Sony entered the video game industry as a supplier of different parts to Nintendo, one of the video game giants in the world. Sony was established in 1945 in Tokyo, and its focus in the development of radios, televisions, and small music gadgets led to fast growth. Sony produced the PlayStation to compete with other gaming giants like Nintendo and Microsoft. Over the years, Sony has faced numerous challenges with its innovative products.
The challenges include legal issues and poor reception of its products. Despite the challenges, the company has always looked into expanding its market share by fixing the issues and venturing into the production of quality products to compete with its closest rivals. Sony’s release of the PlayStation 3 is one of the challenging times that Sony has faced in the recent past. The PS3 console barely made the expected sales, and most of the buyers had to return the PS3 consoles because it did not meet their expectations. This paper looks into Sony and its marketing strategy with a close focus on the PS3 console.
Problem statement
When Sony developed a plan to revolutionise the gaming industry, consumers expected the products to live up to their expectations. PlayStation 1 and 2 made remarkable sales because they exceeded the expectations of the consumers. The quality of the graphics in the PS1 and PS2 was above the rival products, and this gave it an edge over the competing companies. When the company announced the release of the PlayStation 3 console, it created a halo effect in the market. Consumers across the globe could hardly wait to own a unit of the popular product. After its release, the PS3 console did not make the projected sales because its performance and graphics were similar to the Xbox 360, and there were many issues associated with the products.
Statement of criteria (objectives)
The main objective is to develop an understanding of the failure in sales of the PS3 console, and to provide viable recommendations to ensure the situation does not recur in the future. The failure in sales was a result of giving consumers the wrong information in the marketing process. The actual product was nothing like the product that Sony had advertised.
Situation analysis (SWOT)
One of the weaknesses in Sony is that most of its products are produced by external contractors. The capabilities of its supply chain limited its ability to produce the targeted number of consoles. The consoles also had many technical problems that delayed the release of the product, which further led to the loss of potential consumers. Another problem with the release of the PS3 console was the lack of an effective distribution channel for the product.
There were reported shortages of the PS3 consoles in some parts of the world. The European market also had a very poor reception of the PS3, and this had an adverse effect on the performance of the product in the continent. The threat of substitutes was also quite high, but the company had an opportunity to make high sales in North America where the demand for the PS3 console created a halo effect.
Internal and external constraints
The internal constraints involved the lack of capabilities to produce and distribute the product. It was also evident that the cost of production and the price of the product almost cancelled out, meaning that Sony made minimal profits from the PS3 consoles. Its cost was way above the Xbox 360, which could provide similar quality in gaming. Game titles for the PS3 consoles were also previously available for the Xbox 360, which meant that anyone with the Xbox 360 could have the same gaming experience as a person with a PS3 console. The external constraints included the availability of cheaper substitutes. The internal constraints of the company merged with the external constraints to fuel a crisis for the PS3.
Recommendations
Innovation is always the key to harnessing a larger market in the video game industry. The trick is to develop a product that offers better graphics than the existing products. Sony should look into developing products that are upgraded versions of the products existing in the market. The failure in sales of the PS3 was caused by the availability of a cheaper substitute, the Xbox 360, and the availability of other products that offered more thrilling games.
Analysis of alternatives
Sony concentrated on increasing the hard disk space and speed of their product, and they forgot to provide the consumers with unique game titles and better graphics. The company should also always look into developing products before making advertisements. The PS3 was advertised before the manufacturing companies could even test it, and this led to a false advertisement, which led to the high number of returns of the product by consumers. Sony should also consider using the halo effect strategy in marketing when they are certain that the company can satisfy the demand for the new products.
Implementation
Marketing products in Sony should be conducted with integrity, and the company should focus on providing genuine information about their new products. This goal can be attained through taking the new products through tests to highlight the performance details and to provide the collect information to the consumers. Sony should also be aware of its external environment with relation to the competitors, the quality of the rival products, and the availability of cheaper substitutes.
The marketing plan of the selected company, Sony Electronics, will basically focus on some specific issues regarding the three basic questions and the representative of the whole idea. It is a Japanese company was established in May 7, 1946. Placing as an innovative image, the company has an exclusive experience in technological support that is provided to the customers. Different types of produced products are video cameras, digital still cameras, DVD – Video players / recorders, digital broadcasting receiving system, LCD Televisions, projection & CRT televisions, PC, printer system, audio, video monitors, professional equipments, LCD, CCD, semi- conductors, optical pickup, batteries, audio, video, data recording media, data recording system etc.
Here, a marketing plan has been developed on Sony Corporation which is a multinational company & the world’s largest media conglomerates having revenue of approximately $88.7 billion. Knowing that it is one of the largest manufacturers of electronics items & worldwide top 20 semiconductors leader of sales, the plan has focused on Sony’s goals, strategies, action program for the electronics goods for the forthcoming year.
Presenting a number of data including rise in operating income by ¥350 billion of operating profit with 5.4% of margin, this marketing plan will suggest a number of conditions & solution in how the company will market the required goods successfully by the year 2009 through a special attention in segmenting, targeting, positioning, branding & the other related marketing issues to serve the target customers successfully1.
Thus, this plan will serially explain the company’s present condition, its targeted goal & the way to reach at the desired level. This plan will seek the way to generate a significant increase in company sales & profits over the preceding year. The targeted sales & operation revenue is ¥10 trillion with the expected sales & operating revenue of 9 trillion & net income of 130 billion. The group involves a number of product line among which the forecasting & planning of electronics items are the major concern. This increase is seen attainable through improve pricing, advertisement & distribution. The required marketing budget will be 15% increase over the last year.
Company analysis
Market situation: – The Company is efficient in re- engineering capability in developing huge product categories. Now, the sales & operating revenue is about 9 trillion presenting a great increase of 23% than the previous years. The primary buyers are high- income & middle- income consumers, ages 20 to 40, who want to listen good music, getting good services regarding the price & product quality.
Product situation & lifecycle:- To, exclaim the product situation, the following information are important-
Explanation-
Electronics = 65.4%
Game = 11.7
Picture = 11.7
Financial services = 7.5
Others = 3.7
Competitive situation: – Sony’s major competitors in the electronics market are Aiwa, Panasonic, Sonic, & Philips. Each competitor has specific strategy & niche in the market. For example, Aiwa generally offers four models offering the whole price range, sales primarily in department stores, & is heavy advertising spender. It plans to dominate the market through product proliferation & price discounting2.
Environmental analysis:- About 70% of the households now have stereo components as the consumers are spending more time watching TV & videos, listening to music for which efforts must be turned to convince customers to upgrade their stereo system, recorders, cameras & so one.
SWOT analysis.
BCG Matrix & Sony
Using the Boston- consulting group approach, the company can classify all its SBU’s according to the growth- share matrix shown below-
Here, Cash cows are low- growth, high-share businesses or products that need less investment to support the business, but Sony requires more investment.
Dogs are low- growth, low- share businesses or products but Sony electronics occupy a complete inverse position of that.
Question marks are low- share business units in high- growth market.
And finally, STAR remains in the highest position of the matrix which is perfect for Sony products as they occupy the larger market share with a better growth rate than many of its competitors.
Establishing goals & objectives
Kotler, P., Armstrong, G. (2006) expressed that while setting the marketing goals & objectives, the company should respond to the question- “Where do we want to go?” It should specify such things as market share, profits, sales, market penetration, and number of distributors, awareness level, sales promotion & advertising support.
Thus Sony should focus on some preliminary financial objectives. Such as-
Earn an annual rate of return on earnings of 8% over the next three years.
Strengthen the core business through the investment of ¥1.8 trillion.
Produce a cash flow of ¥670 billion in 2008.
