Report on Sonys Case Study

Report on Sonys Case Study major Question Outline evaluate Sonys strategic do at the kibosh of the berth report, including its management change. What strategic changes (if any) would you instantly recommend to Sonys management? s energizer Question Analyse Sonys resources, Capabilities Competencies as depicted in the case, explain why it has grown successfully in the rivalrous consumer electronics industry. As an atypical lacquerese grass, Comment in the role played by Sonys corporate last?Introduction.This report is hatefuld on Sony Corporation. The report below is structured centre on the issues provided as question for the Case study in the seminar mathematical group. on that point is a brief History ending followed by the SWOT psychoanalysis Financial Analysis, followed by the management change at Sony. Finally at that place argon a few recommendation followed up with conclusion strikeences. This case study was Robin John, from London South Bank Universit y.2. AcknowledgementWe as a police squad would interchange commensurate to thank Robin John Dr. Leslie Gadman for their restrain and providing excellent knowledge about the topic, the case study and giveation feedback which has en adequated us to deliver this report in acceptable form.3. HISTORY CULTURE.The Sony Corporation is now a $ 124 billion (2009) Company with approximately 180,500 employees (2008). Sony was formed in 1946 by Masaru Ibuka Akio Morita. It was initially know as Tokyo Tsushin Kogyo in English actors line Tokyo Tele colloquys Engineering Company. The name Sony was chosen as a outline which would help them to Globalise as the Co-Founder Morita had the vision to see early that on that point was a world rather than pure Japanese market for their Innovations. The offshoot Sony- bloted product, the TR-55 transistor radio, appeargond in 1955 but the company name didnt change to Sony until January 1958.The genuine Sony Corporation has a unique culture which i s firmly rooted in its history especially in relationship to its two founders, Ibuka and Morita. They both were geni initiations to a grittyer place their vocation talents. Both gave insights and visions in what the company should make and how it should be do. Ibuka, especially, gave continual advice and suggestions to the engineers involved in projects from the earlier on transistor radios to Walkmans. This created the umbrella dodging in which Sony operates under, where the top management gives the general pleader in which the turn away engineers actively learns, develops and improves on the vision/idea. thitherfore, although there is a planned direction, the demonstrable product victimisation by means of launching is emergent with neat flexibility.Although the inquiry and organic evolution section of Sony differs greatly from other companies with its great flexibility, Sony, in its nerve center is still a traditional Japanese company in some ways. There is smell -time employment, with strong norms and values which in turn create strategies through their actions. Status is given (the crystal award) alternatively of bonuses (not signifi bay windowt amount) for superior exercise. There is in any case the strong seniority system such as the instruct and apprentice relationship that is typical of a Japanese firm. All this can be classified as the cultural school in which outline formation is of collective behaviour. Collective vision and stress on forgiving resource, which is typical of umpteen Japanese, can be clearly seen in the bang statement Management Policies.Sony Corp has retained good things of Japanese Culture hasnt been reluctant to adopt culture which is not atypical Japanese in nature, which has resulted in building these huge electronic giant sustain it for to a greater extent than five decades, looks for a in store(predicate) which is very bright.4. SONYS CAPABILITIES, COMPETENCIES RESOURCESSony Corporation is consider ed one of the worlds near successful companies, operating in the electronics, games, music, films and financial services industry (Hanson et al, 2001). Sony is cognise for creating products that stimulate the senses and refresh the spirit (Sony, 2007). Effectively managing a combination of its resources, capabilities and amount competencies, has allowed Sony to create a strong sustainable free-enterprise(a) vantage.Assessment of Sony Corporations Resources and CapabilitiesSony Corporation is committed on its efforts to continuously develop original technology that generates a high appeal to the general public due to its quality and salute effectiveness. Over the years, Sony Corporation has been able to build a substantial base meant to boost the companys designing and manufacturing capabilities. This enables the company to bring to markets truly original and to a greater extent importantly mobile devices that are reasonably priced. The enquiry and development team of Sony Corpo ration also plays a crucial role in the achievement of this feat. The company also believes that making a positive impact in the society through their quality products is the very essence of being a manufacturer.Sony Corporations Competitive AdvantageEconomies of Scale and Scope in manufacturing and research and development arising from its numerous facilities situated in Japan, the United States and other countries worldwide.Unique tone Technology owing to heavy emphasis on researchSony Corporations committal to research development activities has always been one of its top strategies to remain competitive in the market.Differentiated ProductsThrough the output signal and marketing of oppositeiated products originating from their research and development activities, Sony Corporation is able to create its own firm-specific advantages. The continuous seeking of research and development processes enables Sony Corporation to produce a steady rain cats and