Innovation Dynamics in Sony: Analytical Essay

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Introduction

Innovation is considered as the most primarily bandied about terms in the modern era of global business. The newly devised products and services of an innovative organization offer various numbers of innovative and creative features, traits, and consumer touchpoints in amalgamation. The purpose of the assignment is to explain the innovation strategies and innovation dynamics with reference to the organization “Sony”. Every individual industry progresses via stages of steadiness and calmness when innovation is regarding what can be improved further or stages of disruptions where the rules of the business get completely changed. The potential consumers have evolved in the modern years to become increasingly habituated to explore for the latest, convenient and fashionable products offered by the organisations. In this assignment, some key theory discussion and analyses will be conducted in order to understand the level of innovation and innovation dynamics in the specific organization.

Key Theory Discussion and Analysis

Sony’s focus on innovation from survival

Sony has shifted its focus towards innovation from survival as it has laid emphasis on the creation and development of new products such that the trend of the market shifts completely. Sony has combined artificial intelligence and robotics with everyday gadgets or electronic products. The organization developed PlayStation and walkman that was invincible for several decades. However, the organization faced several losses in the period 2008 to 2014. In that period, software earned the profit and not hardware. However, the organization made such strategies and implemented them that turned out to be in favour of the organization.

The organization developed Aibo that is a robotic dog. The organization also developed a humanoid robot named Qrio. The leaders of the organization took steps that changed the direction in which it was moving forward (Asia.nikkei.com, 2016). The organization developed 4K television that had ultrahigh-definition. The organization started investing on PlayStations and music that proved to be a boon for it. In the era, while the sales of the organization fell manifold that resulted in the association to cut down approximately 10,000 jobs all around the world. The organization made decisions of connecting robotics and AI with the network. The organization put in several efforts in robotics and AI in order to get back its lost battle.

The management of the organization made a drastic decision of shifting its emphasis to emphasis and come out of its comfort zone. The organization started taking risks as organizations like Apple entered and took over the market. Therefore, the organization made decisions of working on Artificial Intelligence (AI) and robotics so that such innovations can aid it to conquer the market. The organization started focussing on the development of hardware or electronic gadgets of better quality with innovative features so that the customers can be benefitted from it. The organization mainly emphasized on Artificial Intelligence (AI) so that the adverse situation that the organization was facing can be turned around. The audio-video technologies that the organization developed embedded robotic and Artificial Intelligence (AI) capabilities in them. The organization embedded Artificial Intelligence (AI) technology in its camera app ‘Xperia’ as the ‘AR effect’, this application utilized Augmented Reality (In.finance.yahoo.com, 2019). The Smile Shutter and face recognition function of the digital cameras and PlayStation respectively are the examples of AI that the organization worked on and achieved in order to change the market trend. The AI-based product that the organization developed was ranked number one in the market. The organization put in several efforts in robotics and AI in order to get back its lost battle.

Sony’s Generic Strategy

In order to gain the competitive edge of other organizations in the world of electronics and technology Sony adopted a generic strategy like Porter’s Model. Sony adopted intensive strategies in order to give tough competition to its competitors in the market. The competitive strategy adopted by Sony is the uniqueness of its products. The intensive strategy adopted by the organization mainly focuses on increasing its share in the market in the field of games, financial services, entertainment, and electronics (Sony.net, 2019A). Behind the success of PlayStation uniqueness was the prime factor. The organization gained an advantage over organizations like Nintendo through product differentiation.

The continuous focus of the organization on innovation aided it to decrease the cost of production and increase its profitability. The main purpose of the organization was to penetrate the market so that it can increase its sales. The other motto of the organization was product development, that is, to embed new innovative features in its products so that the quality of services offered to the customers can be improved. Market development was another strategy adopted by the organization so that it can reach more customers by expanding its branches (Sony.net, 2019B). The organization adopted diversification so that it can offer its customers a wide range of products.

Sony’s Intensive Growth Strategies

Intensive strategies are defined as the specific strategies, which requires additional intensive knowledge and efforts in order to enhance the performance and productivity of the existing products or services in the market (Luo et al., 2011). The three types of intensive strategies that Sony has adopted are market penetration, product development and market development. Market penetration is considered as the primary intensive strategy of Sony as it is focused towards the aim of improving the productivity and profitability of the business by increasing the level of sales in the market where the organization operates. The main goal is to acquire a large volume of the market share by attracting potential consumers. For example, Sony improves its business by escalating its marketing initiatives and various campaigns to improve the sales of its PlayStation devices (Chiesa and Frattini, 2011). The organization implements its differentiation generic strategy in order to attain a competitive edge over its major rivals and to support the penetration process into the market. Sony implements its product development plan as a secondary intensive strategy in order to devise more effective products and services than compared to the competition in the market. In other terms, this second strategy is executed in order to support the generic plan of differentiation in regard to the design and features of the product.