Stoner, J. A. F., et al (2006) argued that those financial objectives can be converted into marketing objectives. To achieve this market share, the company will have to set certain goals for consumer awareness, distribution coverage, & so on. Thus, the marketing objectives might read as following-
Achieve total sales & operating revenue of 10 trillion in 2008. Therefore to achieve 130 billion net income by emphasizing on audio, video, TV & other general electronics items.
Expand consumer awareness of the Sony brand from 15% to 30% over the planning period.
Capitalization of growth in the markets that are developing through the rising economy, for example- Brazil, Russia, India & China means BRIC countries.
Doubling the targeted revenue within the BRIC countries within 2010.
Target of consolidated yearly return on equity by 10% at the ending period of the fiscal year 2010 based on the identified operating profit of 5% of margin.
Strategic investment in television for the forecasted growth by the R & D efforts through the improvement of operating performance with the estimated amount of 1.8 trillion.
Defining marketing strategy
Thompson, A. et al (2007) argued that this strategy & action decision respond to the question, “How do we get there?” Some possible decisions that would be made for each variable are as following-
Market segmentation: – Sony must decide first which segments offer the best opportunity for achieving its objectives to increase sales & profit by creating long- run customer relationship. Its market segments will consist of the buyers with different needs, characteristics, or behavior who might require separate products or marketing program. In this regard, Sony can prepare market segmentation in terms of-
Consumers who want luxurious sound system regardless the price.
Consumers who care mainly about price.
Consumers who think to get high quality at a reasonable price.
Among all the options, Sony will have to decide of going forward a single or more market segments.
Target market: – Sony’s main target market for its electronic items are upscale & middle- earning households, teenagers with particular importance on female buyers.
Market positioning: – By using perfect positioning module, Sony can position its items in a clear, distinctive & particular way in the target customers mind relative to the competitors. Thus, it should express the distinct benefits & features of the items in the target markets. Thus it can position the electronic goods as the best quality & reliable appliances.
Product line: – The product as the first element of marketing mix indicates a full description of the company’s products including DVD-Video players/recorders, and Digital-broadcasting receiving systems, audio/video/data recording media, and data recording systems etc. To make differentiation, Sony can provide a technical customer service over phone lines.
Price: – Price will be fixed on value of the product that will be highly reasonable & affordable for the target customers. That means, the company will offer just the right combination of quality & good service at a fair price. It may also introduce less expensive versions of its established brand name. This can be shown as-
Distribution outlets: – Heavy in radio & TV stores & electronic appliance stores, increased effort to penetrate discount stores.
Service: – Quickly & widely available customer service by ensuring the following-
Develop a training program for the employees.
Follow – up registration cards or telephone calls to provide feedback.
Rewarding effective employees.
Regular contact with target customers with newsletters, telephone call, e –e mail or fax etc.
Advertising: – Develop a new advertising campaign that supports the positioning strategy, emphasize higher – price units in the ads, increase the advertising budget by 20%.
Research & development: – Increase expenditure by 25% to develop better styling.
Marketing research: – Increase expenditures by 15% to improve knowledge of consumer – decision process & to monitor competitor.
Branding & brand positioning Strategy
The major brand strategy of Sony involves the following decision
Brand positioning: – In order to place the product in consumer’s mind clearly, Sony need to position its electronic appliances as more as effectiveness. Here, the company can follow any of the following strategy.
Griffin, R. W. (2006) stated that the company’s can be better positioned by associating its name with desirable benefits. Such as, it can talk about the unique facilities, sound system & parts of the stereo system, guaranteed picture tube of TV, comprehensive advantages of the video or audio player, and long- duration of batteries & other competitive advantages of the product in the line. While positioning, the company should also build up a mission for the brand & a vision of what the brand must do. The brand contact must provide value, satisfaction, simplicity & honesty.
Brand name selection: – It should include the following-
Product’s benefits & qualities.
Easy pronunciations, recognition & retrievable.
Distinctive.
Easily extendable.
Registration.
Legal recognition.
Thus, Sony Electronics for the product line should be better in this regard as Sony offers a distinctive, legal & popular brand image in consumer’s mind.
Brand sponsorship: – The product should be launched as a manufacturer’s brand or national brand. But for future prospect, the company can also go further for co- branding for the selected product line as it has done for its Ericson mobile sets.
Brand development: – Sony ha four alternatives when it comes to develop its brand. Those can be shown as-
Here, the company is to go with the first that describes using the successful company name for introducing additional & modified items in a given product category, that is- electronics goods, under the same brand name by new flavors, forms, colors, added ingredients or parts, package size etc.
Brand positioning map
In such case, Sony should prepare the perceptual positioning maps, which will show the consumers perception of the relative brand versus competing products on important buying decision. It is shown as below-
Selection of target market & develop marketing mix strategy
After defining market segments, it should evaluate each market segment’s attractiveness & selecting one or more segments to enter. Running through an equal speed with the major competitors, the company can also introduce niche marketing by remaking its distinguished TV, stereo set or other compact disks for specific markets. Or additionally, the company can introduce niche marketing by offering its exclusive TV, audio or stereo set to the specific market segments where many other companies have not served yet.
Sony’s target market for the electronics appliances consists of the middle & upper income level buyers who are conscious of quality & make a better sense of fair price. To select the target marketing strategy, it should consider a number of ideas-
Position of product in the product life cycle (PLC).
Product position in the BCG Matrix.
Firm’s resource allocation.
Variability.
Competitor’s marketing strategies etc.
By considering all the aspects, differentiated marketing strategy will be better for Sony since it has the matured product categories. By using this strategy, the company will target the specific customer segment & design separate product according to the needs & wants. Thus, it can make itself a customized company.
Use of marketing mix
Product involves digital broadcasting receiving system, LCD Televisions, projection & CRT televisions, PC, printer system, audio, video monitors, professional equipments etc.
Market Metrix (2008) addressed that Price will be fixed on value basis including discounts, trade- in- allowances & credit terms. Those actions adjust prices, for the current competitive situation & bring them into line with the buyer’s perception of the good’s value. Place includes having a large body of independent dealers & company retail outlets & showrooms. Promotion includes increase the sales- promotion budget by 15% to develop a point- of- purchase display & to participate to a greater extent in dealer trade shows & Sales force expanded by 10% & introduce a national account management system. Person involves the use of efficient human & managerial resource.
Process involves technological background, performance of R & D & organizational structure. Physical ability indicates Sony’s resource availability to produce desired customized electronic appliances. All the marketing mix variables will be blended to promise a better positioning of the product in the marketplace while the company can introduce more for the same strategy for offering the consumers more benefit with same price.
Measuring the success of determined strategies
Outcomes of the proposed strategies can be measured by developing a framework of marketing metrics in which control program can be fixed by sales projection, sales reps etc. Customers can also be surveyed with their different opinions about the company’s performance against the competitors. In- depth surveys can be conducted through online or telephone to know the target customers opinion.
Innovative metrics will be helpful to understand consumer’s attitude to the product. In this regard, loyalty program strength looks for the comparative success of the brand loyalty compared to the other competitors in the industry. Successful segmentation in terms of geo- demographic, attitudinal & behavioral customer dimension & buying behavior are also helpful for having cognitive response3.
Holt, H. H., (2002) stated that Flexible platform of report allows the benchmark competitor group, thus judging the company’s performance, cognitive & cognitive response, it is essential to compare such variables with leading competitors.
Financial outcomes can be measured by setting a successful budget program for the year 2009 & make pro- forma income statement, cash flows & balance sheet. In simpler term, arrangement of a marketing research program to identify whether the company is performing or not in relation of targeted goals & objectives is the better way to set control program.
