end Sony realized that the commitment to implement change is not enough, it is also crucial to apply due diligence to figure out the long-term effect of a strategic move.
Introduction
In the decade of the 80s and 90s there was an electronic gadget that was ubiquitous from Tokyo to New York. It was none other than the Sony Walkman. At the same time household from Asia, Europe and America were entertained using a Sony Television set and the most popular model was the Sony Trinitron.
The once humble and unknown Japanese electronics company has taken the world by storm and was one of the most profitable corporations in the 20th century.
They key to their success was innovation, specifically the creation of miniaturized and portable music machines as well as cutting-edge technology that powered their TV set. Music lovers used their Walkman to enjoy music whenever and wherever they want to listen to their favorite songs.
At the same time TV viewers were delighted with the picture quality of the companys Sony Trinitron TV set.
Needless to say, Sony became the undisputed leader in consumer electronics and was considered a savvy innovator with a knack for knowing what the people really wanted when it comes to consumer electronic goods (Nathan, 1999, p.10).
However, change management was not the strongest suit of the companys corporate leaders during the latter part of the 20th century. It was difficult to change something that was profitable for a long time.
The corporate leaders at Sony made the decision to expand its presence in the United States and set their sights on the U.S. entertainment industry.
The company tried to change but the attempt failed (Tabuchi, 2012). The corporate leaders and major investors at the Sony Corporation must think long and hard on how to implement an effective change management program that could help the company succeed in the 21st century.
Literature Review
Sony was a small Japanese firm when it started but after a few decades, it became a household name due to its innovative electronic products. Phenomenal is the best word to describe the impact of the Sony Walkman and the Sony Trinitron TV.
The company was a leader when it comes to revenue, innovation, and mass appeal. Sony endeared itself to countless millions around the world with a parade of electronic products that are both cutting edge and practical (Nathan, 1999).
The company charged ahead and made daring moves to expand its manufacturing capability to meet soaring demand. Sony Corporation decided to expand and trained its sights on the lucrative U.S. entertainment industry. The decision to buy a film studio was a major leap for the electronics company.
The move could be considered as an extreme example of integration wherein one company tries to control every aspect of the business. For example, a restaurant purchased a farm so that everything that it needs in the kitchen is sourced from this farm.
Nonetheless, it does not require an expert in business management to know that this type of integration does not work all the time. Most of the time it is best to work with suppliers; for instance, manufacturing firms buy components from other firms.
In the case of Sony the purchase of a movie company cannot be considered integration because there is a huge divide between a television set and the movies that are viewed through it. The business decision was mind boggling because the acquisition of Columbia Pictures is not even remotely related to the electronics business.
However, corporate leaders of the company believed it was the right move.
Richard Lynch explained their decision through this remark: The strategic logic here was that of developing a vertically integrated company from the service that develops the pictures and music to the machines that deliver them in individuals homes (2006, p.207).
Richard Lynchs explanation made sense however, it is difficult to comprehend how vertical integration could be achieved because those who purchased Sony Trinitron TV are not compelled to buy movies that were produced by Columbia Pictures.
Therefore, when Sony purchased Columbia it was a business transaction that benefited Columbia Pictures but it did nothing to improve the sales of Sonys electronic products.
Fig.1. Financial Year 2012 Results by Segment (Sony Group, 2013).
Consider for instance the original name of the company; it was called the Tokyo Telecommunications Engineering Corporation.
Therefore, Ibuka and other pioneers laid the business framework that future leaders should follow. It was a statement that the identity of the organization was bound up in technology and hardware. However, decades later, Sony was in the business of making movies.
In order to have a clear picture on how far the company has deviated from its core business, consider the information gleaned from a case study of Sony Corporation, specifically the circumstances that surrounded the deal to acquire Columbia Pictures:
On September 24, 1989, Sony & bid $3.4 billion in cash for Columbia Pictures Entertainment Inc. It was the highest bid ever by a Japanese company for any U.S. property. In addition to the cash price, the Japanese electronics giant assumed nearly $2 billion in debt and contractual obligations (Spar, 2003, p. 368).
Aside from Columbia Pictures, Sony also invested in the purchase of CBS Records. All of a sudden Richard Lynchs explanation made sense, Sony wanted to produce the music that people would listen to with their Walkman.
Immediately after the acquisition of the said movie company and the music recording company, the financial situation at Sony began to change from bad to worse.
