Distribution Sales And Marketing

Published Date: 02 Nov 2017

INTRODUCTION

Sony Corporation is a leading Japanese manufacturer of electronics, games and entertainment products. Sony Corporation is formed and gradually grows into a multi-billion global organization. When we think about Sony at first every ones mind comes the image of its highly technological and innovative electronic goods. The company announced its record loss of revenue of 520 billion yen in March 2012.

The empire-building strategy harmed company’s innovation and operation to slowdown and also impaired their competitiveness, in all the market segments they betrothed in. The global economic slowdown in 2008 distress Sony’s profitability and consumer spending dropped causing company huge revenue loss followed by earthquake and tsunami. Sony also lost their competitiveness against their rivals.

Sony continues to fuel industry growth with the sales of innovative and unique Sony products as well as with the company’s convergence strategy stated by companies new CEO. Sony’s future is determined how the company meets the challenges of change .Company gives more importance to research and development and keep improving the quality of its products.

COMPANY OVERVIEW

The word Sony is derived from two sounds ‘onus’ and ‘sonic’. Masaru Ibuka and Akiro Morila founded Sony Corporation in 1946.Its headquarters is in Tokyo. In 1958 Sony corporate was listed on the Tokyo Stock Exchange. Sony played an important role in the development of Japan as a powerful exporter in 1960s 70s and 80s. It improved its production quality with the participation of American firms.

Sony corporation is a holding company it is a parent company of Sony group. Which is operating in six segments electronics, pictures, games, financial services, music and others .Almost 70% of its income is from the electronic segments .By producing number of iconic products Sony has acclaimed as a world leader? Rather than copping the standard of others manufactures Sony has developed their own technological innovations .They received The Emmy Awards in 1973 for developing Trinitron colour T.V. system .Sony introduced the most success ‘’WALKMAN’’ in 1979. In 1980 they started producing variety of consumer-use still cameras and comcords. In 1990 they began producing home-use PC launching their "VAIO"series. They popularized play station gaming consoles.

They have gone through number of acquisitions and joint ventures. Sony acquired Columbia Pictures Entertainment in 1989 then changed into Sony pictures entertainment. In 2002 Aiwa was merged into Sony corporation .In 2004 Sony corporation established Sony Life Assurance in Japan. In 2004 Sony and Bertelsmann AG come into 50-50 joint ventures and later becomes Sony BMG Music Entertainment. Sony sells mobile sets by joining with Erickson Company. Sony also offers variety of products like music singing robot called Roily, dog shaped Roberts called AIBO, humanoids and QRIO.(R.A.Gershon 2002)

SONY MAIN GOAL

The first and prime object for setting up the company was to fashion an resolute work environment. Sony will continue promoting technological innovation and product development that contribute to cultural and social progress.

VISION STATEMENT

Vision of a company clearly clarifies the direction how a company needs to move. Vision always shows the long run process of a company that determines the future. It is all about the aspirations and abilities of the organization (kotter, 1998)

Sony’s CEO Idei Nobuyuki has openly declared that he want" Sony to become a broad band entertainment company" It continue with the strategy, focusing on the broadband networks. He wants Sony to be everywhere, wherever people gather mainly on the internet. Company continues to seek modern approaches to transform their ability to acquire profitable and sustainable growth.

MISSION STATEMENT

Mission clearly states the working activities and how the business is going on and the position where it is and what it want to achieve. Mission is only for a short period of time. Mission statement tells us about the rules and regulations and goals of an organization (Royal Philis,1998)

Sony is actively trying to improve the quality of life for the next generation through their innovations and creating value for their stake holders. To promote high quality products using nano technology and services those are suitable for the coming era. To promote education in science among the common public.

ORGANIZATIONAL ORIENTATION

Organizational orientation provides complete information of the organization. This tool is used mainly for large organizations both private and public. The profitable organizational orientation Sony established from changing its brand image from "economical and reliable" to "quality and competitive" made some effective changes.

The four major steps to succeed in market are,

As the increase in Market Share increases the profitability, many firms are concerned in increasing the market share. The reasons lies behind are as follows,

1 Increasing the growth of sales even if the industry is not growing.

2 Developing cost advantage.

3 Increasing the bargaining power due to which the firm has an advantage in negotiation with channel members and suppliers.

4 Increasing the reputation of the firm.

SONY’S MARKET SHARE ANALYSIS

Sony is a global multinational company so the market shares are ranged all over the world in different market places, so we can't specify a particular market. Sony is also participating in other major markets such as game console market, computers market and communications market, specially the cell phone market with its merger over Erickson. "Our target is to become one of the top three players in the industry,

In the gaming industry, Sony holds 70% of the market shares while Nintendo and Microsoft share 15% each. "Pricing is the only area of global marketing mix where policy can be changed rapidly without large direct cost implications"( Hollensen,S 2007)

CORPORATE CITIZENSHIP

Sony has a widespread range of responsibility towards the society. Sony is one of the world's corporate organizations which give desired respect to their employees and also help their employees to develop their knowledge by various learning methods like organizing training program, orientation towards new products etc. Sony also shows high levels of co-operate integrity to both stakeholder and society

BUSINESS PLANNING

Sustainability and performance is the key factor of their prior consideration in planning a new product and services. Creating new business models is to decrease their environment impact and to move forward to attain a sustainable growth.