Conclusion
Thus the entire marketing plan of Sony has focused on the company’s recent position in the global market, its major competitors, several strengths & weaknesses along with opportunities & threats etc. Regarding its electronics appliances product line from a number of other products & services, it has been identified that Sony’s main goals & objectives are to maximize profit through the electronics items by improving the sales, promotion, advertisement, brand development by using overall marketing mix elements. It the specific strategies that are suggested will be applied to achieve those goals, it can be predicted that the company will be ever successful in marketing the desired home appliances with long – run customer satisfaction.
Bibliography
Griffin, R. W. (2006), Management, 8th Edition, Houghton Mifflin Company, Boston New York, ISBN: 0-618-35459x.
Holt, H. H., (2002), Entrepreneurship New Venture Creation, 6th Edition, Prentice- Hall of India Private Limited, New Delhi, ISBN: 81-203-1281-3.
Kotler, P., Armstrong, G. (2006), Principles of Marketing, 11th Edition, Prentice-Hall of India Private Limited, New Delhi, ISBN: 81-203-2825-6.
Market Metrix (2008), The Market Metrix Hospitality Index. Web.
Stoner, J. A. F., Freeman, R. E., & Gilbert, D. R. (2006), Management, 6th Edition, Prentice-Hall of India Private Limited, ISBN: 81-203-0981-2
Sony Corporation (2007), Global Annual Report – 2007, Osaka, Japan. Web.
Thompson, A. et al (2007), Strategic Management, 13th edition, Tata McGraw- Hill Publishing Company limited, New Delhi, India.
Footnotes
Sony Corporation (2007), Global Annual Report.
Sony Corporation (2007), Global Annual Report.
Market Metrix (2008), The Market Metrix Hospitality Index. Web.
The main challenge of Sony’s senior management is to increase net profits of its products especially in the electronics industry. The case study shows that Sony’s market share had dropped because of the entrance of competitors. The reason for Sony’s unpopularity today is because the prices of its products are too high compared to products of its arch rivals like Panasonic and Samsung. Matsushita and Panasonic also offer the same quality products and are marketing them using cost –efficient plant production technology1.
Body
Question 1
One of the main challenges of Sony’s senior management is to increase net profits. Increasing profits could be brought about by increasing sales. Also, the process of decreasing expenses would increase net profits. One way to increase sales is to produce high quality products. Another way to increase sales is to advertise in the newspapers, radio and television.
One of the challenges for Sony is to produce a product that retains the high quality known as Sony at a lower price. The products have to be sold at a lower price in order to increase its sales figures. The decreased market price would be reasonable enough even to the point of selling the new products at the same or similar market price as its competitors, Samsung and Panasonic2.
Another challenge would be to create synergy in the organization. All the departments must meet in one big room. They have to discuss the procedures and policies so that the goals and responsibilities of one department could be reached with the help of the other departments within the Sony business organization. Also, each of the departments must have bond with the other departments in the organization. One department must reach to the other departments to ask how they can help their next door business neighbor. These will surely help the employees of the organization achieve their goals in lesser time. For, synergy meant that one department plus one department is equal to more than two departments in an organization3.
Further, another challenge that Sony must tackle is to produce a new product or service that would bring them back to their former no. one position in the electronics marketing pie. This can be achieved by organization if it makes a feasibility study. The feasibility study includes a survey of current and potential customers as to what electronics gadgets and accessories they would want to buy. This survey will be used by the all departments within Sony as a guide to making a new product that will literally bring them back to the top in the electronics market. The company must balance its resource to produce the product and market the product.
Another challenge is for Sony to regain its former glory as the most sought after electronics manufacturer. Sony is on the right track here with the successful launching of its new product that sells like hotcakes. This new product is the Sony Playstation 2 portable. It is an innovative product for it is a mobile video player and a game player. In addition, the Sony officers were right in sacking Idei because he was at the helm of Sony when they were bulldozed from the top sales position by Samsung and Panasonic. Sony’s Idei was forced to retrench many employees and close down some branches in order to reduce variable as well as fixed expenses. Idei also focused on new Semi –conductor plan to help increase sales. However, these did not bring dividends to the shareholders of Sony Corporation. He was rightfully replaced by Howard Singer from the United States. Singer was profitably successful in managing the Sony music products in the United States4.
To answer the above challenges, Sir Howard Singer, head of the U.S. Sony operations5 wants to return Sony back to its former glory with two key ingredients. These ingredients are the Blu –ray, the Cell chip or the Playstation 3. Sir Howard Singer will be forced to drastically decrease all variable expenses as well as the fixed ones if this Howard Singer strategy still fails to remove the clinging Samsung and Panasonic from their perched position on the electronics market pie.
There are origins of the challenges to Sony
First, the 1990s and the 2000s saw the Sony Company wallowing in difficult times. The year 2000 showed evidence that the Korean company, Samsung, was a strong competitor of Sony in the electronics market both here an abroad. Samsung sold their products at prices that were normally lower than the Sony products. Samsung gobbled up a large part of the Sony market pie. In the same manner, the American computer company, Apple, came up with its own electronic products like the Ipod that immediately gobbled increased the Sony electronics market. The Apple products sold like hotcakes6.
And, another origin is the marketing department’s objective to generate more sales commission from selling more Sony products. The marketing department requests the production department to increase the number of the Sony products in order for marketing department to increase sales commissions. A situation arises when The production department would not cooperate by production only its regular number of units. They would give out reasons to the marketing department persons like the department could only do so much because the production people cannot be forced to work harder without any additional incentive7.
Also, another origin of the challenges is the failure of Sony Corporation’s marketing department failure to innovatively and creatively stay ahead of the competition. The marketing department people did not focus their attention on brand development. Thus, their brand was sideswiped by overtaking electronics companies like Samsung of Korea and Panasonic of Japan. Likewise, the marketing department was sleeping on its laurels too much. The reason for the lack of the marketing department to focus on brand development and implementing innovative marketing strategies was because the mostly engineers and sales staff were too self –centered and not customer centered8
Question 2
A change in program at Sony would at least take three years to show results because adjustment is a difficult pill to swallow. There will be strong resistance in some pockets in the organization. They would try their utmost to force management to hold on to the old ways of doing things. These people fear that they may not be able to adjust to the new way of doing things within the time period given them. They prefer not to enter unfamiliar territory for fear that they are old dogs. For, old dogs do not learn new tricks. The management of the company has to give the members of the entire Sony workforce enough time to adjust and master the new way of working life. This new way is the production of new products and using the latest technology9.
Question 4
The main reason why changing the entertainment part of Sony based in the United States is different is because it focuses on the sale of film and music products. And, these two types of Sony products are doing well in terms of sales and net profits in the United States. On the other hand, the changing of the electronics part in Japan is not doing well because the organization style in Japan is inward focused whereas the U.S. organizational management style is outward focused. This means that the Japanese are not too focused on the selling aspect of the organization without listening to the public’s comments, suggestions and criticisms on what THEY want in a product.
On the other hand, the U.S. Sony division makes marketing a top priority in terms of accomplishing the overall organizational goal. They want to produce a product that TRULY caters to the wants, needs and caprices of the public. The Sony here is to increase net profits10.
In addition, the Sony managers in the United States are creating electronics products that are user friendly and pamper the discriminating tastes of the United States customers. On the other hand, the Japanese Engineers were mostly interested in improving their prowess to make products that had never been invented or improvised before by their competitors. In Short, the Japanese engineers were interested in producing a product their current and future customers would shun away from for one reason or another.
And, Generall0y, the Japanese engineers were too engrossed with applying their customs and traditions in the business world. They were trained to produce or create new high quality products that their customers would not want to buy.
The current situation shows that the company’s Tokyo headquarters’ consolidated income statement for all its products sold Japan, Europe, United States and internationally ion the electronic equipment, devices and instruments showed it generated total revenue of $89,601,281,000 for the year ended March 31, 2008. It also generated a net profit of $3,831,204,000 for the same time period. The net income for the current year was 247% higher than the prior year’s net income of only $1,073,78811.
