There’s always a clear leadership (eg,Yoshihide Nakamura(1968.....) and Kazuo Hirai(2012... to date).The company encourages on the job training though their hosts of scholarships programmes available.2012 Corp Strategies includes Creating new businesses & accelerating innovation Sony’s continuous emphasis on restructuring exercises, rather than concentrating on cutting down on unnecessary product lines, and its continual focus on the consumer electronics business at a time when the industry itself was going through a slump period, could be cited as the primary reasons for its continual dismal performance
A blend of Eastern and western culture(Beamish 1999)A mix of “very Japanese thinking” and “not very Japanese thinking”The company encourages innovationInnovative staff are given new opportunities to enable them realise their dream.Eg,Head
- Sony previously worked with Nintendo under partnership agreement, started back in 1983Nintendo developed games and add-ons, Sony developed core technologyLater, Sony successfully developed CD-ROM but there were conflict between Nintendo, Sony stepped outSony then entered gaming market on its own, possessing CD-ROM technology as Core competence
I will mention that once Sony enter Game console market, it’s strategy was differentiation, try to completely differentiate itself from Nintendo. With the entrance of Microsoft, which using similar strategy as Sony has lower the uniqueness of Sony. So it’s current position, as in PS3, is a differentiation focus where the firm looks to typically gain it competitive advantage through product innovation and brand marketing rather than efficiency.
-From the model, we can notice that Sony PS3 and XBoX360 have very similar Strategy. The consumers would not have a clear choice when it come to decision making between either on of these consoles. Oppositely, Wii differentiate itself from the other 2, its unique gaming that cannot be found in PS3, or Xbox can overcome its advantage of poor graphic and additional feature such as movie player.-Only thing that Sony console manage to stand out from other product is its graphic and special disc format which offer optimum memory capacity of 25 GB
-CD-ROM become core competence of Sony as it entered the market due to its much larger memory, resulted in better graphic and user experiences.However, it faces the problem in persuading game developer to work under their new platform, due to its position and experiences in game console market Moreover, Sony spend largely to be in consumer mind by advertising in every major game magazineMicrosoft enter Gaming market in 2001 and introduce Xbox using DVD platform which offer higher memory than CD-ROMSony countered by Massive R&D and come up with Blu-Ray technology which offer better performance than DVDFrom several attempt in adding internet feature into Game console by Nintendo and Saga but failed due to technical error, only allow user to download some game on internet. Sony is the first one that brought the full potential benefit of internet to its PS3, allow people to fully download games, share games and play multiplayer mode only.
We are using Technology lock-in Strategy, Arthur (1998)Sony use its own platform, CD-ROM for its PS1 and 2 and Blu-Ray in PS3, totally incompatible with other consolesSony Introduce
Top management commitment and visible support for innovation Timing : Explicit time based strategiesAdopting a “carry-over” strategy (use inventions for multiple products). “The innovation process is defined as the development and selection of ideas for innovation and the transformation of these ideas into the innovation” (Jacobs and Snijders 2008). The main idea of SCE was to develop a next generation game console as a “Super family computer” along with Nintendo. But after getting betrayed by Nintendo, SCE decided to move into own project. In 1994 Rothwell, a key researcher in the field of innovation management identifies four key principles of Fifth Generation (5G) innovation process namely: integration, flexibility, networking and parallel information processing. These are fundamental principles underlying the innovation process of SCE. SCE integrated hardware developers from central lab, software-related image processing developers from Kihara institute, Sony Music Entertainment (SME), recording media division to work on PlayStation. Flexibility in research department has improved innovating thinking of all engineers. Upstream networking with small electronic component suppliers and downstream networking with demanding customers provided huge benefit in manufacturing process. SCEalso developed indirect knowledge-sharing mechanisms among the software developers byoffering software development support to third parties.SCE used incremental innovation process approach for Playstation2 and PlayStation3. By using latest technologies of the time, such as DVD media, an ultra- high-speed core engine (EE + GS),and ultra-high-speed memory system architecture (co- developed with Rambus), SCEsignificantly enhanced the hardware performance for PS2. For PlayStation3 SCE used a Cell processor by IBM and Toshiba which was based on the Power architecture and combined with NVidia graphics chip, high storage memory, full HD quality and blue ray drive along with minor changes in other components. To avoid long delivery times SCEstrategically chose to utilize a direct sales channel instead of the wholesaler channels in its distribution channel. Direct channels offered a substantial advantage in terms of shorter lead-time in taking orders and responding to additional orders from retailers. High quality business ideas were developed based on Sony's rich knowledge of the CDbusiness, while the hardware design for PS1was created bysharing all of Sony’s intelligence and information resources. PS2succeeded because of its internal development and production of the semiconductor for its core technology, which enabled SCEto achieve both high performance and lower cost. With these two successes in process innovation, Sony dominated the game industry. In short Sony have learned how to manage process (both in ‘do-better’ and ‘do different’ variants) so that they can sustain innovation (Foster and Kaplan, 2002, Geus 1996).
The Making Of: PlayStation(http://www.edge-online.com/features/making-playstation/)The Psygnosis Story: John White, director of software (http://www.edge-online.com/features/psygnosis-story-john-white-director-software/)Verant Interactive (http://uk.ign.com/companies/verant-interactive)ennifer Johns. (2006). Video games production networks: value capture, power relations and embeddedness. Journal of Economic Geography. 6 (1), p151-180.