RESEARCH AND DEVELOPMENT

The main objective of Sony international ltd, is to develop a new technology which can contribute towards the improvement of our society, they will also aim to increase their productivity and the product performance and services to make them sustainable and to access high quality concept. It is necessary for Sony to continue technological innovation in order to maintain group-wide growth. Sony believes that technology made possible by our research and development activities is key to the differentiation of products in existing businesses and the source of creating value in new businesses .Research and development is focused in four key domains: a common development platform technology for home and mobile electronics, and semiconductor, device, and software technologies, which are essential for product differentiation and for creating value-added products research and development costs to sales.

PRODUCT DESIGN

Sony is applying its creative technology principle to design all their product and services in the sense to meet the environmental benefits. All their product has been designed in such a way to reduce their technological impact on the environmental throughout their life period, Sony also focus their attention towards reducing electronic wastes which is very harmful to the human life.

MANUFACTURING PROCESS AND SITE MANAGEMENT

Sony continuously focusing its entire concentration in environmental management through improving their sites both at manufacturing and non-manufacturing and tried to move towards zero emission production .Sony is implementing technological innovation and environmental management to reduce its impact on environment while manufacturing their products.

DISTRIBUTION, SALES AND MARKETING

Sony marketing is mainly based on their product qualities. Sony has tried to reduce their impact on environment in almost all their processing sectors like packaging, distribution. They successfully include all the vital information for the costumers in their products.

INFORMATION DISCLOSURE AND STAKEHOLDER COMMUNICATION

Sony always discuss the matters all its products and other matters with stake holders and also disclose all its information details in a form that is accessible to public they also consider the suggestion of the staff and opinions of the stake holders and take effort for a detail evaluation to improve their products and performance.

RISK, HEALTH AND SAFETY MANAGEMENT

The Sony also focuses the attention towards health and safety problems that arise during the manufacturing of their products. They also take efforts to concentrate in all the management part to rectify it. They aim to reduce the accidents and causality to zero. Sony's management had discussion about the risk factor with stakeholders and public as they realize these measures are the integral part of any business organizations.

ORGANIZATIONAL CULTURE

Organizational culture is the collective programming of the mind that distinguish the member of one organization from other (Hofslede 2001)

The research and development section of sony is entirely different from other companies . There is strong norms and principles which create strategies through their actions. For superior achievements company gives statues instead of bonuses. There is also strong seniority system is existing which is a typical Japanese firm. Over 7,oo,ooo people are working in the company all over the world. (Arslan Ahmed 2009)

MARKETING STRATEGY

Marketing strategy can be called as a process that allows an enterprise to concentrate its minimal resources on the greatest opportunities to amplify sales and accomplish a sustainable competitive advantage. The main aim of marketing Strategy is capturing consumers mind and enhance an innovate brand image, will execute through product groups , incorporating number of out of box marketing campaigns etc.

Sony’s products are available in all color product groups, rating from Bravia, Cyber shot Cameras to Walkman Vaio laptops. A strategy considers all the anticipating moves of competitors in the market.

CORE COMPETENCE

Core competencies are those advantages that are vital for organizations to achieve competitive lead. According to Prahalad & Hamel(1989). Core competency is "the collective learning in the organization, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies. Customer Value, competitor differentiation and Extendibility these capabilities are crucial to a company for achieving competitive lead. Core Competencies are the overall learning about how to control, co-ordinate the production of different items and skilled technologies.

Sony’s several tangible and intangible resources helps to understand its legendary proficiency and maintaining a competitive lead. They are famous for the introduction of several new products at first in the market. Sony has a brand name and it is widely popular for its superior quality, style, fashion and their innovating capability.(Fabio Walter 2008)

MARKET SEGMENTATION

"Market segmentation can be defined as the process of dividing a market into distinct subsets of customers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix"

Market segmentation is the process of identifying key group or sector within the general market. This market can be divided into segments by using four segmentation bases-psychographic,behavioral, geographic and demographic basis. The market is segmented based on the customer needs and wants. Company aims only to push its products.

MARKETING MIX

Marketing Mix is the division of groups to make a particular product by pricing product, branding, place and quality. The ingredients in marketing mix include product planning, pricing, packing, display, serving, physical handling (Neil. H. Borden 1964)

The main concept of marketing is the marketing mix that includes all the necessary marketing issues that a company could adopt and follow to influence and attract the customers.

The marketing mix generally relies on such as

Product

Price

Promotion

Place

PRODUCT

PRODUCT MIX

Any tangible or physical things or services, that satisfies a customer need is often referred as product. As this satisfies the customer by providing their functional requirements, the product is considered as the core element of marketing mix

Sony Corporation is the parent company of Sony group and is the electronics business unit. The various products of Sony Corporation are

PRODUCT LINE AND PRODUCT MIX

PRODUCT MIX

The total brand sets that are marked by a company is termed as product mix .product mix is the total sum of the product lines of the organization. The product mix of the Sony Corporation fails under different categories such as

Electronics

Entertainment

Games

Financial services and others

PRODUCT LINE

The total set of product items and variants offered by the company, which aer closely related in their functions and benefits are known as product line . The product line of Sony Corporation is

1. Television and Home Cinema

2. VAIO computing

3. Digital Cameras

4. Printers and Photo frames

5. Camcorders

6. Accessories and headphones

7. Play station

8. e- BOOK

9. Sony Eriksson mobile phones

10. Reader cameras

BRAND

The brand name of Sony corporation product is Sony which is common for electronics and other products. Bravia brand for televisions of Sony corporation and VAIO brand name for the computer peripherals, which is familiar around the world for its consumer electronic products and gaming systems.

