Category: Sony

New Orientation in Staffing

Sony relies on an ethnocentric orientation in staffing. The staffing orientation requires that managers from headquarters hold key organizational positions in new marketplaces. By employing individuals to work in places they understand better, Sony will empower the employees accordingly based on the organizational culture practiced in the specific country of doing business.

When recruiting individual for foreign operations, the company should employ competent individuals who understand the region better (Abraham 28). This will make it easier to cope with the culture of the people. Proper training and mentoring programs to the managers will ensure they are prepared for the international assignments.

Managing Talent in the Company

The presented analysis shows that Sony is facing challenges in finding the best talent for its organizational operations in Europe and China. If the company is to have an adequate pool of international talent and managers, the first approach is to embrace the issue of diversity.

The company should recruit managers from different backgrounds with knowledge and proper expertise towards management in the business (Abraham 28). The managers should also be familiar with the working environment and region where the business will operate.

This is because different cultures have varied cultural mindsets and organizational behavior. The idea entails promoting productivity and ensuring the greatest gains from the business. The company should also promote diversity in the workplace. This is an important to promote a global mindset thereby improve performance.

Sonys Training Efforts

Sonys training efforts is effective as applied currently. The company pursues programs to train its recruits and counsels them to do whatever they are passionate about and improve their talent. The company also offers an online training system. However, in light of the companys multi-country operations, the company can take some steps to improve the training process. The first step is recruiting a diverse workforce.

A training program based on the expected performance and the unique knowledge of the recruits in needed. The other step involves mentoring and leading the employees to improve their talent (Abraham 27). Finally, the companys 2-year eight-module training program covers all aspects of Sonys business and operations. The program should train the employees about their specific works and departments they are working in.

Labor Relation Problems

In Indonesia, Sony faced some labor unrest thus affecting its output. In Britain and Mexico, similar cases of labor unrest and issues have been faced and the reason there is need to address them. If the management is to improve these labor relations, the first thing is to improve the working conditions of the employees and offer them good working environment.

This will improve the labor relations in the company. A proper human resource team should address the specific problems and issues faced by the workers (Abraham 28). The top management should design a standardized workplace norms catering for the needs and expectations of the employees. There should also be a long-term strategy to employ the required number of workers to avoid future lay-offs.

Sonys Corporate Social Responsibility

The current integrity approach employed by Sony to maintain and retain a universal workplace standard is a good idea. The best thing for the company is to standardize its workplace conditions to create the best working environment internationally. This will result in equal opportunities for all employees and offer them a superior working condition.

While this is something acknowledgeable and effective, the company can consider doing more like promoting environment conservation programs, fighting poverty, and providing essential needs to individuals in the developing nations (Abraham 28).

The company should improve the working conditions in the emerging markets. This will make the company an industrial leader because it will manage its operations properly and achieve the greatest gains.

Works Cited

Abraham, Susan. Development of Employee Engagement Programme on the Basis of Employee Satisfaction Survey. Journal of Economic Development, Management, IT, Finance and Marketing, 2012; 4(1), 27-37. Print.

Internal causes

The internal environment of any business is critical to its long-term sustainability. Factors that shape the internal business environment include the management approach, decisions, and strategic plan. Various internal factors within Sony have contributed to the companys decline over the years. This section will discuss two key factors that have played a major role in the companys decline, namely, lost opportunities and mismanagement and Sonys organizational culture.

Lost Opportunities and Mismanagement

Sony emerged as a pacesetter in the world of electronics by introducing new technologies ahead of the other manufacturers. Sony makes a wide range of electronics ranging from cameras to Smartphones. Sony is still making products that are desirable and of impeccable quality. Perhaps Walkman remains the most notable invention by the company. Despite being able to adopt emerging technologies to create high-quality products, Sonys presence has continued to decline in the market of electronics. People are less excited about using the companys products compared to the situation in the last two or three decades. Numerous scholars have explained this shift in customer away from Sonys products. It is mostly associated with an ineffective business strategy. A business strategy refers to an organizations long-term goals spanning between 3 to 5 years or longer. A business strategy guides a business in pursuing its goals in an ever-changing market environment. Therefore, businesses need to have a flexible strategy that will incorporate the changing trends such as customers preferences.

One of Sonys major failures was the companys inability to shift from a product-centered culture to customer-centered production. The situation led to its loss of opportunities where clients were only interested in companies that provided items that could satisfy their demands. Advancement in technology has resulted in a shift in market behavior, with customers becoming more demanding and charismatic wit reference to the products they use. In other words, customers nowadays want to feel that the products they are using reflect on them, quality notwithstanding.

This rationale best explains why Sony, despite continuing to churn out some of the highest quality gadgets, has continued to experience a dwindling market share. Sony failed to adjust her strategy to suit emerging customer needs, the most notable being customer experience. Competitors such as Apples iPhone jumped onto emerging technology to offer customers experience-oriented gadgets that have often caused market excitement every time a new model is being released. Sony lost this opportunity. On the other hand, it continued to focus on hardware, which, unfortunately, offered less versatility when compared to software. Focusing on software enables manufacturers to manipulate technology in creating formidable and customer-centered products.

Xu and Muneyoshi observe that being a hot seller is important for the long-term survival of any business since it enables a company to remain within the vision of customers (281). Launching a successful product every few years is critical in keeping customers perpetually interested. Throughout six decades, Sony was known for releasing successful products from time to time. However, the companys last formidable invention has been identified as the PlayStation, which was launched in 1995 (Xu and Muneyoshi 281). By becoming less innovative, Sony was giving way to determined rivals to take over the market, thus effectively edging the company out as the greatest manufacturer of electronics. According to Xu and Muneyoshi, Sony has failed in converting its world-class technology into profits due to a failure to match changing customer trends (281).

Numerous scholars have used the case of Walkman to illustrate how the companys strategy caused it to miss opportunities to advance its market strength. When Sony launched the cassette recorder in 1996, no other market player could have matched the technology. In 1971, the company went ahead to invent the Walkman, which was a portable improvement of the cassette recorder. Over the years until 1999, Sony was engaged in efforts to modify the Walkman to suit consumers demands regarding price and comfort of use. However, the company was too focused on the product model to the extent that it failed to observe subtle tendencies by customers.

Xu and Muneyoshi explain that Walkmans rigid platform, ATRAC, could not accommodate the MP3 format, which had become growingly popular in the late 1990s (282). Sony also remained aloof to the desire by customers to have numerous songs in one gadget (Naganathan 70). Perhaps Apple was reacting to Sonys insensitivity to its customers when it launched the versatile iTunes in 2001. Unlike Walkman, iTunes was software that allowed users to access different music platforms on personal computers. Figure 1 below shows the companys brand worth during the 2000-2014 period. It is evident that the lost opportunities have led to the companys loss of value.

Naganathan identifies the lack of innovation as a major cause of Sonys decline (70). The situation undermined the companys image, which had been built around innovativeness over the decades. Sony has also failed to engage effectively in the process of continuous improvement. Continuous improvement helps a business to strengthen its core competencies, thus enabling it to compete effectively in the market. Conversely, Sony engaged in unnecessary diversification, which prevented the company from concentrating on its strong areas (Naganathan 70). Sonys presence in numerous businesses (electronics, online music stores, games, movies, and financial services) has prevented the company from achieving market positioning. Lack of brand focus undermines a businesss strength in the market since it cannot promote itself competitively.

In addition to a weak strategy that led to the companys loss of opportunities, mismanagement also played a key role in its decline. Xu and Muneyoshi observe that poor decisions have compromised the companys edge in the market (281). For instance, failure to follow up on PlayStation 2 and PlayStation 3 paved the way for Microsofts Xbox 360 to attained unparalleled market success. At the time when Microsoft was launching Xbox 360, Sony had 70 percent of the gaming console market share. The mismanagement included the cost structure of the transition from PS2 to PS3. In addition, the PS3 platform was more difficult to use compared to the previous PS2, thus allowing Xbox to attract many of Sonys customers. Atlas Equifin, a minority stakeholder in Sony India, sued the company for alleged financial mismanagement (Money Control par. 1). Allegations of mismanagement can undermine a companys fundraising since shareholders refrain from raising capital.

Sonys organizational culture

The culture of an organization influences its success or failure to meet its strategic goals. Organizational culture ranges from how employees interact with each other to the organizations management approach. The lack of an effective organizational culture can lead to a business failure much the same way a lack of organizational strategy does. Sonys organizational culture is a reflection of Japanese culture. Innovativeness is part of Japanese culture. This observation explains why Sony has always strived to adopt innovative strategies throughout the companys lifetime. Other aspects of the Japanese culture include employee satisfaction and the customer is king attitude. Nevertheless, Sonys organizational culture has not been helpful for the companys strategic presence in the global market. The inflexible nature of its culture has been a disadvantage to the company.

The silo mentality was a cause of Sonys failure (Strategic Direction 2). Silo mentality is described as the attitude that limits interaction among departments within an organization. It undermines the flow of information. Effective communication within an organization facilitatesdecision-making by ensuring that the conflict of objectives is eliminated (Strategic Direction 11). On the contrary, Sony was characterized by a lack of coordination between divisions, a situation that undermined the companys market strength. Strategic Direction describes the culture at Sony before 2005 as having been characterized by an every-man-for-himself attitude where each division protected its own interests with passion (3). These divisions created inconsistencies in the company by allowing rivals to seize Sonys market share. For instance, Walkman was replaced as the market leader by iPod while pS3 gave way to Microsofts Xbox.

Sonys organizational culture as being resistant to change. This attitude is greatly associated with the companys slow adoption of the growing significance of software (Cole 39). Because Sony had attained great success through hardware, it was tempted to ignore software. This claim is evident in the companys top management, which is comprised mostly of hardware engineers (Cole 39). According to Cole, by focusing on hardware over software, Sony sacrificed the optimization role that software would have played in enhancing product quality and versatility (39).

Insight & Recommendation

Future of Sony and the Japanese Economy

Cole asserts that top-technology companies in Japan, including Sony, do not fully appreciate the growing relevance of software (39). This attitude is greatly responsible for the declining innovation, despite Japan being only second to the US in creating new technologies. Worldwide, the value assigned to hardware innovation is diminishing. Instead, the software has become the center of technological innovation since it offers a competitive advantage through its wide versatility. Additionally, the software allows developers to create multifunctional applications. It also provides a wider functionality of hardware (Cole 6). Therefore, the future of technology lies in software advancement. Japanese firms realize this fact. They are working tirelessly to shift from hardware-centered to software-focused innovation. Twenty years ago, it was predicted that Japan would surpass the US in software innovation. Instead, Japan has continued to lose its software edge. Cole observes that electronic devices embedded with software in Japan declined by 50 percent between 2004 and 2011 (7).

