Sony Corporation’s Operations

Management: 10 Decisions, Productivity

UPDATED ONUPDATED ON MARCH 12, 2017 BY LAWRENCE GREGORY

A Sony Xperia Z3
(White). Sony Corporation’s operations management effectively addresses the
objectives in the 10 strategic decision areas to optimize productivity. (Photo: Public
Domain)
Sony Corporation’s operations in the consumer electronics, gaming, entertainment and
financial services markets are guided through proactive productivity approaches in the
10 strategic decision areas of operations management (OM). These 10 strategic
decisions pertain to the main areas of concern to operations managers, with the aim of
ensuring a streamlined business. Sony’s operations management is based on time-
tested approaches that support high efficiency in these main business areas. As a major
player in the global market, the company must maintain high productivity and
operational performance. Considering the dynamism of markets worldwide, Sony must
maintain flexible operations management practices in these 10 strategic decision areas.

For the 10 decisions of operations management (OM), Sony Corporation focuses on

high efficiency, while integrating sustainability principles. These sustainability principles
are central to Sony’s strategic organizational improvement.

Sony’s Operations Management, 10 Decision Areas

1. Design of Goods and Services. Sony considers how its products are designed for
maximum business benefit. In this strategic decision area, operations managers aim to
minimize cost, maximize quality, support operational sustainability, and optimize human
resource utilization. Sony addresses these considerations through continuous
improvement methods. These methods are intended to optimize all operations in terms
of productivity and process efficiency. In addition, Sony’s generic strategy of
differentiation is applied through operations management approaches that emphasize
optimal profitability alongside sustainability principles in product design. For example,
the company’s iteration of PlayStation designs aims to capitalize on the production
efficiency and market success of previous designs. In this regard, Sony adequately
addresses the objectives in this strategic decision area of operations management.

2. Quality Management. Operations managers focus on quality standards and

requirements as objectives in this strategic decision area. Sony’s operations
management policy emphasizes the achievement of and support for kando, which is
“emotional involvement” or the “power to stimulate emotional response.” Kando is a key
factor highlighted in Sony’s vision statement and mission statement. This factor ensures
products that capture customers’ attention and satisfy their expectations. For example,
operations management efforts constantly search for new solutions to enhance the
quality of Sony’s products. These efforts support high operational productivity and the
fulfillment of kando pertinent to this strategic decision of operations management.

3. Process and Capacity Design. Adequacy of production processes, related

standards, and resource allocation is the objective of this strategic decision of
operations management. Sony Corporation addresses this objective through
sustainability, which also helps streamline the business to satisfy market concerns
regarding the environmental impact of business operations. For example, the
sustainability of the company’s production processes helps minimize operational costs
based on the minimization of resource requirements and production waste. In addition,
Sony’s operations managers apply strategic decisions to maximize capacity utilization in
production facilities, thereby leading to the maximization of productivity per facility.

4. Location Strategy. At Sony, operations management is concerned with distances

from customers, suppliers and resources. The objective in this strategic decision area is
to optimize such distances to minimize operational costs and maximize revenues. In this
regard, Sony’s marketing mix involves stores in high-traffic areas, such as malls and
urban centers. This part of the marketing mix helps optimize the productivity of the
company’s distribution and sales operations. Also, Sony’s e-commerce websites add to
the effectiveness of the location strategy. For example, these websites inform
customers about goods and services available at Sony Stores. Moreover, the
company’s operations managers keep facilities productive through optimal location
relative to the labor market and suppliers. Thus, for this strategic decision area of
operations management, Sony minimizes overall average distances among facilities,
resources and markets to optimize business operations.

5. Layout Design and Strategy. The objective in this strategic decision area is to
optimize the flow of resources, such as human resources, materials and information.
For this purpose, Sony Corporation’s operations managers monitor requirements for
operational capacity, resources, and inventory. Highly productive flow of resources is
achieved through an annual review of layout designs and strategies. For example,
Sony’s operations management employs expert opinion and employee feedback to
make decisions on current productivity issues linked to layout designs and strategies.

6. Job Design and Human Resources. The company’s objective in this strategic
decision area is to develop adequate and high-performance human resources to
support business operations and growth. Operations managers use Sony’s
organizational structure to facilitate HR development. For example, the corporate
structure defines job designs that are specific to the main business areas of the
company, such as the consumer electronics business and the gaming business. On the
other hand, Sony’s organizational culture promotes high productivity and operational
efficiency. For instance, the corporate culture’s emphasis on reliability requires job
designs and HR programs that continually develop employees’ knowledge and skills.
Comprehensive support for this organizational culture is included in Sony’s operations
management for this strategic decision area.

7. Supply Chain Management. In this strategic decision area, operations managers’

objective is to maintain adequate supply to support current operations and business
growth, especially in high-growth developing markets (Read: Sony’s PESTEL/PESTLE
Analysis). The company fulfills this objective through automation and inclusive support
for suppliers. Automation maximizes the productivity of Sony’s supply chain
management activities. On the other hand, inclusive support for suppliers ensures
suppliers’ growth and operational adequacy along with the company’s growth. For
example, as suppliers grow with strategic support from Sony, their productive capacity
continues to match the company’s growing supply needs. These efforts show that Sony
reaches out beyond its organization to fulfill the objectives in this strategic decision area
of operations management.

8. Inventory Management. Operations managers make strategic decisions on ordering

and holding to support operations while considering supplier capacity and customer
satisfaction objectives. Sony Corporation’s approach involves centralized inventory
management systems that enable management personnel to determine and update
data on inventory levels and associated operational requirements. For example, as part
of the company’s operations management standards, inventory managers must
regularly check and update data pertaining to their respective facilities or areas of
operations. Through such approach in this strategic decision area of operations
management, the resulting real-time data optimizes inventory and associated
productivity variables at Sony.

9. Scheduling. The managerial objective in this strategic decision area is to maintain

operations schedules that match resources and market demand. Sony’s operations
managers use automated scheduling to achieve high productivity. For example, the
company’s management systems provide real-time data on changes in operational
needs. Sony’s managers use such data to apply appropriate changes in schedules. This
factor supports optimally productive business processes. Sony also addresses issues
on market variations through partial autonomy of some business activities. For instance,
 some of the strategic decisions in this area of operations management are made at the
local or regional level, and others at the corporate level. Such partial decentralization of
operational decision-making helps Sony achieve some degree of flexibility in responding
to market variations.

10. Maintenance. Organizational reliability and operational stability are the objectives in
this strategic decision area of operations management. Sony attains reliability in
combination with sustainability. Sustainability is a core factor in the company’s efforts to
improve the business (Read: Sony’s Corporate Social Responsibility & Stakeholders).
Sustainability initiatives contribute to the reliability of the firm’s operations and
productivity. For example, such initiatives require maximizing efficiency, such as waste
minimization. The resulting efficiency makes Sony Corporation reliable in terms of
productive capacity. In relation, the company’s operations managers ensure stability
through regular maintenance evaluation of resources, such as technologies and human
resources. Corresponding changes are applied to Sony’s operations management
activities in this strategic decision area.

