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INTRODUCTION

Sony is a corporation form of business organization. It was founded in Japan after World War 2
under the name Tokyo Telecommunications Engineering Corporation. In less than a year, the
company released its first product, a power megaphone, and now Sony is one of the world’s most
broadly known electronics companies.

Sony has a long history of introducing technologies. Sony had introduced Japan's first transistor
radio, first direct-view portable TV, world’s first Blu-ray disc player and world’s smallest video
camera.

Sony now employed more than $146,000 people worldwide. The company's year-end revenue in
March 2014 was over $7.5 billion, with an operating loss for the year of over $1.2 billion U.S. dollar.

P.E.S.T. ANALYSIS

Political - China–United States trade war

China is the biggest supply chain to United States market. In 2018, over 96% of video game console
imported into U.S. were made in China. Therefore, if the trade war continues without reconciliation ,
Sony will be affected in importing and exporting. Sony will loss in U.S. market as they are forced to
increase price due to high tariffs.

Economical - Fluctuated exchange rate

Fluctuated currency rate gives Sony positive impact. With lower rate, Sony can improve its
production by hiring more labour in countries such as China, India and Vietnam. According to Sony
Consolidated Financial Results 2018, sales revenue increased 15% which is about 280 billion yen as
the impact of foreign exchange rate.

Sociocultural - Lifestyle changing

As presented in Sony Consolidated Financial Results 2018, the operating income in game and
network services segment expanded about 60 billion yen as increasing in sales which is PS4
hardware. This had shown the lifestyle changing from playing traditional game to video game among
younger generation. People are demanding video games than traditional games.

Technological - Internet

A few decades ago, the only way to discuss Sony products was face-to-face. This limited Sony’s
influence. As internet eliminates communication barriers, Sony is easier to introduce new production
no matter at which location. Although internet benefits Sony, but if Sony products didn’t meet
consumers’ expectation, bad reviews also will come out and affect Sony negatively.
Challenge 1 - Losing position in certain industry

Behaving as though its market leadership could never be challenged, a haughty Sony retained to old
technologies rather than welcoming new ones. For example, when Apple launched iPod in 2001,
Sony had been selling devices that could download and play digital music files. Although Sony had
resources to compete, Sony passed up that idea and continued emphasising CD business. This
showed Sony refused to catch up the trend. Moreover, as the world’s biggest television
manufacturer, Sony tended to produce cathode-ray-tube TV while other competitors like Samsung
and LG were moving rapidly to flat LED TV. These challenged Sony as it was late to adapt new
environment.

Recommendation 1 - Improve R&D

To overcome the problem of lacking advancement, Sony should focus on research and development.
Inside Sony, employees of Research and Development group also have to contribute cooperation to
ensure the efficiency outcome is maximum. According to Statista, Sony invested more and more in
research and development from 2011 to 2018, which is from 3.99 billion U.S. dollars to 4.43 billion
U.S. dollars. By doing this, Sony has the chance to launch new products and to create new income
sources. With using new technologies and innovation, Sony is possible to grab back its market leader
position in television market. Sony’s Research and Development department should keep sight on
products that support high definition content such as 4K definition TV to meet satisfactions and
expectations of consumers nowadays. Moreover, Sony should change its mindset from a
manufacturer oriented to consumer’s oriented. Products should be made with extra value and
longer life span rather than having numerous changes in models.

Challenge 2 - Cyber attack

The planned attack seems to be the most direct concern Sony facing. In 2014, Sony Pictures
Entertainment was hacked by a group of hackers. They had stolen massive volumes of data from
Sony’s network and leaked to journalists. That information included personal information about
employees of Sony Pictures, e-mails between employees, copy of then-unreleased films and
information about executive salaries at the company. This gave a huge negative impact to Sony both
its company and employees. According to BBC, the workers argued they suffered economic harm
from the stolen data. Sony had agreed to pay up to 8 million dollars over employees’ personal
information lost.

Recommendation 2 - Enforce cyber security

How Sony can protect itself from this obstacle? Obviously, the only way is to enhance security
system. Sony either can hire third-party cyber security firm or improve own ICT department by
upgrading devices. Cyber security is important and need to be maintained as servers in Sony consist
a vast amount of company information. If Sony failed to deal with these hacking attack, it will impact
the company destructively. Therefore, security system plays as main role and must be improved in
order to encrypt company data. For example, malware or spyware can be prevented and by
encryption. This is because encrypting data codifies company information to avoid sensitive content
to be read. Not only that, Sony should not only keep company information in server but also need to
keep a copy in paper form as a backup. This helps to minimize the losses after getting hackers attack.

Challenge 3 - Low-cost competitors

Nowadays, more and more manufacturers build up in China. Those competitors slowly snatch Sony’s
market share and it will be a worrying trouble for Sony in the future. This is because other brands
such as Huawei, Xiaomi and Vivo are showing that quality products can be purchased at a very
reasonable price which is lower. Besides, the switching cost for consumers to transfer from one
brand to another as other brands affect the purchasing power of Sony’s customers. For instance,
customers can easily switch their preferences from Sony Xperia to Huawei Nova. Therefore, Sony’s
management should keep cautions to other competitors and plan a new strategy.

