STRATEGIC

PLANNING AND
IMPLEMENTATION
PROJECT

SUBMITTED BY:
GROUP 2
ANANT KHULLAR
ANJALI ARORA
ANKIT
ANKITA SINGH
ANU SARASWAT
ANUJ AGARWAL
ANUPAM PARIDA
ASHIMA NARWAL
VARUN BHATIA
 TABLE OF CONTENTS

 INTRODUCTION

 VISION STATEMENT

 MISSION STATEMENT

 SWOT ANALYSIS

 EVALUATION OF SONY CORPORATION’S STRATEGY

 RECOMMENDATIONS TO THE COMPANY

 CONCLUSION
 INTRODUCTION
Sony Corporation commonly referred to as Sony, is a Japanese multinational
conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth
largest media conglomerate with US$77.20 billion (FY2010).Sony is one of the leading
manufacturers of electronics, products for the consumer and professional markets.

Sony Corporation is the electronics business unit and the parent company of the Sony Group,

which is engaged in business through its seven operating segments – Consumer Products &
Services Group, Professional & Device Solutions Group, Pictures, Music, Financial Services,
Sony Ericsson and All Other. These make Sony one of the most comprehensive entertainment
companies in the world. Sony's principal business operations include Sony Corporation (Sony
Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony
Music Entertainment, Sony Ericsson, and Sony Financial. The company also makes
semiconductors.

Its founders are Akio Morita and Masaru Ibuka and the company was founded in the year 1946.

MAJOR PRODUCTS
Consumer and professional electronic equipment, semiconductors, communication and
information related equipment, battery, play station, chemicals, blu-ray.

VISION STATEMENT

“Sony will be the most comprehensive entertainment company in the world”

MISSION STATEMENT

"To become a leading global provider of network consumer electronics, entertainment and
services"
 SWOT ANALYSIS OF THE COMPANY
Strengths
 Sony was able to create high quality
products for its customers.
 The business of Sony is very reputable.
 Engineers have learnt that from past
failures and they can produce and work
better.
 The company is very competitive and
believes in first mover advantage
 Sony is able to expand its markets.
Opportunities
 The engineering departments have
increased in size and so therefore are
working harder.
 Sony has a high reputation of not
copying any of its competitors.
 The marketing department has
increased advertising techniques in
order to attract new customers.
 Sony is trying to sell their high quality
products cheaper to attract customers.
 Sony corporation may decide to expand
more overseas.
Weaknesses
 Within the last few years Sony has been
making a loss with a few of its
products.
 Sales of all products are seemingly
starting to slow down.
 The company has no sense of direction.
 The functional departments within the
organization are not communicating
with one another.
Threats
 Sony corporation has competitors
which are more powerful, such as
Microsoft
 Recent reports show that most of their
products are forged and sold fake.
 Sony also lacks the direction of strategy
which means its competitors could be
doing better.
 Competitors achieving most of Sony’s
customers due to the fact that their
products are achieving various market
types.
STRENGTHS

1). The greatest asset of Sony is of its human capital, especially its engineers which make up the
R&D department. Their constant innovation is crucial for a consumer electronic firm which
specializes in audio-visual equipment and the higher profit margin, which comes from being the
leader of the pact. Subsidiaries are also well established, such as in the United States and Europe
which give Sony a distinct local hands-on knowledge of the local market. It also makes Sony an
international corporation, bringing together the talents and best of strategies of both world to the
organization. Besides the employees, the two founders, Ibuka and Morita also legends in their
fields which they create vision and sense of direction for the organization. The also acts as
bridges between the employees and the management. 

The self promoting system and job rotating systems creates satisfaction for employees and give
them greater exposure to all aspects of the business. Ideally, this would produce better products
as engineers gain knowledge on consumer needs while marketing people engaged in the
production and can give their point of view.  

The innovative style also stems from the "never copy others" culture, the generous funding of the
R&D and huge amounts in capital investments. As described by Ibuka, "It also stems from
consumer driven in which technology is targeted at consumers or business while American
electronic industries are spoiled by military and space applications."  

Sony has been ahead in the race of Video Tape Recorders and digital imaging techniques in
Mavica which both offer tremendous potential of household penetration and sales. It also has the
opportunity to set up standards and dominate the field. Sony has also acquired enough
technology to increase width by going into the high technology business fields. With the rise of
the Asian countries, Sony also has the opportunity to make use of them for markets and for cheap
labour. 

2) Sony Corporation has managed to be competitive and stay a powerful organization by

learning from past failures. Sony states the following: “Sony has learnt much from previous
unsuccessful products. The Sony MSX home computer, for example, did not attain a satisfactory
level of success. But it did teach Sony development engineers valuable know-how that would be
applied in later years. In effect, these engineers became living resources, representing latent
power within Sony that did not exist in other AV companies”

3) Strength of Sony is their ability to be successful in several different markets. They have made
an impact in the video game market, the PC market, and especially the television market and
there are still numerous others.