Productivity at Sony Corporation

Sony uses different sets of criteria or measures of productivity in its business areas.
These sets are based on the different needs of the consumer electronics, gaming,
entertainment, and financial services businesses. The following are some of the criteria
that Sony’s operations managers use to evaluate productivity:

1. Accounts processed per day (financial services productivity)

2. Units sold per day (Sony Store productivity)
3. Batches of materials processed per day (inventory management productivity)

Sony’s Corporate Social Responsibility

Strategy & Stakeholders
UPDATED ONUPDATED ON MARCH 12, 2017 BY LAWRENCE GREGORY
 Sony PlayStation 2
(PS2) video game console, first released in 2000. Sony Corporation has a corporate
social responsibility strategy that emphasizes sustainability to fulfill stakeholders’
interests. (Photo: Public Domain)
Sony’s corporate social responsibility (CSR) strategy responds to the interests of
relevant stakeholders. In Archie Carroll’s model, corporate social responsibility exists
because of the interactions between firms and their stakeholders. A stakeholder is any
individual or group that affects and is affected by the business under consideration. In
the case of Sony, the concerns underlining the CSR strategy focus on sustainability of
the business. The company’s sustainability efforts also lead to the achievement of
corporate citizenship. For long-term success in the consumer electronics, gaming,
entertainment and financial services markets, Sony Corporation must ensure that
stakeholders’ interests are properly accounted for in the business.

This corporate social responsibility (CSR) analysis of Sony Corporation shows the
importance of achieving business sustainability. The company considers sustainability
as the primary goal in its efforts for satisfying stakeholders’ interests and for corporate
citizenship.

Sony’s Stakeholder Groups & CSR Initiatives

The global reach of Sony’s business relates with the complexity of developing a
corporate social responsibility strategy that suits a variety of businesses and markets
worldwide. Such complexity is based on the fact that the company operates in the
consumer electronics, gaming, entertainment and financial services markets. The
following are the stakeholders arranged according to Sony’s prioritization in its
corporate social responsibility strategy:

1. Shareholders (Highest priority)

2. Customers
3. Employees
4. Suppliers
5. Business partners
6. Local communities (Lowest priority)

Shareholders. Sony’s corporate social responsibility strategy values shareholders as

the most significant stakeholder group. High revenues and business growth are the
main interests of these stakeholders. Shareholders are significant in business valuation
and the availability of capital to support business operations. Sony Corporation
addresses the interests of these stakeholders by finding ways to maximize revenues
and profitability. For example, the company’s premium pricing strategy ensures high
profit margins (Read: Sony’s Marketing Mix (4Ps) Analysis). In addition, the company
aims for sustainability, not just for corporate citizenship, but also for optimizing
operational efficiency and corresponding financial performance. Thus, Sony’s corporate
responsibility strategy fulfills the interests of shareholders as the most prioritized
stakeholder group in the business.

Customers. Customers come second in Sony’s prioritization in its corporate social

responsibility strategy. The company considers customers as essential in achieving
CSR success. These stakeholders are significant because they determine revenues as
well as public perception about Sony and its products. Customers are interested in
effective products and reasonable pricing. For example, people buy PlayStation
consoles despite high prices because they think that the product is highly effective in
fulfilling their gaming and entertainment needs. Sony’s corporate social responsibility
strategy addresses customers’ interests through innovation. For instance, rapid
innovation processes ensure that customers are satisfied with their PlayStation gaming
experience. In addition, Sony’s sustainability efforts lead to products that satisfy these
stakeholders’ interests in environmental conservation and the corporate citizenship of
companies where they buy the products they use. Moreover, the continuing profitability
of PlayStation products indicates reasonable pricing. Thus, Sony’s corporate social
responsibility approach fulfills the interests of customers as the second most significant
stakeholders in the business.

Employees. Sony Corporation achieves its high performance through the support of
employees. The company views employees as a major stakeholder group. Employees
are significant because they influence Sony’s organizational performance. For example,
workers’ productivity directly affects overall organizational productivity. These
stakeholders’ interests include competitive compensation and managerial support. To
address these interests, Sony’s organizational culture is maintained as support for
optimizing employee performance. In addition, the company applies competitive
compensation programs to compete in the labor market, where technology firms
continually search for the most talented and skilled workers. Sony’s sustainability
programs also help optimize employees’ morale. Such programs contribute to employee
satisfaction in the company’s employment and corporate citizenship practices. These
factors show that Sony’s efforts to fulfill its corporate responsibility satisfy the interests
of employees as a major stakeholder group.
Suppliers. Suppliers are stakeholders that influence Sony’s business and corporate
social responsibility strategy. The company recognizes these stakeholders’ significance
in influencing business operations through adequate supply. Continuing and growing
business relations with Sony are the main interests of suppliers. The company
addresses these interests through managerial efforts to maximize operational efficiency
while supporting suppliers’ effectiveness (Read: Sony’s Operations Management, 10
Strategic Decision Areas & Productivity). These CSR initiatives are designed to help
suppliers grow alongside Sony’s growth. Such simultaneous growth is necessary in
ensuring the adequacy of supply to support the company’s global growth and
expansion. In addition, sustainability programs are applied not just at Sony, but also in
suppliers’ operations. For example, the company requires suppliers to satisfy a number
of environmental impact requirements. These corporate responsibility requirements
benefit the stakeholder group in terms of facilitating suppliers’ improvement in fulfilling
their respective corporate social responsibilities. Thus, Sony’s corporate social
responsibility programs satisfy the interests of suppliers as a stakeholder group in terms
of corporate citizenship and sustainability in the supply chain.

Business Partners. Sony Corporation has business partnerships around the world. For
example, the company has deals with telecommunications companies to distribute and
promote Xperia smartphones. The significance of such business partners as
stakeholders is based on their contribution to Sony’s competitiveness in the global
consumer electronics, gaming, entertainment and financial services markets. The
interests of these stakeholders include strong and profitable relations with the company.
As part of its corporate social responsibility strategy, Sony enters mutually beneficial
agreements with these partners. In addition, the company’s corporate citizenship and
sustainability status have a positive impact on the corporate image of these business
partners. Thus, Sony satisfies the interests of business partners as a stakeholder group
through effective corporate social responsibility programs.

Local Communities. Local communities influence Sony’s corporate citizenship in terms

of how residents respond as consumers. For example, a favorable relationship between
the company and a community typically leads to favorable consumer attitude of the
community’s residents toward the company and its products. In addition, this
stakeholder group is significant in terms of political pressure that they wield to influence
regulatory pressure on Sony. To fulfill corporate responsibilities in this regard, the
company must satisfy these stakeholders’ interests, which include business
sustainability and support for community development. Sony satisfies these interests
through a number of ways. For instance, the company sponsors festivals and sports
events in some areas, as part of the marketing mix of the business (Read: Sony’s
Marketing Mix (4Ps) Analysis). Such sponsorship helps enhance community relations
and facilitate community development. These initiatives show that Sony fulfills its
corporate social responsibility based on the interests of local communities as significant
stakeholders in the business.
Sony Corporation’s CSR Performance in Addressing
Stakeholders’ Interests
With a corporate social responsibility strategy that spans a variety interests and needs
among a number of stakeholder groups, Sony maintains focus on attaining sustainability
as a central objective for corporate citizenship. Sustainability principles are applied to
enhance the business while addressing these stakeholders and their interests. In this
regard, Sony has a satisfactory performance in corporate social responsibility. The
company also has commendable educational efforts for the arts, culture, technology
and the environment. However, these efforts are limited to some countries, such as the
U.S.A. and Australia. Thus, a recommendation to improve Sony’s CSR performance is
to widen the implementation and reach of such initiatives. For example, the company
can expand the same educational programs in developing countries. Such efforts would
enhance Sony’s corporate responsibility status, brand image, and effectiveness in
satisfying stakeholders’ interests.