The future of Sony is dependent on the companys ability to manage its numerous divisions in a sustainable way. There has been speculation that Sony is currently being broken up for sale (Patel par. 2). If this goal is achieved, it means that each division will be independent of the other. Sonys focus has been on the Smartphone business. Despite the acute competition from key players such as Samsung and Apple, Sony has registered a slight profit margin from building and selling Smartphones. In 2012, Sony held about 2 percent of the Smartphone market as shown in Figure 2.

The above statistical findings indicate that Sony still has a long way to go in achieving a reasonable share of the Smartphone market. Part of Sonys lack of success in the mobile market is the prominence of Samsung. Patel observes that Sonys Smartphone has not been successful because it targets customers who are currently buying Samsung phones (par. 3). Nevertheless, Sony can maintain relentless efforts to lure Samsungs customer base, especially in the Asian market. Additionally, Sony can capitalize on the recent misfortunes bedeviling Samsungs Smartphone brand. In the last few months, there have been reports of Samsungs Galaxy Note7 exploding, thus causing uproar among agitated customers (CASS Business School par. 4).

Sonys future lies with the PlayStation 4. The last four years have seen restructuring efforts in the company in a bid to revive its market strength. Part of the restructuring process involved revamping the PlayStation to diversify the uncertain Smartphone market (Fahey par. 1). Currently, PlayStation 4 has experienced robust growth, which is promising for the company. The current CEO, Kaz Hirai, believes that PlayStations renewed success will cater for weaknesses in other divisions of the company. Current efforts include making PlayStation into a launchpad for other gadgets and services. This plan will allow other developers to create products to work with PlayStation, thus increasing its usability. Therefore, Sony is succeeding in an area that Microsofts Xbox 1 has failed in, namely, focusing on games.

Sony is making gradual efforts to increase software innovation at the company. This shift from hardware to software is a reflection of the current Japanese technology environment. Companies realize that software is the core of modern innovation. For instance, Sonys latest models of PlayStation are designed to accommodate developer software. Analysts have further observed that the restructuring at Sony has rescued the company from a future financial disaster. Therefore, it is safe to conclude that the company is slowly regaining a share of the market for most of its divisions.

Recommendations

There is a gradual shift from hardware-centric to software-intensive innovation in Japan currently (Cole 43). Japan ranks significantly lower regarding software innovations compared to the US. However, Cole observes that Japan is still ahead of other developed economies regarding software innovations (43). At Sony, Kaz Hirai has been making gradual efforts to improve software innovation at the company. Nevertheless, more needs are done if Sony is to compete on the same ground as rival companies. In the Smartphone sector, Sony is among the weakest competitors as shown in Figure 2. This dismal market performance is attributed to low innovativeness in mobile technology. One of the ways that Sony can promote software innovation is by investing in innovators. The company can hire employees who are passionate about software development as opposed to hardware.

Sonys top management constitutes hardware engineers. This situation can pose challenges in implementing software innovations. Japan has a shortage of information technology professionals when compared to the US. Cole observes that hardware engineers on the top positions are more likely to hire other hardware engineers to fill the junior positions (11). The result is that the company has a deficiency of software innovators. Additionally, hardware engineers are likely to ignore the importance of software innovation in the company. Therefore, it is important for the company to overhaul the management to include software engineers at the top positions.

Sony should strive to produce items that are desirable to customers, including televisions, Smartphones, and cameras among other devices. This goal will be achieved by improving the user interface to be more attractive to customers. In addition, Sony should avoid the trend that has seen it include features that customers do not always use or desire to use in their gadgets. This strategy will save resources for building and improving the features that customers are interested in using. For instance, Sonys smartphone has too many buttons and dials that make it unappealing to the user. Instead, the company may incorporate a larger touch screen with soft buttons.

Sony operates in too many lines of businesses, namely, semiconductors, mobile devices, cable television, stereos, movies, and financial services among others. One of the disadvantages of over-diversification is the issue of fighting competition on many different fronts. This situation means that colossal resources are deployed to manage the overwhelming competition. Additionally, operating in numerous fields can limit a companys ability to develop its core competencies. Thus, it is important for Sony to minimize the field it operates in by getting rid of some of the businesses. This situation will enable the company to focus only on a few divisions, thus promoting innovativeness and efficiency. Sony should also design products according to the market destination. For instance, power outages are common in emerging countries. This situation would call for devices with inbuilt power storage or a longer battery life. Therefore, localization of products will benefit the company through rebuilding customer trust and hence loyalty.

Sony should diversify its markets by reaching out to the emerging economies. In large market areas, Apple and Android Smartphones have not fared well due to high prices. Sony should exploit this market gap by designing cheaper, yet desirable Smartphones and tablets. Sony can also extend its financial services to the emerging markets where internet banking is yet to become fully established. In addition, Sony Pictures, a subsidiary of Sony Entertainment, has been delivering content that is oriented to western and Japanese audiences. Sony Pictures can expand its catchment by designing content that is local to the emerging film industries such as Bollywood. Finally, the company should dedicate a reasonable amount of its resources to research with the aim of creating new technologies and products. The key focus should be on the user interface, which has not been well addressed by Sony.

Conclusion

Sony has endured a declining market share for its many products in the last two decades. The once robust pacesetter in the technology world has been blamed for a declining spirit of innovation. Sonys strategy has not focused on the long-term sustainability of the company. Its organizational culture also undermined communication between and among divisions within the company. Nevertheless, Kaz Hirai, the current CEO has led restructuring efforts aimed at regaining the companys market share in areas such as gaming services and Smartphones.

Due to the success of PlayStation 4, the company is gradually regaining ground. The management believes it is out of the difficulty zone. Although Sony is not quite innovative with software development, it still fares much better when compared with companies in emerging economies such as the GCC nations. For Smartphones, the major manufacturers that dominate the GCC region include Samsung, Touchkon, HTC, and Motorola. These Smartphones, which are manufactured elsewhere, are sold in the Gulf region. Other electronic companies with a market share in the region include Siemens, Frigidaire, and Philips. Overall, innovation in the Gulf region is still much lower compared to that of Sony.

Works Cited

CASS Business School: Was Samsung Right to abandon the Note 7 2016. Web.

Cole, Robert. Killing Innovation Softly: Japanese Software Challenges 2013. Web.

Fahey, Rob. Sonys Entire Future Now Rests on PlayStation 2016. Web.

Jia, Jianzhong, and Yuchan Yin.Analysis of Nokias Decline from Marketing Perspective. Open Journal of Business and Management 3.4 (2015): 446-452. Print.

Money Control: Atlas Equifin files Petition alleging Sony Mismanagement 2008. Web.

Naganathan, Vivian. A Comparative Analysis on Sonys Approach to Problem Solving and Decision-Making. International Journal of Management and Business Research 3.1 (2013): 69-88. Print.

Patel, Nillay. Sony is No Longer an Electronics Company 2015. Web.

Strategic Direction: Improving Organizational Performance: Strategy Execution holds the Key, West Yorkshire, England: Emerald Group Publishing Limited, 2009. Print.

Xu, Fangqi, and Hideki Muneyoshi. Product Innovation Versus Business Model Innovation: The Case of the Walkman and the iPod 2016. Web.

Introduction

For a product to be developed there should be idea generation, product design, and then engineering (Meerman, 2007, p.15). There should be proper market analysis and research. This is the only avenue that companies can grow their market share; by developing new products that their competitors do not have.

The new product needs a marketing plan to succeed in the market. This is a layout that shows the necessary actions that will help it to achieve its marketing objectives. For it to achieve its course it should be formalized to cover the customer needs and groups that are supposed to be served properly.

This process is very tiresome and needs commitment. It includes; idea generation, idea screening, concept testing and development, business analysis, market tests, technical implementation, commercialization, and new product pricing.

These products that are developed should not conflict with the companys goals and objectives. It should also be in need with the customer needs and the plan is supposed to be aligned with the company strategy. There needs to be a way by which the process will improve as the product is not guaranteed to be widely accepted from the first production.

This is a challenge to companies as they do not know which projects to undertake in maximizing returns. It can be achieved by proper maximization of the value, realigning, and balance of the new product. This paper will focus on Sony coming up with a new TV card because it has been selling TVs. This is a potential market that the company can tap into.

Although there are many producers of TV cards, the company has an upper hand as it is already producing complementary products that can be used with it. They are also called video capture cards because they allow videos to be recorded on hard disks. This card will comprise of a tuner and an analog to digital converter.

It seems like the mobile TV card tuner will be more lucrative as people move to watch TV on their handsets. There is also an opportunity for diversification in the production of video capture cards. Sony has a wide pool of engineers that will ensure that the new TV card is well developed. The TV cards produced will be for the mobile TV and the videos (capture cards). Ideas will be generated from the existing TV cards to enhance the quality. After the product has been developed it will be subjected to market tests that will allow improvements. This will ensure that the new TV card is unique, a key strength of Sony coupled with technology.

The Marketing strategy will give the company a chance to limit its resources to the greatest opportunities that will help it to increase sales and have a more competitive advantage over other companies. This strategy will mostly be directed towards the attainment of market satisfaction.

Segmentation

The market segment will involve a sub-set of the market. This group comprises customers who share some common characteristics that will make them demand the same product based on its qualities (Lipe, 2002, p.29). The segment will be reached through a proper market intervention that will respond similarly to the market stimulus.

Sony will produce TV cards for the mobile TV and the videos (capture cards). The companies will target mobile phone users and video editors who will highly demand these products. This group of users promises more returns as they are still growing.

The segmentation criteria will be done using income. These will target middle-income customers as they are likely to embrace this new product. 90% of Japans population comes from the middle-income group (Lie, 2001, p.6). This makes it a very large market that Sony will strive to capture. Some of these people can not access the highly-priced TV cards offered by other companies.

With these groups owning high-quality phones, it is clear that they will demand TV cards so that they can watch their favorite programs at the comfort of their handsets. Another integral section of this middle-income group includes those people who need videos for their editing from different sources. The company will make high-quality video capture cards that will guarantee returns in this market.

Target Market

The target market is important to the marketing strategy. In the long run, the target market will help in the success of the new product in the marketplace.

After identifying a target market, the company will be able to come up with a marketing mix strategy, promotion, distribution, and market-friendly prices that will be effective in maintaining this market. The target market is mostly identified through differentiated or undifferentiated marketing. In the process, it will outline the basics of market segmentation.

The company will target the middle-income end market youths in towns. The youths form 64% of the countries population most of them in urban areas (Lie, 2001, p.12). They are targeted because most of them have been born in the technological era and will continue embracing any new advances in technology. On the other hand, they tend to display high levels of brand loyalty (Lipe, 2002, p.9). The youths dont like being lumped together with the other segments and will appreciate it if given personal attention through the product. Target marketing will give the company a special focus for all the marketing activities.