For example, Sony has continued to improve the performance and design of its gaming products in order to provide their potential consumers with the best gaming experience (El-Nasr et al., 2016). The gaming products and services of Sony have been a major driver of growth for them as they have helped in outperforming the competition in the market. Diversification is considered as the least important intensive strategy as its goal is to achieve growth and development via new developments and progress in the business. However, the significance of this strategy has decreased over the years due to the decision of the organization to pay attention to specific products and services.

R&D structure for AI x Robotics at Sony

In order to come out of the adverse stage that the organization, Sony was facing it invested huge sums on research and development so that it can stand up and win the lost battle. The organization worked in Artificial Intelligence (AI) and robotics in order to offer new innovative products to the customers. The organization did immense research and came up with Aibo the robot dog. The history of Sony begun in D21 laboratory wherein the starting of 2000s or the 21st century the organization’s focus was to create a robot version or edition of living things or creatures. The organization took several steps to make sure that the recent developments that were made can change the market trend and turns out to be in favour of the organization. The organization started expanding its market by increasing the diversity of its products.

The organization collaborated with Olympus in order to develop a neurosurgical microscopic system. This enabled the doctors to open or create small holes in the patient’s body and use instruments like thin forceps specially designed and endoscope that is long and thin in order to perform operations. The doctors need not cut open abdomen of the patients. The organization further worked on the improvement of medical conditions so that the method of operation can be improved and people can be given a better quality of life through artificial intelligence (Sony.net, 2019C). The researchers and developers of the organization further did research so that the medical equipment can be improved and people can be given better treatment.

However, the main emphasis of the organization was to train people to use the tools so that these developed equipment do not prove to be a bane. It was mandatory to make several steps so that the equipment and the gadgets developed are fruitful for human beings. Several tests were conducted to make sure that the products developed are useful and does not have any hazard. Therefore, the organization took the topic of training the employees and the users very seriously so that any adverse effect or negative results are not produced.

The organization is working on machine learning in order to develop innovative products for customers. Sony had taken such measures that brought robots closer to Artificial Intelligence (AI). The organization made its first attempt in 1999 when the organization released AIBO the robot dog. The organization also worked on Artificial Intelligence (AI) and incorporated into digital cameras. Smile Shutter was the function that was incorporated in the digital cameras developed by Sony that was disruptive innovation as it changed the trend of the market (Sony.net, 2019E). The organization also worked on its PlayStation and added Face Recognition feature in it (Sony.net, 2019D). These developments completely changed the trend in the market and proved to be advantageous for the organization as it made the organization earn huge amounts of profit and overcome the closes that its face before.

The organization also worked on its hardware or electronic products and developed $K television with ultrahigh-definition. The organization also worked on Audio Video technology and music so that the experience of the customers in terms of entertainment can be improved. The organization is continuously working on its features so that innovation can be incorporated more and more so that the quality of the products can be improved which in turn will improve the quality of lives of the people or customers. The organization worked on it not only to take control of the market but also to make sure that people or its customers are benefitted from it. Thus, the organization laid emphasis on AI and robotics.

Social Value through Disruptive Innovation

Sony’s Initiatives in Robotics and AI

The organization is amalgamating its prevailing strengths in various units and areas including audio and video technologies and mechatronics with robotics, technology and artificial intelligence (AI) in order to provide the consumers with new proposals and schemes leading to the expansion of the robotics field. For example, the autonomous entertainment robot was pre-inaugurated in the year 2018 and it is considered as the outcome of the organization’s effort in leveraging robotics and AI in order to devise such a robot that interacts and develops a bond with human beings (sony.net, 2019). The appearance and capability of Aibo have evolved in recent times to be considered into account for utilization in different environments. For example, Sony Lifecare Incorporation is planning to adopt Aibo in order to enhance the quality and quantity of its residential services. The Mars Desert Research Station (MDRS) situated in the USA has borrowed two Aibos in order to conduct research regarding the process of establishing a life and living on the planet of Mars (sony.net, 2019). The project handled by the MDRS is focused on monitoring and managing the influence on interpersonal relations and advantages from experiencing a robot within the enclosed research station (Keisner et al., 2016).

