industrial analysis report of Consumer durables and Sony enterprise
Guided by Pro. Dr.Sanjay Bhayani.
An Industrial Analysis
Consumer durables are a category of consumer products that do not
have to be purchased frequently because they are made to last for an
extended period of time (typically more than three years). They are also
called durable goods or durables.
Consumer goods are often divided into two categories: durables and
non-durables. Durables have an extended product life. Since they're
made to last.
Examples of nondurable goods include fast moving consumer goods such
as cosmetics and cleaning products, food, fuel, beer, cigarettes,
medication, office supplies, clothing and footwear etc.
While durable goods can usually be rented as well as bought, nondurable
goods generally are not rented. While buying durable goods comes under
the category of Investment demand of Goods, buying Non-Durables
comes under the category of Consumption demand of Goods.
Sony Corporation Company
Native Name ソニー株式会社(Sony Corporation)
Traded as TYO: 6758
Founded 7 May 1946(as Tokyo Tsushin Kogyo)
Founders Masaru Ibuka
Head Quarters Minato, Tokyo, Japan
Area Served World wide
Key People Osamu Nagayama (Chairman of the Board)
Kazuo Hirai (President & CEO)
Products Consumer electronics
Services Financial services, insurance, banking,
credit finance and advertising agency
Sony found its beginning in the wake of World War II. In 1946, Masaru
Ibuka started an electronics shop in a bomb-damaged department store building
in Tokyo. The company had $530 in capital and a total of eight employees.
The next year, he was joined by his colleague, Akio Morita, and they founded a
company called Tokyo Tsushin Kogyo(Tokyo Telecommunications Engineering
Corporation). The company built Japan's first tape recorder, called the Type-G. In
1955 the company name was changed to Sony.
In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs'
invention of the transistor. He convinced Bell to license the transistor technology
to his Japanese company, for use in communications. Ibuka's company made the
first commercially successful transistor radios. According to Schiffer, Sony's TR-
63 radio "cracked open the U.S. market and launched the new industry of
The company name of sony was created by combining two words of “sonus” and
“sony”. The word “sonus” in Latin represents word like sound and sonic. The
other word “sony” means little son Used in Combination, sony is supposed to
represents a very small group of young people who have the energy and passion
toward unlimited creation and innovative ideas.
Sony co-founder Akio Morita founded Sony Corporation of America in 1960.
Moreover, Sony played a major role in the development of Japan as a powerful
exporter during the 1960s, 70s, and 80s.
Sony introduced a slogan known as "make.believe" in 2009.
Wide product range Strong brand image
64 billion $ annual
When the company was founded in 1946, Mr. Ibuka created the Founding
Prospectus, a document outlining the mission and values that he wanted his
company to adopt. The first section was the “Purpose of Incorporation”, which
was broken down into the following eight points:
a) To establish of an ideal factory that stresses a spirit of freedom and open-
mindedness, and where engineers with sincere motivation can exercise their
technological skills to the highest level;
b) To reconstruct Japan and to elevate the nation's culture through dynamic
technological and manufacturing activities;
c) To promptly apply highly advanced technologies which were developed in
various sectors during the war to common households;
d) To rapidly commercialize superior technological findings in universities and
research institutions that are worthy of application in common households
Vision, Mission and Values
e) To bring radio communications and similar devices into common
households and to promote the use of home electric appliances;
f) To actively participate in the reconstruction of war-damaged
communications network by providing needed technology;
g) To produce high-quality radios and to provide radio services that
are appropriate for the coming new era;
h) To promote the education of science among the general public.
TV & Audio Equipment
Computer Game Consoles
Movie & Video Equipment
Mobile Phones & Music
Strengthening core businesses (Digital Imaging,
Turning around the television business
Expanding business in emerging markets
Creating new businesses and accelerating
Realigning the business portfolio and
Strategy of Sony Corporation
Defining business objectives
Building a new management structure
Accelerating decision-making and execution
Management strategies for
revitalising the Electronic
Shares of consumer durables
market in India(FY12)
Urban markets account for the major share
(65 per cent) of total revenues in the
consumer durables sector in India .
Demand in urban markets is likely to increase
for non-essential products such as LED TVs,
laptops, split ACs and, beauty and wellness
In rural markets, durables like refrigerators as
well as consumer electronic goods are likely
to witness growing demand in the coming
Surveyed as Asia's most valued brand in 2011.
Synonymous with technological excellence and having rich
heritage of technological expertise. For example Trinitron
Colour television, VCR, and Walkman.
Company helped develop the magnetic recording tape, the
compact disc, and the Blu-Ray disc, used today as a medium
for high-definition video playback. Its latest
innovation, a Crystal LED television, was well received at the
Consumer Electronics Show in Las Vegas.
Out of all its products at present, Sony's success with the
PlayStation is most noteworthy -- it has been successful since
inception, and still sees tremendous consumer demand.
A strong foothold in the entertainment industry with Sony
Music and Sony Pictures.
The high cost of media production, especially in its
television business, has affected the company's pricing
strategy. Its television business has lost an equivalent of
$6.3 billion for eight years in a row. It's also losing
market share to manufacturers, such as LG and
While diversifying into too many business segments, the
consumer electronics giant has shifted its focus from its
core competency -- making great consumer-electronic
This has resulted in a distortion in Sony's
brand. Apple, which is also in the consumer electronics
space, has managed to focus on just a few
products, build competency, and make them incredibly
The company can take advantage of its movie and
music business along with its experience in the gaming
space to deliver value-added content to support and
integrate its product line. It has talked about doing this
with a four-screen strategy, which looks like a good
The company lately bought off its entire Sony Ericson
joint venture. This should give Sony the opportunity to
act independently and innovate in the booming
smartphone and tablet market.
The company has the opportunity to enter the
healthcare-imaging sector in a significant way through
a possible acquisition of a 30% stake in Olympus.
Sony faces price competition from competitors such as
Samsung and LG, who are gaining traction with lower-
cost products such as televisions and mobile devices.
If rumours are to be believed, Apple can give a tough
time to Sony by introducing its own version of the
television, Apple TV.
Sony's online network faces threats from hackers. The
company's PlayStation network was hacked, resulting
in leakage of customer information, such as credit-card
Technology, Know-how and Innovation
Threat of New Entrants (Low)
Big global supply chain
(Suppliers are not concentrated)
Suppliers are forced to cut their
prices or go out of business
Direct negotiation with suppliers
in order to encourage:
Many OEMs start to produce
their own components in-house
Bargaining Power of Suppliers (Low)
Suppliers exert power in
the industry by:
* Threatening to raise
prices or to reduce quality
Powerful suppliers can
profitability if firms are
unable to recover cost
Products are fairly
Buyers face few switching
Online shopping has
increased the bargaining power
Buyers are price sensitive and
demand high quality
Bargaining Power of Buyers
Buyers compete with the
supplying industry by:
* Bargaining down prices
* Forcing higher quality
There are few substitutes from other
industries, if any.
Most of them seem to be obsolete or
have one foot out of door.
Digital Camera in the place of Film
Fax machines in place of overnight mail
Threat of Substitute Products (Low)
limit the prices
firms can charge