This target market has a large number of customers (64% of the population) and it is clear that the youths form a majority of the population in different countries. In addition to these, this population continues to increase which will allow the product to grow further. The company expects to get high sales and good profit margins in these target markets.

The company believes that this group will exhibit some strong brand loyalty to the new product hence forming a strong customer base. Uniqueness in this product will be instrumental in forming these target markets by bringing out the best characteristics.

Further research will be instrumental in knowing the emerging trends in this group to comfortably cater for them. In addition, there is also the need to pay attention to both micros as well as macro-environmental variables, and the impact that they have on the target market.

Differentiation

Differentiation will distinguish Sonys TV cards from others to make them attractive to this target market. This will be achieved through additional features and more reliability than other competitors in this sector who dont have these. Sonys TV card will be unique through the enhanced quality of pictures from the TV stations. This will be done by the large pool of engineers who have been designing the companys products.

On the other hand, the TV cards will be retailing in different stores for enhanced convenience. When customers can conveniently get these TV cards they will easily differentiate them from other TV cards. The size will be reviewed to enhance compatibility as there are various sizes of mobile phones in the market.

Marketing Objectives

The companys marketing objectives will be clear, measurable, and have a time frame that will lead to success. Marketing objectives need to be realistic. In addition, they should also be quantifiable and specific within a given timeframe. These objectives will in turn lead to high sales of the new product from the company. In the first year, the company will seek to increase product awareness among the target market by more than 30%. This will be done by aggressive marketing campaigns through the media. It is projected to increase in the second year to 60% after more intensive campaigns.

The other objective will be to inform the target audience about the benefits and features of the new product. This will also be communicated through the media and promotional campaigns in selected areas that can influence the market. It is projected to increase the competitive advantage through differentiation and lead to a more than 10% increase in sales as the product gains market acceptability. On the other hand, the company plans to have a strong marketing team in place that will help in all promotional campaigns. This team will specifically be tasked with promoting the new Sony TV card.

In addition, the company has enough resources that will help it to accomplish these vital objectives in both the short and long run. This is because the new product will be approved by the directors as it will enhance the companys product portfolio. Therefore the company will develop a good promotional plan to support these objectives.

Marketing Mix

The marketing mix will involve the four Ps that are product, price, place, and promotion (Kotler & Keller, 2006, p.25). Products from Sony will be produced en mass on a large scale with a specific volume that can satisfy the market. This will be increased as the market share grows. Since the company intends to target the middle-income end market which is dominated by the youths, there will be a need to ensure that the quality of the product is maintained.

Pricing will be instrumental in guaranteeing success. This means that the company must provide affordable TV cards that will entice the market. The middle-income market segment demands quality and affordable products. In the long run, Sony will review its pricing to be in line with the demands of the market (low prices).

Sonys TV cards will be sold in selected stores and on the internet for increased and easy accessibility. These will ensure that the customers can easily access the products at their place of convenience.

Promotion is necessary to show the communication strategy that the company will use in the marketplace. The company will use promotional campaigns and the media to enhance more awareness about the new TV cards. The management will mainly focus on the youths who will form an integral part of the companys market.

Costs of the Marketing Strategy

The company expects to sell 500,000 units within the first year before it goes fully into the global market. In launching the product the company will need $1million. Since this is an expansion program that the company will be undertaking, it will be wholly financed by the companys shareholders through a rights issue. All the other costs (development, production, and distribution) will be catered for by this issue. This is expected to succeed as it will ultimately add value to the shareholders.

• Expected Sales in the first year $ 18,000,000 ($36.00 * 500,000)
• Development costs $ 5,000,000
• Production costs $ 3,000,000
• Launching costs $ 1,000,000
• Distribution costs $ 4,000,000  6,000,000

From the above information, the venture looks lucrative as the company has a chance to break- even in the first year.

Conclusion

Sony is a global company that continues to provide innovative and high-quality products to cut a niche in the market. Intensive marketing will continue to play an important role in ensuring that the company remains competitive.

Reference List

1. Kotler, P. & Keller, L, K., 2006. Marketing Management. New Jersey: Prentice Hall.
2. Lie, J., 2001. Multiethnic Japan. Cambridge, Mass: Harvard University Press.
3. Lipe, B, J., 2002. The marketing toolkit for growing business. Minneapolis: Chammerson Press.
4. Meerman, S, D., 2007. The new rules of marketing and PR. New Jersey: Hoboken

The companys strategy determines its choice of financial decisions, and revenues depend on the effective realization of this strategy (Piper, 2010). The purpose of this paper is to demonstrate how to apply such steps of the financial assessment process as the evaluation of strategies and revenues to the analysis of Nintendos position in contrast to Sonys position in the market. The paper presents the analysis of fundamentals about Nintendo and Sony and the ratio analysis to complete the review of the companies revenues.

Analysis of the Fundamentals

While using the data presented in the U.S. Securities and Exchange Commission (SEC) 10-K reports for Nintendo and Sony, it is important to analyze and compare the companies strategies (Nintendo, 2015; Sony, 2015). Appendix A presents the findings related to both companies. It is possible to conclude with the focus on the analysis of these fundamentals that Nintendo and Sony are direct competitors in the niche of producing video game consoles. Still, Sony also holds the leading position in producing audio and video electronics. Both companies follow an effective differentiation strategy to attract and retain customers.

Ratio Analysis

To conclude regarding the financial health of Nintendo in comparison to Sony, it is necessary to conduct the ratio analysis with the focus on profitability, activity, leverage, and liquidity ratios.

Profitability Ratio

To analyze Nintendos profitability, it is necessary to apply the formula for calculating Gross Margin Ratio (millions of yen): Gross Margin Ratio = Gross Margin / Net Sales.

Gross Margin Ratio for Nintendo = ¥220,965 / ¥504,459 = 0.44.

Gross Margin Ratio for Sony = ¥4,112,231 / ¥8,215,880 = 0.5.

The companies have almost equal gross margins that are high enough in the context of the industry. It is also important to calculate and compare the data regarding Return on Equity (ROE) following this formula: Profit after Taxes / Shareholders Equity.

For Nintendo, ROE = ¥16,518 / ¥11,632 = 1.42%, and for Sony, ROE = ¥137,604 / ¥33,480 = 4.11%. The higher ratio is typical of Sony, and it demonstrates more possibilities to generate profit for the company to address the shareholders expectations.

Activity Ratio

Activity ratios are effective to measure how the company can use the available assets. Total Asset Turnover Ratio is calculated according to the following formula: Total Asset Turnover Ratio = Net Sales / Total Assets.

For Nintendo, Total Asset Turnover Ratio = ¥504,459 / ¥1,296,902 = 0.4, and for Sony, Total Asset Turnover Ratio = ¥8,215,880 / ¥15,834,331 = 0.5. The ratios are almost equal, and they demonstrate that companies need to improve their approaches to utilizing the assets.

Leverage Ratio

To conclude regarding the financial state of the company, it is also important to pay attention to the Total Debt Ratio that is calculated using the following formula: Total Debt Ratio = Total Liabilities / Total Liabilities + Market Value of Equity.

For Nintendo, Total Debt Ratio = ¥136,001 / ¥162,781 = 0.8, and for Sony, Total Debt Ratio = ¥12,148,300 / ¥12,151,692 = 0.99. The results demonstrate that Nintendo is less dependent on loans than Sony because of differences in ratios.

Liquidity Ratio

It is also important to measure how the companies can meet their obligations to conclude regarding their liquidity. While referring to the Current Ratio, it is reasonable to use the following formula: Current Ratio = Current Assets / Current Liabilities.

For Nintendo, Current Ratio = ¥1,021,135 / ¥98,437 = 10.4, and for Sony, Current Ratio = ¥4,840,618 / ¥5,097,133 = 0.95. The ratio of Nintendo is unusually high, and it demonstrates that the company can easily meet the short-term obligations. On the contrary, Sony is oriented toward addressing long-term obligations.

Conclusion

The strategies and financial performance of Nintendo and Sony were the targets of this assignment. The financial data related to the year of 2015 were examined and analyzed with the focus on the ratio analysis. Thus, the ratio analysis conducted for Nintendo and Sony demonstrates that both companies have strong positions in the industry in terms of profitability and financial leverage results, and Nintendo demonstrates an ability to address short-term obligations as quickly as possible.

References

Nintendo. (2015). Annual Report 2015.

Piper, T. (2010). Assessing a companys future financial health. Harvard Business School Review, 91(11), 1-17.

Sony. (2015). SEC Report 2015.

Appendix A

Analysis of the Fundamentals

Instructions

1. 1. Using the most recent U.S. Securities and Exchange Commission (SEC) 10-K reports for your company and chosen competitor, provide a brief yet succinct comparative analysis as below:

1. 2. Provide your rationale for your choice of equity valuation model: The ratio analysis is selected as an equity valuation model in order to compare the quantitative data related to the financial performance of the two companies.

This report provides a strategic approach on Sony Corporation global strategy and structure and how Sony manage its global operation, innovation and risks. This report begins by analyzing the brief overview of Sony, its business segments and geographical coverage. Furthermore, this report will examine mission and vision of Sony and shows how innovation is deeply rooted in the company mission and vision. This report then follows the global strategy and structure adopted by Sony which is a transnational strategy and matrix structure. Following that, due to the large size of the conglomerate and the nature of its diversification strategy, Sony’s electronic business segment is used in the report as a unit of analysis for its global operation. The second main body shows how big role innovation plays at Sony, on its product and process of innovation, Sony’s research and development centres and how they configure and co-ordinate. Finally, the report will

2. Company overview

i. Sony

Sony Corporation is a Japanese multinational conglomerate corporation established by Akio Morita and Masaru Ibuka on May 7, 1946. Sony Corporation is a global manufacturer of electronic devices, software and games consoles for consumers, industrial and professional markets (Sony, 2019). It operates in three main sectors which include electronics, entertainment and financial service. Sony’s operations are further carried out through diverse business segments as displayed in Appendix 1. With its pictures, music, game and online businesses, the company has successfully placed to be one of the world’s leading digital entertainment brands, providing an exceptional portfolio of inspiring multimedia content (The Forbes, 2018). Sony operates across America, Europe, Africa, Middle East, Asia Pacific and employed about 117,300 people as of March 31, 2018 (Sony, 2019).

ii. Mission and Vision

Sony’s mission is to deliver “Kando” through its superior products, content and services which inspires and fulfils curiosity of the customers (Sony, 2019). ‘Kando’ is a Japanese term which refers to move people emotionally and it is deeply rooted in Sony’s core philosophy to deliver a moving experience to its customers by their innovative products. For instance, the PlayStation attracts and engages consumers through an emotional bond based on the gaming experience. Sony Corporation vision also focuses on the concept of Kando. The engineers of Sony use their infinite passion for technology to create and produce new innovative products to fulfil the customer’s curiosity (Sony, 2019). In aspiring to achieve this, Sony aims to create social value by providing consumers with a sense of enrichment through the creation of a community of interest by connecting producers and customers together (Meyer, 2017). Thus, Sony’s mission and vision complement one another and maintain its strong influence on the business.