SERVICES

The support and maintainability for the troubleshooting, repairs, upgrades and operations in PC AND LAPTOP OF Sony is better than many other products. This could be shown from the following graph where 9% of the product is easy to support,33% is ok to support and only 9% of the whole products is hard to support.

PRICE MIX

Setting price for the product considered as the essential and important one in making as price is a revenue earner and it would be the turn to the company for its effort in manufacturing and marketing a product. if the price of a product doesn’t cover the costs made for the product then the company would acquire a loss, therefore price of the product should be not set in isolation rather it should be blended in accordance to the other 3p’s.

THE DEMAND CURVE

One of the important concepts of pricing is demand. When the price of the product increases, the sales will be low with a decrease in demand which do not require more quantity of the product. If the price is low .sales would increase and the demand will be more which increases the requirement of the quantity of the product.(Jobber.D.2007)

PRICING METHODS OF SONY CORPORATION

There are three methods of pricing based on the cost of the product, competitors for the product and the marketing of the product. The products of the Sony Corporation are priced on the basis of the Cost of the product and Competitor of some of its electronics products, and very few products are priced according to the marketing Source Jobber and Fahy (2003), "Foundations of Marketing", McGraw-Hill, pp: 164

Pricing Strategies of Sony

There are various strategies for pricing such as premium pricing, economy pricing, psychological pricing, product line pricing, optional product pricing, captive product pricing, product bundle pricing, value pricing, geographical pricing, and promotional pricing. Sony follows the pricing strategies such as

Premium pricing

Economy pricing

Psychological pricing

Product line pricing

PREMIUM PRICING

The core product of Sony comes under Premium pricing. The following products are some of the premium priced products the sample price for them are also provided:

Bravia LCD TVs: Price ranging approximately from £250 to £1600 according to the different model and functional facilities.

VAIO Laptops and Desktops: Price ranging from £250 to £2175 depending on various configurations and performances

Projectors / Home Audio: Price of the projectors ranging from £153 to £770 and the Home Audio prices range between £150 and £1500, the price of home video

ECONOMY PRICING

Some of the product of the Sony Corporation adopts economy pricing that is products with low price and high quality, such as

Digital Cameras / MP3 Players: The economy pricing of Sony digital Cameras are from £100 to £1600 and for MP3 Players - £35 to £360 with high quality aud Car Radios: Car radios of Sony Corporation ranges from £50 to £150 according to the audio effects

Mobiles (Sony Ericsson): Sony Corporation released variety of mobiles based on their styles, functionalities and performance ranging from £40 to £475

PRODUCT LINE PRICING

Sony Corporation released variety of products and their sub-products based on their style and performance. For Example Sony VAIO has many sub-products based on their configuration in it such as VAIO F series, FW series, NW series, Z series, W series, AW series, P series ranging from £250 to £2175.

PSYCHOLOGICAL PRICING

The Sony Corporation also provides the products under psychological pricing strategy that attracts the customers psychologically. For example, some of their products such as Digital Cameras ranges £99 instead £100, MP3 ranges from £29 instead of £30 and Bravia TVs from £249 rather £250 and VAIO laptops from £1599 instead £1600.

PENETRATION PRICING

The launch of some new products of Sony Corporation would have a low price with high quality (Penetration Price) in order to enter in to the market. Some of the VAIO laptops of Sony have a price range of £300 to £500 approximately as a penetration price. This price will be modified later once when the product became familiar among customers or when the demand of that product increases.

SKIMMING PRICE

The Skimming price strategy is used by the company that provides high price products for the customers who do not focus on price of the product. Sony Corporation provides very least products in this strategy, such as MP3 Players prices £350 and some digital cameras pricing £1500.

PRICE - QUALITY MATRIX FOR SONY CORPORATION PRODUCTS

Many of the core products of Sony Corporation possess high quality with high price that are in premium positioning such as VAIO laptops, VAIO Desktops, Bravia TVs, XPLOD and play station. Some of their product's quality is medium with medium price that are considered to be in the medium value position (Economy Pricing), such as, printers, photo frames and MP3 players. Products such as Digital Cameras, Batteries, and Home Audio etc are of high quality with medium price that are considered to be in value position.

QUALITY

Low Medium High

Low

Price Medium

High

Source: Marketing Management: Class Notes [03 March 2010]

PRICING ISSUES

Sony Corporation provides discounts for their products as Seasonal offers, during Christmas Eve and New Year era, they also provides summer offers. The Premium products such as VAIO Computing and Bravia LCD TVs will have medium cost during the offer time and the products with medium price like MP3 Players and Digital Cameras would be provided in economy pricing range.