WEAKNESS

Sony’s biggest and most recent weakness is their lack of innovation with PS3. Sony focused on
digital technology when building the PS3 and it has the ability to export video in high-definition.
But this technology can only be viewed on a high definition TV so a lot of people will not even
be able to see the full potential it has to offer. Another downfall to the PS3 is the price, which
Sony has recently lowered by $100. Yet the weakness of the PS3 is even deeper when
considering the range of video game selections. Sony executives made it clear that they know
they need to do more than lower prices to woo consumers back to its flagging video game brand.

OPPORTUNITIES

1) Sony seeks a lot of opportunities that utilize their strengths of innovation. Design is the
essential differentiator when comparing mobile communications products so a lot of emphasis is
laid on Sony Ericsson phones design

2) Sony's Reader, a device the consumer-electronics giant hopes is an early draft of how the
world will read books in the future, is another innovation that Sony is using as an opportunity to
enter a new market. The downloaded books generally cost 20 to 30 percent less than their dead-
tree counterparts, which is also setting a standard on what is expected in regards to new products
that encourage environmentally friendly devices.

3) One of the other CSL projects most likely to succeed was a nifty little piece of graphics
software for cell phones. It might not sound like much, but the ability to draw realistic icons and
avatars directly on a standard (non-touch screen) phone is sure to add appeal to users of mobile
social-networking sites.

THREATS

1) A common threat facing any company in sales is competition. Sony’s Vaio is its newest
innovation in notebook computers. The various models range in price from $845 - $2300.
However, Dell has a great reputation when it comes to laptops similar to the Vaio and the cost of
a Dell notebook computer seems to have a lower price tag than many of Sony’s Vaio models.
Sony’s top competitors in the gaming industry are Nintendo and Microsoft. The PlayStation 3
sales have fallen behind recently.

2) In the LCD television market, Sony excels but still faces some strong competition, including
Samsung, Sharp, Panasonic and more. Many of these same brands appear in the DVD player
market that Sony has to compete with.

3) Competition isn't the only threat Sony is facing. Sony most recently had to make a public
apology concerning the use of a backdrop in a violent video game, "Resistance: Fall of Man."
 EVALUATION OF SONY CORPORATION’S STRATEGY
A company should pursue any and all strategies as long as strategic managers have weighed the
pros and cons of those strategies and arrived at a multi business model that justifies them. The
figure given below shows how Sony has entered into industries that have led it to pursue various
strategies.

First, Sony’s core business is its electronic consumer products business, which is well known for
for its generic distinctive competencies of innovation and marketing. To protect the quality of its
electronic products, Sony manufactures a high percentage of the component parts for its Sony
televisions, DVD players, and so on, and in this case it has pursued a strategy of Vertical
Integration. Sony also engages in Forward Integration: after having acquired Columbia Pictures
and MGM in 2004, it now operates in the movie industry and has opened a chain of by Sony
stores in exclusive shopping malls. Sony has also shared and leveraged its distinctive
competencies by developing its own business units that operate in the computer and smart phone
industry, a strategy of elated diversification. Finally in deciding to enter the home videogame
industry and developing its Playstation to compete with Nintendo, it is also pursuing a strategy of
unrelated diversification. Today, this division contributes more to Sony’s total profits than its
core electronics business.

While Sony has had enormous success pursuing all these strategies in the past, its profitability
has fallen in the 2000’s. Analysts claim that its multibusiness model, which led it to diversify
extensively and focus on innovating high quality products, led it to neglect its cost structure.
They also claim that its strategy of giving each business unit great autonomy has led each unit to
pursue its own goals at the expense of the company’s multibusiness model. Sony’s escalating
bureaucratic costs have been draining its profitability and slowing innovation, which has allowed
competitors like Samsung to catch up and even overtake it in areas like cell phones and flat
screen LCDs.

A discussion of SONY’s strategy would be incomplete if no references are made to the strategic
alliances and international joint ventures with other electronics companies(most notably with
Ericsson) that have been established in order jointly to develop, engineer, design, market and
even produce other electronics lines all over the world. Through this strategy SONY was abe to
serve both local and global markets. These partnerships also contributed to the geographic
dispersion and inter regional integration of different functions of value chain of production.