3. Global strategy and structure

Firms choose a suitable strategy for their businesses among the four main strategic postures while competing globally. They are international, multinational, global and transnational strategy (Hill and Jones, 2009). The appropriateness of each strategy differs with the extent of pressures for local responsiveness and cost reductions.

i. Transnational Strategy

Sony utilises a transnational strategy on their business. A transnational strategy is where firms produce and sell a certain degree of standardized as well as modified products in various markets according to the local preferences Ireland, et. al, 2006). With this strategy, Sony aims to consolidate the advantages of global scale efficiencies with the benefits of being locally responsive either in a geographic region or a country and the authority remains both centralized and decentralized (Sony Business Team, 2015). Sony depends on standardisation of products with global production and distribution; however, it also has a system called “Sony Pledge of Quality” through which new designs for local markets are developed and introduced. Sony Pledge of Quality helps Sony to create products that satisfy the needs of local preferences of consumers (Sony, 2019).

Bartlett and Ghoshal (1989) have stated that transnational strategy is superior in contrast to other strategies and is the ideal way for firms to reach success by reducing cost and achieving local responsiveness (Frynas and Mellahi, 2015). For instance, Sony PlayStation reduces its cost by locating most of its production facilities to low cost countries such as China. Sony PlayStation understands its customer needs in different markets with different cultures of both home and host countries (Steers and Nardon, 2015). Thus, with the effective formulation and implementation of the transnational strategy, Sony PlayStation is able to dominate the global video game market in oppose to Nintendo and Microsoft’s Xbox.

ii. Matrix Structure

Sony Corporation has diverse product portfolio and large global operations and sales in international markets. Following the Stopford and Wells (1972) structure model, a high level of product diversification and global operations and sales has led Sony to adopt a global matrix structure (Frynas and Mellahi, 2015). Sony has implemented a matrix structure to combine well with the transnational strategy as it helps Sony to coordinate the activities effectively between a parent company i.e. Sony Corporation and its subsidiaries or even within subsidiaries to subsidiaries (Sony, 2019).

Following a global matrix structure, Sony is more flexible in all of its activities such as manufacturing products, responding actively to customer needs from different geographical areas. Due to the complexity of the matrix structure, the headquarter of Sony, however, has to be in constant contact with product groups and countries (Ahrens and Guetz, 2015). Sony Corporation’s matrix structure shows that the subsidiaries have a certain level of autonomy depending on the business units. Therefore, the parent company of Sony do not possess complete control over its subsidiaries (Meyer, 2018). As Sony follows a transnational strategy and a global matrix structure, knowledge and ideas sharing exist between Sony Corporation and its subsidiaries.

4. Global operations of Sony

i. Supply Chain

Appendix 3 displays a generic illustration of Sony’s electronics supply chain (Sony, 2018). It is found that Sony’s configuration of their downstream value chain activities are organized according to how high-tech the product is. For example, Sony product items are classified as commodities and requires little technological expertise which are often manufactured abroad. The reasons for this decision are supply chain cost-related (Bin, 2003), as the low manufacturing costs of “commodity” products outweigh the higher costs of transport and longer lead times (Sony, 2018).

China, in particular has proven to be an excellent location for the outsourcing of many of Sony’s less innovative products, where competition is based on efficient, fast production. Alternatively, for leading edge products, Sony found that China’s manufacturing base, in amongst their many others, lack the critical “market mediation” capabilities i.e. the technological expertise, benefits of proximity and the supply chain flexibility to cope with the demands of high-margin, high-risk new product introductions (Sony, 2018). As such, products that fall into this category are often produced in Japan. Sony has several manufacturing facilities dispersed all over the world and the configuration of value chain activities varies according to the product and its manufacturing needs. It will now focus on the configuration and coordination of the manufacturing of Sony PlayStation.

One factor that remains consistent across all value chains is how the subsidiaries are controlled. In 2016, Sony made drastic changes to the management of its manufacturing operations of its electronics division (Sony, 2018). Effective April 2016, Sony created the Sony Global Manufacturing & Operations Corporation (SGMOS). This was created through the merging of Sony Engineering, Manufacturing and Customer Services (EMCS) previously in charge of domestic engineering, manufacturing and repair services of electronics and Sony Corporation, which is in charge of supervising operations globally (Sony, 2018). As a result, SGMOS assumed the responsibilities of EMCS in managing domestic manufacturing operations in Japan and administering manufacturing facilities overseas. In addition, it is also responsible for global shared services functions that oversee procurement, logistics, quality and environment-related initiatives in manufactures all across the globe (Sony, 2018). Through this realignment, Sony has brought together the extensive knowledge and expertise in operations that its various organizations have accumulated, in order to streamline and continue evolving its operations that transcend national or regional boundaries and product categories.

ii. Value Chain

The value chain of Sony PlayStation is displayed on Appendix 4. Now, the report will discuss on how some of the activities of Sony PlayStation’s value chain are configured and coordinated across the globe. Appendix 5 shows Sony’s manufacturing downstream activities are primarily performed in Japan, with parts outsourced to China and some others imported from the U.S. hence the decentralized configuration is pretty clear. The reason Sony implements this strategy is because the PlayStation is relatively low-tech and is classified as a commodity (Sony, 2018). Other products classified as innovative, such as the Aibo, are manufactured solely in Japan, because Sony has found that China’s manufacturing base, in amongst their many others, lack the critical “market mediation” capabilities i.e. the technological expertise, benefits of proximity and the supply chain flexibility to cope with the demands of high-margin, high-risk new product introductions (Sony, 2018). As such, it uses mass production, which China does both efficiently and cost-effectively which is a location advantage. The products are then distributed for sale and all upstream activities are outsourced to retailers across the globe. The idea is developed in Japan and sold everywhere in the world to fulfill the global mindset of the corporate strategy of Sony (Sony, 2019).

These activities are linked through the Sony Global Manufacturing and Operations Corporation which leads to high degrees of coordination for the communication and operations between domestic and foreign manufacturers. Sony’s approach is defined as “global localization”. SGMO sets out the global strategy whereas the various locations across the world have the autonomy to adapt it to local needs, still referring back to the core strategy. The compatibility across the operations back to the core is further explained in the Research and Development (R&D) section.

5. Innovation creation

Innovation is important for companies like Sony to maintain and gain a competitive advantage. The main corporate responsibility of Sony Corporation is to enhance its corporate value through innovation and sound business practices to its customers. Thus, Sony ends generating innovation in various ways either creating products or services which inspires and fulfils its customers curiosity (Sony, 2018).

i. Product and Process Innovation

Innovation has always been the core philosophy and spirit of Sony Corporation (Sony, 2018). The ground-breaking spirit of continuous innovation has always encouraged Sony to create innovative products from its establishment to date. Sony was the first firm to produce portable music players in 1979 such as Classic Walkman as given in Appendix 6 before any other companies could actually conceptualise them. It completely transformed the way to listen to music (Neate, 2014). Furthermore, Sony built PlayStation in 1994 which is one of the most profitable and successful products of the company and manage to dominate the gaming industry.

Recently, Sony also introduced “Aibo” the AI-driven entertainment robot pet for various use in environments in addition to the home and to bond actively with humans. Sony also creates innovation as a process which refers to the implementation of a new or advanced production or delivery method (Frynas and Mellahi, 2015). An example of process innovation is the invention and evolution of Seed Acceleration Program (SAP) and Sony Innovation Fund (SIF) by Sony Group in 2014 and 2016 respectively. Seed Acceleration Program generates start-up projects and supports its business operation while Sony Innovation Fund assists as a corporate venture capital fund to the start-up or early-stage companies (Sony, 2018).

ii. Research and Development (R&D)

In 1986, Sony established a “zone management system” where the worldwide market was divided into four regions which include Japan, America, Europe and South East Asia. The regional headquarters were established in each area with its own R&D main centre and six each sub-laboratories (Noam, 2018). The network of R&D has high coordination despite a decentralised configuration because of the various locations.

The parent company of R&D centres in Japan Sony Corporation assumed the role of the planner of the company’s R&D global strategy (Pablos, 2014). The European, Asian and the US head offices coordinate their regional R&D strategy, while making this strategy compatible with the corporate strategy and its global focus. Also, every main laboratories has its own chief technology officer (Noam, 2018). In order for them to remain consistent and coherent across the regions, not only engineers were moved across the laboratories, but also R&D meetings is held twice a year. This helped Sony R&D to reach synergy and flexibility. At the same time, the laboratories never lose their autonomy. They plan and control their own projects, suitable market needs, following the concept of global localisation. As Bartlett and Ghoshal (1989) suggested having both centralization and decentralization is very challenging but, tools like R&D meetings helped Sony to provide communication among the network of the various R&D across the globe.

The goals for the foreign subsidiaries were to meet the local needs, advance expertise in the local area, contribute to the local society while establishing a global human and information network. Every R&D facility is specialised in one or more fields of technology. For example, Beijing focuses on wireless networks, Las Vegas specialises in 3D Television and Paris focuses on personal music experience.

iii. Foreign Direct Investment for R&D

The FDI reason was home-base augmenting FDI for R&D because, although Japan being advanced in technologies, it benefitted from the various peculiarities of the multiple locations, leading to a dynamic continuous learning in order to keep up with innovations. This complies with the never ending pursuit of global localization, Japanese at its core but localized at the same time. Also, the centres are regarded as international technology creators, since the products designed are meant to be sold across the globe in a boundary-less fashion. The most famous product, PlayStation although designed and developed in Japan was sold everywhere, to fulfill the international mindset of the company.

iv. Innovative Capabilities for Competitive Advantage

The innovative capabilities of Sony are definitely a reason behind Sony’s sustainable competitive advantage. The field of consumer electronics is highly competitive and keeps on changing. Therefore, Sony always makes an effort to keep up with innovations and be competitive in the market. Usually, the firms invest around 2 to 3 percent of revenue to their R&D sector but 6 percent of the company revenue which is extremely high is spend on the research and development by Sony Corporation. The founder of Sony Akio Morita and Masaru Ibuka strongly believes in the power of innovation and innovative capabilities as the main source for Sony’s competitiveness. Hence, the global localization perspective helped the Sony to adapt itself to the various locations as well as market changes, which helped Sony to leverage its technological know-how very dynamically.