Conclusion
Question 3
Sony’s secret for its successful comeback is o the successful outsourcing of its human resource jobs in order to reduce costs. Cost reduction increases net profits. Boggi, Gibbons of Sony stated that “We want to give our Human Resource Partners and COE leaders all the tools they need to help the business make smart decisiong about the workforce and HR12. ” For, the Sony Company is implementing the Japanese organizational theory of harmonization the work relationship among the company’s senior managers, factory workers, and shareholders in order to facilitate production efficiency. Sony employs the Japanese organizational theory of Keiretsu. It supports the multilateral relation –specific investments13.
Sony’s organizational plan was to produce products using modern technology. Sony’s different departments joined forces to make the magnetic videotape recorder and offered many innovative products for home14.
Sony’s new organizational theory that has brought it back to fighting form is the learning organization theory where the members of the entire organization are trained at creating, acquiring, transferring knowledge and reflecting new knowledge and insights15. Sony’s current success is its new product the PSP. This gadget could be used for playing games. It can also be used to sharpen one’s sleepy because the player will have to create one or more strategies to win the war. The gadget has also been known help aid the gadget owner to ensure that important data is being saved while waiting for a single action store important pictures.
It is very popular because the children and young adults can now play their favorite play station games while riding a bus, riding in one’s own car, or just studying inside the School library. The owner of the gadget could also use the larger memory space in the new to save music files or otherwise. Sony’s change plan has been very successful. For, the company’s new product the Play Station Portable or just simply PSP could be improved further in order to increase the company’s sales.
An increase in expenses to produce a product would surely result to an increase in sales. The new Sony program must be durable, not poisonous or unhealthy. Sony must strive to fill the company’s valuable customers’ need for electronic gadgets that are low -priced and very affordable. Likewise, Sony’s ventured into marketing new products that would fill the needs and wants of its current and prospective clients is a good strategy at the area where prospective clients could easily buy it is a good organizational and marketing strategy. The new organization –wide strategy includes the buying, manufacturing and selling of new products in the market that overshoots its goals or objectives as an organization.
It also includes the improvement of the current assets in order to improve the products wants and needs and physical appearance like. The company must produce new products with the customer’s preferences in mind in order to take advantage of a captured market. Conclusively, Sony has been successful in the new implementation of their change policies as evidenced by the success of its PSP gadgets. Their success was brought about by synchronizing and synergizing all the departments within the organization in a production and marketing super machine that would increase profits and roses.
Works Cited
Dosi, Giovanni, David J. Teece, and Josef Chytry, eds. 1998. Technology, Organization, and Competitiveness: Perspectives on Industrial and Corporate Change. Oxford: Oxford University Press.
Gilson, Ronald J., and Mark J. Roe. 1993. Understanding the Japanese Keiretsu: Overlaps between Corporate Governance and Industrial Organization. Yale Law Journal 102, no. 4: 871-906.
Goh, Swee C. 1998. Toward a Learning Organization: The Strategic Building Blocks. SAM Advanced Management Journal 63, no. 2: 15+.
Kirton, M. J. 2003. Adaption-Innovation: In the Context of Diversity and Change. New York: Routledge.
Lai, Lawrence W.C., and Ben T. Yu. 2003. The Power of Supply and Demand: Thinking Tools and Case Studies for Students and Professionals. Hong Kong: Hong Kong University Press.
Mathieson, Rick. 2005. Branding Unbound: The Future of Advertising, Sales, and the Brand Experience in the Wireless Age. New York: AMACOM. Web.
Mckell, Lynn J., and Kenneth B. Mckell. 1994. High-End Audio for Multimedia Environments. T H E Journal (Technological Horizons In Education) 22, no. 2: 83+.
Barbara Czarniawska. 1999. Writing Management: Organization Theory as a Literary Genre. Oxford: Oxford University Press.
Pfeffer, Jeffrey. 1997. New Directions for Organization Theory: Problems and Prospects. New York: Oxford University Press.
Buskirk, Bruce D., and Allan C. Reddy. 1997. “2 High-Tech Consumers and Business-To-Business Markets”. In The Emerging High-Tech Consumer: A Market Profile and Marketing Strategy Implications, ed. Reddy, Allan C.:7-23. Westport, CT: Quorum Books.
Sony Corporation Income Statement. 2008. Web.
Footnotes
Jeffrey Pfeffer, New Directions for Organization Theory: Problems and Prospects (New York: Oxford University Press, 1997) 4.
Lawrence W.C. Lai, and Ben T. Yu, The Power of Supply and Demand: Thinking Tools and Case Studies for Students and Professionals (Hong Kong: Hong Kong University Press, 2003) 53.
Esther Thorson, and Jeri Moore, eds., Synergy of Persuasive Voices Synergy of Persuasive Voices (Mahwah, NJ: Lawrence Erlbaum Associates, 1996) 10.
Rick Mathieson, Branding Unbound: The Future of Advertising, Sales, and the Brand Experience in the Wireless Age (New York: AMACOM, 2005) 7.
Alfred D. Chandler, Peter Hagstrom, and Orjan Sölvell, eds., The Dynamic Firm: The Role of Technology, Strategy, Organization, and Regions (Oxford, England: Oxford University Press, 1999) 345.
Lynn J. Mckell, and Kenneth B. Mckell, “High-End Audio for Multimedia Environments,” T H E Journal (Technological Horizons In Education) 22.2 (1994).
Barbara Czarniawska, Writing Management: Organization Theory as a Literary Genre (Oxford: Oxford University Press, 1999) 2.
Tony Barrow, and Julian Newby, Inside the Music Business (London: Routledge, 1999) 21.
M. J. Kirton, Adaption-Innovation: In the Context of Diversity and Change (New York: Routledge, 2003).
Tony Barrow, and Julian Newby, Inside the Music Business (London: Routledge, 1999) 21.
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William G. Stopper, “Achieving Post-Outsourcing Success,” Human Resource Planning 28.2 (2005).
Ronald J. Gilson, and Mark J. Roe, “Understanding the Japanese Keiretsu: Overlaps between Corporate Governance and Industrial Organization,” Yale Law Journal 102.4 (1993).
Giovanni Dosi, David J. Teece, and Josef Chytry, eds., Technology, Organization, and Competitiveness: Perspectives on Industrial and Corporate Change (Oxford: Oxford University Press, 1998) 240.
Swee C. Goh, “Toward a Learning Organization: The Strategic Building Blocks,” SAM Advanced Management Journal 63.2 (1998).
The present company analysis focuses on the shift that Harold Stringer made in the Sony Company as soon as he became its CEO in 2005. The issue gains importance in the context of the state of affairs that were evident in the company’s policy before the shift – Stringer emphasized the problem of the incoherence of Sony’s subdivisions, namely electronics and entertainment units (Bremmer, 2005). Thus, his chief goal became bringing the Japanese company to harmonious and multifaceted unification of its spheres of activity and achieving a more stable and intelligible course of action without controversy and ambiguity. Sales and profits speak for themselves and indicate the success of Stringer’s strategy – all markets in which Sony exists and sells its products are continuously expanded, with increasing influence and share of Sony.
The task of the present analysis is to bridge the company’s strategy starting from1990s, the 2000s and finishing with the latest stage of the company’s development it is going through under Stringer’s governance with the core competence theory worked out by C.K. Prahalad and Gary Hamel who claim Sony to be one of its main adopters. The theory is based on a set of premises that help a company achieve continued competitiveness due to innovation and strategic advantage. But to proceed to the analysis of Sony’s strategy as to being core competencies oriented or not it is necessary to identify the position in which Sir Harold Stringer found himself as soon as he became Sony’s CEO.