In the early part of the 1990s, problems began to crop up, specifically in relation to the acquisition of CBS Records and Columbia Pictures. Consider the highlights below (Spar, 2003, p. 378):
1990 Columbia Pictures Entertainment suffered negative cash flow
1991 the combined cash flow of Sony Pictures and Sony Music turned negative
1992 In the third quarter alone, announced a 37% decline in operating income
1993 The film Last Action Hero a $60 million production, bombed at the box office
It did not take long before the executives and shareholders realized that the creation of Sony Music and Sony Pictures was an ill-advised move.
The negative cash flow and the failure to realize their objectives were unacceptable to the shareholders and therefore a major change needed to be initiated in order to bring back Sony Corporation to the top of the list of the most profitable company in the world.
The changes that were made right after the dismal performance of the company shook the foundation of Sony. In fact the core leadership and most probably the board of directors were compelled to hire an American to become the companys first ever CEO.
Several years later a commentary was written with regards to the historic move, Sony Corporation of Japan did something almost unheard of in Japanese business circles.
It appointed a Welsh-born American citizen as head of the Japanese company (Lynch, 2006, p. 107). A message was sent and it reverberated all over the world.
Michiyo Nakamoto, made the revelation that the crisis surfaced as early as April of 2003 and she added that at the same year, &Sony revealed a sharp deterioration in its electronics business and weak mobile phone sales.
It launched a costly overhaul to regain its competitive edge. Yet barely halfway through that three year exercise Sony is again faltering (2005).
Richard Lynch on the other hand made a complimentary analysis that supported Nakamotos observation and he wrote that Sonys woes could be the result of the following: a) threat from low-wage labor manufacturing and b) shifting away from innovative products e.g. liquid crystal display (LCD) screens (20006, p. 108).
It was made clear that the former CEOs of Sony dreamt of making a great deal of money by venturing into the entertainment industry while at the same time prodded the other half of the company to manufacture and sell consumer electronic goods.
The juggling act did not work and there was no evidence to show that the firm accomplished vertical integration.
The company that was once known for its innovative technology made wrong assumptions when it comes to the future of music and TV technology.
Thus, the company was caught flat-footed in the fast transition to new technologies. Therefore, Sony, which had not invested in manufacturing LCD panels, was forced to buy them from competitors
(Nakamoto, 2005, p.12). This episode in Sonys history helps explain the sudden rise to prominence of a Korean electronics company called Samsung. Needless to say, it was late in the game when the company realized that it was betting on the wrong technology.
Their problems could be traced back to the day they purchased Columbia Pictures and CBS Records. The rush to consolidate in the guise of vertical integration was a major blunder in company history.
For example, CBS Records was in the business of producing music and therefore, it placed the company in bind because it could not invest in a technology that could store music in a digital format. During that time no one knew how to handle the thorny issue of copyright infringement and digital music files.
In fact, Sonys corporate leaders were adamant to discourage the electronics division from marketing a portable player that could download music from the Internet (Nakamoto, 2005, p.14). It was also the same time period when the Steve Jobs and his team were poised to change the world with their Ipod.
Sony had the resources and the technological capabilities to develop a device similar to iPod, however, all plans related to its development were considered taboo because of CBS Records.
It is important to point out that two major changes were made in the latter part of the 20th century. First, there was a rush to create vertical integration and second, there was the radical move to hire an American CEO to drastically alter the fortunes of the ailing company.
However, it is also important to point out the theoretical frameworks needed to understand the change process.
There are at least four major categories of change and these are: 1) Evolutionary; 2) Dialectics; 3) Life Cycle; and Teleological. Evolutionary change is a continuous cycle of variation, retention, and selection that could result in gradual or radical change (Sengupta & Bhattacharya, 2006, p.5).
The dialectic theory of change on the other hand talks about the existence in a pluralistic world of ambiguous and contradictory forces and values that compete with one another to get control over the others (Sengupta & Bhattacharya, 2006, p.5).
However, the life cycle theory of change proposes that there is a linear and irreversible sequence of prescribed stages, which facilitates organization to move from the point of departure towards an end, (Sengupta & Bhattacharya, 2006, p.5).
Finally, the teleological theory talks about the companys interaction with the external and internal construct and its effort to reach the defined goals (Sengupta & Bhattacharya, 2006, p.5).
