Sony Corporation

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Table of Contents

Company Overview
How Internal and External factors may affect the firm
EFE Matrix
SWOT Analysis
Conclusion
References

Company Overview

Sony Corporation (Sony) is one of the leading electronics manufacturing and distribution Companies in the world. The company deals with the design, development, manufacture, and sale of products such as communication products, televisions, video and audio products among other electronic components (Städtler, 2011). Apart for this entity, it also offers insurance services through its subsidiaries in Japan. Other business operations include advertising agency and network services.

The company’s operations fall under six reportable segments. They include networked Products and Services; Music; Consumer Products and Devices; Pictures; Financial Services and others. It also operates its subsidiaries across 200 countries inEurope, North America as well as Asia. The Company’s headquarters is in Tokyo, Japan. Its major industry competitors include Dell, Creative technologies, LG, Samsung, Fujifilm Holdings, Philips, Pioneer Corporations, Hitachi, and Casio Computers (Städtler, 2011).

How Internal and External factors may affect the firm

The internal factors are those whose origin and control are within the capacity of the firm. They include strengths and weaknesses. The strengths within Sony shall be material assets that will boost its performance if well administered. This firm may achieve strategic objectives through utilization of its strengths.

On the other hand, external factors entail those influences that emanate from outside the firm. They come as opportunities and threats. Threats are harmful hence; they will impair on Sony’s growth objectives. Such threats may come in form of strong brands, imitation, and changing customer needs.

On the other hand, opportunities are external factors that the business can utilize in achieving its objectives. Threats also fall under the external fundamentals that could damage performance of Sony Corporation (Jalan, 2004). Analysis of the company using this tool would be beneficial in diagnosing the external and internal environments in which Sony operates. As such, the information can steer growth and progress within the limits of its goals and aims.

EFE Matrix

It relates the firm’s performance ratings relative to a laid down aggregate score. The tool employs a factor approach is its analysis of the external opportunities as well as threats in which numerous factors relevant to the firm are established. Allocation of weights depends on the magnitude of their influence on the firm’s performance in order to develop their relative weights (Städtler, 2011). The weights may take ratio or percentage form.

No	OPPORTUNITIES	WEIGHTS	RATINGS	WEIGHTED
1	Maintenance of leadership in prices	0.10	3	0.3
2	Creativity and Innovation	0.25	3	0.75
3	Strong IT base in the industry	0.1	4	0.4
4	Wide Network and global Presence	0.1	4	0.4
5	Strategic Outsourcing and marketing	0.1	4	0.4
6	The capacity to develop Quality products	0.15	3	0.45
	THREATS
1	Price wars	0.05	4	0.2
2	Product imitation	0.05	2	0.1
3	Strong and competitive brand in the industry	0.05	4	0.2
4	Changing consumer needs	0.05	3	0.15
TOTAL		1.00		3.35

The above analysis of 3.35 aggregate weight score in Sony’s EFE Matrix indicates that it is responding well in respect of its threats and opportunities in the electronics industry.

The analysis depicts the external environment in which Sony operates, and how it is doing relative to the industry participants (Jalan, 2004). It is therefore, important to note that strategic efficiency has capitalized on the opportunities presented by both environments. On the other hand, the company has done well in monitoring and dealing with the threats that may deter its progress.

The ratings used above for individual factors are calibrated on the scale of 1to 4. The total maximum score obtainable by any industry participant is four. The weights and ratings employed in the EFE Matrix demonstrate the effectiveness of a Company’s strategic framework (Jalan, 2004). Below is the interpretation of the weighted scores in order to show the outcome of the performance obtained by Sony.

4 = Excellent Response to factors; 3 = Above Average; Average Response and 1 = Poor Response.

Internal Factor Evaluation Matrix (IFE Matrix)

No	INTERNAL STREGTHS	WEIGHTS	RATINGS	WEIGHTED
1	Customer relationship	0.10	3	0.3
2	Production Adaptability	0.10	3	0.30
3	Leadership in Technology	0.10	4	0.40
4	Reliability of products	0.10	3	0.30
5	Leading Supply chain	0.10	4	0.40
6	Financial ratios	0.15	3	0.45
	INTERNAL WEAKNESSES
1	Weak management	0.15	2	0.30
2	Little Diversification	0.10	3	0.30
3	Communication loops	0.10	3	0.30
TOTAL		1.00		3.05

The IFE Matrix is an audit tool of an organization. This strategic management tool helps the management to evaluate a company’s internal environment in relation to its threats and strengths.

