Assignment 2: LASA 2—Capstone Strategic Audit

Sony Corporation

Module 6 Assignment 2

Misty Dawn Varco

B6028-P Solutions to Organizational Challenges: A Capstone Experience

Dr. Richard Dool

10/09/2013

INTRODUCTION

Sony Corporation is one of the leading manufacturers of audio, communications and technology and video products globally. Their activities are consistent that the use of technology is the root to new ideas, and also stimulate senses which create an opportunity for new experiences. The company is based in Europe, and its headquarters in Tokyo whose role is to manage and develop the electronics of the company. This company’s vision is to make a new exciting entertainment experience for their consumers, followed by providence of cutting edge products with the up to date content and services. Its mission is to be committed to bringing new technologies in ways that enable consumers to restructure their perception of the world and enhance their lives (Pahl, & Richter, 2009). The following report will detail the internal factors which are the strengths and weaknesses and the external environment of the corporation which are the current opportunities and threats. Further the balance scorecard will evaluate on the current performance and success of the company.

STRENGTHS

For a very long time now, Sony Corporation has successfully built a name in the home entertainment industry. They have a good name as being a specific company that produces high quality products and are highly innovative. According to the record they have produced new devices within a short period, and they have imprinted their brand among other consumers all over the world as a result of their diversity of the products in the market. The company is identical with technological excellence and has a high heritage on technological expertise (Pahl, & Richter, 2009). A firm foothold in the industry of entertainment has benefited the company and recorded reduced losses. The company has a dedicated team with more experienced workers, and this has contributed to their high level of competitiveness.

WEAKNESSES

Despite the company’s success the company has had to let go of many jobs worldwide approximately sixteen thousand in the sector of production as a result of reduced sales on some of its products and poor decision making by the management. There is a high cost associated with media production like the television business which has affected the pricing strategy of the business and this has led to reduced sales and consequently losing the market share to its competitors (Pride & Ferrell, 2012). As a result of the diversification to many business segment the company has transferred its focus from its main competency which is making high quality consumer electronic products.

OPPORTUNITIES

Sony Corporation has an established brand name and has utilized this brand name as being Innovator Company to attract more customers. They have the reputation of production of original products and rarely produce similar products to its competitors. The engineers in the company have worked hard to ensure that its products are improved. Sony has been concentrating on improvement of its marketing strategies with an intention of attracting new customers and creation of awareness and additionally acquires trust from their customers which has consequently worked (Pahl, & Richter, 2009). The company has succeeded in the purchase of its entire Sony Ericson which was an act of joint adventure, which has given the company an opportunity to be independent and be more innovative in the market of Smartphone.

THREATS

The various threats responsible for the hindrance of acquirement of full success in the future include the stiff competition from its competitors which include Samsung and LG. These two competitors have been easily getting traction due to the production of products which go for cheaper prices, and this has reduced the total sales of Sony Corporation (Pride & Ferrell, 2012). Consequently Apple is believed to have given Sony Corporation a tough time with the introduction of similar products like Sony products. There has been an increase in black market, and the sale of smuggled products which are cheap has increased. The consumers have shown to prefer these products since they go for less price and this has been a threat to the company’s sales. Additionally involve the rise in price of the raw materials required for the manufacture of electronic devices.

SONY’S BALANCED SCORE CARD

The following balanced scorecard will translate the company’s vision and its strategies to coherent performance measures. It will concentrate on its financial measures and analysis, the customer perspective and knowledge of the company’s products, the internal processes taking place within the organization and learning and growth of the business and evaluation of the balance of these measures between the short term objectives and the long term objectives of the company (Kaplan & Norton, 2001). The balance scorecard will evaluate of the company’s desired performance and outcomes and their relation to their current success.

FINANCIAL ANALYSIS

Sony Corporation is identical when it comes to consumer electronics and has established a good name with the production of computer games like the play station 3. The company is known for its designs and manufacture of good and classic products. There are professional products which include semiconductor and related components. In the global category, Sony has many more assets and its global assets are more which has contributed to its success after disposal. They also have various financial businesses and advertising agency based in Japan. From its income statement with the comparison with its performance in the previous five years the following shows its performance. During the year 2009 to 2010, the revenue increased from $79,456.60 to $86,656.42 but has shown a decrease up to $72,157.03 in the current year. This is an implication that there has been a decrease in the quantity of sales over the years. This is an impact of the increased competition in the market which produces cheaper products (Bettis, Bradley, & Hamel, 1992). The gross profit has also shown to decrease from $28,356.36 in 2011 to $24,566.67 in the current year. Having too many expenses and high cost of sales has contributed to this decrease.