Sony Corporation’s Marketing Mix (4Ps)

Analysis
UPDATED ONUPDATED ON MARCH 1, 2017 BY ROBERTA GREENSPAN

A Sony Store in
Christchurch, New Zealand. Sony Corporation’s marketing mix (4Ps) addresses the
variations among the consumer electronics, gaming, entertainment and financial
services markets. (Photo: Public Domain)
Sony Corporation’s Marketing mix or 4P (Product, Place, Promotion & Price) effectively
support global business operations. The marketing mix defines how a firm executes its
marketing plan and specifies strategies and tactics specific to the business. In the case
of Sony’s marketing mix, these strategies and tactics are based on the conditions of the
 global consumer electronics, gaming, entertainment and financial services markets. The
company’s diverse business operations require complex considerations in developing
the marketing mix. Nonetheless, Sony maintains a marketing mix that comprehensively
satisfies the organization’s needs in reaching its target customers.

Sony’s marketing mix (4Ps) is based on the varying conditions of the consumer
electronics, gaming, entertainment and financial services markets. The company
effectively implements strategies and tactics to maintain a satisfactory share of target
markets around the world.

Sony’s Products (Product Mix)

Sony has products in the consumer electronics, gaming, entertainment and financial
services markets. However, the company uses a different categorization to properly
group its various products. This element of the marketing mix is called the product mix,
which identifies the firm’s products or organizational outputs. The following are the main
product lines in Sony product mix:

1. Mobile communications
2. Game and network services
3. Imaging products and solutions
4. Home entertainment and sound
5. Devices
6. Pictures
7. Music
8. Financial services
9. Others

Sony’s Pictures products include motion pictures, television productions, and media
networks. PlayStation units and related content are grouped under Game and Network
Services. The company’s batteries, semiconductors and recording media are included
in Devices. Disc manufacturing is included in Others. This element of Sony’s marketing
mix shows considerable diversification of the business, in line with the business-type
divisions in the company’s corporate structure (Read: Sony’s Organizational Structure
Pros & Cons). Such diversification limits the effects of market-based risks.

Place/Distribution in Sony’s Marketing Mix

Sony employs a variety of places for delivering its products to target customers. This
element of the marketing mix identifies the places or venues that the firm uses to
transact with customers, to distribute and deliver products, or to allow customers to
access the products. Sony uses the following places or venues:

1. Sony Stores
2. Authorized sellers
3. Cinemas and media networks
4. Official websites

Sony Stores sell genuine products and accessories, including Cyber-Shot digital
cameras, batteries and television units. These stores are also significant in promoting
the brand, considering their name. The company also earns through authorized sellers,
such as computer stores and smartphone stores. Motion picture products (movies) are
delivered to target customers through cinemas and media networks. Sony also has
official websites for devices, PlayStation content and other products. In this element of
the marketing mix, Sony maintains a variety of places to distribute its products
effectively and to have a wider market reach.

Sony’s Promotion (Promotional Mix)

Sony promotes its products in a variety of ways and forms. This element of the
marketing mix identifies the promotional mix or the methods that the firm uses to
communicate with its target customers. The following promotion methods are used in
Sony’s business:

1. Advertising (most significant)

2. Public relations
3. Direct marketing
4. Sales promotion
5. Personal selling

Advertising is the most significant promotion method in Sony’s business. For example,
the company advertises its products through online media and print media. In addition,
public relations are used as a way to build brand awareness and enhance corporate
image. For example, the company sponsors sports events, music festivals, and other
events. Direct marketing is applied to establish deals with organizations that use Sony
products. On the other hand, sales promotions are used to attract customers based on
discounts. For instance, the company implements discounts for its PlayStation gaming
products for Black Friday. Employees use personal selling at Sony Stores to persuade
target customers to purchase the company’s products. This element of the marketing
mix highlights activities that support the company’s market penetration efforts
(Read: Sony’s Generic Strategy & Intensive Growth Strategies).

Sony Corporation’s Prices and Pricing Strategy

Sony is known for high quality products. However, these products are typically sold at
relatively high prices. This element of the marketing mix determines how the company
sets its prices. Sony applies the following pricing strategies:
1. Premium pricing strategy
2. Market-oriented pricing
3. Value-based pricing

The premium pricing strategy involves high prices. Sony’s products are typically priced
higher than the market average. The high prices support a premium brand image, which
aligns with the company’s differentiation generic strategy. On the other hand, the
company applies market-oriented pricing for some of its products. This pricing strategy
ensures competitiveness, based on the prices of competing products. Sony also
implements value-based pricing to determine the appropriateness of some premium
prices, based on actual product value and customers’ perceived value of the products.
The strategies in this element of the marketing mix show the importance of high prices
to ensure high profit margins and to support a premium brand image.

Sony Corporation’s PESTEL/PESTLE

Analysis & Recommendations
UPDATED ONUPDATED ON FEBRUARY 28, 2017 BY ROBERTA GREENSPAN

A Sony PlayStation
video game console (PSone model). A PESTEL/PESTLE analysis of Sony Corporation
shows many opportunities based on external factors in the remote or macro-
environment of the electronics, gaming, entertainment and financial services business.
(Photo: Public Domain)
Sony Corporation continues its global success by addressing the external factors and
related issues in the remote or macro-environment of its business. The
PESTEL/PESTLE analysis identifies such external factors in the political, economic,
sociocultural, technological, ecological and legal aspects. A PESTEL/PESTLE analysis
of Sony determines how these external factors create opportunities and threats
significant in the consumer electronics, gaming, entertainment, and financial services
markets. The company must effectively consider these factors in its strategic decision-
making. Including the results of the PESTEL/PESTLE analysis can increase the
 suitability of Sony’s strategies with regard to the remote or macro-environment of the
business.

A PESTEL/PESTLE analysis of Sony Corporation considers the external factors in the

remote or macro-environment of the company’s business in the electronics, gaming,
entertainment and financial services markets. Investors and managers can use the
analysis in evaluating Sony’s strategies.

