In this report, the marketing andoperational strategies of Sony Corporation will be analysed and interpreted,focusing on the ways that the company chooses certain strategies to enhancetheir impact on the industry.
One product that Sony has introduced and hascontinued to dominate the gaming industry is the PlayStation 4. The marketingand operational strategies used by Sony to make sure that the PlayStation 4dominates will be analysed and discussed. Analysisof sony Sony is aJapanese company whose name originates from combining Sonus; the original latinfor sonic which means sound, with Sonny. The company Sony incorporated by IbukaMasaru and Morita Aiko in 1946. The pair met during world war two working asengineers designing heat seeking missile for the imperial Japanese army. Thecompany has a global revenue of 68.
35 billion and a net income of 659 million.The company employs around 128,500 people globally. The company operates allover the globe starting its journey in Shinagawa to Tokyo and then Minato. In severalterms, Sony has been the leader within its industry, the company started frommaking rice cookers to Japans first magnetic recorder, over the years thecompany has created innovative and valued products. Examples of these are whenthey announced the worlds first cd player, it was the CDP-101, another majorexample is the first ever stereo cassette player, the infamous Walkman.
Being oneof the world’s largest electronics manufacturer, Sony has its fair share ofglobal competitors. The first being Samsung, another one of the leading manufacturersof electronic goods. LG is also another competitor, a rather large onegenerating over 100 billion dollars yearly, employing 210,000 people in across80 countries.
Other competitors arePanasonic, Philips, Dell. S.W.O.T Analysis of SonyStrengths – Sony has many strengths, one of them beingthat they built a brand, they are a trusted household name.
The success of SonyPlayStation is probably the most noteworthy strength. The company is well knownfor their technological excellence rich heritage of technological expertise.Weaknesses – the main weakness forSony is the excessive cost of media production, especially in the televisionbusiness, it has affected the companies pricing strategy. The company has lost6.3 billion dollars every year over the last 8 years. It is now losing itsmarket share to competitors such as LG and Samsung.
Another weakness is thatwhile diversifying their products they forgot about its core competency, thiscaused a distortion in Sony brandsOpportunities – Sony takefull advantage of its movie and music business along with the experience theyhave in the gaming sector to deliver content which is valued and to integratedwithin its product line. The company also can enter the health care imagingsector with a possible addition of a 30% stake in the Olympics.Threats – the companies main threatis price competition from its competitors such as LG and Samsung, who aresneaking in the market with their lower cost products such as mobile phones andtelevisions. Another huge threat which looks over the company is hackers; thecompanies PlayStation Network was hacked which resulted in leaking of somecustomer information such as credit card information. SonyPlayStation 4 SlimSony introduced the £259 PlayStation4 on September 15, 2016, it sold almost 40 million consoles by the first-yearmark.
Alongside the PS4 the company also introduced their new Dual Shock 4 padwhich look almost the same as its predecessor; arguably the best pad Sony hadever made and most definitely up there with the best pads ever made. Theconsole is equipped with a 5Ghz IEEE 802.11 connection to the console. Thereliable 5GHz connection will improve quality of the PS4’s Remote PlayFunction. Sony claims that power draw and energy efficiency reduce powerconsumption by 28% compared to earlier models.
Marketstrategy’s The main marketing objectives ofSony are to increase the sale of their products as well as to uphold the valueto their customers and partners. Sony has a large advertising budget of 3.7 billion,this is since they have such heavy competitors. Furthermore, having such highcompetitors means that Sony must show deeper focus on promotion and marketing.While digital marketing is at the centre of this strategy, the company also usethree main elements that are quite clear-cut. The first element is product,Sony has a strong product mix which is the reason they aren’t intimidated bycompetitors.