Sony’s Initiatives in Automotive Image Sensory

The organization in the year of 2014 proclaimed that it would exploit or materialise image sensors for utilization in the automotive sector. Sony has always positioned the automobile industry in the primary choice for its business of image sensors and it is constantly working on R&D in order to popularise the notion of self-driving vehicles (Mukhi and Lakhani, 2016). In order to promote the notion of safety and preventive measures in self-driving cars, the organization has introduced a safe-zone notion named Safety Cocoon (sony.net, 2019). This concept of safe-zone is focused on securing the safety of the car in different driving conditions by 360˚ monitoring around the self-driving car. In other terms, it means enabling early planning and preparation in order to avoid risk and casualty. The automotive image sensors of the organization provide various benefits and advantages to the users including greater sensitivity, wide extent of dynamic range and mitigation functions, that also help in reducing flickering when portraying traffic signals or signs. The primary aim of Sony in the field of automotive image sensors is to drive the acceleration of the trend of self-driving vehicles or cars by sharing and communicating this long-term vision with its collaborated partners (sony.net, 2019).

Global Education

The mission of Sony Global Education Incorporation is to develop an educational infrastructure for the interlinked societies of future times. The entity is focused on fostering the people held liable for carrying the initiatives to cater to the problems and issues faced by the modern world in order to explore solutions for a brighter future of the world. For example, Sony in the year of 2017 introduced an interlinked robotics kit named KOOV for the future innovators (sony.com, 2019). KOOV helps the learner to understand the concept of coding by organizing various blocks into different shapes to develop robots that are specially programmed in a different way.

Disruptive Innovation Journey of Sony

It can be said that the disruptors of the modern world can easily evolve into the future’s disrupted. Disruptive innovation specifically refers to the technology whose implementation essentially influences the way or the manner in which a sector or industry operates. Disruptive innovation is completely differentiated from disruptive technology as that kind of innovation focuses on the utilization of the technological elements instead of focusing on the technology itself (business today.in, 2019). In the modern field of the business world, a majority of the technologies and inventors have eventually led to disruptive innovation. At the initial stages, Sony’s potential of disruptive innovation was a long and uncertain journey but since its establishment, the organization has properly managed to convert the faded potential into a profitable business. In the year of 1970, Sony caused disruption to its imaging business under the leadership of Shigeyuki Ochi. Next, in the year 1972 and 1977, Sony developed a pixel image sensor along with the assembling of the CCD R&D team. This team was termed as costly and every individual member had to encounter insults and criticism from other colleagues and staffs. It can be said that disruption takes place when the compulsory mainstream consumers start purchasing the devised products or service in a large volume.

Sony by introducing its CCD-V8 i.e. an 8mm single-unit VCR along with a camera with an installed CCD chip of 250,000 pixels marked its inauguration of new successful business as the eye of the camcorder was introduced on a global scale (sony.net, 2019). This uncertain journey of converting a blurry potential into a successful business not only bought success and fortune to the organization Sony but also caused disruption to the camera industry. Hence, it can be said that innovation amalgamated with technology is an essential and crucial competence to possess.

Sony: Disruptor to Disrupted

There is a second face to this key theory discussions and analysis and it is that how does an organization as Sony termed as a preeminent example of disruptive innovation evolved on to become a loser. There are various reasons for this and the primary reason is the failing power or potential of Sony in the field of consumer electronics and music. However, the stock prices of the organization have always been stable such as $47.94 billion in 2012 to $68.35 billion in 2017 (digit.hbs.org, 2019). The organization has always been avoiding and missing valuable opportunities that have eventually led them to be dwarfed by negligible competitors including Samsung and Apple. The market capital of Sony is estimated to be of 1/30th of Apple and 1/9th of Samsung. Hence, it can be said that Sony is still sustaining in the business but winning is not the throne of possibility in the short-term business.

Figure 1: Total Revenue of Sony from 2008 to 2017

(Source: digit.hbs.org, 2019)

The secondary reason behind the organization’s failure was to adjust its model of business that explains how Sony developed values. It is important for every business organization to reevaluate their business strategies and plans in accordance with the acceleration of technological innovations and initiated change in specific industries. Sony never reevaluated its business strategy in the middle of technological innovations and changes. The organization has always paid attention towards its hardware, developing the potential of its extensive R&D that offered sustaining and disruptive innovations including Sony Trinitron or Discman (hbr.org, 2019). Hence, it can be concluded that Sony failed in reanalyzing on how it developed values and this hampered its potential to progress into the shift from the notion of hardware to software. The organization, for now, is focusing on its gaming platform and the specific values that it has developed for its potential users via networking and software.