Political Factors Affecting Sony’s Business

Political conditions affect the markets where Sony operates. This aspect of the
PESTEL/PESTLE analysis considers the influence of governmental activity on the
remote or macro-environment of the company. The following political external factors
are significant in Sony’s case:

1. Political stability of biggest markets (opportunity)

2. Increasing governmental support for data security (opportunity)
3. Increasing governmental support for online business (opportunity)

Sony Corporation benefits from the political stability in majority of the biggest markets.
This stability corresponds to the minimization of political barriers in the remote or macro-
environment, thereby presenting opportunities for business expansion. In addition, Sony
has the opportunity to grow based on the increased governmental support for data
security. Governments are now increasing their efforts for data security, which supports
the growth of businesses with online operations. In relation, governments are
developing additional measures to support online business. This external factor creates
opportunities for Sony to enhance its online operations. For example, the company can
expand its online services in relation to its gaming products. In this aspect of the
PESTEL/PESTLE analysis, Sony has growth opportunities based on the political
stability of the biggest markets.

Economic Factors Important to Sony Corporation

Sony’s performance depends on economic trends. This aspect of the PESTEL/PESTLE
analysis identifies the economic conditions significant to the business. Sony needs to
consider the following economic external factors in its remote or macro-environment:

1. High growth of developing markets (opportunity)

2. Economic stability of developed markets (opportunity)
3. Increasing disposable incomes (opportunity)

Sony has the opportunity to grow alongside the economic growth in developing markets.
These markets have the highest growth rates, which can boost the company’s overall
revenues. In addition, the economic stability of developed markets presents
 opportunities for Sony to enhance its operations, while experiencing minimal market-
based risks. Another consideration is the increasing level of disposable income
worldwide. This external factor creates opportunities for Sony to grow its revenues. For
example, the company can market the PlayStation more aggressively, based on the
expectation that customers are increasingly capable of buying the product. Based on
this aspect of the PESTEL/PESTLE analysis of Sony, economic conditions present
opportunities in the remote or macro-environment.

Social/Sociocultural Factors Influencing Sony’s

Business Environment
Social trends affect the responses of customers to Sony’s products. This aspect of the
PESTEL/PESTLE analysis determines the effects of social or sociocultural conditions
on the remote or macro-environment of businesses. The following sociocultural external
factors are relevant in the case of Sony Corporation:

1. Increasing adoption of online gaming (opportunity)

2. Improving wealth distribution (opportunity)
3. Increasing openness toward leisure (opportunity)

The increasing adoption of online gaming and the improving wealth distribution create
more opportunities for Sony to increase its revenues from the sale of its gaming
products. For example, the company can expect potential increases in PlayStation sales
revenues, as more people are likely to purchase the product. In addition, Sony can
boost its sales revenues based on increasing openness toward leisure. This external
factor highlights the benefit of marketing gaming and entertainment products to address
the leisure needs of target customers. This aspect of the PESTEL/PESTLE analysis
shows that sociocultural conditions lead to significant growth opportunities in Sony’s
remote or macro-environment.

Technological Factors in Sony’s Business

Sony depends on technologies used in its business, and technologies that facilitate the
use or consumption of its products. The effects of technological trends and conditions
on the remote or macro-environment of firms are considered in this aspect of the
PESTEL/PESTLE analysis. Sony must address the following technological external
factors:

1. Increasing dependence on digital technologies (opportunity)

2. High rate of adoption of mobile technologies (opportunity)
3. High rate of R&D activity (threat & opportunity)

Sony Corporation has growth opportunities based on the increasing dependence on

digital technologies. This external factor points to increasing individual and
 organizational demand for digital technologies. For example, the integration of digital
technology in smart homes presents new markets or market expansion opportunities for
Sony. In relation, the company can exploit the high rate of adoption of mobile
technologies by innovating its mobile devices for higher competitiveness and revenue
generation. On the other hand, the high rate of research and development (R&D)
activity among firms increases their competitiveness against Sony. This external factor
is a threat because it creates more challenges against the company. Nonetheless,
based on the same external factor, Sony has opportunities to grow its electronics,
gaming, entertainment and financial services businesses. For instance, the company
can use its R&D investment to develop competitive advantage to support the
differentiation generic strategy (Read: Sony’s Generic Strategy & Intensive Growth
Strategies). In this aspect of the PESTEL/PESTLE analysis, there are major
opportunities for growth and competitiveness in Sony’s remote or macro-environment.

Ecological/Environmental Factors
The conditions of the natural environment affect Sony and its markets. This aspect of
the PESTEL/PESTLE analysis covers the effects of ecological trends and conditions on
firms’ remote or macro-environment. In Sony’s case, the following ecological external
factors are significant:

1. Increasing emphasis on business sustainability (opportunity)

2. Increasing demand for environmentally friendly products (opportunity)
3. Increasing availability of recycling facilities (opportunity)

Sony Corporation has growth opportunities based on the increasing emphasis on

business sustainability. For example, the company can enhance its brand image by
increasing its sustainability efforts. In relation, Sony can innovate to make its products
more environmentally friendly. Such products could attract more customers. Another
consideration is the increasing availability of recycling facilities. This external factor
improves the potential success rate of Sony’s efforts to address product end-of-life
concerns. For instance, the company can take advantage of the availability of such
facilities to implement more comprehensive recycling programs. Based on this aspect of
the PESTEL/PESTLE analysis of Sony, there are notable opportunities for business
improvement based on external factors in the remote or macro-environment.

Legal Factors
Sony Corporation must satisfy legal requirements appropriate to its remote or macro-
environment. This aspect of the PESTEL/PESTLE analysis determines the effects of
regulations on firms. Sony must consider the following legal external factors:

1. Improving patent protection (opportunity)

2. Increasing regulations on e-waste (threat & opportunity)
3. Increasing product regulation (threat & opportunity)

The improving patent protection highlights governmental and intergovernmental efforts

to protect patents. This external factor presents opportunities for Sony to grow its
business while expecting minimal challenges in protecting its proprietary information
and designs. On the other hand, the increasing regulations on e-waste are a threat in
terms of the additional efforts and expense of reducing the environmental impact of the
company’s consumer electronics and gaming products. Nonetheless, Sony has
opportunities to strengthen its brand image by proactively improving its products to
minimize environmental impact. In relation, the increasing product regulation threatens
the company by requiring additional expenditure for compliance. For example, Sony
must increase its R&D investment to satisfy additional regulations on product safety.
Still, this same external factor creates opportunities for the company to continually
improve its products to ensure compliance and build competitive advantage. In this
aspect of the PESTEL/PESTLE analysis, Sony has considerable threats and
opportunities in its remote or macro-environment.

Recommendations based on Sony’s PESTEL/PESTLE

Analysis
This PESTEL/PESTLE analysis of Sony Corporation reveals a number of significant
opportunities and threats that shape the electronics, gaming, entertainment and
financial services markets. Most of these external factors present opportunities that
Sony can take. A recommendation is that the company must increase its efforts in
product innovation to improve environmental impact and competitive advantage, while
addressing concerns regarding product regulation. Sony can focus more on enhancing
its mobile devices to take advantage of opportunities based on the high rate of adoption
of mobile technologies. Such enhancement should embody kando, which is emphasized
in Sony mission and vision statements. Another recommendation is to expand the
business in developing markets to maximize Sony’s revenues. As shown in this
PESTEL/PESTLE analysis, these concerns are crucial determinants in the company’s
remote or macro-environment.