Sony’s product is technologically efficient as well as beingoutstanding in terms of design and quality. The second and third element ispricing and promotions. The company use premium pricing, this creates a premiumimage for the company. The brand is known as a company that sells premium technology,so the pricing should correspond with the premium image. They aim theirproducts at the higher end of the market. The segment which they target ishigher end customers, small and big businesses. The premium pricing strategyhelps maintain the companies brand image while also reflecting their investmentin technology, research and development.
Another reason premium pricing istheir chosen method, the company spends billions of advertising, and even moreon research into technology and quality, keeping all this in mind its clear tosee that the premium pricing strategy seems appropriate. Sony use many ways to promotethemselves including traditional and modern. Social media is at the forefrontof digital marketing when it comes to Sony. Social media can be a major factor,if a unique, interactive and creative customer experience is provided. Thecompany has used social media for them to engage with their customers and atthe same time promote their products. They have several million followers onFacebook and Twitter.
The company also uses Pinterest and Google Plus to helpmarket their products. This method as well as being cost effective and reachingmillions of people, the biggest advantage of using social media as a promotionmethod is that they get to engage with their customers which helps develop andpersonal connection to their customers, which furthermore maintaining theircustomer base and upholding the value of the customers to the company. Thecompany has always been focused making sure their customers are heard andsatisfied. Operational StrategiesThe company has 10 decision areasthat they focus on to enhance their operations strategy. The first area isdesign of goods of services. Sony considers how their products are made for maximumbusiness benefit. In this area the operations aim to minimize the costs,maximise the quality, optimize human resource utilization and supportoperational sustainability.
The company is continuously attempting to improvetheir methods. The second area is quality management. The operational managersare focused on standard of quality and requirements as an objective in thisdecision area. Their policy exaggerates the achievement of and support forkando which is ’emotional involvement’. Kando is a very important factor in thecompanies’ vison and mission statement. This factor makes sure that customersare captured by the products. An example of this is that the operationalmanagers are always looking for ways to improve the quality of their products,these efforts support the Kando factor. The third decision area is process andcapacity design.
Adequacy of production processes, related standards andresource allocation is the main objective of this decision. The companyaddresses this objective through sustainability, which helps the companysatisfy the market concerns regarding the environmental impacts. Usingsustainable company production processes allows the company to lower theoperational costs based upon minimizing the resource and production waste. Thefourth decision area is location strategy. Sony is concerned with the distancefrom their customers, suppliers and resources. This objective of this strategicdecision is to minimize the distance which will maximise their revenue andfurther lower their costs of distributions.
The fifth decision area is layoutdesign and strategy. This objective is to enhance their flow of resources, suchas human, information and material resources. For this reason, the operationalmanagers monitor their requirements for operational capacity, resources andinventory. Achieving a high flow of production is done via an annual review oflayout designs and strategies the management team use expert opinion andemployee feedback for them to make decisions on productivity issues linked tolayout and design. The sixth decision area is job design and human resources.
This objective in this decision area is to develop human resources to supportthe business’ operations and growth. The managers use the companies organisationalstructure to organize HR development. To give an example, the companiescorporate structure defines job designs that specific to certain areas ofbusiness within the company.
The seventh strategic decision area is supplychain management. The objective is to maintain the companies’ currentoperations and business growth. They fulfil this objective by automations andcontinuous support for suppliers. Automation means that the companies supplychain management activities are maximised. Furthermore, they support theirsupply chains to gain growth for the supplier, this means that they cancontinue to maintain the companies supply needs while continuing to match thecompanies’ production capacity. The eight-decision area is inventory management.
Sony’s operational managers make strategic decisions ordering and holdingoperations while at the same time considering the suppliers capacity andcustomer satisfaction levels. The companies approach to this objective involvescentralizing their inventory management systems that enable managementpersonnel to produce and update data on the inventory levels and operationalrequirements. An example of this is that the inventory managers must regularlycheck and update the data. The ninth decision area is scheduling, in this areathe objective is to maintain operations schedules that match the companies’resources and the market demand. The company uses automated scheduling whichhelps them achieve high productivity as everything is done on time.