6. RIsk management

Sony recognizes various risks and manages them well because of the geographical dispersion as well as industrial diversification. Among the others, Sony does not have a centralized decision-making for risk management. Rather, all of the risks are conducted under the company with “committees” as the board of directors where every subsidiary provides mechanism of identification and response to challenges, tailored to their respective locations which gives them great autonomy in the matter.

i. Cyber Attack

Cyber security has been the major risk for the businesses. There were some of the incidents that took place back in 2011 and 2014 where Sony Pictures and PlayStation Network was crippled by hackers. This incidents can be labelled as a black swan event as it proved the weakness of the company in serious situations. The online services were shut down as Sony attempted to secure the breach, which put the sensitive personal data for over 100 million customers at risk. Protecting the data privacy of Sony users are very important to Sony. Hence, to fulfil this commitment to privacy, Sony took a number of steps to prevent future breaches including enhanced levels of data protection and encryption; enhanced ability to detect software intrusions, unauthorized access and unusual activity patterns; additional firewalls; establishment of a new data centre in an undisclosed location with increased security and the naming of a new Chief Information Security Officer. Sony has also improved its stance against cyber-attack. For instance, through a risk mitigation strategy of partnering with Amazon Web Services.

i. Intellectual Property Right (IPR)

According to the Vice President of Sony Interactive Entertainment (SIE), one of the biggest intellectual property challenges facing the industry is the copyright which refers as given the need to protect creative content. Sony has been the copyright owner of the innovations related to its video games. Sony sued Eric Davis in America because he has the marketing and sales distribution of the ‘Jailbreak’ PS4. Jailbreak refers to modify electronic device to remove restrictions in the game. Eric’s production and design of such is not only for the purpose of profit, but also detrimental to the original intention of the PS4 system to prevent pirated game works.

ii. Investment Strategies

Sony focuses its investments into more profitable businesses and divests from businesses performing less well in order to maximise profits and minimise costs. From Appendix 7, the green are the most profitable industries of Sony receiving the most funding in their R&D so entertainment as a whole is doing great. In Yellow, are the stable profit generators which receive less large-scale investment and are focusing more on cost efficiencies. In Red is the least profitable industry, Mobile Communications, due to market volatility in consumer tastes and high competition.

7. Recommendation & conclusion

It can be seen from Appendix 8 that Sony is doing well on most of its business sectors. However, Sony is struggling in their smartphone business which is part of the mobile communication industry in comparison to its competitors. Hence, change in their strategy is needed. Sony is divesting in this area by cutting down jobs and is also considering a partnership as they still plan to continue producing smartphones. Sony should use a change agent to mitigate the risks and partner up with Huawei as they have previously collaborated together in the television industry and have similar competencies and have potential for synergy.

Introduction

The king has fallen from his crown. The sentence cannot be more perfect to describe the failure of the once-upon-a-time master of consumer electronics industry: Sony. From early 1980s until 1990s Sony was known for its cutting-edge technology, sophistication, and desirability. With infamous Walkman and Trinitron, Sony was considered as Apple of its era.

Now everything has changed. Sony may continue to produce high-quality products, but people do not get excited from them anymore. As people moved to competitor products and sales declined, some of Sony products were discontinued. In this case, we will look further why exactly Sony discontinued artificial intelligence robot as known as AIBO and how they revive it.

The History of Sony AIBO

ERS-110. Picture: Sony

Sony AIBO – a robotic dog pet designed as adult companion – was first introduced in May 1999. The first model, called ERS-110, were sold in Japan and U.S. at ¥250.000. Several months later, Sony decided to introduce ERS-111 limited edition to the European market and surprisingly there were 135.000 orders in a week. This first version of AIBO can walk, perform some movements, and show different moods.

ERS-210. Picture: Sony

In October 2000, Sony launched the second generation of AIBO which called ERS-210. This newer version offered improvement in mobility, touch sensors, and facial LEDs. With additional features such as Name Recording Function and Face Recognition, ERS-210 was closer to its owner. The ERS-210 could also respond up to 40 words and phrases.

Almost a year later, Sony introduced LM series of AIBO. L stands for Latte, while M stands for Macaron. The ERS-311 Latte was only available in white color, while the ERS-312 Macaron was available in dark grey and black colors. Although there were some features lacking, such as LED facial expressions and wireless capabilities, they had advantage in terms of price.1

ERS-311 Latte. Picture: Sony

ERS-312 Macaron. Picture: Sony

ERS-220. Picture: Sony

In the same year as LM series launching, Sony introduced the futuristic-looking dog called ERS-220. Compared to the previous version, ERS-220 had additional digital camera for this AIBO version for taking pictures.

ERS-7. Picture: Sony

Two years later, Sony launched its ambitious AIBO project called ERS-7 which capable of speaking 1000 words and understanding more than 100 words. This version was special in terms of its functionalities. Scheduling, news or email reading, music playing, video recording, and diary writing could be done with this ERS-7 version. The ERS-7M3 version, variant of ERS-7, was the last AIBO that Sony produced before it being discontinued in 2006.

Sony Struggles Over Lost Opportunity

If we must choose the day when Sony lost its title as the king of technology industry, it was October 3rd, 2001. That was the day when Steve Jobs introduced iPod in Apple Music Event. A small, portable music hearing device with high regard of simplicity and carry more than 1000 music inside.

At that time, Sony had the all the resources needed to build something like iPod. The question is, why did not they make one? To answer this simply is because they were too late to realize the importance of digitalization, a shift towards software or user experience, and the importance of Internet.2

“Why Sony did not invent iPod is one of the great lessons in corporate failure.”

-Michael Pascoe, editor. Source: The Sydney Morning Herald

Many argued that one of the reasons why Sony did not invent something like iPod is bad-timing. Two years prior iPod launching, Sony had tried to create something similar but failed due to expensive small hard drive. Because of these first expensive players, Sony left the idea behind.

Although some people may agree that Samsung failed because they lost their timing, but others like CEO ChangeLabs Dominic Thurbon and New York Times journalist Hiroki Tabuchi argued that the most reasonable cause of Sony’s lost opportunity is their silo structure and culture.

“With its catalog of music and foundation in electronics, Sony had the tools to create a version of the iPod long before Apple introduced it in 2001. It didn’t happen. Initially, Sony engineers resisted the power of the company’s media divisions.”

-Dominic Thurbon, CEO ChangeLabs. Source: The Sydney Morning Herald

To create something as radical as iPod, all Sony divisions had to forget their jealousy of each other and move towards common purpose. For example, Sony hardware engineers had to cooperate with software engineers. On the other hand, Sony Music need to support this invention by completely tear down their current distribution process and make it align to support the iPod-like product from Sony. The lack of common purpose and highly competitive silos eventually damage the company reputation in technology industry.

This is the proof that the more expert and balanced a company is, the more they probably resist to change. All their effort can be too focused on the existing dominant design and it will slower their reaction to new technology architecture. This kind of “comfort zones” can be alluring trap for a successful company, and Sony is living proof for that.

One of the greatest mistakes of Sony is they failed to reevaluate their business strategy amid technological changes. There are at least three mistakes that Sony did. The first mistake is Sony was too late to realize the importance of software, hardware, and service integration in its products. This mistake was mainly caused by the company’s silo structure. The second mistake is Sony completely missed changes in mobile phone industry. Sony completely exit the mobile phone industry now, due to its unpopular product. This can affect Sony badly, because nowadays consumers using mobile phone more than digital camera. The third mistake of Sony is its “kludgy” software in products.

As technology innovation moves in very fast phase, change within industry is unavoidable. There are two choices: change or become extinct. The story of Kodak is a proof for this. When Kodak had failed to move from chemical photography to digital photography, Fujifilm existed to “kick” Kodak out of business.

The need to change is not only driven by the company, but also by user. The big part of Sony success story from 1950s until 1990s was their disruptive technology in hardware. Unfortunately, they became too focused in innovating and selling hardware while the shifting from hardware to software started to happen. It was not enough for user to have smaller, lighter, MP3 version of Sony Walkman. Users’ typical question of “What are the specs?” slowly changed to “What is it like to use?” They need a new user experience – combining hardware, software, and social identity in one device, which Apple’s iPod successfully achieved. 3

The failure of Sony to realize the business change in technology industry came with huge price. The shifting from product-oriented customer to experience-oriented customer made Sony market value today is roughly the same as when Walkman ruled in 1980s, only one-ninth of Samsung Electronics and just one-thirtieth of Apple’s.

In 2004 until 2005, Sony’s annual revenue of US$68.6 billion were the lowest for five years, and it also were 5% below forecast. Moreover, Sony reported loss three times between 1999-2005: in 2001, 2003, and 2005.

Decreasing sales, especially in gaming entertainment and consumer electronic segment of Sony, forced Sony to change their business strategies. Sony needs to make its business operation lean to get more profit. One of the impacts from this situation was Sony decision to discontinue AIBO until Sony get better financial outcomes. This decision was made with consideration of AIBO’s high production and maintenance cost. With Sony’s struggle in consumer electronic industry, it was just not profitable for Sony to pursue such an ambitious project.

Samsung Is Now What Sony Once Was

When we talk about consumer electronics industry today, it is not complete without Samsung. Twenty-six years ago, Samsung was known as a supplier, a high-volume, low quality manufacturer without brand recognition outside Korea. At that time, Samsung’s chairman, Lee Kun-hee, had been traveled around the world to review how his company was faring. To put it simple, he was not happy with what he saw. After he ended his trip, he called a spontaneous meeting with his top executive and said literally and figuratively:

“Change everything but your wife and children.”

-Lee Kun-hee, Chairman of Samsung. Source: Forbes

At that time, Lee already recognized the need to change the way the company was doing business. The process is known as business process reengineering, which in some way was the catalyst for Samsung’s transformation in the market.

So, what makes Samsung can surpass Sony today? There are at least two reasons why Samsung – an unrecognized brand in 1990s – was able to beat Sony. The first is strong value proposition from its products, and the second is the business model that enable value to be delivered to customer. For value proposition, Samsung always consider quality, design, and price of products. Samsung wants to be a premium brand, therefore Samsung management had to ramp up the quality, established design centers around the world, and release the product at competitive price. Combined with innovation and relevance, Samsung give customer what they want to and can buy into. To balance quality, design, and price, Samsung needed to create business model as enabler.

From Sony case, Samsung had learned the consequences of misses of inflection points. To sustain in high-technology industry, Samsung cannot ignore that sensing changes in the market is also important. In this competitive industry, there is always something new, and if the firm does not realize that, it will fall out of favor quickly. 4

The Revival of Sony AIBO

In recent years, Sony was slowly regained its standing. Sony’s PlayStation sales in Q2 2018 caused Sony’s operating profit jumped by 59 percent and revenue increased by 6 percent. Analysts said that Sony was entering a growth phase after many years of huge losses.