By 2005 Sony reached a substantial decrease in sales and profits (see Table 1) that were shrinking in all segments but financial services (see Table 2). The major segment of target markets was occupied by the United States of America where sales figures prevailed the Japanese ones (see Table 3). Judging from this situation, it became evident that the forces of the company have to be more focused on a selected set of core products and not on everything the company could potentially handle.
Harold Stringer entered the company at the very beginning of its “accelerated growth” and “creation of a new management structure” (Annual Report 2005: 7). It was clear that the company that had been operating for more than 60 years by that time needed a change to retain its competitiveness and leadership in target markets. With this purpose, Stringer announced that his effort will be targeted at binding and enhancing “technological hardware and content development” (Annual Report 2005: 7). As one can see from the 2005 annual report, the set of Sony products did not change with the flow of time and remains the same, so it is not necessary to consider the shift of the company’s profile – the range of activities of Stringer became focused on identifying the key actions needed for the company not only to remain competitive at that very moment but to project the market and become potentially competitive, shaping the market with its innovations.
Proceeding to the theoretical substantiation of Sony’s strategy for the past three years it is necessary to admit that whatever it is – it is successful, raising the company’s shares in international markets and making it more competitive in the context of contemporary changing needs of the consumers. Thus, it is necessary to identify whether Sony pursues the core competencies strategy or not – relying on the theory C.K. Prahalad and Gary Hamel offer in their work “The Core Competence of the Corporation”.
The authors first of all claim that core competencies are the way to succeed in the international market due to innovation and quick development as the main characteristics of the company’s activity:
Focusing on core competencies creates unique, integrated systems that reinforce fit among young firm’s diverse production and technology skills – a systemic advantage your competitors can’t copy (Prahalad and Hamel, 1994: 1).
The main advantage that the companies achieve adopting the core competencies strategy is the ability to surprise the consumers and to correspond to their needs on time, consequently being able to generate their markets. Emphasis is made not on low costs and high quality, but invention (not ignoring the former two qualities as well). This way, core competencies become the complex issue including many elements: it is collective learning in an organization (the ability to coordinate productive skills and produce innovations); it is the organization of work and delivery of value (the example given by the authors includes Sony’s miniaturization as a value they represent); it is also communication, involvement and deep commitment to working across organizational boundaries (Prahalad and Hamel, 1994:5).
One more emphasis authors make is the fact that competitiveness should be considered both in the long and in the short run – in the first case it rests on the “ability to build, at lower cost and more speedily than competitors, the core competencies that spawn unanticipated products”, while in the second case it depends on the “price/performance attributes of current products” (Prahalad and Hamel, 1994: 4).
Prahalad and Hamel (1994) speak about a set of ways to identify core competencies in a company, which may substantially help in the Sony strategy analysis: first of all, the company has to have “potential access to a wide variety of markets” (7) – Sony is successful in this respect in electronics, gaming markets as well as financial services, pictures, and music (Annual Reports); the company has to make a significant contribution to the described markets and add to the customers’ benefits considerably (e.g. Sony’s Walkman was a great success integrating both innovative technologies, music facilities, miniaturization and resulting in a Network Walkman model, WAIO T-Series laptops impressing by their size and set of functions, etc.); the company also has to create conditions that would be difficult for competitors to imitate – a good example may be provided with the case of Sony buying CBS Records and Columbia Pictures as a measure to ensure complementariness of resources).
The signs of Sony pursuing the core competencies strategy are multiple; after some losses resulting from basic changes of the worldwide technologies Sony has managed to catch up with the overall tendencies (e.g. the failure with VCR and current success with Blu-Ray technologies; Sony’s refusal from plasma TV-sets as a declining and unprofitable market) (Harding, 2008; Sanchanta, 2007; Waters, 2009). Sony manages to pursue the strategy successfully, fulfilling its basic rules – defining the core competence, core products, and end products and seeking “to maximize their world manufacturing share in core products” (Prahalad and Hamel, 1994: 9-10).
Comparing the situation with the policies Sony pursued in the 1990s and early 2000s it is clear that the focus of the company has become more precise. Despite the steadily growing figures of incomes and sales starting from the very beginning of the company’s existence its policy was too dispersed, which may be seen from the strategy defined in 1995 as “aggressively expanding its operations outside Japan” – (Annual Report 1995: 2). As it may be seen from the quotation, Sony was aimed at grasping as many subdivisions of activity it could handle as possible. In the 2000s the effort of the company was mainly concentrated on finding out which subdivisions are profitable and in which spheres it would be better for it to concentrate. After the major losses in VCR production at the turn of the century in its largest segment, the electronics industry, the strategy became much more careful and far-reaching (Annual Reports).
The change evident nowadays is different from the approach that used to be chosen in many ways; mostly the influence may be attributed to the global crisis affecting the world economy nowadays. However, the company’s decision to reduce expenditures by 250 billion yen by 2010 (Sony Outlines Initiatives to Enhance Profitability and Competitiveness, 2009: 1) is the element of the strategy aimed at major savings. Among other measures, in this context, one should mind significant remuneration cuts as well as the early retirement benefits to enlarge the scope of opportunities for Sony’s employees. The three-year strategy announced at the beginning of 2009 includes major structural changes (including full closing of plasma production mentioned above, outsourcing of software development to India to reduce costs, and moving resources to Japan for unification) (Sony Outlines Initiatives to Enhance Profitability and Competitiveness, 2009: 2).
All information provided above signals Sony’s pursuing the core competencies strategy – the core competencies of Sony are miniaturization, the ability to blend innovative technologies and represent them in user-friendly devices, as well as the ability to produce portable entertainment, digital sound, and video displays (e.g. the series of VAIO laptops, Sony Walkman, Cyber-shot DSC-T7, etc.). The company is coming to the fore in the international electronics market, especially in the context of upcoming Blu-Ray technologies. The company even manages to survive the crisis without substantial losses – thus, it is reasonable to await even better, more productive results from the company’s management and staff that will be revealed in its revenues and sales.
Bibliography
Bremmer, B. et al., 2005. Sony’s Sudden Samurai. Business Week. [internet]. Web.
Froud, J., Johal, S. Leaver, A and Williams K., 2006. Financialization and Strategy. London : Routledge.
Hamel, G. and Prahalad, C., 1994. Competing for the Future, Harvard Business School Press.
Prahalad, C K., and Hamel, G ‘The Core Competence of the Corporation’, Harvard Business Review, May/June, 1990 (downloadable) and also reprinted in de Wit and Meyer (3rd ed pp.325-33), (2nd ed pp.436-48).
The Sea Soft Company, being a distributor of water softeners, has an understanding with its dealers on the mode of evaluations they can make regarding projected sales and revenues. On this basis, Sea Soft can estimate the likely value of sales and through this, it could come up with ways to plan future returns. This method allows the company to obtain a profit of 75% from its sold products.
The point that sticks out is that Sea Soft allows the dealers to return the softeners if they are damaged at the company’s expense. This happens if the damage takes place in the hands of dealers. The company also allows the return of unsold softeners within 90 days of their purchase at the expense of the seller, which at least cushions them from the negative consequences of unsold softeners.
The company needs to streamline some of its dealings with brokers to ensure that it can have a sound strategy. This would help it access revenues at all times. The company needs to renegotiate the modalities, which govern the return of damaged softeners so that more than 75% of softeners being sold currently can be disposed of safely. The company should also restructure the policy about the 90-day period that has been set aside for dealers to sell the softeners and submit revenue to the company. The company can readjust the period to 60 days so that it can factor in the expected revenue within a shorter time than it has been before (Braggs 55).
Recognizing revenue at the point of sale makes it easier for the company to keep track of volumes of sales. The company can use these figures from sales to strategize. The firm can increase its earnings in case it capitalizes on the figures (Braggs 65).