It is important to point out that the change made at Sony Corporation is described more effectively using a combination of the dialectics and teleological theory of change.
Fig.2. Sony Corporations Net Income 2008-2012 (Statista, 2012).
Analysis of the Research Findings
There were two major changes made in the latter part of the 20th century. First, Sony decided to expand and acquired CBS Records and Columbia Pictures. It could be argued that the dialectics and teleological theory of change is applicable in this instance.
With regards to the dialectics theory, the company was pressured to expand because at that time the company needed to sustain its growth. With funds at its disposable due to the phenomenal success of Sony Walkman and Sony Trinitron, the organization needed to invest in something that would ensure long-term growth.
In the dialectics framework there is pressure from competing forces and it could be argue that during this period Sony was wary of its rivals within the consumer electronics industry. Thus, there was the need to take the first step and there was the pressure to break away from the pack and take the lead in the race.
The teleological framework is also applicable in this instance because the company made goals to increase its profitability and ensure its position as the best consumer electronics company in the world.
Thus, the company decided that there is no other way to do it other than to increase its efficiency by creating synergy with other companies or other business partners. The decision was to establish vertical integration.
The stakeholders involved were the corporate leaders at Sony Corporation, CBS Records, and Columbia Picture. The other major stakeholders were the shareholders of the respective companies as well as the employees and customers of the three organizations.
With regards to the first major change that was made, the company must be commended when it comes to the preparation made and the actual activities that were geared towards making the change. The major stakeholders were aware of the decision and they fully supported the move.
The integration of CBS Records and Columbia Pictures into Sony Corporation was completed without a major glitch.
The change process was completed, however, this case study points out another major component of change and that is the decision-making process that was made prior to the goal of creating vertical integration. In the long run it was proven to be a costly mistake.
It is important to point out that the changes that were made were not the result of a life cycle process. In other words, it was not something that the leaders considered as inevitable. They made radical changes to the company because of the perception of competing forces and the fear of obsolescence.
In other words the company was eager to stay relevant and was more than eager to sustain its phenomenal growth. It is acceptable to make the conclusion that the company overreached and tried to do something that the organization was not built to handle.
The second major change was to overhaul the companys management process by hiring an outsider. Needless to say it was not easy to get a unanimous vote to hire an American CEO.
An overview of Japanese history and culture, as well as an in-depth look at their management techniques would reveal that the Japanese people are almost fanatical in the way they value loyalty and raising up leaders and managers from the ground up.
Hiring an outsider who did not have a deep understanding of the companys history was not a popular choice. However, the decision was made to deal with consequences of the Columbia Pictures and CBS Records fiasco.
The hiring of an American CEO is not an example of a life cycle type of change. In other words, it was not part of the natural growth and development of the company to hire an American business leader.
Thus, the change that was made was totally out of character. The change framework applicable is dialectics and teleological because the company responded to external pressure and made the decision to change.
The decision to hire an American CEO did not result in radical changes, such as, the sale of Sony Pictures and Sony Music.
It could be argued that the purpose of the hiring may have been to appease investors and to show stakeholders that Sony was trying its best to mitigate the impact of the decision to acquire two companies that struggled to make a profit.
Conclusion and Recommendation
The financial and business related problems of Sony Corporation are important reminders that organizational transformation must be top priority of the company.
The phenomenal growth of the company from a fledgling electronics consumer company in Japan to a world-leader in miniaturized music equipment to cutting-edge TV technology and its near collapse is proof that change must be constant. It is therefore critical to understand the nature of change.
Thus, business leaders must be grateful that thinkers and analysts were able to determine four broad categories of change management frameworks. Although there four major frameworks only two are applicable in the case of Sonys change management process.
The dialectical and teleological frameworks could explain why Sony was compelled to make changes. These two frameworks focused on external and internal forces that created pressure for a firm to make the necessary changes to adapt. As a consequence Sony Corporation was compelled to make radical changes.
It is therefore imperative to point out that Sony did not wait for changes in the outside world to overtake them and render the organization obsolete. In fact, the company adopted a more proactive approach.
Other companies fail to embrace change. Sony did not fear change, however, the change management process that they adopted required a second look. The turning point was the decision to adopt vertical integration. Without a doubt leaders of various industries believe in the importance of vertical integration.
The purpose of vertical integration is to create a more cost-efficient operation. Moreover, the strategy was also implemented to significantly increase Sonys market share when it comes to their portable music devices.
