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Sony case study


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Sony case study

  1. 1. 2010rightcenterA Case Study On Electronic Products Of Sony Pvt. Ltd.<br />Acknowledgement<br />We take the opportunity of submitting this report to express our deep regards to those who offered invaluable assistance and guidance in this hour of need.<br /> First & foremost. We would like to express my gratitude to my professor and guides, for their constant support, encouragement and valuable guidance, without which the successful completion of this report would have been impossible. They are responsible for making us realize how important it is for us to concentrate and put focused efforts on this project.<br /> Last but not the least; we would like to thank our friends and colleagues for their support and invaluable help.<br /> Submitted by:<br /> Surabhi Agarwal <br />Submitted to:<br />Prof Deepti Verma<br />Index<br />S.No.Particulars1.Introduction2.History3.SWOT4.Case-study<br />Sony India Pvt. Ltd.<br />Company:Sony India Pvt. Ltd.Managing Director:Mr. Masaru TamagawaDate of Establishment:November 17, 1994Location:A-31, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110044, India.Staff Strength:636 (as at March 31, 2007)Share Capital:Rs. 550 millionShare Holding:100% subsidiary of Sony Corporation, Japan Branch Offices:Delhi, Haryana, Ludhiana, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Vijayawada, Jaipur, Chandigarh, Lucknow, Pune, Ahmadabad, Indore, Cochin, Coimbatore, Ghaziabad, Guwahati, Hubli and Ranchi Business Activities:Marketing, Sales and After-Sales Service of electronic products & software exports Products: Televisions, Hi-fi Audios, Home Theater systems and DVD players, Personal Audio (CD/Cassette Radio Players and Walkman®), Audio Video Accessories, Car Audio and Visual Systems, Notebooks, Gaming Consoles, Camcorders and Digital Still Cameras, Digital Imaging Accessory (Batteries, Chargers, Microphone, Photo Printers), Mobile Phones, Recording Media and Energy Devices, Broadcast and Professional products. <br />Introduction<br />Sony Corporation (Sonī Kabushiki Gaisha) is a multinational conglomeratecorporation headquartered in Minato, Tokyo, Japan, and one of the world's largest media conglomerates with revenue exceeding US$99.1 billion (as of 2008). Sony is one of the leading manufacturers of electronics, video, communications, video game consoles, and information technology products for the consumer and professional markets. Its name is derived from sonus, the Latin word for sound.<br />Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its five operating segments—electronics, games, entertainment (motion pictures and music), financial services and other. These make Sony one of the most comprehensive entertainment companies in the world. Sony's principal business operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson, and Sony Financial Holdings. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. The company's slogan is Sony. Like no other.<br />Sony India is one of the most recognized consumer electronics brand in the country, with a reputation for new age technology, digital concepts and excellent service. In India, Sony has its footprint across all major towns and cities in the country through a distribution network comprising of over 7000 dealers and distributors, 210 Sony World & Sony Exclusive outlets and 22 direct branch locations. Sony India also has a strong service presence across the country with 21 company owned and 160 authorized service centers.<br />The first thing that comes to people’s minds of the company and products of Sony is its high-technology-filled-with-gadgets electronic goods and innovation. It was also this innovation that makes Sony the greatest company that started in post-war Japan. Sony has used its innovation in building markets out of thin air, created a multibillion, multinational electronic empire with products such as the transistor radio, the Trinitron, the Walk-in and the VTR. That changed everyday household lives forever. <br />However, this consumer targeted quest for excellence and constant innovation instead of targeting mainly at profit also has a lot to do with current crisis Sony is facing - sales and profits are down or are slowing down, capital investment cost and R&D are climbing, competitors are moving in with copycats, the battle between VHS and Beta and the search for a smash hit product such as the Trinitron or the Walk-in. <br />History<br />Masaru Ibuka, the co-founder of Sony.<br />In 1945, after World War II, Masaru Ibuka started a radio repair shop in a bombed-out building in Tokyo. The next year, he was joined by his colleague Akio Morita and they founded a company called Tokyo Tsushin Kogyo K.K., which translates in English to Tokyo Telecommunications Engineering Corporation. The company built Japan's first tape recorder called the Type-G.<br />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. While most American companies were researching the transistor for its military applications, Ibuka looked to apply it to communications. Although the American companies Regency and Texas Instruments built the first transistor radios, it was Ibuka's company that made them commercially successful for the first time. In August 1955, Tokyo Telecommunications Engineering released the Sony TR-55, Japan's first commercially produced transistor radio. They followed up in December of the same year by releasing the Sony TR-72, a product that won favor both within Japan and in export markets, including Canada, Australia, the Netherlands and Germany. Featuring six transistors, push-pull output and greatly improved sound quality, the TR-72 continued to be a popular seller into the early sixties.