The act of recognizing revenue after the initial 12 months makes it possible for the company to carry out long-term plans. This would allow the firm to estimate revenues and profits (Braggs 67).
The third option offers more benefits to Sony because revenue is recognized once it has been confirmed as collected. The company’s cash flow situation is presented accurately because only payments that are received are factored in the overall revenue projections of the company (Braggs 69).
The first option of recognizing revenues at the point of sale makes it easier for the estimates to be overvalued because there is no guarantee that payments will be received within the estimated time. Buyers may fail to make payments within the expected time hence exposing the company to some cash flow problems (Braggs 71).
The second option makes it difficult for the company because the payment period is done gradually and it is subject to deferrals by buyers who may be unable to make all outstanding payments when they are expected to do so (Braggs 73).
The third option limits the company to recognize only revenues that have been paid out by buyers. The company is disadvantaged because it may not plan adequately. This is due to the existence of other revenue streams. This may affect the company negatively regarding its ability to push volumes (Braggs 75).
In conclusion, Sony can recognize revenues after payments have been made. The 12 months payment period can be reduced to between 6 months. This would ensure that customers pledge to make payments for the purchases as early as possible.
Works Cited
Bragg, Simon. Wiley Revenue Recognition: Rules and Scenarios. New York, NY: John Wiley & Sons, 2010. Print
Sony is a multinational corporation that records some of the highest sales revenues globally in the semiconductor industry. In order to continue playing its role in the competitive global industry, the company has a mission of creating value for its stakeholders and improving the quality of life for the next generation of people across the globe through better innovations.
Vision
As a dominant firm in the semi-conductor industry across the globe, Sony has a vision that it must seek new approaches that transform the firm’s ability to achieve profitability and growth that is sustainable in the long run.
Marketing Objective
Through the combination of the above aspects of the vision and the mission, Sony Corporation aims at meeting specific needs of its stakeholders through development of better products. This could be achieved if the firm:
Becomes the first technology leader in the industry
Produce high quality innovative products that meet specific consumer needs.
Developing a Growth Strategy
The growth strategies can well be developed in various ways through the utilization of the Ansoff Matrix. The matrix determines the best course of action for the firm to undertake. The matrix can be represented in the table below.
Penetration of the Market: this aspect of the strategy aims at increasing the market share of the corporation since it aims at increasing new customers for the music systems of Sony. Given this strategy, Sony Corporation could achieve it by pricing its products at a favorable price that is affordable by consumers. It could also re-brand its music systems and increase its budget on marketing the products.
Market Development: this strategy involves Sony Corporation taking the developed music systems into new markets especially in emerging markets through expansion of the distribution networks and establishing strategic partnerships in emerging markets. Moreover, Sony could find new uses for its Sony music systems such as use in commercial places rather than domestic use only (Mills, 2002).
Development of the Product: this strategy involves modification of the music system to fit into specific customer needs. For instance, the use of the system in commercial places could be different from the system use at home at this may require development of products for different customers.
Diversification: this strategy involves a venture into markets that are completely new to Sony. This means that the firm could venture into new markets in different countries such as other developing nations that the firm has never ventured in. this strategy requires undertaking of a research concerning the new market and its viability as the firm’s product destination. This could be followed by research and development of music systems that fit into the specific needs of the new market.
Pricing Strategy
Pricing of the music systems is significant for Sony because price is a sensitive factor that most consumers do consider in the course of their purchases. The generic strategies established by Porter are significant in establishing the prices of the music systems of Sony (Porter, 1998). The aim of the pricing of the music systems is to establish a competitive advantage of Sony over its competitors in the same industry. Cost leadership is a significant strategy that can be used by Sony to sell its high quality music systems at a lower price as compared to the firm’s competitors such as Samsung and LG. Differentiation strategy will enable Sony to differentiate its music systems using various aspects such as output and color among other features. The strategy makes the products of the firm outstanding as compared to competitors. The focus strategy on the contrary will enable Sony to focus on a given segment of the market such as the lower and middle classes in the society and develop systems that fit these market groups’ needs.
The Marketing Mix
The marketing mix involves establishment of the various elements of marketing for the music systems of Sony Corporation such as the product, price, promotion, place, procurement activities and distribution channels.
Product: Sony has a variety of products that it sells to its market in different locations across the globe. The major products that the firm boats of in the music sector include the home theater, home audio, and portable audio among other products sold by the firm. The focus of Sony Corporation should be products that are highly marketable and are grouped as starts using the Boston Consultancy matrix. Given that the firm produces many music systems, home theaters are known to provide high revenues for the firm and the company should focus on them so that it can generate fast revenue in the new markets. Products that have low sales should not be the focus for the firm (Schultz, et al. 2007).
Price: as one of the most significant aspects of marketing, the price of music systems sold by Sony should be chosen carefully. Skimming could be used in low market penetration as high prices are charged for premium home theaters. Comparable pricing should be adopted by Sony in markets where the firm is not dominant. This will enable the firm establish prices for the home theaters based on prices already set by dominant players. Lastly, market penetration strategy could be applied by Sony Corporation with the intention of penetrating in the new market. The strategy allows the firm to set new low prices as compared to competitors in the new market.
Place: the element involves establishment of the means through the firm will distribute its products to the outlets throughout the new market. It could be through dealership or online shopping. It also entails the way through which Sony could attract new retailers as well as maintenance of premium appearance for the distribution network.
Promotion: promotion is usually done with the aim of increasing awareness of the product among consumers. It is the discipline of marketing communications and involves highlighting the strengths of Sony’s home theater brand as opposed to other brands in the market. The promotional mode to use could include advertising through the print media, broadcast media and electronic marketing. A given amount of duns should be set aside by Sony specifically for promoting the home theater brand in emerging economies across the globe.
People: they refer to the employees that are in direct contact with the consumers. Their training on how to effectively handle the customer matters since they determine the level of sales for the firm. Where necessary, Sony could outsource its sales personnel especially if sending its sales team to the market would be costly.
Process: this element of the marketing mix involves establishment of clear procedures that the sales team of Sony should employ while delivering the services and products to the customers (Kitchen & De Pelsmacker, 2004).
Targeting and positioning of Sony’s Music System
Venturing into a new emerging market for Sony would require that the firm positions itself well. This could be achieved through effective segmentation of the market in order to attain all relevant features that characterize consumer needs. This should be followed by targeting a given group in the market and thereafter positioning the product, which involves using relevant strategies such as public relations to ensure that consumers perceive the home theaters of Sony in a positive manner.
References
Kitchen, P. & De Pelsmacker, P. (2004). Integrated marketing communications: A primer. London, Routledge.
Mills, G. (2002). Retail pricing strategies and market power. Melbourne: Melbourne University Publishing.
Porter, M. (1998). Competitive strategy: Techniques for analyzing industries and competitors. New York, NY: Simon and Schuster.
Schultz, D. et al. (2007). In search of a theory of integrated marketing communication. Journal of Advertising Education, 11(2), 21-31.
The applicability of game theory in making decisions is an interesting aspect to observe. Game theory can be defined as a set of actions by particular decision makers, who are aware that their actions affect each other. Thus, for every case in which there are more than one decision maker –player, and more than a single direction for action involved, there is a game that can be formed from such case. Thus, it can be stated that game theory can be applied to more than one context. Despite being associated mostly with economics, game theory is not restricted to such discipline. Nevertheless, financial aspects are always found in most decision making processes. One case that can be investigated using game theory can be seen through the issue of piracy in video gaming world. The most recent top story in such context is that Playstation 3 – a video game console manufactured by Sony was jailbroken. A jailbreak is a hardware and/or software modification process that allows running unauthorized software on a particular device. In that regard, the present paper will attempt to describe the current story along with the preceding events as a game situation. Additionally, the solution to such situation will be provided and compared with the way it turned out in reality.