With the look of the cash inflows and outflows of the company, it is evident that more cash is used in operating activities compared to the cash generated from operating and financing activities. The net investing cash has reduced from $10,729.71 to $7,483.02 and the cash accumulated at the end of the year has decreased with the same margin. Just like any other company the availability of assets shows the ability of the company to deal with its short term liabilities. In the case of Sony Corporation, all types of short term assets show to decrease including the net receivables, the level of inventory and cash. The total assets have decreased from $445,634.05 in 2012 to $38,689.71 in 2013. The total liabilities have consequently decreased from $136,925.13 in 2012 to $1,274,410.46 in 2013. Despite the short term losses the company is able to meet its obligation in good time.

CUSTOMERS

Sony Corporation is aware that its customers are expecting a high level of quality products and this has been fulfilled by the company for couple of years. It needs to get its materials from various suppliers globally and thus it has ensured that it maintains a good relationship and trust between them and their external parties. To get to the customers the company creates awareness of their products through advertising and sales promotion (Kaplan & Norton, 2001). They have their own television channel where they advertise their products and also take the opportunity of advertising during their big events to promote their products. They do sales promotion to attract new customers, and this has been a useful tool to increase their sales.

On their websites, they have excellent customer service as they provide all the information that consumers need to know about the Sony products. With this, the company has been able to retain a good relation with its customer and thus ensuring that they can fulfill the immediate demands of the customers. They provide their products in respect to the customer demands thus meeting specific demands. Sony has ensured proper treatment of its employees; from the record it is evident that the company employs high skilled manpower for its operations and thus the payments made to these people is high and thus encouraging them to work harder (Bettis, Bradley, & Hamel, 1992). Many suppliers and customers have hope in the products of the company, and thus this has been a motivating factor not total these stakeholders as they play a big part in the success of the company.

LEARNING and GROWTH

Sony Corporation has concentrated its mission on the idea of innovations of new products and has also come out with new products which include Sony online service which has enabled users download music, various television shows, games like the play station and movies which are located in the company’s extensive libraries and positioned to computers, televisions, digital cameras, game consoles. This has allowed doing business online has positioned the corporation in a position to be an online business and it’s entering in the new market shows that Sony is practicing diversification and product development. The reason for doing this is to spread its risks as it is not totally dependent on one product, market or industry (Kaplan & Norton, 2001). Sony has been able to balance its sales during the large seasonal and the cyclical fluctuations. The product development strategy has been used by the company to attract new customers and also retain the existing customers. Their growth method has been organic and the company has its own suppliers and distributors and has its diversifications in different but related industries.

INTERNAL PROCESSES

Sony Company has focused more on enhancing network initiatives within the industry to enhance their profit increases. There has been a challenge with the issue that most of the Sony products are highly priced and thus cannot be afforded by the middle class people cannot be able to access them and this has made its competitors take advantage of the situation. As a result Sony has tried to show its customers how their products are worth the pricing by giving the warranties of longer periods. There has been a strategy set for the management team and they are working towards expanding their markets overseas and ensure product promotion (Bettis, Bradley, & Hamel, 1992). They have had to do some research to establish the causes of the drop in the number of sales. The operational management has concentrated on these facts to ensure there is a better control on costs to lower the costs the company is having. They are focused on ensuring that they meet the expectations of the external environment and expand its operations and venture into many more markets.

References

Bettis, R. A., Bradley, S. P., & Hamel, G. (1992). Outsourcing and industrial decline. The Executive, 6(1), 7-22.

Kaplan, R. S., & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting horizons, 15(1), 87-104.

Pahl, N., & Richter, A. (2009). SWOT Analysis-idea, methodology and a practical approach. GRIN Verlag.

Pride, W. M., & Ferrell, O. C. (2012). Marketing. Mason, Ohio: South-Western Cengage Learning.