<br />In May 1956, the company released the TR-6, which featured an innovative slim design and sound quality capable of rivaling portable tube radios. It was for the TR-6 that Sony first contracted " Atchan" , a cartoon character created by Fuyuhiko Okabe, to become its advertising character. Now known as " Sony Boy" , the character first appeared in a cartoon ad holding a TR-6 to his ear, but went on to represent the company in ads for a variety of products well into the mid-sixties. The following year, 1957, Tokyo Telecommunications Engineering came out with the TR-63 model, then the smallest (112 × 71 × 32 mm) transistor radio in commercial production. It was a worldwide commercial success.<br />Product & Technology Milestones<br />-4762584455(1955) Japan's first transistor radio, employing five transistors developed in-house. The TR-55 became the forerunner of later portable radios. <br /> <br />-47625469900 <br /> TR-610 Highly acclaimed for its novel design, it was a hit in both Europe and the US. Approximately 500,000 units were sold throughout the world. <br /> <br /> <br />6667536830(1965) TFM-110 This model featured a black and silver design which was representative of the “Solid State Eleven.” Its chic design and unprecedented advanced sensitivity made the TFM-110 a top seller. <br /> <br />1905099060(1975) ICF-5900 Five-band radio known by the nickname “Sky Sensor.” Its crystal marker (based on a quartz crystal resonator) ensured precise shortwave tuning. <br /> <br />1905022860 1976 ICF-7500 Skillfully designed to separate the tuner and speaker, resulting in a high-performance, compact FM/AM receiver. <br /> <br /> <br />19050514351995 ICF-TR40 Model commemorating the 40th anniversary of Sony radios. This handy portable radio featured a faux-leather exterior with metallic trim. <br /> <br />184151238251997 ICF-B200 Emergency radio with built-in manual power generator. Just turn the handle to charge the internal batteries. <br /> <br /> <br />-85725571502000 SRF-G8V The use of magnesium alloy ensured a slim but durable body. With a text-to-speech function and a stand charger, this radio was designed specifically for commuter use.<br />INTERNATIONAL MARKETING<br />Sony Corporation - SWOT Analysis.<br />The Sony Corporation - SWOT Analysis company profile is the essential source for top-level company data and information. The report examines the company’s key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy.<br />Sony Corporation (Sony) is one of the world’s leading consumer electronics firm with additional interests in the entertainment industry through subsidiaries dealing with recorded music, motion pictures, TV programming, DVDs and videos. The group operates globally and is headquartered in Tokyo, Japan. It employed 163,000 people as on March 31, 2007. The group recorded revenues of JPY8,295,695 million (approximately $70,355.8 million) during the fiscal year ended March 2007, an increase of 10.5&percnt; over 2006. <br />The increase was driven by strong sales within the electronics, game and the pictures segment. The operating profit of the group was JPY71, 750 million (approximately $608.5 million) during fiscal year 2007, a decrease of 68.3&percnt; compared with 2006.The net profit was JPY126, 328 million (approximately $1,071.4 million) in fiscal year 2007, an increase of 2.2&percnt; over 2006.<br />StrengthOne of Sony’s greatest strengths is their ability to produce innovative, quality products. Sony’s web page states “Sony innovations have become part of mainstream culture, including: the first magnetic tape and tape recorder in 1950; the transistor radio in 1955; the world’s first all-transistor TV set in 1960; the world’s first color video cassette recorder in 1971; the Walkman personal stereo in 1979; the Compact Disc (CD) in 1982; the first 8mm camcorder in 1985; the Minidisk (MD) player in 1992; the PlayStation game system in 1995; Digital Mavica camera in 1997; Digital Versatile Disc (DVD) player in 1998; and the Network Walkman digital music player in 1999” ( World published The 20 Most Innovative Products for the Year 2006. Sony’s Reader was listed as number six and Sony’s PlayStation was listed as number sixteen. Sony Corporation has managed to be competitive and stay a powerful organization by learning from past failures. Sony states the following: “Sony has learnt much from previous unsuccessful products. The Sony MSX home computer, for example, did not attain a satisfactory level of success. But it did teach Sony development engineers valuable know-how that would be applied in later years. In effect, these engineers became living resources, representing latent power within Sony that did not exist in other AV companies” ( strength of Sony is their ability to be successful in several different markets. They have made an impact in the video game market, the PC market, and especially the television market and there are still numerous others.