- Created SCE in 1993 after being excluded from Nintendo project - Collaboration with SME’s R&D and business development for PlayStation - SCE offered incentives to third-party software developers that Nintendo did not provide. - Developed indirect knowledge sharing mechanisms among the software developers by offering software development support to third parties. Experimentation: - Using CDs in gaming consoles. - Using DVDs in PS2, although the technology was just developing at that time. - Releasing PS2 at high price and still maintaining sales - Trying to implement new high speed core processor “Cell” in PS3 and other products of Sony. ( This was a failure as the processor manufacturing was delayed) - Promoting independent game developers
REFERENCES Tidd, J., and Bessant, J.(2009) 4th Edition, Managing Innovation: Integrating Technological, Market & Organisational Change, John Wiley &Sons, Chichester.MIT Link: https://mitsloan.mit.edu/LearningEdge/CaseDocs/07-046-Sonys-Battle.pdf?v=20120410Business article: http://www.gamesindustry.biz/articles/2012-10-05-sonys-steep-learning-process
From the innovation audit in Appendix ___ strategy and learning were given a high score of 6 whereas processes and links were given
Innovation Audit Sony
THE GAME BEGINS IN 3 2 1…
Press Start ...
• May 7, 1946 and is headquartered in Minato-Ku,Japan.
• Operates three business units- Electronics, Entertainment and Financial
• Major products -Televisions, Digital imaging, Semiconductors, Electronic
components, Professional solutions, Medical
• Staff Strength of 168,200
• 183 countries.
• Mission: "To experience the joy of advancing and applying technology for
the benefit of the public.”
• Brand Message: “Make. Believe”.
Global Market Position
• Restructuring in its organizational structure.
• The quest to be innovative is one of reasons for the
• Latest Restructuring was on April 1st, 2012.
• Divisionalised and Adhocracy.
• Visionary-Top-down identification.
• President Kazuo Hirai, Sony switches to a new
management structure with gaming - core
• New structure - Revitalization and Growth of
Electronics Businesses and Deliver Compelling
User Experiences as “One Sony”.
• Three core pillars: digital imaging, game and
Initiatives to promote
• Lunch time learning aimed at encouraging
creativity and managing stress
• Sony University at nurturing talents anywhere
in the world
• High Potential Programme-Progresses the core
skills of Super Sony Folk
• “Work Smart”-Designed to enhance an
individual's body, mind, emotions
Diffusion of Innovation Diagram
system (62 million
(33 million units
million units sold)
Sony Play station
(125 million units
Color TV game6
(3 millions units
sold, in Japan)
Boy (118 million
Source : http://dotpixelgames.com/wp-content/uploads/2010/04/video-game-timeline.jpeg
Sony PS 2
(138 million units
Sony PSP (76
million units sold)
Nintendo DS (154
million units sold)
(24 millions unit
X Box 360
(76 million units sold)
Sony PS 3
(77million units sold)
Introducing New disc
format Blu-ray in its
new PS3, internet
Conflict with Nintendo,
Entering Game Console
Technology, Shift in User
developer to work
under their new
Game Sharing, Face
Porter’s Generic Strategy
Generic Strategy (Porter, 1980)
SONY Technology Lock-In Strategy
• Technically differentiate product (incompatible with
rival, so zero sum game)
• Introduce better quality products
• Form strategic alliances (catch-up)
• Develop more effective process technologies
• Target marketing in leading magazines and media
• Cross-leverage installed user bases in related markets
• Understand heterogeneous demand (distinct user groups)
• Build brand image amongst key socio-economic groups
• Improve / exploit distribution channels
• Exploit better organisational resources
• Exploit better access to key resources
•Process is top-down
•Senior management search and select
•Middle to lower level management deal with Implementation
•Capture is determined as success or failure by the whole organisation
visible support for
CONTINUOUS INNOVATION AS
A MULTI ACTOR PROCESS
Research design and
Integration within the
Upstream with suppliers
IBM & Toshiba
Learning: Kolb’s experiential learning cycle
Experience – Honest capture of
experiences (even costly failure) thus
having raw materials to reflect
Reflection – what happened, what
worked well, what went wrong etc..
Conceptualizing – capturing and
codifying the lessons learned into
framework and eventually procedures
to build on lessons learned.
Experimentation – the willingness to try
and manage things differently next
time, to see if the lessons learned are
Capturing and re-using past experiences:
- SCE in 1993 - Nintendo project
- Collaboration - SME’s R&D & Business Development
- Incentives to third-party software developers
- Indirect knowledge sharing
- Using CDs .
- Using DVDs in PS2.
- High price and still sales.
- High speed core processor “Cell” in PS3
- Promoting independent game developers
- Releasing PS4 - lower price
- Utilization of all Sony’s resources (intelligence and
Learning and Adaptability - Main strength
- Cutting edge technologies into PSs’ hardware.
- Improvising on the product even after its release there by
finding new ways for price reduction.
- Reasonably pricing of PS4.
- Enabling offline mode in PS4.
- Encouraging independent game developers.