Sony Corporation’s Five Forces Analysis

(Porter’s Model)
UPDATED ONUPDATED ON FEBRUARY 26, 2017 BY ROBERTA GREENSPAN
 A Sony Cyber-shot
DSC-HX5VN. A Porter’s Five Forces analysis of Sony Corporation indicates the need
for strategies to counteract the effects of competition in the industry environment.
(Photo: Public Domain)
Sony Corporation’s long-term success is pinned on the organization’s ability to address
business issues, such as the ones shown in this Five Forces analysis. Michael Porter’s
Five Forces analysis is a management tool for determining the intensities or strengths of
the forces influencing the business, based on the external factors in the industry
environment. In Sony’s case, these external factors are based on multiple industries,
considering that the company has businesses in the electronics, gaming, entertainment
and financial services markets. The dynamics of these markets affect the concerns
most significant to the business. To maintain or improve its growth trajectory, Sony’s
strategic decision-making must include such external factors and the issues raised in
this Five Forces analysis.

A Porter’s Five Forces analysis of Sony shows that competition and the bargaining
power of buyers have the highest intensities among the five forces in the industry
environment. Strategic solutions are necessary to address the external factors that
create such strong influences on Sony’s business.

Overview: Sony’s Five Forces Analysis

The external factors impacting the business environment of Sony are evaluated in this
Five Forces analysis of the company. It is essential to address these external factors
and the corresponding five forces to ensure long-term competitive advantage. The
intensities of these forces relative to Sony are shown as follows:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (moderate force)
4. Threat of substitutes or substitution (moderate force)
5. Threat of new entrants or new entry (weak force)

Recommendations. In Sony’s case, competition and the bargaining power of

customers have the highest intensities among the five forces. These two forces are the
most significant considerations in Sony’s business decisions pertaining to the industry
environment. It is recommended that the company must implement measures to
increase its competitiveness. For example, rapid innovation can increase the
competitiveness of Sony’s Xperia smartphones. This recommendation also addresses
the bargaining power of customers by increasing product attractiveness. In addition, to
ensure a holistic strategic approach to issues in the industry environment, Sony must
develop measures pertaining to the bargaining power of suppliers, the threat of
substitution, and the threat of new entrants. However, this Five Forces analysis puts
emphasis on the bargaining power of buyers and competitive rivalry, which is also
identified as a major threat in the SWOT Analysis of Sony Corporation.

Competitive Rivalry or Competition against Sony

Corporation (Strong Force)
This aspect of the Five Forces analysis evaluates the impact of other firms in Sony’s
industry environment. Competitive rivalry affects the company’s revenues. The following
external factors are responsible for the strong intensity of the force of competition
against Sony:

 High aggressiveness of firms (strong force)

 Low switching costs (strong force)
 Moderate number of firms (moderate force)

The high aggressiveness of firms is the main external factor responsible for the strong
force of competition that Sony experiences. However, low switching costs are also a
major contributor. With low switching costs, customers can easily transfer from one
provider to another. For example, customers can easily transfer from Sony Xperia to
Samsung Galaxy phones. The moderate number of firms makes a moderate
contribution to the force of competitive rivalry. In this aspect of the Five Forces analysis,
Sony’s management must remain cautious of the effects of competitive rivalry and low
switching costs on the business and its industry environment.

Bargaining Power of Sony’s Customers/Buyers

(Strong Force)
The influence of customers is covered in this aspect of the Five Forces analysis of Sony
Corporation. Customers or buyers determine the market share and profitability of
 products. In this case, Sony must account for the following external factors that create
the strong intensity of the bargaining power of customers:

 High quality of information (strong force)

 Low switching costs (strong force)
 Moderate frequency of purchases (moderate force)

The high quality of information empowers Sony’s customers in evaluating products

available in the market. For example, customers are more effective in deciding whether
or not to transfer from one brand to another, or from one company to another. Thus,
Sony and other firms can effectively implement aggressive marketing and information
campaigns to attract customers. In relation, the low switching costs enable customers to
easily transfer from one company to another, thereby further intensifying the effects of
the bargaining power of buyers. The moderate frequency of purchases has a limited
impact on Sony’s business. A higher frequency of purchases typically corresponds to a
higher intensity of the effect of customers on the industry environment. This aspect of
the Five Forces analysis indicates that Sony must focus its attention on quality of
information and switching costs to properly address the strong bargaining power of
customers in the electronics, gaming, entertainment and financial services markets.

Bargaining Power of Sony’s Suppliers (Moderate

Force)
Sony Corporation depends on suppliers to support its business. This aspect of the Five
Forces analysis focuses on how suppliers influence the availability of materials that
firms use. The following external factors are responsible for the moderate intensity of
the bargaining power of Sony’s suppliers:

 Moderate size of individual suppliers (moderate force)

 Moderate overall supply (moderate force)
 Moderate forward integration (moderate force)

The moderate size of Sony’ suppliers correspond to their moderate and limited influence
in the industry environment. For example, a strategic change in one supplier would have
a moderate and limited impact on the company. In addition, the moderate overall supply
has a corresponding moderate and limited impact on the availability of materials that
Sony needs. Another external factor that contributes to the moderate intensity of the
bargaining power of suppliers on Sony is the moderate level of forward integration.
Forward integration is the degree to which suppliers own or directly control the
distribution and sale of their goods and services. Based on this aspect of the Five
Forces analysis, the bargaining power of suppliers is a moderately significant issue in
Sony’s operations.

Threat of Substitutes or Substitution (Moderate Force)

 Substitutes are threats that could hamper the growth and development of Sony
Corporation. The degree to which substitutes attract customers is considered in this
aspect of the Five Forces analysis. Sony must consider these external factors that lead
to the moderate intensity of the threat of substitution:

 Low switching costs (strong force)

 Moderate variety of substitutes (moderate force)
 Low availability of substitutes (weak force)

The low switching costs facilitate the movement of customers from the products of
established firms like Sony toward available substitutes. This external factor creates a
strong force in the company’s industry environment. However, the moderate variety of
substitutes limits this force. For example, customers find that they have many more
gaming options through Sony PlayStation compared to traditional non-online games.
The low availability of substitutes in many areas further limits the threat of substitutes
that Sony experiences. For instance, non-digital gaming products are not readily
available in brick-and-mortar stores in many localities. Based on this aspect of the Five
Forces analysis of Sony, such combination of external factors leads to the moderate
intensity of the threat of substitution.

Threat of New Entrants or New Entry (Weak Force)

Sony Corporation must address the potential growth of new entrants. This aspect of the
Five Forces analysis examines how new entrants compete and reduce the company’s
market share in its electronics, gaming, entertainment and financial services
businesses. The following external factors are responsible for the weak intensity of the
threat of new entry in Sony’s industry environment:

 Low switching costs (strong force)

 High cost of brand development (weak force)
 High cost of doing business (weak force)

The low switching costs empower new entrants to easily attract customers away from
established firms like Sony. However, a major barrier to new entry is the high cost of
brand development. For example, new firms must allocate sums that approach the
expenditure of large established firms to create and maintain a strong brand. This
external factor limits the influence of new entrants in Sony’s industry environment.
Similarly, the high cost of doing business prevents new firms from readily competing
head-to-head against established companies. Thus, the threat of new entry has a weak
intensity in affecting Sony, as shown in this aspect of the Five Forces analysis.