<br />The greatest asset of Sony is of its human capital, especially its engineers which make up the R&D department. Their constant innovation is crucial for a consumer electronic firm which specializes in audio-visual equipment and the higher profit margin, which comes from being the leader of the pact. Subsidiaries are also well established, such as in the United States and Europe which give Sony a distinct local hands-on knowledge of the local market. It also makes Sony an international corporation, bringing together the talents and best of strategies of both world to the organization. Besides the employees, the two founders, Ibuka and Morita also legends in their fields which they create vision and sense of direction for the organization. They also acts as bridges between the employees and the management. <br />The self promoting system and job rotating systems creates satisfaction for employees and give them greater exposure to all aspects of the business. Ideally, this would produce better products as engineers gain knowledge on consumer needs while marketing people engaged in the production and can give their point of view. <br />The goodwill of the company among the consumers is one of the biggest asset of Sony corporation. the general image of the company is – it a big company with huge experience in every field they are in ,provide high quality products, very expensive and best product.<br />Distribution network of Sony and all it’s subsidies id world class.<br />Showrooms made exclusively for the Sony products are very exclusively made. Which makes a customer entering it get caught spirit of Sony and feels completely dragged by it.<br />WeaknessSony’s biggest and most recent weakness is their lack of innovation with PS3. Sony focused on digital technology when building the PS3 and it has the ability to export video in high-definition. But this technology can only be viewed on a high definition TV so a lot of people will not even be able to see the full potential it has to offer. Another downfall to the PS3 is the price, which Sony has recently lowered by $100. Yet the weakness of the PS3 is even deeper when considering the range of video game selections. The majority of games available are all first-person shooter games, which appeal to a particular market. There are few games that appeal to a different section of video gamers. Sony executives made it clear that they know they need to do more than lower prices to woo consumers back to its flagging video game brand.OpportunitiesSony seeks a lot of opportunities that utilize their strengths of innovation. At Sony Ericsson, design is about more than just a good looking product: it is integrated into every step of the process – intelligent features, user-friendly applications, innovative materials and, of course, attractive visual appearance. Design is the essential differentiator when comparing mobile communications products.Sony's Reader, a device the consumer-electronics giant hopes is an early draft of how the world will read books in the future, is another innovation that Sony is using as an opportunity to enter a new market. The downloaded books generally cost 20 to 30 percent less than their dead-tree counterparts, which is also setting a standard on what is expected in regards to new products that encourage environmentally friendly devices.One of the other CSL projects most likely to succeed was a nifty little piece of graphics software for cell phones by Ivan Poupyrev. It might not sound like much, but the ability to draw realistic icons and avatars directly on a standard (non-touchscreen) phone is sure to add appeal to users of mobile social-networking sites.Although there was far too much on display today to cover in depth here, there was a clear emphasis on what many predict will be the boom technology of the next few years – social networking in all its forms.ThreatsA common threat facing any company in sales is competition. Sony’s Vaio is its newest innovation in notebook computers. The various models range in price from $845 - $2300. However, Dell has a great reputation when it comes to laptops similar to the Vaio and has a broader range of notebooks to choose from, not to mention that Dell has also been a top seller when it comes to desktop computers. Additionally, the cost of a Dell notebook computer seems to have a lower price tag than many of Sony’s Vaio models.Sony’s top competitors in the gaming industry are Nintendo and Microsoft. The PlayStation 3 sales have fallen behind recently. In 2007, 82,000 PS3s have sold and 360,000 Nintendo Wiis.In the LCD television market, Sony excels but still faces some strong competition, including Samsung, Sharp, Panasonic and more. Many of these same brands appear in the DVD player market that Sony has to compete with.Competition isn't the only threat Sony is facing. Sony most recently had to make a public apology concerning the use of a backdrop in a violent video game, " Resistance: Fall of Man." Sony used the Manchester Cathedral in northwest England in this video game, which features a bloody gun battle scene between American soldiers and aliens. Sony made a formal, public apology on July 6, 2007. However, when asked to withdraw the game or make donations to community groups, they have refused.<br />Case<br />The company was also gathering a reputation as the ‘‘guinea<br />pig’’ of the Japanese electronic manufacturers. Sony continually<br />was first to market with new innovations, such as the transistor<br />radio and the first solid state TV set in 1959. Other, larger<br />manufacturers would sit back and see whether markets<br />emerged for those products. If they did, they would then jump in,<br />releasing competitive products. As Sony’s successful track<br />record became better known, the larger manufacturers were<br />waiting shorter and shorter periods of time before entering new<br />markets.