Recommendation 3 - Improve aftersales service

In order to hold consumers’ loyalty, Sony should make better in the customer service. Customer
service is one of the important elements to make a business to be successful as it represents the
brand image, mission and value of the business. Via understanding the customers’ needs and wants
from the feedbacks, Sony has the chance to improve its products and service to exceed consumers’
expectations. According to Customer Service Scoreboard, the overall rating of Sony is slightly lower
than Huawei which is 27.82 and 30.21. Therefore, Sony must focus in customer service so as to rise
above in the competition. For example, Sony Customer Service department should treat consumers
respectfully and politely. Employees also should be professionally trained and behaved positive
personalities. Furthermore, an excellent customer service not only can retain existing customer, but
also can find new customers. If Sony provides a good aftersales service, existing customers will give
positive reviews and encourage other people to purchase Sony’s products.
References

BBC News. (2020). Sony pays up to $8m over hacked data. [online] Available at:
https://www.bbc.com/news/business-34589710 [Accessed 9 Feb. 2020].

Bush, T. (2020). SWOT Analysis of Sony Unveils its Standings. [online] PESTLE Analysis. Available at:
https://pestleanalysis.com/swot-analysis-of-sony/ [Accessed 7 Feb. 2020].

Greenspan, R. (2020). Sony Corporation’s Five Forces Analysis (Porter’s Model) - Panmore Institute.
[online] Available at: http://panmore.com/sony-corporation-five-forces-analysis-porters-model
[Accessed 8 Feb. 2020].

Greenspan, R. (2020). Sony Corporation’s SWOT Analysis & Recommendations - Panmore Institute.
[online] Panmore Institute. Available at: http://panmore.com/sony-corporation-swot-analysis-
recommendations [Accessed 12 Feb. 2020].

Sony.net. (2018). [online] Available at:

https://www.sony.net/SonyInfo/IR/library/presen/er/pdf/18q1_sonypre.pdf [Accessed 11 Feb.
2020].

Statista. (2020). Sony R&D expenses 2011-2018 | Statista. [online] Available at:
https://www.statista.com/statistics/739101/sony-research-and-development-expenses/ [Accessed 9
Feb. 2020].

UKEssays. November 2018. Analysis of Sony Corporation and its competitors. [online]. Available
from: https://www.ukessays.com/essays/marketing/analysis-of-sony-corporation-and-its-
competitors-marketing-essay.php?vref=1 [Accessed 11 February 2020].

UKEssays. November 2018. An Analysis And Case Study About Sony Corporation Marketing Essay.
[online]. Available from: https://www.ukessays.com/essays/marketing/an-analysis-and-case-study-
about-sony-corporation-marketing-essay.php?vref=1 [Accessed 9 February 2020].

Vox. (2020). The 2014 Sony hacks, explained. [online] Available at:
https://www.vox.com/2015/1/20/18089084/sony-hack-north-korea [Accessed 9 Feb. 2020].
 APPENDIX A

Marking rubric for Individual Assignment Report (BUS 30105/30205) – 35%

COMPONENT Excellent Good Moderate Weak Marks

(9 - 10) (6 - 8) (3 – 5) (0 – 2)
Very detailed Good introduction Adequate Little or no
introduction of the of the company introduction of the introduction of the
company history, the history, the company history, company history,
products, the sales products, the sales the products, the the products, the
revenue, and revenue, customer. sales revenue, sales revenue,
INTRO customer. Manage to Managed to customer. Touch to customer. Fail to
highlight on highlight on briefly on highlight interesting
interesting issue interesting issue interesting issue issue about the
about the company about the company about the company company

Able discuss the Able discuss the Able discuss the Fail or too briefly
relationship of relationship of relationship of discussed the
environment with environment with environment with relationship of
business in a very business in a good business environment with
detailed manner. manner. Arguments adequately. Some business. Arguments
External Arguments are logical are logical but environment are not logical and
Environment with good evidence. lacking of evidence.
arguments are not not backed by any
Not more than one Minor error exists in
logical and not evidence. Unable to
error exist in arguments. properly supported point which
arguments. by any evidence. components
Errors exist in the affected the
arguments. company the most.
Provided very good Provided good Provided Suggestions given
Discussion on suggestions that are suggestions that are moderate contains error and
challenges & logical and based well logical and based suggestions that not logical.
recommendations conducted research. well conducted are logical.
research.
Uses correct 1-3 errors in 4-6 errors in 7 or more errors in
grammar, sentence grammar, sentence grammar, sentence grammar, sentence
structure and structure or spelling. structure or structure or spelling.
spelling throughout Followed format. All spelling. Fail to Didn’t follow
document, no error. references are follow format format. Didn’t cite
Format Followed format. All properly cited properly. Few the references
references are references are accordingly.
properly cited cited.

SUMMARY
COMMENTS
TOTAL 35%