It is not clear however, how the leaders were able to connect a music recording company to a portable music device like Sonys Walkman.
It is difficult to understand how someone could make the assumption that the purchase of Sony equipment would compel consumers to buy files, data, or software from the same organization.
For example, a car manufacturer is not expected to create their own tires because consumers have the freedom to choose the best brand.
There are so many things to consider when it comes to the purchase of ancillary items. Consumers base their decision on price, quality, and even the convenience of purchasing a particular item.
The justification to acquire CBS Records on the pretext of vertical integration requires a stretch of the imagination.
However, there seems to be no justification for the purchase of Columbia Pictures because Sonys Trinitron does not operate using film from the movie studio. Therefore, it is hard to understand where vertical integration could be inserted in this particular business deal.
Executives at Sony must realize that the eagerness to anticipate change and the commitment to change are not enough to succeed. It is important to pursue due diligence in thinking through the decision process. For instance, the two companies struggled with billions of dollars in debts.
Secondly, there was no clear plan how Sony could transform a financial liability like Columbia Pictures into a cash cow. Furthermore, they purchased CBS Records at a time when music studios were losing money because of digital music files.
Sony Corporation must also reconsider how the company interpreted vertical integration. Even a small business firm understands that it is not prudent to integrate everything into the companys supply chain. It is best to focus on their strengths and establish business partnerships to help them deal with their weaknesses.
The change process must not only focus on the need to change in the present time, it must also focus on the long-term and immediate effects of the changes that were made. A comprehensive feasibility study should have been included in the change management process.
Finally, Sony should rediscover its roots and remember that the company rose to prominence because of innovation and not the acquisition of other companies.
References
Lynch, R 2006, Shaking up Sony: restoring the profits and the innovative fire, Indiana University Press, Indiana.
Nakamoto, M 2005, Caught in its own trap: Sony battle to make headway in the networked world, Financial Times, London.
Nathan, J 1999, Sony: the private life, Houghton Mifflin Company, New York.
Sengupta, N, & Bhattacharya, M 2006, Managing change in organizations, New Jersey, Prentice Hall.
The Sony Corporation deals in financial services, entertainment, game, and electronics. Sony is a world-leading manufacturer of audio, video, information and communication technology products with its capital in Tokyo, Japan (Sony Global About Sony Group, n.d.). The Company has many subsidiaries in different countries worldwide, and it has unique products that contain exciting multimedia content.
For example, Sony Europe is a subsidiary of the Sony Corporation that deals in managing, developing, and supplying electronic products across Europe. The Company believes in exploring new areas to create new ideas in order to enhance human lives through technology. Moreover, it strives to develop a wide range of products and multimedia services that provide customers with a wide range of product choice.
It has tailored its products like televisions, portable audio and digital imaging equipment towards the customers viewpoints or perspectives. In this manner, Sony Europe has been endeavoring to maintain market leadership in the electronic field.
Historically, Sony is known for its quality and innovative products such as the first transistor radio of 1955, Trinitron color television in 1968 and play station 3 of 2006 (Sony Global About Sony Group, n.d.).
These products went on to hit the consumer and professional market thus winning the company international recognition as a global company. In Middle East and Africa, Sony selected Jebel Ali Freeport Zone as its regional head quarters. This station serves over 40 countries within the expansive region.
Since its launch in 1992, the company has commanded a huge share of the market in all sectors of its different businesses. For example, during the 2007 financial year, Sony Gulf announced a turnover of $1 billion. The Company executes large sales, advertising, and marketing across its many partners in Kenya, Pakistan, and Saudi Arabia.
In line with the financial target that was announced in 2012, Sony plans to attain a sales volume of over 8.0 trillion yen at an income margin of over 5% and return on equity of 10% for the entire Sony Corporation by FY14. Explicitly, the electronic business targets a sales volume of 6 trillion yen at an operating margin of over 4.5% during the same financial year.
Sony Television
In 2012, Sony bounced back onto the TV scene with a new design of the HX853 series that worn multiple awards on the television business (Archer, 2013). The liquid crystal display (LCD) television has grabbed a controlling share in the present global and dynamic world market. Initially, the company had been facing competition rivalry from the South Korean Samsung Electronics Company and LG Electronics International.