Samsung Revenue 2007-2017. Source: Statista

After watched its prominence evaporate in nearly everything from televisions to smartphones, Sony decided to relaunch AIBO in 2018, twelve years after it was discontinued. It was Sony’s attempt to show its prowess in AI, robotics, and high-quality consumer electronics.

AIBO also acts as a proof that Sony learned from its past mistakes. Under the leadership of Kazuo Hirai, Sony had to knocked down barriers between divisions and created products that connect with people at emotional level. While most of its products may not captured consumers affection yet, Sony hoped that AIBO will serve as a statement of the brand-new Sony.

AIBO was set to be a personal companion of adults. With more than 400 parts, this new AIBO can move like a real animal. Its eyes are Sony displays which can follow the owner around the room. It also can imitate gesture, act on commands, and take pictures with voice initiation.

With $2900 price tag, it is sure an expensive pet. Even so, this new Sony AIBO was already sold as many as 20.000 units in Japan. Sony AIBO was a true expression of brand-new Sony, it was made to show Sony’s ability of high-technology consumer electronics innovation. Sony AIBO may not as profitable as Sony PlayStation, but this product is a statement of how the company is changing towards the future and that is highly important to regain Sony’s own reputation.

It still to be seen whether this new Sony AIBO will be continued. It was mentioned by Mike Fasulo, the president and COO of Samsung Electronics, that demand of AIBO outside Japan predicted to be fewer. Moreover, the high-price of AIBO does not ensure its profitability. As mentioned before, there is a risk of discontinuing the product if Sony does not have good financial outcomes. There are other factors too, such as change in trends and highly competitive market that may disrupt the growth of Sony. Therefore, Sony’s future business strategy will play a vital part of Sony AIBO continuity.

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Introduction

Sony is a world-renowned large-scale comprehensive multinational conglomerate. Headquartered in 1-7-1, Gangnam, Minato-ku, Tokyo, Japan.

Sony is a world leader in audiovisual, video games, communications products, and information technology. It is the world’s first pioneer of portable digital products. It is one of the world’s largest electronics manufacturers and one of the world’s three major players in the video game industry. One of the six major movie companies in Hollywood, USA. Its brands include Xperia, Walkman, Sony Music, Columbia Pictures, PlayStation, and more.

There was a brand of Vaio, but on February 6, 2014, Sony divested VAIO business, and the Vaio brand will be operated by Japan Industrial Partners Inc.

From April 1st, 2018, the current deputy director and chief financial officer Yoshida Kenichiro was promoted to the president. The current president and CEO, Hirai Kazuo, is the chairman of the company.

On December 18, 2018, the ‘2018 World Brand Top 500’ compiled by the World Brand Lab was announced, and Sony ranked 100th.

It has emerged as an industry leader in technology by designing, developing, and manufacturing electronic devices such as transistor radios, tape records, and televisions.

Sony introduced products such as CD Player and portable music system popularly known as “Walkman” which revolutionized home media industry. Sony further diversified into cameras, gaming consoles, home news PC’s, mobile phones, and televisions which helped them build their value and image in the international market.

Sony has established production base in Asia with a wide sales network in around 200 nations across the globe. They have a strong marketing network in Japan, US, and Europe.

Sony Subsidiaries and International exposure

In October 1968, the world’s first color TV with Trinitron TV image technology was released: KV-1310. In May 1975, the world’s first BETAMAX video recorder was released.

In 1978, a revolutionary CCD (charge-coupled device) sensor technology was developed. In July 1979, the revolutionary Walkman World’s first Walkman product was released: TPS-L2. In 1983, the United Kingdom Philips jointly released a compact disc (CD) and led the 74-minute standard. In December 1996, the first digital camera was released: CyberShot DSC-F1. In March 2000, the Sony PlayStation 2 generation game console was released. In October 2001, Sony and Ericsson each held 50% of the shares and jointly established Sony Ericsson. In February 2002, the Blu-ray Disc standard for the next generation DVD disc storage format was released. In December 2004, the next generation of PlayStation Portable handheld game consoles using UMD storage media was released. In January 2005, IBM and Toshiba (TOSHIBA) jointly released the Cell-microprocessor with 4GHz start-up. On May 16, 2005, the E3 show in the United States released the PlayStation 3 generation game console equipped with the Cell processor. On July 19, 2005, he announced a partnership with Konica Minolta (Konica Minolta) to join the digital SLR camera market in response to the saturation of consumer digital cameras. On August 25, 2005, the joint IBM and Toshiba (TOSHIBA) announced the detailed process of the Cell-microprocessor. On September 13, 2005, September, BRAVIA’s next-generation LCD TVs were released worldwide. On September 30, 2005, SanDisk released a Memory Stick Micro (M2) memory card. On February 21, 2006, the world’s smallest support high-definition 1080i HDV-HC3 was released. On April 10, 2006, it again cooperated with South Korea’s Samsung Electronics to produce the eighth-generation S-LCD LCD panel factory. On April 20, 2006, the brand new digital SLR camera brand alpha (alpha) was released. In November 2006, PlayStation 3 equipped with Cell processor and next-generation Blu-ray Blu-ray technology was officially launched in Japan, the United States, Taiwan, and Hong Kong. On November 2, 2006, the eighth-generation S-LCD LCD panel factory, which was put into operation with South Korea’s Samsung Electronics, officially started construction. It is expected to officially put into production capacity in the fall of 2007. On November 11, 2006, the PlayStation 3 generation game console was officially launched in Japan, and 100,000 consoles were sold out in an instant. In 2006, with Ericsson announced that it will expand its cooperation, in addition to continuing the original mobile phone design and manufacturing business, the two parties will jointly develop software for mobile and broadband TV applications.

On January 19, 2006, Sony and Kemei jointly announced the acquisition of Kemei Camera Business by Sony. The acquisition agreement officially decided to transfer some assets related to Kemei digital SLR cameras to Sony, while Kemei will camera and related. The customer service of the product is entrusted to Sony, and the agreement will take effect from now on. In February 2008, with the release of the new flagship Xperia X1, Sony Ericsson’s high-end smartphone brand Xperia officially entered the public’s field of vision. In January 2011, the PlayStation VITA second-generation handheld game console with quad-core, dual joystick, and front, and rear touch screens was released. On October 27, 2011, Sony announced that it will acquire the remaining 50% of the shares for 1.50 billion euros. It is wholly-owned and announced that it will stop using the ‘Sony Ericsson’ brand from mid-2012. In the future, the mobile phone will be unified with the ‘SONY’ logo. In April 2012, Sony was approved by the European Commission to acquire the established music company EMI for $2.2 billion. So far, Sony has become the world’s largest music company, controlling one-third of the world’s music copyright. In July 2012, Sony acquired the cloud game company GAIKAI for $400 million to expand its future gaming machine business. On February 21, 2013, the PlayStation 4 was released in London, but product information such as the appearance of the price was not announced at the time. On June 10, 2013, the PlayStation 4 was officially released at the E3 Electronics Show in the United States, and the appearance, price, and starter games of the mainframe were announced. At the press conference, Sony confirmed that it will not restrict second-hand game transactions, regular online certification, etc., like competitor Xbox One.

Joint Ventures

Sony Ericsson

Sony Mobile Communications is an international company founded on October 1, 2001. It is a joint venture between Sony and Ericsson. It was originally founded on February 16, 2012, and is headquartered in London. It is Sony Ericsson Mobile Communications. Sony Mobile’s exclusive operation is to create smartphones under the Android-Xperia sub-brand, as well as device accessories and software. The strategy is to release new models that enable digital photography and other multimedia features.

Sony ESPN

Sony Pictures Networks India partnered with ESPN to form a joint venture called Sony ESPN, which was officially launched in October 2015. The channel is aimed at the Indian subcontinent and is commented in 6 languages, the NFL season (2016) aired IPL competition (2016-17) -17) with NFL playoffs, Super Bowl, and Pro Bowl. Sony ESPN’s content includes cricket, football, hockey, tennis, golf, NBA basketball, badminton, and other activities.

Ghelia

Sony Computer Science Labs, in collaboration with Japan’s AI venture capital firm UEI and the Business Incubator World Innovation Lab, launched a new joint venture to help companies collect data and develop artificial intelligence programs. This joint venture through UEI aims to create a platform to provide basic services to companies that incorporate AI into their business.

According to the pie chart, the data showed that the FY2017results accounted for about 180 bin yen of Games and Network Services, which was the most propotion in the whole pie chart, and the Financial was the second proportion, about 170 bin yen. Other factors are Semiconductors, Music, Home Entainment and Sound, Pictures, Imaging Product and Solutions, Mobile Communications.

According to the value of supply chain transaction by geographic area, mainland were China and Hongkong region, accounting for 39%, the smallest proportion is in the United States, only 1%.

Opportunities

Sony is one of the most recognized and loved brands in the world. Sony plans to implement some network initiatives to expand the T.V business. International consumption of American TV dramas continues to remain strong. On the international market side, Sony plans to launch six new regional language games, and Sony will transfer its gaming technology from the London studio to India.

Challenges

European economic issues have slowed growth of the AD sales market in many territories.

Programming prices are expected to rise, volatility of foreign currencies create uncertainty for predicting financial results in US dollars.

To enhance the brand further by taking advantage of all the assets across the organization globally, including both electronics and environment.

The damage from cyber-attacks is estimated at $170 million. On April 25, 2011, the Sony PlayStation Network was attacked, forcing the company to rebuild the network. Sony revealed that more than 100 million accounts of personal data were stolen, and the service was not available for a few weeks until recently partially restored. The hacker has obtained user information and may include a credit card number. The PlayStation Network had a total of 77 million users. On April 27, the network was attacked again and Sony was forced to shut down the network.

Sony has notified the PlayStation network users that personal information (including name, address, payment history, and birthday) was obtained by an ‘unlawful person’. Last week, the ‘illegal person’ attacked the Sony network and caused service disruption. Sony user credit card numbers may also be mastered.

On July 13, 2006, the European Court of First Instance in Luxembourg overturned the EU’s 2004 approval of the merger of Sony Music and Bodman (BMG), making SONY BMG the world’s number one. The two major record companies are in danger of being split. The European Court of First Instance said in this historic judgment that the European Commission that approved the merger at that time only conducted a very sloppy examination of the consequences of the merger. The Commission did not provide sufficient evidence to legally prove that the two mergers did not There is a dominant market position, and there is no such possibility after the merger.’