Sony Corporation’s SWOT Analysis & Recommendations

UPDATED ONUPDATED ON MARCH 1, 2017 BY ROBERTA GREENSPAN
 A Sony Xperia M4
Aqua Dual E2363. A SWOT analysis of Sony Corporation shows capabilities to improve
business performance in the electronics, gaming, entertainment, and financial services markets.
(Photo: Public Domain)

Sony Corporation is a major firm in the electronics, gaming, entertainment, and financial
services markets. The company has the necessary strengths to continue succeeding,
based on its SWOT analysis. The SWOT Analysis model is a managerial tool for
determining the internal strategic factors (strengths and weaknesses) and external
strategic factors (opportunities and threats) affecting the business. A SWOT analysis of
Sony reveals a number of global market issues that could reduce business
performance. Addressing these issues is crucial to the long-term viability of the
company. Sony must strengthen itself to overcome these challenges.

This SWOT analysis of Sony Corporation identifies key challenges that potentially limit
the company’s global growth and expansion. Maximizing the market performance of
Sony products requires solutions that adequately address the issues outlined in this
SWOT analysis.

Sony’s Strengths (Internal Strategic Factors)

Sony’s business strengths are outlined in this aspect of the SWOT analysis. Strengths
are internal strategic factors that support business growth and profitability. The following
strengths contribute to profitability in Sony’s case:

1. Strong brand
2. Diversified business
3. Popular profitable products

Sony Corporation has one of the strongest brands in the markets where it operates. A
strong brand enables the business to easily attract customers to new products and
current offerings. In addition, Sony has a diversified business. For example, the
 company has electronics and gaming products, as well as financial services and
entertainment products. This diversification limits market-based risks and improves the
stability of Sony’s business. On the other hand, the company benefits from its popular
profitable products, such as the PlayStation. This is one of Sony’s strengths because it
ensures profits despite competitive rivalry. Based on this aspect of the SWOT analysis,
strengths ensure continuing business success. Still, Sony must improve these strengths
to remain effective against competitors.

Sony’s Weaknesses (Internal Strategic Factors)

This aspect of the SWOT analysis identifies Sony’s weaknesses or the internal strategic
factors that limit or reduce the company’s performance. Weaknesses create barriers to
business growth. Sony’s weaknesses are as follows:

1. Lack of dominant mobile devices

2. Vulnerability of databases and networks
3. Imitability of some products

The lack of dominant mobile devices is a major weakness in Sony’s business. The
company’s devices are low performers in the market, compared to those from
companies like Samsung and Apple (Read: SWOT Analysis of Apple, Inc.). Also, with
increasing reliance on online services, Sony’s must solve the vulnerability of its
databases and networks. This factor is a weakness because it is a concern for the
business and its customers in terms of data security. Another one of Sony’s
weaknesses is the imitability of some of its products. For example, competitors can
imitate the company’s cameras and home theater equipment. In this aspect of the
SWOT analysis of Sony Corporation, weaknesses pose significant barriers to growth.
Addressing these weaknesses can increase the company’s competitiveness and
profitability.

Opportunities for Sony Corporation (External Strategic Factors)

Sony has opportunities to further grow its business, as shown in this aspect of the
SWOT analysis. Opportunities are external strategic factors that can boost business
growth and profits. In this case, Sony has the following opportunities in the electronics,
gaming, entertainment, and financial services markets:

1. Further business diversification

2. New product development
3. Rapid innovation

Further business diversification can increase Sony’s growth. For example, building on
its current competencies, the company can explore opportunities in related industries. In
addition, Sony has the opportunity to develop new products to create new income
streams. Furthermore, rapid innovation can boost the company’s competitive
 advantage, especially when considering the high level of competitive rivalry in the
industry. This aspect of the SWOT analysis shows that the company faces opportunities
to raise its profitability in current and new industries.

Threats Facing Sony Corporation (External Strategic Factors)

Sony must overcome and solve threats to its electronics, gaming, entertainment, and
financial services businesses. Threats are external strategic factors that potentially bring
down business performance. Sony faces the following threats in its external
environment:

1. Cyber attacks
2. Competition
3. Software piracy

Cyber attacks are a major threat against Sony, especially because the company is
increasing its reliance on online databases and networks. Competitive rivalry is also a
threat that concerns the business, as other firms are aggressive in markets worldwide
(Read: Sony’s Five Forces Analysis). Software piracy presents challenges in terms of
maintaining profitability. For example, imitation can decrease revenues from Sony’s
gaming and related products. Thus, it is essential for the company to develop solutions
to protect its software products. As emphasized in this aspect of the SWOT analysis of
Sony, measures must be implemented to prevent or mitigate the effects of threats to the
business.

Sony’s SWOT Analysis – Recommendations

There are a number of key issues shown in this SWOT analysis of Sony Corporation.
The lack of dominant mobile devices is a significant weakness. While the company
already offers mobile devices, a recommendation is to apply aggressive marketing and
further enhancement of these products to help grow the business. These actions are
significant, especially when considering high profit potential in the global mobile devices
market. Also, Sony must address the vulnerability of its databases and networks, whose
security is a determinant of customer satisfaction. A recommendation is that the
company must apply continuous improvement to keep such security abreast of current
technologies. This recommendation also addresses the threat of cyber attacks. In
addition, it is recommended that Sony must implement rapid innovation alongside new
product development to expand the business. For example, rapid innovation can
increase the company’s market share and potential profits in the mobile devices market.
This SWOT analysis indicates a number of steps that Sony can take to overcome its
weaknesses and address the most significant threats in the electronics, gaming,
entertainment, and financial services markets.

Sony’s Organizational Culture for Customer Satisfaction

UPDATED ONUPDATED ON FEBRUARY 21, 2017 BY PAULINE MEYER
 A Sony Cyber-Shot
DSC-S2000. Sony Corporation’s organizational culture focuses on customer satisfaction in the
electronics, gaming, entertainment, and financial services business. (Photo: Public Domain)

Sony Corporation’s organizational culture puts customer satisfaction at the core. A

firm’s corporate culture determines the habits, values and traditions inculcated in human
resources. Sony’s organizational culture affects corporate employees, as well as the
employees in the company’s subsidiaries in the electronics, gaming, entertainment and
financial services industries. Thus, cultural characteristics are significant in establishing
a unified organization toward influencing the direction of human resource development
and performance. Through its organizational culture, Sony maximizes its workers’
effectiveness in satisfying customers’ preferences and expectations.

In applying its organizational culture, Sony Corporation trains and maintains its human
resources to satisfy customers. Sony’s success is partly due to the effectiveness of the
characteristics of this corporate culture in connecting the company with its target
customers.