This tool summarizes the strengths and weaknesses of Sony Company in order to observe its performance from the internal space (Städtler, 2011). The methodological approach used in the design of the IFE is similar to that used in EFE. The difference between the two is that IFE deals with the internal factor analysis whereas EFE examines the performance of a firm with regard to external.

Sony’s weighted score of 3.05 represents an average performance and response to its internal factors influencing its operations. It shows a well strategically managed position in a bid to capitalize on the prevailing strengths while at the same time cushioning itself against its weaknesses (Jalan, 2004).

Interpretation of the weights

4 = Excellent Response to factors; 3 = Above Average; Average Response and 1 = Poor Response.

SWOT Analysis

Strengths

Sony has the capacity to develop a high-quality product portfolio for its customers.
historical results and record show that the company is reputable in the market
Advanced and technological capacities capable of handling multiplicity of product lines present Sony with a rare opportunity for success. The company engineers have the knowledge of the previous failures and are capable of making up for the lost glory.
The competitiveness of the company is good compared to its market rivals
The ability to expand its market share and produce a wide range of products

Weaknesses

Prevailing price wars in the industry are a major undoing to Sony. The company has enjoyed the confidence of being a price leader the recent past, but the emergency of strategic price wars poses a potential threat (Jalan, 2004).
Minimal diversification in its product portfolio is a critical scenario that may hamper Sony’s strategic growth. Retarded growth of its sales depicts a great slow down in its expansion plans.
The management of the company seems to have no proper strategic management plan to forge the business ahead.
Lack of proper formula of communication within the functional departmental network has led to reduced productivity.

Opportunities

Its originality and creativity is an essential asset for its potential growth. Its reputation may pose a significant platform for its progress.
Its customer led pricing strategies aimed at winning market loyalty is a huge milestone opportunity presented to it (Jalan, 2004).
Its technological strength may render its expansion plans possible in order to capture other income streams.
Strong and robust supply chain- marketing and advertising departments have stepped up their strategies to create new market niches for its expanding product portfolio through strategic partnerships with leading chain suppliers.

Threats

Competitors- The industry is rife with competitors who are equally powerful. They are market participants with strong brands, and they include Samsung, Fujifilm, and LG among others.
Market surveys and researches indicate that imitation of its products is on the increase. This product proliferation poses a huge threat on the originality of products and customer loyalty developed over many years. This trend occasioned by the emergence of new and cheaper technologies from the Asian region whose proponents have interfered with the brand (Jalan, 2004). Lack of adequate and comprehensive strategy implies that most of its rivals are doing better because their product penetration is doing well.

Summary of SWOT matrix (Analysis)

STREGNGTHS	WEAKNESSES
Production capacity and adaptability	Stiff competition from strong brands on the market
Financial ratios	Price wars
Leadership in technology	Little diversification
Price leadership	Lack of strategic communication plan
Excellent customer service

OPPORTUNITIES	THREATS
Wide market Coverage and global presence	Price wars
Maintenance of low price leadership	Changing needs of the consumer
Supply Chain	Presence of other strong brands (Samsung, LG)
Creativity and innovation	Product Imitation (Chinese Electronic industry)
	Emerging markets

Conclusion

The SWOT analysis above demonstrates how Sony has been able to nurture is ability to gain a competitive advantage in the market. Although weaknesses and threats are inevitably present, their effects have remained detrimental due to capitalization on opportunities and strengths inherent within the firm. Some of the significant factors greatly responsible for this milestone include a robust and sustainable technology, price leadership, and innovation.

References

Jalan, P. K. 2004). Industrial sector reforms in globalization era. New Delhi: Sarup & Sons.

Städtler, R. (2011). Strategy Coursework – Sony Corporation. Norderstedt: GRIN Verlag.

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