2. Where is Sony vulnerable? What should it watch out for?

What Sony is vulnerable to is the inside problems. It becomes slow in launching new product innovation. In today business, if we cannot walk ahead and stand still, it is equivalent as we walk backward. By doing nothing besides promoting the existing products, it is wasting the company’s resources such as money and time. It is conservative in producing the new thing which means it is opening the door for the competitors to come in. And these reasons make the Apple and Palm Computing to win the consumers and take away the company’s market shares. Others from Japan, Korea, Taiwan and China are appearing in front of Sony to punch the out dated products from retail stores.

Being conservative is a clear thing to failure but the company still has another big internal problem, the breakup of corporate loyalty. The problem in sales of insurance division is seen as the inception of the management issues. The top management did not make agreeable negotiation with division’s CEO and thus the bad story leaked to the public. Even worse, divisions such as music, movie and gadget businesses are walking away from each other and do not see the direction that they can go in the same direction for the best of Sony. Music division takes the reason like the piracy to prevent the loading of music in digital music player. So, why don’t they come up with win-win strategy that allows consumers to enjoy varieties of music while allowing the Music company to make profit? Does the CEO of Sony not know the problem or he just does not have the ability to integrate these divisions together?

The third bad thing is the incompetency of marketing department. The one coming up with new product idea should be from marketing, not R&D. Marketer should know what the needs are and inform R&D. But, what they are doing is just focus only on promotions, which pulls down the company’s position and the leader in technology. In such situations, they are losing 2 out of the 3 pillars of the founders, being creative in product innovation and creative in product planning and operation. But, they are just not creative enough.

While Sony is having 3 main internal problems, competitors just come in and immediately take up Sony’s market shares. They are faster, more creative, offer more economic products and newer to the customers. The result is Sony’s big drop in sales and profitability. If the problems are still unsolved, what more are the further losses of customers especially in entertaining electronic device and downloading, the prolong problem of corporate loyalty, as well as more intense competitions beyond entertainment.

So, they should look for the new management strategies to solve the internal problems as mentioned earlier and these can be achieved by redesigning of how each division can work together, how marketing should work with R&D, and how to be more aggressive to get back the market’s shares in today business.(YIM TO NHA)

Posted in: Sony Case Studies(MBA)