Features of Sony’s Organizational Culture

Sony states that its organizational culture is synonymous to customer satisfaction, as

highlighted in its Customer Satisfaction Campaign known as CS21. This emphasis on
customer satisfaction shows the company’s efforts in understanding and addressing
what customers need or want. Considering three factors (customer’s viewpoint, voice of
customer, and customer’s expectation), the following characteristics are the pillars of
Sony’s organizational culture:

1. Reliable (customer’s viewpoint & customer’s expectation)

2. Credible (customer’s viewpoint & voice of customer)
3. Cordial (voice of customer & customer’s expectation)
Reliable. The reliability of employees is a cultural characteristic that enables Sony
Corporation to consider customers’ viewpoints and address customers’ expectations.
This feature of the organizational culture increases customer satisfaction by ensuring
that employees are capable of addressing customers’ needs and inquiries about the
company’s products. For example, Sony’s product design and development processes
for the PlayStation are mainly based on customers’ perspectives and expectations in
gaming. In this way, the corporate culture helps match the company’s output to market
demand.

Credible. This feature of Sony’s organizational culture is based on knowledge and skills
necessary to satisfy customers. Customers’ viewpoint and the voice of customers are
factors that compel the company to ensure credibility in its human resources. For
example, based on customers’ perspectives and feedback, Sony develops training
programs to improve standards and procedures. HR training and development
programs reinforce the corporate culture through a credible workforce.

Cordial. Cordiality meets concerns at the intersection of two factors: the voice of
customers and customers’ expectations. This characteristic of Sony Corporation’s
organizational culture facilitates warm and friendly relations between employees and
customers. Higher customer satisfaction is a result of this cultural feature. For example,
personnel’s cordiality makes customers feel welcome at Sony Stores, thereby
increasing the probability of sales. Thus, Sony’s corporate culture is a way to retain
customers in the electronics, gaming, entertainment and financial services markets.

Sony’s Organizational Culture: Advantages & Disadvantages

An advantage of Sony’s organizational culture is that its emphasis on customer

satisfaction leads to higher customer retention. Satisfied customers are more likely to
purchase from the company again. Another advantage is that the organizational culture
has a positive impact on Sony’s employees. For example, the characteristics (reliability,
credibility and cordiality) are exercised not just toward customers, but also between
employees. This cultural condition improves employee morale and organizational
effectiveness.

Sony Corporation’s organizational culture has the disadvantage of limited focus on

innovation. Even though the company is innovative and its cultural considerations focus
on what customers want, there is a lack of institutionalized support for innovation
through the corporate culture. In this regard, a recommendation is to implement
adjustments to add focus on innovative behavior among Sony’s employees. For
example, the company can add a feature that encourages employees to develop
innovative ideas to satisfy customers’ specific demands. In this way, the organizational
culture would facilitate product development to support Sony’s generic and intensive
growth strategies. The addition of innovation as a cultural characteristic also helps
fulfill Sony’s mission statement and vision statement.
 Sony Corporation’s Organizational Structure Pros & Cons
UPDATED ONUPDATED ON SEPTEMBER 8, 2018 BY PAULINE MEYER

A Sony Cyber-shot
DSC-S600 camera. Sony Corporation’s organizational structure supports flexibility in the
electronics, gaming, entertainment and financial services markets. (Photo: Public Domain)

Sony Corporation’s organizational structure evolves to accommodate pressures from

the electronics, gaming, entertainment and financial services markets. A firm’s
corporate structure reflects the design and system used to determine the relative
positions and functions of organizational members. Sony has changed its organizational
structure to adjust to changes in the industry. The company’s structural change
supports improvements in competencies to address competitive rivalry. As a major
global business, Sony has an organizational structure suited to address challenges in
current global market conditions.

Changes in its organizational structure have increased Sony’s business resilience. The
new corporate structure ensures the company’s effectiveness in focusing on its key
business segments and the most profitable products.

Features of Sony’s Organizational Structure

Sony Corporation has a balanced matrix organizational structure. Even though

geographic divisions are present, the corporate structure is primarily based on business
function and product/business type. Some executives head multiple divisions or groups.
For example, Sony’s Research & Development group, Energy Business, and Storage
Media Business are under the same executive. The following are the characteristics of
Sony’s organizational structure:

1. Function-based groups
2. Business type divisions
3. Geographic divisions

Function-Based Groups. This structural feature involves Sony’s business functions.

For example, Research & Development functions are grouped together. The objective is
to use the corporate structure to support functional efficiency and effectiveness. Sony
has the following function-based groups in its organizational structure:

1. CEO
2. Finance
3. Research & Development
4. Legal, Compliance, Corporate Communications, CSR, External Relations, Information Security
& Privacy
5. Manufacturing, Logistics, Procurement, Quality & Environment
6. Engineering
7. New Business (Strategy)
8. Sales & Marketing
9. Human Resources & General Affairs

Business Type Divisions. In its organizational structure, Sony maintains divisions

based on business type or product type. For example, the Storage Media Business is
responsible for producing storage devices. The company now focuses on three main
business segments, namely, (1) Devices, Game and Network Services, (2) Pictures,
and (3) Music. However, the business type divisions that compose the segments in
Sony’s organizational structure are as follows:

1. Energy Business
2. Storage Media Business
3. Imaging Products and Solutions Business
4. Game & Network Services Business
5. Pictures Business
6. Music Business
7. Home Entertainment & Sound Business
8. Mobile Communications Business

Geographic Divisions. This structural characteristic is the least significant in Sony

Corporation’s business. The company uses geographic divisions for finance, planning
and strategic decision-making. For example, geographic divisions are used in financial
reports. Sony uses the following geographic divisions:

1. Japan
2. United States
3. Europe
4. China
5. Asia-Pacific
6. Other Areas

Sony’s Organizational Structure: Advantages & Disadvantages

Flexibility is a key advantage of Sony Corporation’s matrix organizational structure. For
example, the linkages among function-based groups and business type divisions enable
the company to responsively address market demand. Sony’s corporate structure also
has the advantage of resource focus on specific businesses or product types. The
business type divisions enable the company to focus its efforts and resources to support
innovation and product development, which is secondary among Sony’s intensive
growth strategies and necessary in applying the company’s generic competitive
strategy.

A disadvantage of Sony’s organizational structure is the limited flexibility of geographic

units of the business. Nonetheless, the company has subsidiaries in various countries,
especially the United States. Still, Sony can improve its organizational structure by
increasing the autonomy of some of its groups, such as the sales and marketing
function in Europe.

Sony’s Generic Strategy & Intensive Growth Strategies

UPDATED ONUPDATED ON MARCH 1, 2017 BY PAULINE MEYER

A Sony Store in
Markville Shopping Centre, Markham, Ontario, Canada. Sony Corporation’s generic competitive
strategy (Porter’s model) and intensive growth strategies support bigger shares in the
electronics, gaming, entertainment and financial services markets. (Photo: Public Domain)

Sony Corporation applies its generic strategy (Porter’s model) for competitive
advantage and profitability in the electronics, gaming, entertainment and financial
services markets. An organization’s generic competitive strategy, based on Michael
Porter’s model, establishes how the business competes against other firms. Also, Sony
adjusts its intensive growth strategies to continually grow the business despite changes
in markets. An intensive strategy specifies the approaches used to ensure business
growth. As one of the biggest companies in the industry, Sony’s case is an example of
effective implementation of a generic strategy and intensive growth strategies
appropriately developed based on business needs and market conditions.