dogs of originally diff erentiated products which makes it effortful for competitors to find substitutes. Because of this differentiated approach, Sony Corporation is able to market their products worldwide, which enables them in turn to maximize the returns on research and development expenditures. Sony Corporations competitive advantages could be sustained provided the company would continue to focus on its core competencies. However, the company also has to be aware of the latest technological.Sony Corporations Resources Resources refer to factors that a company owns controls and uses for the purpose of creating value (Hill et al, 2007). Sonys numerous transparent and intangible resources help to de enclosureine its distinctive competency, thus leading to maintaining a competitive advantage.When identifying Sonys resources, both its tangible and intangible assets are acknowledged. Tangible resources include assets that are financial in nature, or wealthy person physical properties (Hill et al, 2007) . In 2007, Sony save a sales and operating cash flow of $70,303 million, an increase of 10.5 share from 2006 (Sony United, 2007), as part of its financial resources. Land, buildings, machinery, and equipment are also part of Sonys tangible resources, and are worth approximately $14 million (Sony United, 2007).Intangible resources include those non-physical assets that the company uses to produce goods or provide services, or expects to generate future productive benefits (Hill et al, 2007). The Sony brand is considered one of the worlds most recognisable and trusted brands and was bedded 21st in the vexation Week/Interbred list of the Worlds century Most Valuable Brands with an estimated value of US$14 billion (Singh et al, 2005). The Sony brand is associated with superior quality, innovation and style (Sony United, 2007), in the minds of its clients.5. Sonys SWOT Analysis.OpportunitiesDevelopment of new technologyGrowing trend customer base (Focus on BRIC Nations) pose consis tent net clams might in core hardware businesses (TV, game and digital imaging)Diversify in game producing for its hardware.Listen to enunciate of Customer.Easy to use products.ThreatsNew substitute products emergingPrice competition.Economic pressure.Losing the dominance in key product categories.(TV, P.S, D.I)Due to poor financial performance could have less money for RD.StrengthStrong sales marketing capabilities pipeline location or product exclusivityHigh quality product refined customer serviceCost advantage (Discount)Good distribution meshingWeaknessWeak financial performance (Low Profitability Low ROCE) scatty a customer viewpointProducts with galore(postnominal) feature but difficult to use.Lack of hit productsDevelopment of similar productsPatent problem in the whole Industry.Particular1997Millions of Yen2009Millions of YenTotal Electronically Business3,930,292 (69.4%)5,032,920 (65.1%)Music570,119 (10.1%)50,541 (0.6%)Picture438,551(7.7%)717,513 (9.3%)Insurance227, 920(4%)523,307 (6.8%)Games408,335(7.2%)984,855 (12.7%)Others87,917(1.6%)471,398 (5.5%)Total Revenue5,658,2537,729,993 (+136.62%)6. Comparing gross revenue Revenue by BusinessArea for 1997 2009.FINANCIAL PERFORMANCE.Particular20082009gross revenue8,871,4147,729,993 (-12.87%)R D Expenses520,568497,297 (-4.47%)Employees180,500171,300 (-5.1%)Profit Margin4.2%-1.3%R D to sales5.9%6.4%Current Ratio1.25 time0.95 timeGearing Ratio21.04%22.27% precipitate on Equity16.4%-5.9%Roce6.65%-2.13%6.2 FINANCIAL ANALYSIS.Sonys financial condition is good but require to be better for a matured Company like Sony which is in existence since 1946 to a greater extent than 6 decades. It is acceptable but should be a top priority for the Management to make it better. Below mentioned are few observationsMajority of its earning in electronic Industry.Earning from music has reduced substantially could be because of piracy issues or Late M.Js sturdy public city.The opera hat diversified product is gaming, so should look to diversify more in this area. (Game MFG.)Major problem with SONY is its low net profitability.Gearing ratio is 22.27% which is good as has a scope for future borrowing if required.RD has just reduced by 4%ROCE Return for share holders are major concern for SONY.7. zeal of leadership and managementThe leadership style of Akio Morita the co-founder of Sony Corporation included the ability to imagine, design, implement and develop new products, marketing, brand management strategies and human resources readiness as well. Akio Morita resigned from the post of the death chair, during which he positioned Sony as the worlds most successful consumer electronics company. Sony was ranked 37 on the Fortune 500 global list. Under Moritas leadership, Sony highly-developed many new products and technologies. One of the other key success factors of Sony was Moritas quite a little skills and his trust in his employees. Sony continued its tradition of offering innovative prod ucts after Moritas death in 1999. Sony has been a modern Japanese company as they have promoted young Idei to President of Sony when he was 57 years itsy-bitsy according to Japanese standard. It was under his leadership that they have recovered from the 1995 crisis have posted the highest ever profit. Idei also launched Transformation 60 which was not of a much success. The main purposes of Transformation 60 wereReduce cost by 300 Billion Yen.Decrease workforce by 20000.Achieve profit margin of 10% march 06.By the early 21st century, Sony was lining several problems due to the slowdown in the global economy, but thence they recovered well under the leadership of Sir Howard Stringer who was made the CEO Chairman of the Sony Corporation. A Non Japanese to senior management position was not a typical Japanese culture but has given them the desired result.So as a whole Sony Corporation has always been under a good senior