SAMPLE PRICE COMPARISON FOR SONY CORPORATION

The following table provides a price comparison between Sony VAIO laptops and Toshiba according to their configuration, performance and functionalities sony vaio price graph

PROMOTION MIX

The promotion mix includes the following key characteristics that a company follows to promote its product:

Ø Advertising

Ø Personal Sales

Ø Direct Sales

Ø Sales Promotion

Ø Public Relations and Publicity

Ø Internet Promotion

PROMOTION MIX OF SONY

Sony follows all the six key characteristics of Promotion mix in order to promote its products:

ADVERTISING

Sony Corporation spends $3.6 billion (Mike Bradbury, Neal Kissel, 2006), every year for advertising its products in order to push its products to the customers and pull the customers towards their products. During 2007 and 2008 they have reduced their advertising expense by 50% due to recession, but currently they have improvised their expense in advertising to same (Mintel: April, 2009). Sony Corporation advertises its products in adopting many different ways and media. For example, majority of their advertisements is on television for their core products such as, Bravia LCD TV and VAIO laptops. Some of their products such as Playstations were promoted through sports, like Football in England Premiere League. Advertisements were also published in various newspapers and Magazines in order to make people aware about their products.

Sony also supports Co-Operative advertising, which provides materials and guidelines to their dealers such as ‘Sony World' for promoting advertisements in television and radio commercials, here the media costs will be shared between the Sony Corporation and the dealers.

DIRECT MARKETING

Sony covers a wide range of methods for promoting its products directly to customers:

Ø Telemarketing: Sony hires some companies for marketing its products through telephone using both in-bound and out-bound call centres. In January 2010, Sony Corporation provided IBM to outbound its part of Business processes (Source: sony.net, January 2010).

Ø Direct-Response Advertising: The promotion of the Sony products are also done by direct-response advertising that is, providing coupon to customers and getting their feedback or by providing ‘phone now' options.

Ø Catalogue Marketing: Sony frames its products catalogue about their various products and provides to customers for promoting its new featured products among the People

Ø Electronic Marketing: A wide range of ads are place in Internet, E-mails and Interactive Cable TVs which promotes the recent release consumer electronic goods to customers.

Ø Inserts: Many of the ads of Sony products features and functionalities are placed as leaflets in some of the magazines. Door to door leafleting is also carried out in some of the places.

SALES PROMOTION

The sales promotion is usually done in two ways:

Ø Consumer Promotions: this is done by offering coupons, Premiums, Money off, Bonus packs, free samples, Prize promotions and loyalty cards.

Ø Trade Promotions: This is processed by providing pricing Discounts, Allowances, Competitions and free goods.

Sony supports the two promotions by providing: Money Off, Seasonal offers during Christmas, New Year and Summer time offers, in order to increase its sales. They also provide premiums such as warranty and free services to customers who purchase some Premium products. According to a report Sony sold 20 million units of its product Playstation3 during the year 2008, in order to promote and increase its sales further Sony planned and reduced the price for the Playstation3 which improvised the sales for 2009 as expected by the company (Mintel, 2009). Sony promoted its Mobile product Sony Ericsson P1i by providing free scratch cards that would allow the customers to download 10 free Software for that mobile phone. Also Sony Ericsson K550i provided an offer of free Bluetooth headset and a year Manufacturer's warranty, when purchased.

PERSONAL SELLING

The process of selling the products to the customers directly by the company either face-to-face or through a medium is known as Personal selling.

Sony supports personal selling by selling its products directly to its customers through its website. All the details about the various categories of products are displayed in the Website of Sony Corporation. The customers could verify the details of the product and compare their prices, and could purchase the products directly from the website. This would offer an ease of purchase to customer and would develop trust among them about the company.

PLACE MIX OF SONY

The marketing decisions on place that is distribution of the products of the company should focus on the adequacy of the product quantity and customer needs.

DISTRIBUTION CHANNELS OF SONY

There are four main types of channels for distributing a product such as:

Ø Producer -- Consumer

Ø Producer - Retailer - Consumer

Ø Producer - Wholesaler - Retailer - Consumer

Ø Producer - Agent -- Wholesaler - Retailer – Consumer

THE SONY FOLLOWS THE FOLLOWING DISTRIBUTION CHANNELS

Source: Jobber.D (2007), Principles and Practice of Marketing, 5th Edition, pp: 682

Ø The product is distributed directly from producer to retailer through Online that is allowing the customer to place the order in the website of Sony Corporation and delivering the requested order directly to the customers by sending the order to their address.

Ø The other channel of Sony is distributing the products to the distributer or retailer where the customers could purchase the products from the retailer by visiting to their showroom.

Ø Sony also supplies the product to the wholesalers who then sells the product to the retailer where the consumer could buy the goods directly by making their presence over the branches of Sony such as Sony World, Sony Centre, Sony Shop and many other Sony retail outlets. The Sony stores location could be found by accessing their website http://www.sony.co.uk/dealerlocator/search

DISTRIBUTION INTENSITY

There are three types of intensity according to the nature of the product. They are Intensive distribution by utilising all the available outlets, Selective distribution by utilising limited number of outlets, and exclusive distribution where there is only one wholesaler/retailer available in one sales area.

Sony Corporation's distribution intensity is "Selective Distribution" by providing products to the selective dealers.

SALES CHANNELS OF SONY

Sony Corporation supports three major sales channels:

1) Direct Sales channel

2) Dealership Sales channels

3) E-Commerce

Sales of the variety of the products of the Sony Corporation, is made through the company's website which is the direct sales. The alternative way of Sony Corporation in selling their products is by selling the products to dealers who then sells to customers. The most widely and ease of purchase for the customers worldwide is through E-commerce that is by selling the products via marketing websites such as Amazon, ebay, etc,. Mostly the price of the product purchased by the customer using either of the methods will not be affected. But the prices may vary from the rural areas to urban areas.