Also usingthis system means that they have real time data on changes in the operationalneeds. They managers use this information to apply appropriate changes to theirschedules. The tenth and the last decision area is maintenance. Achievingoperational stability and organisational reliability are the main objectives ofthis area. Sustainability is one of the company’s main factors upon improvingthe business. Sustainability factors adds to the reliability of the company’soperations and productivity.
PlayStation4 Marketing StrategiesSony knew the market in which they would promote the PlayStation,this is because they have a very strong gaming community which loves the companies’games consoles and has done over several of years. The continued support forplay stations ever since the first one is the main reason they focused theirmarketing on gamers. ‘Sony isenjoying record sales of its PlayStation 4 console, signalling a return tofocus on gaming over entertainment is a marketing strategy that is paying off.’Natalie Mortimer, 2015. The company the 4P’s or better known as marketing mixas a strategy to promote their product. Price, place, promotion and product. Price – Sony has kept their premiumpricing policy due their high-end technology background.
Another pricing schemethey use is skimming, in which they make the prices higher upon introductionbecause of the high anticipation from their gaming community then the companycan skim prices after a couple of months of release. Place- Sony is very dependant on itssuppliers as they provide them with raw materials and valuable parts to thecompany. These parts are vital for the company as its an important part of thedevelopment and production of the games software and hardware. The company usesonline markets such as Amazon, GameStop and Walmart as they are a huge part ofthe sales figures. Promotion- The PlayStation promotesitself with its range of features however the company use an Umbrella BrandingStrategy which is the reason they have kept the company name alongside the productfor further promotion as well as sales.
Another way in the company promotes itsproducts is online. As soon as the product release, the internet will be filledwith ads about the PlayStation because most of the users of games consolesspend their time on the internet.Product- the PlayStation 4 is thenewest gaming console produced by Sony. The aim was to give users ahigh-performance gaming experience like they’ve never experienced before. Thepowerful processing power and high-end graphics allows the customers to playgames on a new level, which makes PlayStation within the hardcore gamingcommunity.
PlayStation4 Operational StrategiesSony has manydifferent operational strategies to improve the PlayStation, one of them beingto retain and expand engaged PlayStation users. This means they willcontinuously enhance the features of PS4 game to maintain and strengthen theircompetitive advantage. Another way they will make this strategy is to gain newcausal users while at the same time strengthening the engagement of their coregaming community.
Addressing opportunities in growth in markets with economicdevelopment and cultural transitions, an example is that currently people tendto watch more tv or use gaming consoles as a way of spending their free time,so they could use this and come up with innovative ways to capture a newmarket. Conclusion The conclude, Sony has been very successful in operatingtheir business internationally. Over the years, they have managed to gain theircustomers trust and loyalty due to their extra attention to detail in choosingthe correct marketing and operational strategies. The company has a very wellknown and reliable brand name which is a household name in over 80 differentcountries. The continuous marketing strategies the company use most definitelyhelps towards the yearly sales revenue. Using premium pricing is a terrific wayto gain maximum sales because at the time of a products release customers willwant to buy the product no matter of the price.
The main operational strategywhich has proved most beneficial is quality management. This is because ifevery product that Sony produces has the same or better quality, they willuphold their brand image being a premium technology provider. The company usedthe marketing mix a marketing strategy for PlayStation which was an excellentchoice because it gives the company the chance to look at all the aspects ofmarketing and make any appropriate changes, while at the same time providingthe guidance needed to make these changes. The Kando factor is very importantto the company because it ensure that they are always looking for ways tobetter the company and its products. Overall, the company will continue itsdominance in all almost all its industries mainly because of their brand imagewhich is a very important element of making sure the company maintains itsexpediential growth since the companies start up. If Sony continues to valueits customers trust and loyalty, there will be nothing stopping them continuingtheir journey into the technological world.