Assignment 2: LASA 2—Capstone Strategic Audit

Sony Entertainment Company

Module 4 Assignment 2

Misty Dawn Varco

B6028-P Solutions to Organizational Challenges: A Capstone Experience

Dr. Richard Dool

09/24/2013

Abstract

This report will talk about the Sony Entertainment Company. This is a company that deals with an amazing piece of hardware that provides gaming activities. This report is to show how this product is another of the Sony Company that is out there with a competitive feature to some of Microsoft companies. One of the major products to talk about in this is the play station. Though there are a variety of these it is of different kind and one of the powerful products that has brought Sony Company in the map. As other company, the Sony will experience competition, threats; it will have strengths and will and must have strategies to ensure that it is growing.

Table of Contents

Abstract 2

Company history 4

Target market 4

Competitive advantage 5

Competitors 5

Internal analysis 6

Weakness 6

The five factors of analysis 7

Strategic evaluation 7

Strategic recommendation 8

Company history

The Tokyo, Japan based company was started in November 16, 1993. Apart from its play station products, it also handles research and development, sales of both hardware and software for the play station, and it deals with production. The Sony computer entertainment of America which was established in May 1994 was located in Foster City. The history of play station is remembered because it’s when two competitive companies were working together. Nintendo and Sony Company were working to develop a super disc. Now, due to the disagreement between the two companies, they had to part ways. Nintendo decide to go and work with Philips which did not please the Chief Executive Officer (CEO) of Sony Company. Even after the two companies had separated, efforts were made by the Sony Company to unite the two companies but Philips had already taken their interest (Böhm, 2008). A veteran engineer who had experience was appointed two later made the Sony play station. The father of play station, as many would call him, he made this Microsoft that was designed a for the purpose of multi-media and multi-purpose entertainment unit. Asia competing gamete play station could play it competitors Nintendo games. It was also able to act as an audio compact disk player which could read compact disks with computer information. In1994, a different play station that could play compact disk-read only memory (CD-ROM) games only was released. This kind of idea saw the Sony Company take the lead in the best selling videogame company (Böhm, 2008).

Target market

The play station video game is said to have the higher rising percentage in the entire entertainment companies. This research shows that most people prefer this play station because of its cheap price. The play station targeted for the young kids has seen the older people interest in them. In North America, the percentage in November was seen to have increased to 31%. Due to some of the technological advantages that the company has experienced over a couple of years, it market is increasing day by day. This has also seen it’s dominated in most countries like Japan and Korea (The Hollywood Reporter 1994). Due to its competitive quality it is seen to outsell Xbox 360 in countries like Europe. According to research done in 2013, the product has a pleasing market in the Americans market. Its rapid growth is seen to extent in the continent of Asia.

Competitive advantage

People want things that will last and so the play station is made to last for ten years. This means that this product taken care of, within ten years one will still have the product and can pass on top other generations. Although the price is likely to be high the product is of quality and fill of potential. This product is said to compete at high levels for more years to come. The product been the only one that can adapt to blue-ray technology something that no other console can do makes this product competitive. Its sleek style is outstanding with no other console that looks like it in the market. This are great ideas the have seen the play station though high priced, overcome to stay at top of the game with others.

Competitors

When taking of external environmental scan, we have to understand the things that affect the company outside it. Natural disasters can play major role in this. Considering the Sony Company which is located at a country where natural calamities like earthquakes occur, it is a very clear that it affects it. More of the time when an earthquake occurs the company may undergo so many loses including loose of market due to most market comes from there. When there are earthquakes the energy sector goes down and as we know the company depends highly on the energy to produce its console. This affects the company highly that it can collapse. In other external factors, competitions get on the legs of the company. No company ignores potential competitors and for Sony the Apple and Google Company throws big competition to it. As a way to tackle it, the company must stay on toe to compete with the competitors. In countries were the markets of the products of that particular company will be less it will not venture so much. Many companies such for places were the market is high and pleasing.

Internal analysis

Strength of a company is very important because it leads to its growth. Sony Company will need capitals to fund for new products with which it will reach the consumers. Without a product for years when other competing companies are producing is very risky. So if a company has acmes to funds then the company is affected positively internally. The diversity and global presence of a company affects it on both sides. As the company get to expand their market, its products need to move from different parts of the world. This will see more exposure to the entire world of its product.

Weaknesses

The company is bond to make losses due to some of the mistake that they make while producing. In the year 2010, Sony warned of its laptops that were heating faster. This led to consumer’s disappointment. This act could have seen the consumer move to other companies that compete with Sony. When there is a weakening global scenario, the weakening of dollar leads to turn down profitability and rising interest rates. This could see the company face a hard time that if not planned well will see the company loose.

The five forces of analysis

According to the porter’s five forces analysis, the first is new competition. This is also said to be fear of the unknown. Apparently the Sony Company will experience few due to the advancement levels the industry has reached. Another great threat is of substitute product or service. This kind is in beta status and a major substitute of cloud gaming. Though there is a huge potential that is not measured yet (Dino, 2013). The bargaining power of the customers which has helped them gets the play station which appears to be the best in the market. Since prices were reduced the consumers’ whereas results to this due to there demand though the console were of high price. The decision is seen as a great help for the willing buyers who saw the price was high. Also there is the bargaining power of the suppliers, who is the hardware before; it was the international business machines corporations.

Strategy evaluation

The current strategies are to express product leadership, strong performance and global presence profitability focus on investments and development. To ensure this set objectives the board got another Chief Executive Officer to ensure the leadership developed. Toward the start of 2012, a new Chief Executive Officer was appointed to the Sony Company. This brought up the development of anew and organized set of structure. This was afresh starting that saw a fresh strategy of things. If things like poor performance were affecting the company previously, now with the new Chief Executive Officer, a strong and energetic start. The Sony Company has to consider global presence with all means. Continents like Africa should be the target to ensure they boost it with technology gaining by getting consumers. This kind of strategy will see the market expand to high levels. It can also see it gaining the consumers of Africa a good relation unlike other companies that have not ventured to those places (Sheikh, 2008).

Strategic recommendation

The Sony Company is to set strategies that are a profit generated. Finding a segment focus and restructuring it around the focused segment is a major thing for a company. The Sony Company has not established competitive advantage in any segment due to the high competition it faces. These segments will help to apply most of their resources in the segments that are productive.

Acquiring aggressively will allow the company to gain market share, have accesses to technology, have economy of scale and reduce manufacturing cost. Refining quality control is when the company takes advantage of the strength of the brand name. Consumers are used to its products and believe in them. Incidents like the laptops getting heat faster should not occur again. This might give another picture for the company.

References

Böhm, A. (2008). The Swot Analysis. NorderStedt: GRIN Verlag. Odies C. Ferrell, M. D. (2011).

Dino, G. (2013, February 28). An Analysis of the Sony PS4 and Its Role in the Video Game Industry. Retrieved on September 13, 2013, from  http://leviathyn.com/games/editorials/2013/02/28/an-analysis-of-the-sony-ps4-and-its  role-in-the-video-game-industry/

Sheikh, M. U. (2008, October 21). Sony. Retrieved on September 13, 2013, from  http://www.docstoc.com/docs/10545346/Sony-And-Its-4ps-of-Marketing-Mix

The Hollywood Reporter. (1994). Sony latest to toss hat in vid game arena. Marketing Strategy 5th Edition. Mason, Ohio: Ceneage Learning. Los Angeles, California: (Hollywood Reporter, Inc.