PESTLE ANALYSIS

POLITICAL FACTORS

Japan’s current transition from single to double party system abstracts resulting implications for Japan –based multinational corporations , interms of future legislation , government & trading policies

ECONOMIC FACTORS

Reduction in the disposable income resulting from recession has had a negative effect on consumer electronics sales world wide , increasing price competition.

Rating agencies have warned Japan of possible reduction in credit rating. The effect of changes incurrency exchange rates has been unfavourable for sony 2007 onwards, stripping away billions of yen (sony 2010)and such unfavourable currency exchange rate is deterring investors.

SOCIAL FACTORS

Aging population is one of the main hardles for sony in japan . Sony’s largest market is in japan it has up to 43% of its total sales. (SONY, 2010). Due to several security attacks and failure to notify innediately has tarnished Sony’s brand image.

TECHNOLOGICAL FACTORS

Consumers are moving toward multi-functional devices, the demand for dedicated devices is reducing

The market for 3D related technologies is growing rapiedly.

Industry –wide movement toward networked products& services and cloud computing.

LEGAL FACTORS

Age and content restrictions from international regulatory bodies.

EU warning over privacy issues following security breach on PSN network & Sony online entertainment properties.

ENVIRONMENTAL FACTORS

Some of Sony’s manufacturing activities were suspended after recent tsunami (sony) resulting in sharp price drop of 9% (yahoo finance 2011).

ANALYSIS OF SONY’S COMPETITIVE ADVANTAGE

MARKETING STRATEGY OF SONY CORPORATION

"Competitive marketing strategy occurs within department, across organizations, and within people's head as a way of doing business. Marketing strategy defines the specific market towards which activities are to be targeted and the types of competitive advantages that are to be developed and exploited" (West et al., 2006: 04, 35)

"Primary focus is to effectively allocate and coordinate marketing resources and activities to accomplish the firm's objectives within a specific product market" (Mullins and Walker 2010: 43)

Sony is a well-known, popular, and successful company and strongly emphasizing on strategic marketing planning that enables the company to stay competitive and alive in its industry. Sony is continuously expanding its products and services from electronics to digital i.e. Sony Home Entertainment and BMG Music Entertainment and lot more like movie production and distribution (Sony Picture) and Games. Sony has launched 3D-related products for the home, including TV, Blu-ray Disc players/recorders and 3D gaming on PlayStation3.

SIMPLE WAYS TO APPROACH MARKETING STRATEGY

Source: West et al., 2006: pp:05

"The marketing plan is the central instrument for directing and coordinating the marketing efforts. The strategic marketing plan lays out the target markets and the customer perceived value offerings the firm will offer, based on as analysis of the best market opportunities" (Kotler, et al., 2009: 86)

COMPETITIVE ADVANTAGE OF SONY CORPORATION

The most important thing the company should aware of the competitor's activities, and acquire their actions and backgrounds when implementing its strategic marketing planning and this can be done by different kinds of strategies and the most important one is (Porters generic strategies) because gaining knowledge and information against competitor's enable and help in creating measures to gain advantage over competitors.

Unique and innovative standard quality technology owing to heavy emphasis on research and development, the commitment of Sony Corporation's to research and development in industry has always been one of its top priority i.e. strategies to gain leadership and remain competitive in the market. The competitive advantage possessed by Sony is discussed with the help of Porter's generic strategies and Porter's five force analysis.

PORTER’S GENERIC STRATEGIES

Professor Michael Porter suggested that some of the most rudimentary choices faced by companies are essentially the range of the markets and competition in their respective markets. The profit of any organizationis the difference between its total revenues and costs. Therefore high profitability can be attained through achieving the lowest costs or the highest prices with respect to the competition. The Porter's generic strategies are:

Ø Cost

Ø Differentiation

Ø Cost Focus

Ø Differentiation Focus

THE MAIN STRATEGY OF SONYIS DIFFERENTIATION AND DIFFERENTIATION FOCOUS

Competitive Advantage

Low Cost Product Uniqueness

Target Industry Wide

Scope

Market Segment

PRODUCT DIFFERENTIATION

Sony Corporation is able to create its own firm specific advantages through its innovative, unique production i.e. differentiated products and from their activities of research, development and best marketing practices. Because of its differentiated strategy, Sony products are hard to imitate and also make its hard or difficult for competitors to find substitutes. It is exactly because of this differentiated approach, Sony is able to market their unique products globally, in return which enables them to maximize the returns on both research & development expenditures.

The competitive advantage of Sony Corporation could be persistent provided the company would continue to emphasize on its core competencies both inside & outside approach. Sony Corporation should not be satisfied with the things they already know about their competitors and should make every effort to find out things about its competitors that cannot be clearly noticed. However the corporation has to be strongly aware of the latest technological changes both (inside & outside approach). In the consumer market, Sony Corporation has gain much success as compared to its competitors like Samsung, NEC, LG, HP, Dell, Lenovo etc. but the Corporation's future goal has to produce and sell more.

Sony Corporation has numerous core competencies by which they could gain more advantage over their competitors another core competency of the company is its brand management. In today's market structure most top companies including Sony find it very hard or difficult to create any kind of sustainable competitive advantage based on product alone. The key internal strengths of the Sony Company are the correct and effective marketing strategies, but there are continuous changes and emerging condition in globalization, stiff competition and technological innovation into which Sony has to improve its operational standards.