Sony’s generic competitive strategy (Porter’s model) focuses on product uniqueness.

Intensive strategies that aim to grow Sony’s business through increased market share
are relevant in the electronics, gaming, entertainment, and financial services markets.

Sony’s Generic Strategy (Porter’s Model)

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. For example, novelty and uniqueness were among
the factors that lead to the success of the PlayStation. In using the differentiation
generic strategy, Sony must continue innovating novel product features to maintain
competitive advantage against competitors like Nintendo.

The differentiation generic competitive strategy highlights the importance of product

uniqueness in ensuring profitable business. In applying differentiation, a strategic
objective is to increase the rate of innovation to boost Sony’s competitive advantage. A
financial objective based on this generic strategy is to minimize production costs in all
segments of the business. Fulfilling this objective contributes to competitive advantage
by increasing Sony’s business efficiency and corresponding profitability.

Sony’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration (Primary). Sony Corporation’s primary intensive growth strategy is

market penetration. This intensive strategy aims to grow the business by increasing
sales in markets where the company currently operates. For example, Sony grows its
business by intensifying its marketing campaigns to sell more PlayStation units. The
objective is to attract more customers and obtain a larger market share. Sony uses its
differentiation generic strategy to create competitive advantage to support market
penetration. In implementing the market penetration intensive growth strategy, product
uniqueness enables the company to attract and retain more customers. A strategic
objective linked to this intensive strategy is to flexibly adjust marketing campaigns to
ensure Sony’s competitiveness against other firms in the financial services,
entertainment, gaming, and electronics markets.

Product Development (Secondary). Product development is applied as a secondary

intensive strategy to grow Sony’s business. In this intensive growth strategy, the goal is
to develop products better than the competition. For example, Sony continues to
innovate its gaming products, which are a key growth driver that outperforms
competitors. This intensive growth strategy supports the generic strategy of
differentiation in terms of product design. Sony’s innovation efforts ensure that novel
and unique products features are emphasized. A strategic objective based on the
product development intensive strategy is to grow the company by rolling out new
breakthrough products. These products must possess competitive advantage based on
novel features or design that embody Sony’s mission statement and vision statement.

Market Development. Sony Corporation uses market development as a supporting

intensive growth strategy. The company grows by entering new markets or market
segments in implementing this intensive strategy. For example, Sony can introduce its
products to developing markets where it still does not have major presence. The
company can also find a new application for its products to create a new market for
them. Sony’s generic competitive strategy of differentiation supports this intensive
strategy by making products attractive to new target customers. Based on market
development, a strategic objective is to grow the company by entering new market
segments.

Diversification. Diversification is the least significant among Sony’s intensive growth

strategies. Growth through new business development is the goal of this intensive
strategy. Diversification’s significance has decreased because of Sony’s decision to
focus on fewer products. These products have the highest competitive advantage in the
product mix (Read: Sony’s Marketing Mix). For example, the company now focuses on
three main businesses: (1) Devices, Game and Network Services, (2) Pictures, and (3)
Music. The generic strategy of differentiation is applied in this intensive strategy in terms
of using product uniqueness to create competitive advantage necessary to grow Sony’s
core businesses. This intensive growth strategy leads to the strategic objective of
finding new business opportunities to expand the company.

Sony Corporation’s Vision Statement & Mission Statement

UPDATED ONUPDATED ON FEBRUARY 21, 2017 BY PAULINE MEYER
 The Sony Building in
Tokyo, Japan. Sony Corporation’s vision statement and mission statement focus on kando to
attract and retain customers in the electronics, gaming, entertainment and financial services
markets. (Photo: Public Domain)

Sony Corporation is a highly diversified business, with products spanning electronics,

gaming, financial services, and entertainment. The company’s mission statement and
vision statement are noteworthy in continually driving the business to maintain its
market and industry position. The vision statement sets the end-goal of the business. In
this case, Sony focuses on the concept of kando, which is also emphasized in the
company’s mission statement. The corporate mission specifies the ways through which
the business can fulfill its corporate vision. In this regard, Sony’s mission statement and
vision statement reinforce each other to maintain their strong influence on the business.

With its vision statement and mission statement aligned with each other, Sony
Corporation develops profitable financial services, electronics, entertainment and
gaming products. The firm’s corporate mission and corporate vision effectively guide
organizational and employee performance to ensure business resilience in the industry.

Sony’s Vision Statement

With regard to its corporate vision, Sony states, “Our vision is to use our passion for
technology, content and services to deliver kando, in ways that only Sony can.” In
this vision, emphasis is on the concept of kando. The following components are present
in Sony Corporation’s vision statement:

1. Deliver kando
2. Use our passion for technology, content and services
3. Ways that only Sony can
 Sony’s vision statement introduces the concept of kando, which CEO Kazuo Hirai
defines as “emotional involvement” or the “power to stimulate emotional response.” The
concept is integrated in product development and innovation processes. The
implementation of kando also supports Sony’s generic strategy and intensive growth
strategies. The second component of the vision statement indicates what the company
must do to deliver kando. For example, the firm’s employees must use their passion for
technology and content to design and develop new gaming products. The third
component of the corporate vision stresses the importance of the company’s
uniqueness. Such uniqueness is based on the nature and characteristics of
organizational resources. Sony capitalizes on its expertise, human resources and
successful business processes to support this uniqueness component in its vision
statement.

Sony’s Mission Statement

Sony’s corporate mission is to be “a company that provides customers with kando –

to move them emotionally – and inspires and fulfills their curiosity.” The mission
highlights the importance of kando and what it does for customers. Sony’s mission
statement has the following components:

1. Provides customers with kando

2. Inspires and fulfills their curiosity

In its mission statement, Sony Corporation focuses on the concept of kando. Such focus
aligns the corporate mission to the vision statement. To effectively apply the concept,
the mission statement requires that Sony must develop products that evoke emotion
that moves customers. For example, the PlayStation attracts and retains customers
through an emotional bond based on gaming experience. In relation, the second
component of Sony’s mission statement focuses on what the business must do for
customers. In this case, the company must inspire and fulfill customers’ curiosity.

Sony Corporation’s Mission & Vision – Analysis & Recommendations

Sony’s vision statement only partly satisfies conventions and standards of good
practice. For instance, the corporate vision specifies how to deliver kando, but does not
provide information on a desired future condition of the business. An ideal vision
statement must contain details that describe the company’s target future situation. Thus,
a recommendation for Sony to improve its corporate vision statement is to add
information on a future business state achievable by delivering kando, such as
leadership in the electronics, gaming, entertainment, and financial services markets.

Sony’s mission statement gives a general description of what the business does for
customers. However, the corporate mission does not contain enough information to
guide strategic decision-making. An ideal mission statement must include sufficiently
specific details on what the company must do in order to achieve the corporate vision.
In the case of Sony, the mission statement is not specific enough to guide strategy
formulation. Thus, a recommendation is to modify the mission statement to include
information about the company’s approach to capturing a larger market share or
developing better electronics, gaming, and entertainment products and financial
services.