The European Court’s decision means that Sony Music and Bodman (BMG) will re-submit the merger plan to the European Union, and the new plan will include market conditions. The European Commission will re-examine the merger of Japanese Sony Music and German BMG.

At the end of 2005, Dell (DELL), the world’s largest personal computer manufacturer, continuously reported a laptop explosion accident and caused an investigation by the US Consumer Product Safety Commission and the Ministry of Economy, Trade and Industry.

On August 15, 2006, Dell and the US Consumer Product Safety Commission conducted ‘the largest global battery recall notice in the history of the electronics industry.’ The recall included approximately 4.1 million Dell lithium ions manufactured by Sony. After the battery, Apple, Toshiba’s Dynabook, Lenovo’s IBM-ThinkPad, Fujitsu, Hitachi, Sharp, Gateway are announced. Recall the laptop battery. On September 29th, Sony decided to launch the ‘Lithium Battery Autonomous Replacement Program’ on a large scale to recycle lithium batteries for notebook computers produced worldwide, and to provide free replacement of new products.

Sony said that the reason for the recall is that in extremely rare cases, tiny metal chips in the relevant battery cells will contact other parts of the battery core, resulting in a short circuit. In general, when this happens, the battery pack will be powered down. However, under some extremely rare conditions, this internal short circuit can cause overheating of the cell and possible fire. The probability of this happening will vary depending on the computer system configuration used by different computer manufacturers.

On October 19, 2006, Sony announced the “Fiscal Year 1 of the fiscal year 2006”. Due to the impact of the “Lithium Battery Autonomous Replacement Plan”, Nobuyuki Oneda, the financial founder, said that there may be a total of 9.6 million recalls worldwide. The Sony-made notebook battery will cost the company about 51 billion yen, which is much higher than the previous estimate of 20 billion to 30 billion yen.

On February 29, 2016, Sony (China) Co., Ltd. submitted a recall plan to the AQSIQ to recall some imported VAIO notebook battery packs. The production date is from January 2013 to April 2013. The model number is VGP-BPS26. According to the company’s statistics, the number of battery packs affected in mainland China is 10,617. Due to the incorporation of metallic foreign matter in the production process, the battery pack in the scope of the recall has a risk of burnout in some cases.

Competitive risk

Sony must deal with the bargaining power of some suppliers and the bargaining power of customers, the threat of new entry, the competitive competitiveness, and the threat of alternative service products. Although Sony is trying to differentiate their products through modern design, high-quality graphics, and superior technology. They still exist as alternatives to Sony Walkman, iPad or Android or tablet games that threaten Sony PlayStation and HD, DVDs via Blu-ray. Alternatives to music downloads or streaming media will have an impact on Sony’s recorded music industry.

Sony and ERICSSON

The Sony G-TYPE recorder (tape player or recorder) was the first hardware device created by Ibuka and Morita in 1950, and the first pocket-transistor radio was released in 1957. In order to penetrate the global market, they introduced the image quality of Trinitron TV in 1968. Ericsson was founded in 1876 by Lars Magnus and began to manufacture mobile phones with potential technological improvements that shape the future of mobile and broadband Internet communications. Ericsson is the only company in the world to provide systems for all major mobile communication standards, actively promoting standardization and delivering innovative solutions in more than 140 countries.

Ericsson used to buy chips from a single source from Philips. In 1999, due to the interruption of the fire in Philips, it was unable to provide chips, and Ericsson had to face huge losses. Sony is a fringe player in the global mobile phone market, with a share of less than 1% in 2000. Sony Ericsson’s joint venture began on October 1, 2001, and the main goal of the joint venture is to develop an alliance that allows Ericsson to reduce the cost of expensive development of the next generation of mobile phones. Ericsson has also successfully innovated cheap camera phones, cross-platform technology, operating system experiments, and color screens. After 2007, due to the rise of smartphones on the market, the company’s feature phones gradually lost market, and the company’s operations slipped into the slump. After half a year of negotiations, on October 27, 2011, two-parent companies, Sony and Ericsson, reached an agreement. Sony paid Ericsson 1.50 billion euros ($1.47 billion). The former bought Sony Ericsson from Ericsson. On October 27, 2011, Sony announced that it will acquire 50% of Sony Ericsson’s shares held by Ericsson for 1.05 billion euros. Sony Ericsson becomes a wholly-owned subsidiary of Sony. The transaction was completed in February 2012 and Sony Ericsson was renamed Sony Mobile.

The word ‘Sony Ericsson’ has ceased to exist. The original 50% of Sony Ericsson shares in the past 10 years have also officially returned to Sony. The mobile phone series product was named ‘Sony Mobile’, and the mobile phone logo produced in the future was also changed to ‘SONY’. On February 15, 2012, the Sony mobile communication subsidiary was established, and Sony Ericsson was officially out of the market. After Ericsson exited the mobile terminal business, it focused on 2G, 3G, and 4G mobile communication networks and professional services in the communications market.

New Model

The first device introduced by the Sony Ericsson brand is the T68i, which includes a color screen, a connectable camera, and an email function. The new products feature digital photography and multimedia capabilities (download, view video clips, and personal information management features). In 2003, it introduced the iconic T610, the first model to include a built-in camera. In 2005, Sony promoted its brand through K750 devices including Cyber-shot camera technology. Ericsson effectively provides hardware, and Sony can use its technology and exclusive products to help itself stand out from competitors’ manufacturers. In 2007, shipments reached an all-time high of $103 million each year. In 2008, sales fell to 96 million, Sony Ericsson has been too focused on high-end mobile phones, and was affected by failure to keep up with competitors, highlighting HTC, the Apple iPhone launched in 2007, and Google’s Android accounted for its share of sales.

A few days ago, Sony Ericsson officially said that the Ice Cream Sandwich operating system, Android 4.0 version, will start to log in to XPERIA smartphones in mid-March and late-March 2012. The world’s first V phone Xperia arc S LT18i.

Sony Ericsson released the latest performance Android 2.3.4 smart new Xperia arc S LT18i at the International Electronics Show (IFA) in Berlin, Germany. As the flagship new Xperia series, the Xperia arc S LT18i not only inherits the award-winning design of the Xperia arc LT15i but also features a high-speed processor upgraded to 1.4GHz. At the same time, it is advanced with Sony Exmor R for Mobile image sensor and 3D panoramic scanning. The outstanding performance of video technology, Xperia arc S LT18i was awarded the ‘2011-2012 European Best Camera Phone’ award by the European Video Association (EISA). Xperia arc S LT18i continues the appearance of Xperia arc LT15i won the 2011 Germany Red Dot 2011 ‘slim design, the thinnest part of the fuselage is only 8.7mm, coupled with arc, add The three colors of white, pink and black, upgrade the fashion taste; under the refined appearance, the high-speed processor upgraded to 1.4GHz speeds up the mobile phone in the startup camera mode, media and application conversion by 25%, and the web browsing growth rate is also high. 20%. In conjunction with the leading Android 2.3.4 smart operating system, the Xperia arc S LT18i will fully enhance the consumer’s mobile-connected life experience.

The Xperia arc S LT18i combines Sony’s high-end imaging technology to provide users with an optimized entertainment experience: the multi-touch Reality Display with 4.2-inch, Sony Mobile BRAVIA Engine image processing engine, perfect for beautiful images and videos; Sony xLOUD enhanced speakers, superior audio effects; 8.1-megapixel camera with HD recording and Sony Exmor R image sensor for clear shooting in low-light environments; 3D panoramic scanning for users to break space constraints, shooting Have fun in it.

Start Over

In June 2008, it launched a £756 million cost-cutting plan, and by the end of 2010, about 8,000 employees were laid off. Cutting costs has helped the company build a platform. Mobile World Congress 2011 – Return to the Black Economy – Android is a major factor. Sony launched the Xperia series, which is available from Android, including the Xperia X10, Mini Pro, Vivaz Pro, the game-centric PlayStation-certified phone Xperia Play and more Sony brands such as its camera sensor Exmor R and image processor Bravia engine. In 2011, it differentiated its market. However, after the loss of £37 million in the second quarter results report, its problems reappeared and were attributed to the impact of the earthquake in Japan, which caused four locations to close and stop production. Shipments fell by 11 million to 7.6 million year-on-year.

• Nokia 24.2%
• Samsung 9.2%
• LG Electronics 6.8%
• Apple 5.6%
• ZTE 4.5%
• Sony Ericsson 2%

Many of their production centers and research and development centers around the world. Closed, they had to cut off about 3,000 employees. Sony decided to acquire Ericsson’s shares at Sony Ericsson’s price as a subsidiary of Sony Electronics. Therefore, Sony Ericsson became Sony Mobile Communications.

Foreign exchange

Sony’s electronic business, R&D, and headquarters management fees are mainly calculated in Japanese yen, and manufacturing costs (including material costs, parts procurement costs, and outsourcing manufacturing service costs) are mainly from the US dollar and the Japanese yen. Derivatives, foreign exchange forward contracts, foreign currency option contracts are used to mitigate the effects of fluctuations in foreign currency exchange rates and expected cash flows from intercompany transactions. London’s Sony Global Treasury Services (‘SGTS’) hedges the net foreign exchange exposure of Sony and its subsidiaries.

The SGTS typically forecasts an expected risk exposure for the three months prior to the actual transaction. However, in some cases, SGTS will partially hedge the expected risk exposure one month before the actual transaction occurs when certain products are produced with a shortened production-sales cycle. Sony’s foreign exchange transactions with third-party financial institutions are mainly for hedging purposes. Minimize the adverse effects of foreign exchange fluctuations on their financial performance, especially in the electronics sector. Sony seeks to localize materials and parts procurement, design, and manufacturing operations outside of Japan. Changes in fair value of derivatives designated as cash flow hedges (including foreign exchange forward contracts and foreign currency option contracts) are initially recorded in accumulated other comprehensive income and reclassified as profit when the hedged trade affects revenue.

It shows the electronic manufacturing facilities at Sony all over the world.

Drawbacks

Sony does not offer premium phones like other competitors in the mobile phone manufacturing industry. Their research and development is very slow. If your R&D department is not up-to-date, it means that you are not providing satisfactory products to your customers. They offer innovative products, but marketing strategies are not as effective as attracting customers. They face problems because they focus on cost-cutting plans and unemployment. In June 2008, they had 12,000 employees. After the launch of this cost-cutting plan, the number of employees worldwide decreased by about 8,000.

In 2008, Sony’s quality problems were mainly concentrated on notebook products.

The motherboard of the Sony FZ35 laptop is exploding with design flaws. The complainant said that because the purchased notebook is still under warranty, Sony’s maintenance department replaced the machine or motherboard for free, but Sony denied the notebook has design flaws.