The Company has initiated a strategy of producing unique and quality products in the market. Coupled with high innovative ideas, the Sony Corporation has been able to gain competitive advantage over its competitors that produce and supply television sets.
In the 2012 financial year, the company was able to build a strong foundation and strategic investment plan for the TV business. Some of the exceptional features that Sony televisions have include the ability to playback wide collection of photos and music from USB products; these distinct features have given Sony a competitive edge over the perennial competitors in the market. These are the common features of Smart TV.
Smart TV also has social media sites like Twitter, You Tube, Picasa, and Facebook. This television model is also able to stream several video platforms through its online platforms. Some of the video highlights include Netflix and Lovefilm, BBC iPlayer, BBC sport, and Sky News. Sony 55W905A is another model that has a remote that functions with a special android application.
The remote uses the Near-Field Communications (NFC) technology; therefore, one can strike the remote on an NFC-portable device like the Xperia smartphones to mirror the screen of the device on the TV. Moreover, the current Sony televisions take close to 10ms for the signals to arrive at the inputs; it is a unique feature that the company has added in their televisions.
In addition, it recorded momentous advancement on the line of high profit margins in the TV business. This path to profitability on TV business has remained among the core strategies in this 2013 financial year. Some of the features that the company has added in their new TV models are the X-Reality PRO which is an engine that process images and Triluminos Display which makes the screens to display wide color.
In addition to enhancing the quality of the display and image, the company is targeting to expand its 4K LCD TV lineup (Sony Corporate Strategy Meeting FY2013, 2013). Sony plans to capture and control the emerging markets by producing and supplying TVs that meet the customers needs. Further, it plans to reduce the operational and fixed costs in order to register more sales than before hence returning to profitability in FY13.
Logistics strategy
Sony Corporation produces television models, which are durable; therefore, it has modified a cost-effective distribution strategy that ensures that the products are available in local markets at the right quantity. In the Indian market, Sony uses one level conduit of distributing products where customers purchase the TV sets from recognized Sony dealers who obtain the products directly from the company.
On the other aspect, the current development in technology has forced the Company to use the internet as a way that customers can acquire information on Sony retailers and their locations. Sony has joined the international television divisions in producing programs that command a worldwide appeal since globalization has reshaped the cultural, social, political, and economic parameters of all societies.
The globalization process has altered peoples experiences on entertainment hence changing the market demand. These changes have also made Sony collaborate with local companies in developing a subscription business model. This model enables consumers to acquire information on the products before purchasing them.
The Company intends to expand the TV business in all its regional markets worldwide as a means of realigning its business portfolio with the supply chain strategy (Ford, 2011). For example, Sony targets India in developing its television production and television network due to its rapid market growth.
Sony in a bid to sell its TV aligns its supply chain strategy, marketing strategy, finance strategy and human resource strategy in a specified direction in order to form the overall business strategy.
The Company believes that effective management and strong creative decisions are the essential cornerstones it requires in strengthening its foundation and place as a chief actor in the electronic field. In line with realigning its business portfolio and optimizing resources on the television business, Sony has finished transferring the small and medium-sized LCD business to an external agent.
A clear supply chain strategy improves customer service, increases profits, and continues to minimize the reduced costs of production and operation. Evidently, a right logistics strategy facilitates achievements of business goals by engaging the management team in meeting the strategic objectives of a firm.
The Sony Corporation has also set clear its logistics strategy; for instance, it decided to reduce the number of materials and parts that suppliers gave the company in 2010 (Ford, 2011). This approach assisted Sony in cutting the production costs of the electronic products in order to regain control of the market that had been so competitive in the previous year.
The dynamic and evolving logistics strategy of the Sony Corporation lowered the cost of products distribution in the long-term perspective. The Company delegates sales to selected dealers through its selective distribution method. In expansive markets, it employs grey scale marketing strategy, but does not offer benefits for purchasing television sets such as a guarantee and warranty.
Corporate Strategy
Customers
The Company has employed cost-cutting mechanisms in manufacturing the LCD panel. It is still exploring other avenues that can require further production efficiencies to reduce the cost of the television models by over 35%. In addition, it targets to reduce its fixed business costs of the television business by 30% in the 2013 fiscal year.
The Company intends to attract and retain customers using this cost reduction strategy in the market. Sony also intends to increase customers receptions on their television sets by advancing the image and quality of audio on these products. Sony studies the needs of different geographic markets in order to produce products that actually meet the needs of the markets.