Programs for generating Innovations

Startup Acceleration Program develops startup projects and supports business activities

The Startup Acceleration Program was launched by Sony in the year of 2014 in order to gather ideas and notions prevailing beyond the various business categories and shape them for commercialization (sony.net, 2019). This was possible due to the knowledge of a vast range of human and management resources by Sony Group in different sectors including electronics, financial services and many more. In the coming years, the organization is planning to launch businesses and gain innovative and creative breakthroughs by leveraging coordination and collaboration involving talent and technology both. This would be possible by pacing the establishment of tie-ups and partnerships with potential joint venture entities operating actively in their specialized fields of business. This program was utilised by the organization as an approach to establish business start-ups and materialize standardised concepts and notions by tapping into the production and design knowledge that Sony Group possesses.

The first ever initiative that the organization has carried out under the shade of the program is known as “First Flight” i.e. an e-commerce portal providing a specific platform to the organization for developing links and connections between their launched start-ups and potential consumers (sony.net, 2019). This initiative focused on the specific potential consumers who have a taste for new products and services and who are interested in converting business ideas into successful and profitable business. Under the planning of the initiative and crowdfunding framework, a project under evaluation process for start-up establishment tends to attract a large volume of consumers in acknowledging their reviews regarding whether it can be used as a marketable product or not. Additionally, various business proposals and developments in the process are reported daily on the e-commerce website in order to acknowledge the reviews and feedbacks by consumers and then incorporate it to improve their service. However, the programs for generating innovations and other solutions for pacing the exploitation of business concepts were expanded to encompass business entities operating outside the Sony Group. The Group has also installed a Creative Lounge in Tokyo to trial and test the new ideas and notions with the help of 3D printers and other important equipment (sony.net, 2019).

Expansion of the Startup Acceleration Program Worldwide

In the year of 2016, Sony Group established its European hub of the program in Sweden and it utilises the similar processes and methods as the Japan hub (Tasic et al., 2015). The European team assembled constantly shares ideas and notions with the Japanese team while executing workshops and training programs for the hardworking European staffs and employees to guide them in developing successful ideas and networks. Till date, three auditions have been conducted with the effective cooperation and active involvement of the individual employees from various countries such as Netherlands, UK, Belgium and many more. The two things that Sony wanted its specific program to accomplish are the cultivation of a new pool of entrepreneurial talent and effective training of experts and professionals having the desire to pace the establishment and function of new potential businesses (sony.net, 2019). The start-up projects evolved from the program have been guided by a small group of elite and expert members by gaining a lot of support and help from people specialised in various fields. The amalgamation of Sony’s entrepreneurial talent pool and innovation knowledge affords potential opportunities to extract the maximum of the potential of staffs and employees.

Cultivation of Startup Projects and Initiatives

Sony Group in the year of 2016 launched a project named “Startup Switch” i.e. an annual business strategy for new start-ups and businesses (sony.net, 2019). The entries are auditioned and screened before selecting the winning entry and the organization awards a prize and supports the startup to pace business development by delivering mentoring with promotional and technical activities.

Conclusion

It can be concluded from the assignment that innovation is the major key to restoring and sustaining the shine of Sony and to achieve this Sony pursues various innovative initiatives focused on enhancing the quality of the product or service. The organization has portrayed its potential to lead effectively and sustain relevantly by backing up from the pack in every virtually known category of a camera. The purpose of the assignment was to explain the innovation strategies and dynamics of Sony in a detailed manner and by including discussion of key theories and concepts used by the organization. It has been concluded that the more Sony has attempted to play it safe, the more it has dealt with obstacles and struggles. The organization has lost its sense or judgement of direction and eventually grew risk and threats-averse. In this assignment, the various innovations and programs for generating innovation have been demonstrated.

Recommendations

The various recommendations advised to Sony Group are as follows:

Improving the Quality of products and services – The organization needs to devise design-related quality initiatives and schemes. Sony requires relevant units and departments such as original equipment and design manufacturer i.e. OEM and ODM in order to comply with the quality standards and norms set by the groups.
·Improving the safety of the products and services – It can be said that offering of dependable products and services that can be utilised by the consumers safely is the primary objective and priority for Sony. It needs to ensure that the explanations and knowledge provided to the potential consumers regarding safety are appropriate and easy to understand.

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