Case study paper happens to be one of the most intimidating tasks for the students. It’s not that corporate professionals are very fond of this exercise, but they know their way around the task. However, everyone struggles to gather relevant data on the chosen topic. Things get even harder if the topic is lesser known to common people.
Sony Corporation, on the other hand, is a popular name all across the world. Therefore, conducting a case study on this topic is going to be a lot easier than usual. To make things even better, we have assembled some major details about Sony Corporation that you can use for your case study paper.
A Brief History of Sony Corporation
Sony is one of the leading electronics companies in the world. The company started its journey from Tokyo to becoming one of the top multinational giants on the planet. From tape player to the iconic Walkman to the latest OLED TV – Sony’s tireless innovation has made it a profitable company for over 70 years.
Akio Morita and Masaru Ibuka founded Sony after World War II in 1946 in Tokyo. During that time, it was operating under the name Tokyo Telecommunications Engineering Corporation. Interestingly, the company started its operation with less than 200,000 yen, which is slightly more than $1,500.
The company released its first product, a power megaphone in less than a year. It released Japan’s first tape recorder in 1950. When the company decided to go global in the mid-1950s, it started looking for a new name, as the initials TKK was already taken. They combined the Latin word for sound, "Sonus," with an American word "Sonny" to get its current name Sony in 1958.
In 1960, Sony launched its branch in the US. They opened their UK branch eight after that. The company continued to grow during the 70s in European countries including Spain and France. It started its operations in Germany in 1986. The company’s mobile communication division, gaming division, imaging-products division, and Sony Pictures division remain profitable even today.
Business Strategies of Sony
In May 2018, Sony Corporation held its Corporate Strategy Meeting in Tokyo. Kenichiro Yoshida, current President and CEO of Sony Corporation, revealed the company’s corporate direction and mid-term strategy. This strategy creates the roadmap for the company over the next three years, starting with the fiscal year ending March 31, 2019.
For years, Sony's mission has been to inspire and fulfill the curiosity of customers. Its motto is to move people emotionally and get closer to them. The Japanese word KANDO expresses this mission. With the help of KANDO, Sony’s sustainable efforts aim to generate societal value as well as high profitability across its three major business areas – electronics, entertainment, and financial services.
- Overall Strategy of the Company
Sony Corporation has a clear approach toward fulfilling the goals set for the near future. Its overall strategies are listed below:
- Reinforcing the Direct to Consumer (DTC) services and content IP, while creating "Communities of Interest" remains one of the major strategies for Sony. Interestingly, the "Community of Interest" is believed to bring together people who share emotional values and experiences.
- Positioning branded hardware as sustainable and consistent cash flow generating businesses. The branded hardware allows Sony to connect users and creators through its innovating audio and video technologies.
- Maintaining Sony’s number one position worldwide in imaging applications by focusing on the area of CMOS image sensors. These sensors help to capture real-world experiences and are quite vital to KANDO creation.
Apart from these primary objectives outlined in Sony’s Mid-term Corporate Strategy, the company has also revealed its long term vision.
- Sony’s Long-Term Vision in Creating Social Value
Sony Corporation is one of the Fortune 500 companies in the world (ranked 97th in 2018). Sony Corp. has long-term vision to create social value. Here are the ideas that the company looks forward to exploring.
- Besides creating economic value as a company, Sony Corporation needs to focus on contributing to the natural environment of the Earth.
- With the mission of KANDO, Sony plans to create social value by providing a sense of enrichment through the introduction of a Community of Interest.
- The company also plans to continue promoting environmental and human rights initiatives across all level of its supply chain. Sony Corp. acknowledges the fact that their business exists only because of the natural environment and society.
- Sony also plans to make improvements in its imaging and sensing technologies to contribute safety in the self-driving care era.
- Sony Corp. also has the vision to make a broader contribution to the field of education. Their plan involves nurturing creators, providing tools to help children learn about programming, and incubation of businesses.
These details offer a clear idea about how Sony Corp. plans to operate in the near future. However, it is too soon to say if the company’s strategy is going to remain the same after three years.
SWOT Analysis of Sony
Like most of the major conglomerates, Sony Corporation serves two types of customers (B2B and B2C). Since the company operates in a variety of segments in the global market, the area of analysis is broader than usual.
i. Great competency in product differentiation and high value-added models.
ii. Reduction in PS4 cost due to advanced research and development.
iii. Impressive recurring business revenues.
iv. Steady growth in licensing revenues, broadcasting and streaming.
i. Higher marketing expenses due for motion pictures and media networks.
ii. Pictures segment not up to the mark as compared to the target set by the company.
iii. No proprietorship of any major US broadcast networks.
iv. Incurring high restructuring costs.
i. A great demand for Gaming and Network services.
ii. A significant shift in the market towards value-added models in home entertainment.
iii. Significant growth in semiconductor and image sensor division.
iv. Huge demand for digital streaming and recorded music.
i. Frequent earthquakes in Japan are making it difficult to manage operations smoothly.
ii. The fluctuation in foreign exchange rates.
iii. Increasing competition in the electronics and mobile segments.
iv. A low diversified portfolio can reduce profit during global recession.