Notably, the company has made massive steps in developing and commercializing the next generation display units such as OLED. The television business is even integrating with Sony network services and the companys mobile products in order to provide distinct user services and experiences, and even attract customers on the television lineup.
The Company has also employed strong innovative practices in the television business such that customers can continue to identify its products in the highly competitive and populated market. Sony highly relies on its motto of make.believe since it continues to carry out extensive research on what is possible in the television business.
Afterwards, the technocrats and engineers try to put the findings into practice and then take it to the market after believing in its operations. The innovative idea has proved essential since the current market is undergoing fast technological changes.
The President and CEO of Sony Corporation also attested to the harshness of the market and environment in which their television business operates (Sony Corporate Strategy Meeting FY2013, 2013). Therefore, it remains the role of the CEO to reposition the growth and rebuild the entire electronic business in order to contain the stiff competition from its competitors.
Suppliers
In their corporate strategy meeting on April 12, 2012, the company decided to restructure its headquarters and sales groups in order to increase its efficiencies on the management and operational front. In mid-2009, Sony faced stiffer competition than before thus forcing it to take a new approach to address the shift in the competitive landscape.
This problem became a critical supply chain issue in the global market for the Company until the Executive Deputy President Yutaka Nakagawa had to lower the quantity of materials and parts suppliers by over 50% and even had to purchase cost reductions of 20% in FY10.
Nakagawa did this by improving and rationalizing the process of payment terms. The Company employs effective management in dealing with its suppliers in the current unpredicted market through cutting the product suppliers in situations of stiff competition from competitors.
Competitors
In dealing with competitors, Sony has produced a variety of television sets thus enabling customers to have a wide range of product choice to consider during purchases. Some of the television products include BRAVIA TV, Sony KDL-55W905A, and PS3 Sony style (Archer, 2013). In addition, the Company adopted cost-cutting strategies in 2009 in order to out do the competitors in the television business.
The Company had avoided this strategy for along time until in 2009 when the global recession hit the entire market in the previous financial year. For example, the gap in pricing between the 32-inch and 42-inch LCD television is quite narrow, symbolizing a price reduction strategy.
Inventory planning
Inventory planning assists firms to study the demand of their products in the market and decide when to order inventories and the quantity of the new inventories to order. The process enables firms to align their sales and production capacities with their strategic objectives.
Sony has been maintaining close relations with prospective retailers in order to provide them with sales feedback thereby assisting them in analyzing the actual market demand of their products. The Company utilizes the concept of JDA solutions and services in creating scorecards, data that rely on forecasting and exceptional analyses that it shares with its retailers.
These service levels enable Sony to track stored data on a daily basis. As a result, Sony can work with the key retailers in correcting any mismatch that may arise between supply and demand of the television sets. Inventory planning has made Sony experience numerous benefits, some of which include 40% enhancement in the accuracy of forecasting and 18% increment in in-stock levels (Marcus, 2010).
Evidently, inventory planning has enabled Sony to match the supply and demand of its products. On the design process, Sony has gone through evolution since 1960. The design on Sony Walkman attests the real satisfaction of customers needs of demanding a lifestyle of music on the go.
Other electronic products like BRAVIA LCD TV models are portable as they are made of LCD Panel. Notably, the Bravia models have large display resolutions of 1,920 dots by 1,080 lines and low power consumption rates.
The KDL-40XBR9 model, for instance, uses 205W, accepts MPEG2, MP3, and JPEG in its USB ports, and consumes less than 0.3W on standby mode (Marcus, 2010). Sony encourages designs that are user friendly in the present evolving world.
Conclusion
The Sony Corporation has diversified its services in many sectors. The television business has revolutionized the entertainment industry. For instance, the X Series-4K TV is a unique model since it is the first TV with the highest and largest picture resolution to be in the market. The model produces premium picture qualities and has extensive features that take entertainment to a new dimension (Archer, 2013).
The Sony Internet TV has also revolutionized the Sony Entertainment Network as people can stream videos on You Tube and chat with friends on the common social media networks like Facebook, Twitter, and Picasa.
References
Archer, J. (2013). Sony KDL-55W905A review | Plasma and lcd tvs Reviews | TechRadar. TechRadar | Technology News and Reviews. Web.
Ford, H. (2011). Sony Television Marketing Management. EzineMark.com: Free Content Online Directory. Web.