Game Description
A certain background might be required to explain the context of the current situation, regarding piracy and Sony Playstation 3 (PS3). Initially at the time of the release, PS3 had the ability to install any other operating system (OS) on the device. It is alleged that such option contributed to that PS3 could not be jailbroken for a record period of time, as opposed to other video gaming devices, as it gave hackers the opportunity to install their programs without the need to break the security of the system (Digital Foundry; Fahey). Once Sony discovered that the option of installing other OS might make their system vulnerable, it had two strategies to choose, either such option or to keep it. The payoffs of both strategies are not completely known for Sony at the time, as it did not know how it will turn out. The information at the time of making the decision was known to both parties, and thus, making the game of perfect information.
The second participant of the game can be seen through hackers’ community. They also had several decisions to make, which according to their statement in 27th Chaos Communication Conference (27c3) was largely based on the actions of Sony (Digital Foundry). Thus, their strategies can be divided between choosing to break the security of the system or not, i.e., cooperate with the manufacturer or not. The payoff for the hackers’ community can be seen in terms of satisfaction for the hackers’ community and avoiding losses for Sony. The best option, in that matter is ten, no losses incurred by Sony, and total satisfaction by the hackers’ community. The measurement can be estimated through the statement made, where the number five might mean moderate satisfaction, assuming that hackers will not be obliged to jailbreak a system that was already open, and moderate losses for Sony, as it will have the opportunity to patch the security for future games. The payoffs in this game are assumed, based on the common knowledge and rationality. Considering the Sony was the last platform that was not jailbroken by hackers, the worst pay off is that their games can be copied freely through the internet, incurring huge losses to the company. The worst payoff for the hackers’ community is the possibility for litigation, which might mean that in an ideal case they will have to stop their activities for the time of such litigation.
Representation
The game can be described as a sequential and with perfect information. The extensive representation of the game can be seen through the following graph. Considering that there are opportunities for both parties to gain in this game, such game can be described as a non-zero sum game.
In normal form, the game can be represented as follows:
Hacker Community
Sony
Keep other OS option
Remove other OS option
Cooperate
(10,10)
(0,10)
Break the System
(5,5)
(0,0)
The Solution
In order to solve the game which is of sequential order and perfect information subgame perfect Nash equilibrium (SPNE) method might be used. Such method is dependent on the characteristic of the game consisting of subgames, i.e. “a subset of branches and decisions in a game tree” (Rasmusen 256). The solution of such game can be seen through backward induction, where the determination of the path begins at the last node, and then moves backward. For the game described, the payoff for hacker community is chosen at the last node, where the outcomes providing maximum payoffs are chosen. Such nodes are the far left and far left nodes, each of which constitutes a ten; the rest of the nodes are ignored. Next, the payoff for the first player – Sony, is determined between the two path chosen previously, which in this case is either to remove the other OS option or to keep it. The option providing maximum payoff to Sony is to keep the other OS option. Thus, the selected path represents the equilibrium in this case. An illustration of backward induction can be seen through the following graph.
Conclusion
In reality, Sony chose the other option, to remove the other OS feature, which turned to provide the least payoff. Such fact can be explained through making the wrong assumptions regarding the knowledge each player has about the other. In that regard, Sony sought to maximize its profit, but it turned out that the assumptions of rationality was wrong. Nevertheless, it should be stated that there were a certain indication for the company that removing the other OS option would no maximize its profits, when many customers complaint for the removal of an advertised option, and accordingly, as series of law suits were filed against the company (Conley). Thus, at this stage Sony should have been aware that choosing such strategy would not be clear in terms of payoff. Accordingly, once such option was removed, hackers made their determination to restore it (Kuchera). It can be concluded, that in the presented game, one of the players failed to determine the outcome of the strategies employed, which led to an outcome with the least payoff.
Although conflicts at the workplace can be unpleasant, it is normal to have them. In Sony, as in any other company, conflicts also occur, and managers strive to establish a common language between all sides involved, though the result of the conflict may be disappointing for one of the parties. Since conflicts are almost unavoidable, it is crucial to be able to handle them appropriately with the help of suitable strategies.
The Conflict at the Sony Company
The conflict that emerged in Sony was related to accusing the company of sexual harassment and discrimination, though a court dismissed the complaint. Seven former employees and one current filed a lawsuit claiming that they encountered unwelcomed advances, ignoring, humiliating comments, and so forth. Some female employees stated that the company has a culture of systemic sexism expressed by dirty jokes regarding women, grabbing breasts, and ranking by “hotness” (Hazra, 2022).
It suggests that many managers at Sony attempt to act like nothing happened, thus exacerbating unethical practices. Moreover, the situation points out that the environment in many teams is tense, which can negatively impact productivity, as well as a sense of justice in employees (Sahoo & Sahoo, 2019). Moreover, workplace stress, especially induced by sexual harassment and discrimination, may also cause higher costs and reputational damage to the company (Foy et al., 2019). Therefore, the manager should have chosen a more active approach to solving the problem.
In this situation, the managers seem to use an avoiding strategy that may be unproductive in resolving such a serious issue. One can also suggest applying either accommodating or collaborating approaches to perform an analysis (Elgoibar et al., 2017). Here, it is necessary to assess the benefits and disadvantages of the three methods with respect to the described conflict. Thus, avoiding strategy could work if the employees solved their issues independently, without involving the manager. However, avoiding is usually associated with the manager’s inability or fear to take part in the conflict, which leads to a decreased level of trust in the team (Sahoo & Sahoo, 2019).
An accommodating approach would be beneficial in terms of satisfying the needs of the accuser and punishing the guilty. Nevertheless, in view of the absence of proof, the accused would feel the unfair treatment. Finally, collaborating method and open dialog with the accuser and accused would help to find a solution that satisfies all the parties. On the other hand, it may not be useful because the conflict concerns not the question of project specifics but corporate culture. Therefore, each situation requires a relevant method of resolution.
Table 1. Benefits and Disadvantages of Avoiding, Collaborating and Accommodating Styles.
Avoiding
Benefit
Useful for independent teams
Teams solve conflicts autonomously
Disadvantage
Feels like the manager is afraid of conflicts
Lack of trust in teams
Accommodating
Benefit
Good option to establish fairness
Leaves the accuser satisfied
Disadvantage
May not work in the absence of evidence of misconduct
In conflicts, can be used deliberately to chasten someone
Collaborating
Benefit
Suitable for friendly and supporting teams
Open dialog
Disadvantage
Time-consuming
May not be useful in corporate culture issues
Dealing with conflicts with family or friends differs from handling them at work. The main reason for the difference is the level of interpersonal interaction between people. With family, one may tend to show more emotions because family members are closer. They can express understanding and forgive when someone overreacts. On the contrary, the workplace has particular rules of conduct, which establish the level of proper reaction during disputes. In this regard, colleagues may misunderstand incautious petulancies, which may turn the conflict into a deteriorating and highly stressful event. Thus, people’s behaviors are not the same at home and at work due to different contexts.
A collaborative conflict resolution style is the most appropriate to apply at work. It is effective when people discuss possible solutions. Furthermore, this approach helps to create an atmosphere of friendliness and helpfulness (Elgoibar et al., 2017). In addition, willingness to strengthen the other’s skills and knowledge also plays an important role in setting the collaborative environment (Elgoibar et al., 2017). Thus, the collaborative style is suitable when people in a team know well each other’s traits and are able to support colleagues.
However, this style may not be suitable for particular teams where members are not ready to cooperate with each other, or there is a kind of competition between them. Moreover, finding a solution that satisfies everyone involved may be a time-consuming practice. It is especially unwanted when a problem requires urgent action. The collaborative approach requires the parties to take the initiative. In addition, people need to trust each other and have good listening skills. Thus, using this style may not bring positive results if team members are used to fulfilling instructions.