Table 1: SWOT Analysis of Sony Corp.
Sony PESTLE Analysis
There's no denying that the business environment of Sony Corp. is as diverse as it can be. It is not just because it is a multinational company but also because it deals in a number of areas in the market.
i. Government policies regarding locally produced goods can help create more business opportunities for the company.
i. Fluctuations in the currency market have a role to play in sales.
ii. The company relies strongly on the US Fed interest rate scenario.
iii. The consumer behaviour is in favour of the company.
i. Significant growth in the demand for value-added models of electronic products.
ii. A major shift to digital streaming from downloads.
i. Increasing demand for virtual reality based products in the gaming industry.
ii. Improve earning with the help of better investments and advancement in technology.
i. Delay in approvals in receiving or producing components.
i. Being prone to earthquakes, Sony’s operations in Japan are most likely to get affected.
Table 2: PESTLE Analysis
It may not be possible to summarise all the major aspects of the corporate empire built by Sony Corporation over the past 70 years. But it is quite clear that the company knows how to make things work in this competitive world. What is more interesting is that instead of following a trend, Sony Corporation has always relied on its innovation to set the trend in the market.
The latest strategy adopted by the company stresses on creating social value for sure. However, they have not shifted from their goal of maintaining the no.1 place in the market even today. Based on the analyses done on the company, it can also be inferred that for the time being the majority of the elements are also in favor of Sony.
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Most Popular Questions Searched By Students:
Q- What is Sony’s business strategy and its reason for failure?
Ans- Sony perceived itself as the victim of creating products for mass production rather than opening up new markets.
With Dell, HP, Lenovo, and others, Sony had ended up in a cost, price, and manufacturing war to produce less expensive PCs rather than innovative products. As a result, Sony has developed a distinctly industrial strategy centered on manufacturing and volume rather than trying to create new products that are miles ahead of rivals.
The inability of Sony to transition from a production-centred culture to a customer-centred culture was one of the company's biggest failures. As a result, it lost out on business opportunities because customers were only drawn to vendors who could meet their demands.
Q- What challenges does Sony face?
Ans-Sony's corporate culture, which started more than 30 years ago, is a contributing factor to its current financial difficulties.
Sony's main issues/problems are slowing sales and revenues, cost-cutting measures, relocation of factories to Asia, divisional cooperation, and effective management.
As a result, the business may encounter opposition to any innovations the new leader may introduce. Stringer's biggest obstacle will be getting past internal opposition at the company.
Q- What is Sony's corporate strategy?
Ans- Sony is a well-known company that conducts a wide range of business. By aggressively implementing their convergence approach, they aim to maximise their uniqueness. Sony's main objective is to captivate and inspire its customers with its unique products. The business was established in 1946 by Masaru Ibuka and Akio Morita, and it has its headquarters in Minato, Tokyo, Japan.
As there are numerous competitors of comparable calibre, Sony's business strategy when marketing its products tends toward high-volume marketing and high brand visibility. Sony advertises across all platforms, including TV, print, online, billboards, and more. Sony's reputation is built on the superiority of its goods and services.
Q- What are Sony's strengths?
Ans- Sony Corporation has one of the strongest brands in the markets in which it competes. Sony also runs a variety of businesses. For instance, the business offers financial services, entertainment goods, and products for gaming and electronics. This diversification reduces market-based risks and increases Sony's financial stability. On the other hand, the business gains from its well-liked, lucrative products, like the PlayStation. This is one of Sony's advantages because it ensures profits in the face of fierce rivalry in the industry. Therefore, strengths guarantee ongoing business success. However, Sony needs to strengthen these areas to continue to compete effectively.
Q- Is Sony an ethical company?
Ans- Companies that achieve exceptional transparency, integrity, ethics, and compliance are recognised with the "World's Most Ethical Companies" award. The Sony Group Code of Conduct, which serves as the cornerstone of Sony's culture, is based on the fundamental moral principles of Fairness, Integrity, Honesty, Respect, and Responsibility. So, the Ethisphere Institute has named Sony Corporation one of the "World's Most Ethical Companies."
Sony has actively engaged with stakeholders, including clients, employees, business partners, and local communities, as part of its corporate strategy to create sustainable social value through its business activities.