Sony’s CR series notebooks produced since January 2008 have been accused of short-lived phenomenon. This notebook series, which once occupied the ‘sales champion’ of Sony notebooks, was almost found to have problems after one week of consumer purchase.

The quality issue in 2009 involved the expansion of the product line.

First of all, there are endless TV problems. At the beginning of the year, Sony LCD rear-projection TV KF-E42A10 and other five problems TV problems, Sony took a free on-site service to upgrade the TV software for users but did not provide any compensation.

There are camera problems. On August 20th, Sony China Branch released a product announcement on its official website, stating that it will replace the DSC-W170 housing parts of the Cyber-shot digital camera sold from April 2008 for consumers. At the end of August, 315 Consumer Electronic Complaints Network received several complaints about the Sony T20 digital camera in the country, and “starting inexplicable jitter” became the complaint keyword.

Mr. Luo from Shenzhen felt deeply about the process of defending his rights caused by the purchase of the Sony FX1000E camera. ‘Sony has been suffocating and evasive to consumers. There is nothing in the communication except for the feedback. Sony’s every push Step by step is testing consumers, and the complaints ‘hiding cats’ and ‘playing Tai Chi’ also seem to be their way of handling.

The notebook problem also exploded. In the second half of 2009, Sony received 209 complaints about abnormal computer fever, including 83 in Japan and 126 outside Japan. The main reason is that computer design defects can cause computer overheating and short circuit. To this end, Japan Sony announced the recall of hundreds of thousands of VAIO TZ series notebooks on September 4, 2008. However, Sony seems to be lacking in handling complaints from Chinese users.

Dozens of Sony Sony notebook users reported that the fan built into the computer was noisy, and the computer screen showed “water ripples”, which seriously affected normal use. Although Sony (China) Co., Ltd. timely introduced measures such as extended warranty and explanation for the user’s response, the user did not recognize it. The stalemate until January 17, 2010, Sony China announced: VGN-CS1 listed in October 2008 The series, the CS2 series listed in February 2009, and some of the VAIO notebooks listed in the CS3 series listed in May 2009 may have a horizontal line on the LCD panel after a period of use. The company decided to base on the original two-year warranty period. , extended 1 year warranty period, that is, 3 years of free repair service from the user’s purchase of products. Users who have purchased the 3-year extended warranty service are not covered by this policy.

In 2010, complaints against Sony products entered a period of high incidence. Not long ago, People’s Daily Online analyzed the results of online and offline surveys of 3,000 consumers and found that Sony occupied the second place with 23% of the brand’s ownership, but at the same time, Sony’s proportion of complaints was also related to brand ownership. Just proportional. In this survey of People’s Daily Online, the focus of consumer complaints is on after-sales service. For Sony digital cameras, the problems that reflect more are: the door repair is not timely, the maintenance level is not high, and the maintenance point cannot be contacted.

In the 315 consumer rights online, Sony’s complaints in recent years have also shown a significant upward trend. From the 1st to the 15th of this month, there are 64 on the 315 Consumer Electronic Complaints website. A complaint about Sony.

On January 24, 2016, Sony announced that there is a light leakage problem with its high-end full-frame card camera RX1RII, and Sony will provide free inspection and repair services for this camera.

Conclusion

R&D is an important part of any organization, and it plays an important role in mobile phone manufacturing companies, but Sony Ericsson uses it as a cost and closed R&D department. Companies must seek to innovate and implement new marketing strategies to provide customers with a satisfying product and raise awareness. Equally important, we should also know that customers always want new and different things. Therefore, providing them with new and different mobile phone companies should always seek the best R&D tools and technologies.

Introduction

The Sony PS3 is the latest gaming console set to replace Sony’s iconic PS2 gaming system. Promising better graphics, user interactivity and access to an online gaming community the Sony PS3 was meant to become an innovation that defined the latest gaming genres in the gaming industry.

Unfortunately initial sales of the product waned as a result of its initially high price and stiff competition from Nintendo’s interactive motion controlled Wii system. This actually resulted in abysmal PS3 sales during the first year of release with fewer consumers choosing the expensive PS3 console with few games compared to the much cheaper and trending Wii console. In light of this event, Sony changed its initial concept view for the PS3 in order to incorporate this growing consumer demand for interactivity.

Initial Promises of the PS3

As a gaming console the PS3 promised, and subsequently delivered, games which would literally astound gamers with the depth of the graphics and the greater degree of in-game features not present in the previous generation of consoles.

With titles such as God of War 3 and Devil May Cry 5 the PS3 was able to give gamers a fully interactive gaming environment that astounded consumers with the level of graphics available. The reason behind is the fact that the PS3 employs a Blu-ray disk reader which can play games with 30 to 40 gigabytes of information as compared to the DVD disks of the old PS2 which could only hold three to four gigabytes of information.

It delivered on its promise of greater functionality due to the presence of the Blu-ray player since it enabled consumers to play not only games but various high definition Blu-ray movies on the unit itself. The PS3 also promised to enable greater connectivity and interaction among gamers through the use of the Playstation network which enables players to compare scores, chat, interact and fight against each other over online connections.

Another feature the PS3 also promised was to be more than just a gaming platform but a home entertainment system enabling families to watch online TV programming, listen to music and an assortment of other similar functions. Finally, in an attempt to prevent the continued market dominance of the Wii gaming system the Sony introduced the Playstation Move, an interactive motion sensor device that enables players to have the same motion sensor capabilities of the Wii yet with better graphics and usability.

Changing the culture of gaming and the role of gaming within the home

The features of the PS3 gaming console enabled a greater degree of usability and interactivity by the entire family as compared to previous gaming platforms developed by the company which focused on either one to two player usability.

The interactive features in the form of the PS3 Move system meant that nearly the entire family could join in on a single game with each player having their own motion controller. Unlike the standard gaming controllers of the unit the new motion controllers enabled a greater degree of space and movement when interacting with the game which made it more of a group event rather than a solo gaming experience.

Not only that the added features of the unit in the form of a Blu-ray player, online TV viewer, and music player meant that the device could be used beyond just an ordinary gaming experience. As a result the growing level of interactivity seen from the PS3 means that the culture of gaming has been changed to include more user interactivity and playability as well as the addition of a group/family dynamic when it comes to gaming experiences.

Cyberterrorism is a new type of cunning schemes that are applied by individuals and hacker teams that aim at affecting or destroying information systems and computer networks. Such attacks range from installing malicious software programs to the destruction of entire infrastructures. Although it is often almost impossible to identify hackers who are involved in such intrusions, there are different methods to improve a situation after the attack. The example of Sony cyberattacks will be closely discussed in this study. The main goal of this paper is to analyze the case of cyberattacks on Sony, discussing the existing evidence and alternative decisions that could have alleviated the negative impact of the incident on customers.

Issue

Sony was subjected to a large-scale elaborated cyberattack by an Internet hacker team called Anonymous. The team launched the attack as a response to the pursuit of several famous hackers (Takahashi, 2011). This invasion was one of the elements of the operation called Payback. The operation was a series of attacks that were aimed at bringing the company’s website down. However, Sony was not the only target of the hacker group. All companies that refused to acknowledge and support WikiLeaks were at risk of such attacks. The team members believed that Sony abused the judicial system as the company censored information about its products that its clients share with each other (Takahashi, 2011). The hackers warned that they would continue their wicked activities.

Data Analysis

WikiLeaks published an enormous number of confidential government’s messages, which provoked protests among many large corporations. Sony sued a famous hacker, Hotz, for reversing “the PlayStation 3’s security system and posting “jailbreaking software that allows users to run unauthorized programs on their PS 3s” (Takahashi, 2011, para. 4). Therefore, the attack had political motives. In addition, the hackers stated that Sony violated the privacy of people. However, the company’s senior managers claimed that they had detected the cause of the first attack that had taken place several days before, and they blamed Anonymous for it. The hacker group denied its involvement in this incident (Tsukayama, 2011). These facts demonstrate that there was a highly sophisticated conspiracy that might have involved people throughout the world, including Sony’s employees. The company claimed that “hackers had broken into its PlayStation and Qriocity networks April 17-19 and may have released the personal and billing information of up to 77 million people” (Tsukayama, 2011, para. 6). It made Sony shoot down its Web site.

Although the hacker group denied its involvement, they had enough reasons for this attack. Anonymous is a clandestine team that performed operation Payback, and some of its members are related to “/b/” bulletin board, an online platform for anonymous communication. Usually, the hacker team organizes distributed denial of service attacks against disagreeable companies, for example, credit card organizations that stopped supporting WikiLeaks. A month before the first Sony attack, the group had started a 24-hour boycott against the company’s stores throughout the world. Also, the hackers attacked several other Web sites and the company’s employees. However, some other hacker groups might have been involved in this incident, but none of them took responsibility for it (“Update on Sony investigation,” 2014). Another possible reason might have been internal problems with servers of the company. However, the company did not comment on this suggestion. Among all potential reasons for this incident, the most probable was the hacker attack by Anonymous. Although the group claimed that its members had never been engaged in credit card theft, they had many opportunities and motives to do it. An investigation could not prove the group involvement, though some evidence was found (Tsukayama, 2011). Among the various details that the company revealed, one attracted particular attention. One of the company’s servers contained a file that was called “Anonymous.”

Alternative Decisions

However, Sony could have prevented the escalation of the incident, but it did not make enough efforts. The company should have informed its customers about the first intrusion earlier. Also, Sony simply posted information about the breach of its security system on its Web site, which was not an adequate measure to notify consumers about the attack. Although Sony’s executive claimed that the company’s specialists had needed time to gather all information about the attack, it did not justify the company’s failure to inform customers as it took them one week. However, Sony undertook some effective actions to make it up to their customers. For example, the company provided all PlayStation Network users with additional security software (Tsukayama, 2011). It also gave them 30 days of premium service. In addition, the company provided its users with free access to its services for the period when the service was down. Therefore, the key decision criteria that guided the company’s actions were to maintain customers’ satisfaction and rebuild a corporate image. However, Sony’s attempt to minimize a negative impact was not successful.

Conclusion

Cyberattacks might affect any organization regardless of its size and status. Such crimes can bring significant damage to information systems and other infrastructure. However, the example of cyberattacks on Sony demonstrates that negative effect can be considerably reduced. Therefore, it is necessary to base all decisions related to this issue on the thorough estimation of the possible unfavorable outcomes.

References

Takahashi, D. (2011). Hacktivist group Anonymous launches “payback” cyber attack on Sony.Venture Beat. Web.

Tsukayama, H. (2011). Cyber attack was large-scale, Sony says. The Washington Post. Web.

Update on Sony investigation.(2014). Web.

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 people’s private information is illegal under the US constitution because the act entails intruding into people’s 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 organization’s 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 people’s 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.