PORTER’S FIVE COMPETITIVE FORCES

Source: (Mullins and walker, 2010: 82)

According to Michael porter view "the collective strength of these forces determining the ultimate profit potential of the industry and the ability of firms in an industry to earn rates of return on investment in excess of the cost of capital". Technology is continuously increasing and the electronic industry has a rapid growth. The present brands have made high entry barriers for new entrants and its takes so long for the new product to be popular in the present market place.

RIVELARY AMONG PRESENT COMPETITORS

"Rivalry occurs among firms that produce products that are close substitutes for each other, especially when one competitor acts to improve its standing or protects its position" (Mullins and Walker, 2010)

Sony Corporation is the world top producer of the electronic devices and equipments. Sony is having a big market share for hand held Computer OS. The usage of Sony Laptops in USA is eighty percent and also Sony is holding a big share in hardware market as compared to its competitors like Toshiba, Samsung, and Hitachi etc. In Laptop market Sony's major competitors are DELL and HP both is providing standard class of computers to their attractive customers. Sony is facing threat from Samsung Home theatre market and Cannon Digital Camera's, which is coming to market with an effective policy and low cost strategies and this has lead Sony to intense rivalry.

THREATS OF NEW ENTRANTS

"The greater the threats of new entrants, the less will be an industry's attractiveness" (Mullins and walker, 2010) As technology is continuously growing the entry of new electronic company will have to face and deal with high costs for their introduction of technology in the industry also they have to face marketing and advertising issues. Sony Corporation is facing a great threat from its competitors like Samsung in Home theatre Products like (Plasma TV, Sony Bravia). All Sony major competitors are establishing their distribution channels globally. Sony is an emerging company with several hundred unique products but political factors for Sony can be alter at any time because the government is holding the power to do amendments in trade policy any time, so from this aspect Sony Corporation must aware of these governmental laws, which can strongly effect its performance and weaken its competitive position.

BARGAINING POWER OF SUPPLIER

"The greater the bargaining power of the key supplier to an industry, the less will be the overall attractiveness of the industry" (Mullins and Walker, 2010: 84)

The suppliers of Sony Corporation are powerful as suppliers want a platform of industry and right channel for their distribution & consumption. The suppliers of Sony Corporation's competitors have relatively less bargaining power because the value of their products in the market is less as compared to Sony products and still their product have to establish reliability or consistency in the market. The brands of competitors are in conflict with Sony Brand where these products have been able to protect the confidence of its attractive customers globally. Sony has unveiled plans to rapidly boost its 3D product range over the next year, launching TV, Blu-ray and gaming products with the technology.

BARGAINING POWER OF BUYERS

In the mobile computing industry it is fact that the bargaining power of the buyers is relatively low and aside from Sony there are several more giant players in the industry. For price and model customers are always having less bargaining power as they are all the time looking for cheap price and also they have the power base of switching costs which allow them to buy the same kind of products with cheaper price but different classification. Electronic industry has a big customer base and companies should focus on the market trend. Sony is targeting market from different aspects while covering every age group for game and home theatre entertainment. Sony Corporation is now become a brand name with unique and attractive products and getting customer attention quickly and also makes them to buy a vast range of products.

THREATS OF SUBSTITUTE PRODUCTS

Competition in the industry is always on the peak and alternative products of the same purpose are always available at a low price and minute margins. In electronic industry competition never stops, to get better results manufacturer are using every market planning strategy to attract customers for their own products and also spend or invest a lot of money into product marketing and advertising activity. Customer is looking all the time for quality and brand name. Sony laptops are little expensive as compared to DELL and HP also play station 3 if we compare it to XBOX 360 is much more expensive. But Sony strategic management and marketing policies are much better as compare to its competitors like Cannon, Nikon, HP, DELL, and Lenovo etc.

SWOT ANALYSIS

SWOT analysis, is a strategic planning tool used to estimate the strengths opportunities, weakness and threats. It also helps to recognize and identify the internal and external factors that are favorable and un favorable to achieve their goal.

STRENGTHS:

Sony has established a full-fledged supplier management system.

They select suppliers that meet the terms with laws, maintain solid financials, innovate technologically, and protect the environment, offer aggressive prices and control constituent qualities.

They accentuate on the regular exchange of information with suppliers via Ecommerce throughout the homogeneous procurement process.

The company has established a broad sales network, registered in approximately 200 countries and territories.

Sony provides good after-sales service.

Almost all of Sony’s consumer-use products carry a warranty.

The company maintains support contracts with customers in addition to warranties.

They also maintain customer information centers in their principal markets.

Sony has a strong brand name. Their products are generally measured to have

high quality and good design.

Sony has a number of Japanese and foreign patents, and is licensed to use number of patents owned by others. Sony considers their overall license position favorable to their operations.

WEAKNESSES:

Sony operates several product lines that serve too many parts of the entertainment value chain. They serve as a content provider, content aggregator, broadcaster, hardware producer, and manufacturer of value-added products"

.

The "empire-building" strategy not only caused the company’s innovation and operation to slow down, but also impaired their competitiveness in any of the market segments they are affianced in. Further, the product lines have little connections among themselves, and therefore do not generate many network externalities or cost advantages The current financial results are weak, showing high liquidity risks, diminishing sales, slowly recuperating profitability, low operating efficiency, underperforming stocks, and low investor confidence.