<br />To keep Sony at the leading edge, up to 10-percent of the<br />company’s sales were committed to research and development.<br />To develop international sales operations, most Japanese<br />companies tend to work through Japanese trading companies.<br />By contrast, Morita decided Sony would set up its own sales<br />offices, with the first being established in New York. Morita also resisted the urge to move the company into OEM deals -- making<br />a radio and putting someone else’s brand name on it -- at this<br />time as he was keen for the Sony brand name to gain recognition<br />first.<br />Sony also continued to add more products to its range of<br />consumer electronics. Early videotape units were large,<br />expensive and used mainly by broadcast stations. Ibuka set out<br />to develop a small system that could be installed in homes. By<br />1969, the Sony U-Matic video recorder was released, featuring<br />three-quarter inch wide video tapes. The company then<br />perfected a home video unit, using a self contained half-inch<br />video tape cassette about the size of a book.<br />In color television technology, Ibuka had another team working<br />on the technology that would later come to be called Trinitron --<br />an innovation in which the electron beams generating the TV<br />picture were packaged in one compact, highly efficient unit. The<br />new technology debuted in 12-inch and 7-inch TV sets -- niche<br />markets everyone else had ignored while they turned out larger<br />and larger color TVs.<br />In many companies, sales companies actually discourage<br />innovation, because that means re-educating the sales force.<br />This is an expensive exercise, usually including R&D<br />expenditure, increased advertising and sometimes new facilities<br />for the manufacture of the new products. It also obsoletes<br />existing product lines. In profit conscious companies, particularly<br />those where compensation is tied directly to profitability, sales<br />managers will prefer not to innovate. The challenge, therefore,<br />is to get sales people to think long term and not to focus on<br />projects that will come to fruition in the immediate future.<br />One of the distinctive features of Japanese creativity is that it is<br />driven by changes in the consumer marketplace rather than by<br />defense industry expenditure. Many U.S. and European<br />technology breakthroughs are spin offs from defense work<br />funded by the government. In Japan, by contrast, technological<br />innovation goes hand in hand with commercial viability.<br />International Marketing of Sony Pvt.Ltd.<br />Sony's decision to shift focus from the domestic to the international market took seed during Morita's 1953 visit to Philips. Holland resembles Japan in many ways. If a company like Philips can succeed in the international market, there's no reason why Totsuko can't, he thought. Boosted by this convicton, he directed Sony to begin concentrating its energies on producing exports for the international market.<br />Their initial goal was to build up overseas markets which would yield 50&percent; of their gross sales. Thanks to sales of transistor radios and the diligent marketing efforts of Morita and his staff, this goal became possible within seven years.<br /> Next came step two. Morita took an assertive stand. Until now we have merely exported overseas. From now on, however, we must go to the heart of the matter. Overseas marketing is an overseas business. I believe that Sony can become stronger by setting up overseas offices. Offices had already been set up in New York, Hong Kong and Zurich for this purpose. A radio factory had also been established in Shannon, Ireland. <br />2962275257175<br /> <br />The early days of Sony Corporation<br />Then in February 1960, Sony Corporation of America (SONAM) was established to oversee Sony's marketing activities in the United States by doing business with Americans like an American company. This was something that no other Japanese electronics corporation had dared to attempt. Many doubted that a company specializing in transistor radios and other electronics products, as opposed to a general trading company, could deal successfully without an agent's assistance.<br />Morita was well aware of the risks. In light of Sony's current situation, we may be acting a little prematurely. But a business that doesn't take advantage of its opportunities doesn't deserve to be called an enterprise. We may be overextending ourselves, but the time to act is now. We at Sony don't believe in shying away from the hardship that comes along with a good opportunity, and we ask all our employees to uphold this spirit, explained Morita to his employees.<br />Marketing Strategy<br />The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market.<br />PUBLIC RELATION MANAGEMENT<br /> <br />OBJECTIVES<br />1. PR efforts began by identifying three target audiences, defined as (1) jetsetters who require an ultra-portable notebook, (2) early adopters and affluent consumers desiring high-end electronics regardless of cost and (3) image-conscious consumers whose purchases are driven by aesthetics and who appreciate stylish design.<br />2. Position Sony as a leader with an " industry first" technology that meets the needs of today's mobile PC users.<br />3. Drive sales and garner significant media coverage of the T350 notebook.<br />