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.

References

 Dess, G. G., & Davis, P. S. (1984). Porter’s (1980) generic strategies as determinants
of strategic group membership and organizational performance. Academy of
Management Journal, 27(3), 467-488.
 Glazer, R. (1999). Competitive Advantage Through Information-Intensive
Strategies. Handbook of Services Marketing and Management, 409.
 Merchant, H. (2014). Configurations of governance structure, generic strategy, and
firm size. Global Strategy Journal, 4(4), 292-309.
 Parnell, J. A. (1997). New evidence in the generic strategy and business performance
debate: A research note. British Journal of Management, 8(2), 175-181.
 Sony Corporation – Form 20-F.
 Spry, A., & Lukas, B. A. (2016). Brand Portfolio Architecture and Firm Performance:
The Moderating Impact of Generic Strategy. In Looking Forward, Looking Back:
Drawing on the Past to Shape the Future of Marketing (pp. 866-867). Springer
International Publishing.
 Varadarajan, P., & Dillon, W. R. (1982). Intensive growth strategies: A closer
examination. Journal of Business Research, 10(4), 503-522.

TAGS: CASE STUDY & CASE ANALYSIS, CONSUMER

ELECTRONICS INDUSTRY, ENTERTAINMENT
INDUSTRY, FINANCIAL SERVICES INDUSTRY, GAMING
INDUSTRY, GENERIC STRATEGY (PORTER'S MODEL) &
INTENSIVE GROWTH STRATEGIES, SONY
CORPORATION, STRATEGY
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