The current management team has been reasonably old-fashioned. While reorganization has repeatedly been implemented, it was usually done on a small scale. Strategically significant mergers and acquisitions were rarely conducted.

As Sony expanded into more segments and geographic locations, they became more sensitive to exchange rates and interest rates that are exogenous factors out of Sony’s control.

OPPORTUNITIES

Companies new CEO Kazuo Hirai might bring changes to the company. His expertise in computer entertainment and PlayStation might bring more focus to the firm’s product lines.

These products include games, Mobile TV, interactive TV, VOD, etc conditions; the business is likely to benefit from a recovery from the recent economic crisis

.

Sony’s stock price is possibly undervalued after its decline by more than 50% in

2011,which might attract more equity investments in the firm in the near future.

The considerable competition from Apple and Google could result in more assimilation within the electronics and software industry. Sony may take this opportunity to acquire more aggressively in order to drive down their manufacturing and intellectual property costs.

THREATS:

The Great East Japan Earthquake and its consequences may continue to badly affect Sony’s operating results and financial condition by incurring excessive restoration costs that exceed their insurance policies causing energy supply shortages that may lead to a reduction or suspension of production.

Product quality degradation caused by using replacement components reducing overall demand by consumers and businesses.

Sony must overcome increasingly severe competition from firms that may be more specialized or have greater resources.

Foreign exchange rate fluctuations can affect financial results because a large portion of Sony’s sales and assets are denominated in currencies other than the Yen.

Sony’s business reshufflings and renovation efforts are costly and may not attain their objectives.

Increased reliance on external business partners may increase the possibility that: Sony may incorporate flawed or inferior third party components or software. Third party components may be subject to copyright or patent intrusion claims. Sony’s operations may be affected if the external partners are subject to business or service disruption caused by accidents or bankruptcies. (Hao Tang 2012)

SONY IN INDIA

Sony corporation ,Japan one of the most renowned brand names in the world today established in India on November 1994, focusing on the sales and marketing of Sony products in the country. In a span of 16 years . Sony India has exemplified the hunt for excellence in the world of digital lifestyle becoming the country’s leading consumer electronics brand. In India , Sony has its foot print across all major towns and cities in the country through a distribution network comprising of over 10,400 dealers and distributors 270 exclusive Sony outlets and 23 direct branch locations. Sony India also has a strong service presence across the country with 255 service outlets.

KEY CONSIDERATIONS

One of the most important things we will need to be assure of is if the population of

India will be able to purchase our products. Sony carries many high end products, such as

Play station 3 and LCD TV’s we will be able to price many of these products much lower. This will give the population a greater purchasing power.

India’s geographic location leads little trade by land.  Located on the Indian Ocean gives it plenty of trading opportunities with the countries around India.   India being primarily a country with an enormous coastline has a huge share in the annual economic growth report.  Sony will take benefit in exporting its products to other countries.  Sony will do whatever is the most efficient way to customer satisfaction.

Economic considerations

India’s economy is booming   "The slow pace of reforms in critical areas had affected India's growth in the past years.  This will help Sony significantly.  India has the fifth largest retail sector in the world.  As the youth population is also growing Sony will greatly benefit from this boom because of the electronics and things that kids are attracted to.  This will be one of Sony’s biggest benefits to doing business in India. 

          

Financial consideration

 Merger and Acquisition advisory firms are helping businesses in India.  Sony will look into these m&a firms to handle long term investments and finances.  The developed economies were worst affected by the global economic downturn.  India's investment on the other hand was able to face downturn and it had placed itself in a very strong position compared to other countries. People from developed countries started diverting their funds to India to draw favorable and profitable returns since it is a growing economy.  A balanced profit and loss approach has made a ground for both the domestic and the foreign investors to find India a secure place for investment.

Workforce demographics

.  India has the youngest workforce among the largest economies in the world.    The younger workforce will have significant benefits to Sony.

Finance

Sony is one of Japan’s largest corporations by revenue. It had revenues of 6.395 trillion yen in2012. The company was massively profitable throughout the 1990s and early 2000s , because of the success of its play station.

In 2012 Sony announced that it would decrease its workforce by 10,000 an attempt to take the company back into green . In 2012 it faced a dreadful result after the company was founded net loss of 520 billion yen. Total loss of revenue exeeds 900 billion yen with in the past four years. Sony is also facing challenges due to the de regulations and liberalization policies. Sony is also struggling in the macro economic changes including Japan’s declining and aging population( Lynch, R. 2006)

Strategic Partnership Strategy

Sony and Ericsson combined together and formed Sony Ericsson in 2001.Sony Ericsson purchases several key components such as camera modules, memory , batteries and LCD panels from Sony. In 2004 Sony , the legendry iconic electronic giant SamSung

Joined hands in several strategic alliances with huge investment in research and development Sony and Sumsung are continuing to collaborate in the display area. Sony and interDigital team to launch machine-to-machine focused joint venture called convida wireless. Convida wireless represents a new collaboration between Sony, a longtime technology leader Inter Digital.The sharp and Sony collaboration will allow Sony stable access to a highly competitive and quality panel source . The collabooration with sharp and other partners will allow Song to comeback in track in track from the alling current situation.( Patrick Van de Wille 2013)

SONY CORPORATION’S SUCCESS

As per the brand message "make.belive", the Sony Corporation signified it spirit of ability and creativity in turning ideas into reality by innovating new products and implementing technology in them. Sony products are good in quality and satisfactory to customers for fulfilling their needs. The company's success could be observed from the release a new products and technologies to world and leading the top in the list of semiconductor manufacturing. Sony's achievements and product fame could be estimated from the surveys made by the media in which soy has been placed in top 10 to top 20 worldwide brands.

