Designing Channel System for Sony TV

LOGISTIC CONCERNS - FOUNDATIONS

Classification of products
• Televisions fall under 'Shopping Products’.
• Higher planning and comparison.
• Requires personal selling and advertising.

Logistics Perspective
• Supply chain planning
• Supply chain collaborations.
• Reverse logistics and sustainability
Product attributes of Sony tv
• Fast user interface
• 4K UHD streaming video
• Recommendation engine
• Transfer smartphone content to the smart TV
• Universal search calibrated mode of clarity
• Mobile communications
• Game and network services
• Imaging products and solutions
• Home entertainment and sound
Carrier selection and cost tips
Carrier Selection
For shipment companies like Sony, saving cost is one of
the main goals to implement Transportation
Management. This is largely done by consolidation, load
planning and by selecting cheapest carrier. Facilitation of
carrier selection is one of the important features of SAP
Transportation Management. This can include several
factors like, cost, geographic locations, minimum
transportation allocation, and even relationship of the
carrier with the shipper.

Transport modes performance rating

Sony corporation uses the 5 model method to evaluate
the transport management performance:
• Accuracy
• Cost per X
• On time pick up and delivery
• Time
• Perfect shipment measurement
CHANNEL SYSTEM
 CHANNEL AND LOGISTICS

Sony Supply Chain Solution, Inc. is an in-house

logistics organization that develops and provides
innovative business services for Sony Group, a
world leader in consumer electronics and
entertainment. With responsibility to provide many
business processes including procurement and
forwarding, order taking, inventory control, job
support, and international logistics of Sony TV, Sony
Supply Chain Solution, Inc. must keep pace with
production innovation in a wide variety of
manufacturing fields.
 Channel strategy and logistics management are closely
related, but channel strategy is a much broader and
more basic component than is logistics management.
Channel strategy is concerned with the entire process of
setting up and operating the organization that is
responsible for meeting the firm’s distribution objectives.
Logistics management, on the other hand, is more
narrowly focused on providing product availability at the
appropriate times and places in the marketing channel.
 Multichannel Conflict

Multi-channel conflict is when multiple distribution

channels participate in selling the same brand. For
example, if the same product is available on a retailer’s
website and physical store at different price points.
 ROLE OF INTERMEDIARIES

Sony has many firms that help them to sell their products
to consumers. Sony has many retailers, distribution
centres and marketing agencies to help them reach the
ultimate customer. Regarding to Sony without
intermediaries it is there is a difficult to get Sony
products. For example: Intermediaries need to purchase
Sony TV from Sony company and set an acceptable price
irrespective of the profit margins.
FUNCTIONS OF DISTRIBUTION CHANNEL

Information

Risk Taking Promotion

Distribution
Contact Channel Financing

Functions
Physical
Matching
Distribution

Negotiation
 SERVICE OUTPUT DEMAND

• Bulk breaking

• Spatial convenience

• Waiting and delivery time

• Assortment and variety

• Customer service

• Information sharing
ALTERNATE CHANNEL FORMATS
 MAKE OR BUY DECISION

Benefits:
• Lower costs and higher capital investments
• Source of competitive advantage
IN-BOUND LOGISTICS
Sony engages in a series of complex in-bound logistics activities that the company either possess or provided by
3rd parties. As the company expands, Sony also begin to engage 3rd parties such as Flextronics and Solectron to
manufacture some of its product components so that the company will continue to possess sufficient wave
length to engage in its core businesses and core competencies. To lower its cost of production, Sony also
restructured and shut down some manufacturing facilities. In fact, the company has shifted some of its
production plants to low-cost countries such as China to take advantage on the cheaper labour cost. The ability
to manage the complex and geographically dispersed in-bound logistics activities is certainly Sony’s strength.

OUT-BOUND LOGISTICS
Sony is well connected to the distribution networks that every country possesses. In fact, to ensure that Sony’s
products and services are delivered and reached their destinations on time, Sony has invested heavily to
automate parts of the out-bound logistics function to track sales orders, movement of products and payments.
In addition, Sony also allows its music and pictures to be distributed through the broadband networks. In 2002, it
was also reported in prominent magazines such as InfoWorld and PC Magazine that many customers felt that
Sony’s products and services were among the best in the world and their staffs were well trained to handle the
various operations and services. As such, the possession of the capability to train employees and business
partners to manage the complex and geographically dispersed out-bound logistics activities to enhance the
various operation protocols is surely Sony’s strength.
OPERATIONS

Sony’s businesses span across different continents. It production empire alone is spread from Asia to the U.S and
to Europe. The details are as follows:
(1) Almost 50% of the electronics segment's total annual production during the fiscal year 2002 took place in
Japan (approximately 65% of the annual production in Japan was destined for other regions).
(2) China accounted for slightly more than 10% of total annual production (approximately 70% of which was
destined for other regions).
(3) Asia, excluding Japan and China, accounted for slightly more than 10% of total annual production
(approximately 60% destined for Japan, the US and the EU).
(4) The U.S and Europe together accounted for the remaining slightly less than 25% of total annual production
(most of which was destined for local distribution and sale). Generally, Sony has been able to manage its
businesses well and hence is able to achieve successes with some of its products. For instance, Sony was
able to make a capture a sizable market shares in the video, PC and television markets in just a few years
after entering the markets.
CONFLICT AND POWER
TYPES OF CONFLICT

• Vertical channel conflict

• Horizontal channel conflict 

• Multi-channel conflict 
RESOLUTIONS

• Sony could make this work if they sell their products at a price premium on their web site,

thereby making it cheaper to buy from a retailer.

• Can keep profit making outlets.

• They can focus on one channel more, which is more profitable to the company.
 STRATEGIES
• Sony Corporation uses differentiation as its generic strategy for competitive advantage.
Differentiation involves products that are unique in comparison to other products in the
market. In applying this generic strategy, Sony integrates features that make its products
attractive and profitable.
• Sony tries to price its product in a very strategic manner. For instance, they try to have a three-
tiered pricing strategy, which appeals to the economy buyers, the middle-class buyers and high-
end buyers. Whenever Sony Corporation launches a new product, which has some unique
features they try to go for price skimming strategy.