Not having enough conflict can pose a problem in the workplace. When there are no disagreements between employees, it can point out their indifference and non-involvement in corporate life. For instance, it can be a situation when employees only do what the manager demands and neither ask questions nor disagree with the manager. It means that no one is interested in achieving some results, or the employees do not want to interact with their manager. Anyhow, it is better to have productive conflicts where all participants are heard, and their opinions are respected.
Conclusion
To conclude, one should always be flexible in selecting strategies for particular conflicts because it also depends on the parties involved. The analysis of the issue that took place in Sony shows that each conflict management strategy has its benefits and disadvantages with regard to the situation at hand. Conflict can strengthen a team if it is based on mutual respect of dispute participants.
References
Elgoibar, P., Euwema, M., & Munduate, L. (2017). Conflict management. Oxford Research Encyclopedia of Psychology. Web.
Foy, T., Dwyer, R. J., Nafarrete, R., Hammoud, M. S. S., & Rockett, P. (2019). Managing job performance, social support and work-life conflict to reduce workplace stress. International Journal of Productivity and Performance Management, 68(6), pp. 1018-1041. Web.
Sahoo, R., & Sahoo, C. K. (2019). Organizational justice, conflict management and employee relations. International Journal of Manpower, 40(4), pp. 783-799. Web.
The Sony Group of companies is mainly involved in the electronics, entertainment, and game sectors. Sony represents various businesses but has still managed to remain globally unique. Besides the need to make profits, the company is also involved in a wide range of Corporate Social Responsibility (CSR) initiatives.
The reason why I admire Sony’s Corporate Social Responsibility agenda is because it encompasses the entire operations of the company. The company has divided its CSR initiative into 7 categories that involves the environment, management, responsible sourcing of raw materials, responsible manufacturing of products, responsible training and development of its workforce, engaging the community in a responsible manner, and innovation (Sony Corporation para. 2).
Sony’s management has demonstrated its commitment to sound corporate governance by embracing corporate governance systems. The company also complies with its own requirements in a bid to enhance transparency.
In addition, Sony abides by the established business ethics. It also complies with the relevant laws and regulations. The company’s Global Compliance Network enables it to reinforce its commitment to integrity. In addition, employees have access to the necessary resources to address any emerging ethical and legal issues (Sony Corporation para. 3). Sony is also committed to maintaining a sustainable environment for future generations.
Sony manufactures a wide range of eco-friendly products that have been designed to ensure better environmental performance (Sony Corporation para. 4). Sony’s Blu-ray disc player is an example of an eco-conscious product that maintains high performance and saves resources, energy, and space. The company is also involved in a project dubbed SORPlas that entails recycling of plastics in a bid to minimize oil consumption.
In 2011, Sony managed to reduce its global CO2 emissions by 30% (Sony Corporation para. 5). As a committed global citizen, Sony ensures that its supply chain is managed in a responsible manner. The company is also committed to producing reliable, high-quality products.
For example, Sony creates and upholds sound partnerships with suppliers of raw materials in line with its internal policies and the relevant laws and regulations in the procurement of raw materials (Sony Corporation para. 5). In addition, Sony’s employees involved in the production process are normally given the necessary support to enable the company achieve CSR with regard to human rights, labor, and environmental conditions.
Sony runs various businesses globally as part of its product responsibility initiative. Sony is committed to creating a positive working environment. In addition, the company endeavors to recruiting employees from diverse backgrounds. Sony is also committed to meeting the needs of the community as a part of its global citizenship. In addition, the innovation of its products and services is geared towards contributing to society.
The above actions are important to Sony as they enable the company to promote a sustainable business model by addressing the issues of resource conservation, climate change, biodiversity, and control of chemical substances. These issues affect the various product lifecycles stages of the company products, including research and development as well as recycling.
If at all Sony is to retain a competitive edge in its area of operations, the company needs to enhance its ethical policies and standards as regards the process of procuring of raw materials, manufacturing of products, and distribution of such products to its global customers. In addition, the company should consider extending its citizenship efforts to encompass diverse areas that touches on the lives of people, including arts and culture, social welfare, education and academics, as well as volunteer services.
As the world is continuously transforming, businesses have to adapt to environmental, societal, and economic changes. The ability to effectively and timely response to these changes by modifying the organizational structure, its goals, and practices can significantly benefit a company. Many organizations have announced new strategies to achieve some of the UN Sustainable Development goals, such as gender equality, responsible consumption, and economic growth (About the sustainable development goals, no date). Sony Corporation, for instance, is one of the first companies to include several societal responsibility commitments into its strategic planning and operation. This paper will link organizational changes of Sony Corporation with the McKinsey’s 7S model and analyze its promises towards the environment, employees and the public.
The first part of the 7S model that needs to be addressed is “strategy”. Strategy defines a business’s goals and plans that will improve its competitive advantage (Channon and Caldart, 2015). According to the president of Sony, the primary commitment that will lead the company until 2050 is the “Road to Zero” initiative (Yoshida, no date, para. 3). The corporation promises to operate entirely on electrical power by 2040 and, thus, keep itself on the market and grow its competitive advantage (Yoshida, no date, para. 3). Since people become very environmentally aware, “Adaptation and change are necessary for an organization’s survival” (Král and Králová, 2016, p. 5169). Sony’s commitment towards zero impact might as well be the only strategy to both keep the current market share and expand the future customer base.
In addition to the external factors, the corporation works to improve its workplace environment. This is crucial for the achievement of the goals set because strategy restructuring does not guarantee employee compliance (Wagner, 2019). To ensure inclusiveness and resolve inner conflicts, Sony promotes free communication policies, in which employees feel heard and protected (Promoting a speak up/listen up culture, 2019). This goes along with the “staff” aspect of the McKinsey model that is responsible for employee quality and well-being (Channon and Caldart, 2015). Providing its human capital with good working conditions can fasten corporate goal achievement.
The third driver of Sony Corporation’s change in society and education. The company operates under the “for the next generation” motto, which promotes accessible public education in sciences and technology (Policy, framework and main scope of community engagement, 2019). However, none of the three mentioned commitments will be met if they are not interpreted appropriately by the internal and external environments. For this reason, Sony has adopted a new operational structure, which resembles the 7S model, to enhance the progress of realizing its strategic plan (CSR organizational structure, 2019). The company attempts to rearrange communication to meet McKinsey’s “shared values” aspect – the core of company culture (Channon and Caldart, 2015). Having each department be included in the planning and implementation of societal commitments helps to ensure unity and cooperation within an organization.
Sony Corporation has shown great examples of successful organizational change as the company was able to restructure its values efficiently. Although their commitments towards society have transformed, they managed to keep the original purpose of being educative, responsible, and not harmful. Analyzing company transformations through McKinsey’s 7S model perspective represented the effects of the drivers for change on the organization. Sony established environmental promises that define its strategy for the upcoming decades, created communication channels for employees that improve staff quality and well-being, and restructured its managerial system to keep being an innovative and educative business. Due to quick and effective response to external changes, the corporation was able to transform itself successfully.
Channon, D. F. and Caldart A. A. (2015) ‘McKinsey 7S model’, Wiley Encyclopedia Management, 22 January, 12, pp. 1-2. doi: 10.1002/9781118785317.weom120005.
Král, P. and Králová, V. (2016) ‘Approaches to changing organizational structure: the effect of drivers and communication’, Journal of Business Research, 69(11), pp. 5169-5174. doi: 10.1016/j.jbusres.2016.04.099.
Wagner, R. (2019) ‘Activating employees for sustainability – the importance of narrative and sensemaking in a salutogenic approach to internal CSR communication’, Proceedings of the 5th International CSR Communication Conference. Stockholm School of Economics, Stockholm, Sweden.