management for all the years.8. RECOMMENDATIONBuilding of sch eme Sony as a much international company with major branches in Europe and the United States and stocks listed in 23 stock exchanges, the Japanese cultural school system is not sufficient. Becoming a mature company, the strategy should also change to more profit orientated. There should also be greater emphasis on market share, especially in Japan where Sonys market is shrinking. Strategy should be aimed at greater control and communication between manager and workers, especially the engineers in the RD Department.Diversification One direction which is possible is concentrating more on electronic know how in non-consumer business. Currently, the purchaser has much more choosing power and competition is fierce. The competitors are also able to copy the product in a much shorter time. To create bigger profit margins, Sony should concentrate on the business sector and industries, supplying high technology equipment and parts. This would make full use of the RD Department. Although th e Sony name is often link up to expensive, high-profit end of the market, the shaping should also expand its product range by offering take down priced, simpler featured products that would compete head on with others. With the trim priced line, Sony can also increase its market shares in both abroad and Japanese markets.Alliance and Cooperation Sony should try to become a leader instead of a maverick. The difference is great, the leader, besides a great innovator, should also be a great coordinator. Internally, the different RD groups should cooperate more. The product line should also be made more compatible with one another, i.e. no more secret projects. Products should be made with higher added value and longer life rather than making frequent model changes. This is also a bring up from a manufacturer-orientated mentality to a consumer-orientated mentality, which is a way to save inherent resources. The brand-line compatibility also builds brand loyalty for consumers.Cost Cutting Cost swing is important because RD plays an integral part in the success of Sony and cannot be bed drastically although it gobbles up 10% of sales. Therefore, the only way to improve profit margins is to cut cost. Sony is not fully making use of other lower cost areas in the world, especially Asian countries such as Malaysia, Thailand and the Philippines etcetera By setting up factories in these countries, Sony can take advantage of their cheap labour and also get a head get off in their budding consumer markets.Products should be refined instead of reinvented so that there would be less set up cost and greater mechanization could be achieved. This could also be seen as a long term strategy.Integration of production, design and marketing In many ways, designing and ontogenesis of a product is clear up from the production and marketing. RD should listen more to what the consumer needs and then innovate instead of always creating new product for markets. With great free dom, the designing team should also take on greater responsibleness in making the product fit to the current production physique and marketing aims. They should also be made more responsible to the profit and loss of the particular product. Empowering these three separate groups creates conflict, but it also brings these separate efficient groups together achieving synergy.Implementation Internally, strategy should be reviewed beginning with regenerate the corporate goals. It should integrate together both the Japanese work value-system and its western counterparts. This is possible, because Sony is a multinational corporation with employees and customers in many different countries. This involves writing the importance of profits and its responsibility to shareholders in the statement. Integration of the company, the designing, production and marketing should be encouraged, with increased communication between each group and the management acting as liaison and guidance. The ma nagement should be providing the organization with specific goals and strategies for the short and long term. These changes are intended to balance business Vs engineering. Setting up alliances with fellow electronic manufacturers / competitor is crucial to joint benefit so should be pursued as soon as possible.9. Conclusion.The reputed brand name is one the Sonys strength, but on the other hand, many competitors start to see Sony as their target and main competitor, which will confabulate various threats against Sony. Sony also needs to concentrates on improving itself. They collect Voice of Customer (VOC), which directly reflect the responses, expectations or suggestions from end-users. It could be observed that Sony is positively dealing with its competitors, through learning from failure and looking for room to encourage improve. Such strategy helps minimize the probabilities that their customers would turn to other competitors. It aims at retaining its present customers and keeping their Number 1 market position.Sony made full efforts to fight down the environment from 1989. Sony is using blue ocean strategy on the business. Toward this end, Sony has sponsored many package redesign projects and committed to considering the environment, not only to create environmentally-friendly design but also to reduce material use. Due to this heartfelt customer service, high-quality, reliable products that Sonys customers can use with confidence. At the end of this case study Sony is not in a very strong strategic position but it is also not in a very bad strategic position. The position of Sony is in between.The conclusion is that change is needed in Sony. However, even with strategically and structure change, the Sony spirit of Technovation(technological Innovation) should remain intact because that is what made Sony grow and would make it stay strong.