The migration of the electronic services to the digital services raised Sony's market by showing its innovation strategy to the world. Customers also felt that the prices of the basic products are medium with a good quality. Sony influenced most the worldwide customers with its wide range of products that includes various functionalities and high end performances. The Quality of the products that are manufactured by the Sony Corporation seem to increase every year. But there are some minor defects with their parts such as non-longevity of the batteries of the laptops. Sony concentrates on marketing the products of it in order to make them available in the customer's view. Sony keeps on releasing new products by delivering new technologies and new products for the consumers. As the product's prices are fair with the good quality and considerable service, Sony seemed to retain its customers with it, with improvises or stabilises the revenue of the company.

The company sticks to its strategy by following it strictly which make it differentiated from its competitors. Sony Corporation tends to release new products by March 2010, such as world's first ‘Demodulator LSI for DVB-T2'. Sony joins with discovery communications and IMAX to launch the world's first 24/7 3D Television Network in U.S.

Supporting Diversity in the Workplace

Sony promotes flexible working arrangements and diversity through the DIVI*@Sony project, which fosters an organizational culture suitable for diverse employees by offering

working environments that suit the needs of employees, irrespective of nationality, culture, race, gender and the presence or absence of physical limitations. Sony is striving to create an environment conducive to the greater opportunities for women and providing work environments in which disabilities are not an obstacle.Sony aims for working environments where employees can balance work and caring for family by increasing awareness of and expanding systems for caring for children and family members.

Training & Development

Sony recognizes its people as its most important management asset and the growth of its-

people as a crucial aspect of its management foundation. Sony strives to further enhance

motivation and encourage personal growth for its employees through on-the-job learning, These

programs are designed to:

• foster global business leaders and engineers;

• nurture management skills, in line with the belief that leadership abilities are essential for employee growth; and

• support individual career-building efforts (CSR Reporting 2012)

SONY’S CHALLENGES AND ISSUES

Sony has created differing interest between its various units (Tjosvold 1998).Sony seems to be aware of the problem of a lack of communication between departments. A second challenge for Sony is to be able to better assess the needs and wants of the market. (Edward ,2005) the need to adapt the products to different markets. To be able to serve the demands of the market properly . Although Sony is an international company and listed in23 stock exchanges . Sony’s market is dwelling not only in United States but also in Japan. The competitors are also able to copy the product in a much shorter time . The major reason for the declining profit are affected by the critical strategic issues faced by Sony which became a main drawback for them. The first strategic issue faced by Sony was the inefficient manufacturing structures which decrease Sony’s quality that badly affects their reputation and caused a decline in product competitiveness Sony even failed to fully study the problem(Forbes 2006) (Kotler&Keller 2006) argue ,good reputation can create a positive prejudice in the mind of the customer which make customer prefer the brand. There for, the diminishing of Sony’s reputation will create a negative prejudice and weaken their core competences which will directly affect their competitive advantages and become a major threat for Sony. Besides that quality and reputation issues, Sony are insufficient in responding to the shift of market demand and losing of its competitive advantages. The delays and lack of gaining advantages in building distribution channels . Sony lost its competitive advantage and large portion of the market shares in the game and electronic industry.

Recommendations to boost core competitiveness

Japanese culture school is not sufficient . To get a dominant position on the global market the company should change or modernize their strategy. . They should give more prominence on research and development department. Strategy should be made more control & communication between managers and workers. . One direction which is potential is focused more on electronic know how in non-consumer business. They would make full use of the R&D department It is better for them to produce less dependent and they can use there unique tales in video and semiconductor technology. With there technological advantage they can produce products in low cost and simpler features and introduce it into market to complete with other copycats .Acquisitions will allow Sony to gain market share, to have economies of scale, reduce manufacturing costs, and have permission to new technologies and patents. A higher market share would offer Sony with higher pricing power; economies of scale would raise productivity; reduced manufacturing cost would assistance Sony in a price competition; technologies and patents would permit Sony to speed up their innovation progress,

Another strategy that Sony implement to boost its core competence is miniaturization (DeWit & Meyer, 2004). Priem and Butler (2001) have shown that the Resources Based View ,contains a theory of sustainability but not a theory of competitive advantage" (Johnson et al, 2005: p155). Mintzberg et al (1998) argue that positioning is important and had develop the Positioning School.. Finlay (2000Thus, risk management and crisis control are also essential for Sony to implement in order to stay alert and increase their awareness to potential threats.

CONCLUSION

In the age of globalization, business ethics immensely influence competitors, share holders, suppliers, government, employees, customers and civil society. Corporations main focus should be on decent issues and on various purposeful fields such as human resource, finance, production, marketing, ICT etc. Sony want to get ride from their current crisis , they should learn from their mistakes and implement effective and efficient strategies . Another major concern for is to rebuild their damaged reputation and gain

Confidence from their customers.The impressive work done by global corporations in inculcating and fervent business ethics underscores the importance of value based leadership in international business scenario.

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