CORE COMPETENCY

SONY has several core competencies which they could utilize to further gain advantage over
their competitors, and if possible, overtake LG and other companies in its market leadership in
the automotive industry. One core competency of the company is their brand management. The
products are known in every part of the world. Another core competency is their supply chain
management, which links to their ability to maintain a steady stream of raw materials coming in
for production because of their long- term good standing with their raw materials supplier. Their
highly coordinated logistics system handled by outsourced firms also form a part of their core
competency, leading to excellent inventory management and always on-scheduled production
activities. Yet another core competency is the fact that SONY is the pioneer of mass production.
This helped the company as it was able to get ahead of their competitors in both manufacturing
processes and cost cutting.
 RECOMMENDATIONS TO THE COMPANY

Building of Strategy

 With Sony as a much international company with major branches in Europe and the
United States and stocks listed in 23 stock exchanges, the Japanese cultural school
strategy is not sufficient. Becoming a mature company, the strategy should also change to
more profit orientated.

There should also be greater emphasis on market share, especially in Japan where Sony's market
is shrinking. Strategy should be aimed at greater control and communication between manager
and workers, especially the engineers in the R&D Department.

Diversification

 Sony should concentrate on the business sector and industries, supplying high technology
equipment and parts. This would make full use of the R&D Department, the strongest
advantage of Sony without waiting for the price cutting and technology adaptation to fit
the average consumer’s needs.
 To use its unique talents in video and semiconductor technology to create its version of
the office of the future.
 Although the Sony name is often related to expensive, high-profit end of the market, the
organization should also expand its product range by offering lower priced, simpler
featured products that would compete head on with other copycats. With the lower priced
line, Sony can also increase its market shares in both overseas and Japanese markets.
Alliance and Cooperation

 New products, which involve both hardware and software such as the Mavica, should try
to achieve industry wide standards.
 The standard may not be the best or the one created by Sony, but Sony, by pioneering in
the field first, would already have a significant head start and the standards is just a way
to ensure stability to allow Sony to concentrate on product development and
improvement.
 Internally, the different R&D groups should cooperate more. The product line should also
be made more compatible with one another which is crucial through the communication
between groups and managers, i.e. no more secret projects.
 There should also be a shift from a manufacturer-orientated mentality to a consumer-
orientated mentality, which is a way to save natural resources. The brand-line
compatibility also builds brand loyalty for consumers.
 In relationship with the other electronic firms, a more cooperative attitude should also be
taken. Just like when Japanese took over the US market through cheap yet quality
consumer goods, other Asian countries such as Taiwan and South Korea, with their lower
labour cost, pose as great competitors at the lower end of consumer goods. Therefore,
Sony should cooperate in setting up standards in high technology areas in order to reap
maximum profits and extend the technological lead-time over their fellow Asian
countries.

Cost Cutting

 Cost cutting is important because R&D plays an integral part in the success of Sony and
cannot be cut drastically although it gobbles up 10% of sales. Therefore, the only way to
improve profit margins is to cut cost.
 Sony currently has factories in the United States and Japan. Although this is good for
relationship of the firm in a foreign firm and offers a chance to pay suppliers with local
currencies, Sony is not fully making use of other lower cost areas in the world, especially
 Asian countries such as Malaysia, Thailand and the Philippines etc. By setting up
factories in these countries, Sony can take advantage of their cheap labour and also get a
head start in their budding consumer markets.
 As mentioned above, products should be refined instead of reinvented so that there would
be less set up cost and greater automation could be achieved.

Integration of production, design and marketing

 R&D should listen more to what the consumer needs and then innovate instead of always
creating new markets. With great freedom, the designing team should also take on greater
responsibility in making the product fit to the current production pattern and marketing
aims.
 Employees should also be made more responsible to the profit and loss of the particular
product. Empowering these three separate groups creates conflict, but it also brings these
separate efficient groups together achieving synergy.

Implementation

 Internally, strategy should be reviewed beginning with renewing the corporate goals. It
should integrate together both the Japanese work ethic and its western counterparts.
 Integration of the company, the designing, production and marketing should be
encouraged, with increased communication between each group and the management
acting as liaison and guidance.
 The management should be providing the organization with specific goals and strategies
for the short and long term. These changes are intended to balance business Vs
engineering.
 Setting up alliances with fellow electronic manufacturers / competitor is crucial to mutual
benefit so should be pursued as soon as possible. . This is also a change in culture for
Sony so top management has to actively push and pursue for this direction.
 CONCLUSION

Although other electronic firms are taking market share and profits from Sony by being
copycats, the heart of Sony's success, the innovative spirit and quest of excellence and perfection
cannot be copied.

Sony's main task is to integrate its talent by placing common goals and priority for this
increasing competitive market. Sony also has the potential to innovate into a company with
international operations as well as culture since it was one of the first Japanese companies to set
up a main branch in the United States. With strategy and luck, Sony could become a great firm as
it was and will be.

Sony has been responding to these problems, it has taken major steps to reduce these costs, speed
innovation, and lower its cost structures, including exiting industries like PDAs and recorders.
The next few years will show whether the company has been able to better implement its
corporate strategies to improve its profitability.