The Importance of Porters Five Forces for Sony Corporation - Essay Example

? Provide an analysis of Sony Corporation explaining the relative importance of each of Porter’s Five Forces for the organisation’s strategic position. You should support your arguments with evidence from the company and/or the relevant literature Table of Contents Introduction 3 Background of Sony Corporation 3 Discussion 4 Analysing the position of Sony Corporation by Porter’ five forces 4 Recommendation 6 Conclusion 6 References 7 Introduction In this age of tough competition, sustainability is the most important desire of any organization, operating in any segment. Due to which, each and every organization desires to offer innovative types of products and services so as to attract wide range of customers in order to enhance its range of market share. Side by side, with the help of this strategy, the reputation and profit margin of the organization might also get enhanced thereby amplifying its total sales to a certain extent as compared to others. Background of Sony Corporation Sony Corporation is one of the reputed Japanese brands in the segment of electronics, operating successfully from 1946. Being headquartered in Tokyo, it operates successfully in the entire world among many other rivals of that segment with the name of Tokyo Telecommunication Engineering Corporation. Later in the year 1958, it started its operation with its corporate name, Sony Corporation (Sony Corporation of America, 2013). The prime objective of the organization is to offer wide range of inventive products as well as multimedia services to its customers at a competitive age so as to satisfy their demands. Side by side, by doing so, it might also enhance its market share and equity by 35% as compared to other rivals of the market. Apart from this, by presenting wide range of innovative products, the brand image and position of the organization of Sony Corporation might also get enhanced significantly among the existing players and the new entrants. This report mainly highlights the background of Sony Corporation in brief way along with its strategic position in the market of electronics among other rivals. Side by side, this report also describes the importance of each of the porter’s five forces for the strategic position of the organization of Sony in this age (Sony Corporation of America, 2013). Discussion Analysing the position of Sony Corporation by Porter’ five forces Porter’s Five Forces Threat of new entrants- As, Sony Corporation is operating in an industry based on high ended technologies, so in order to remain competitive; it focused on some essential criteria’s. Constant research and development- in order to remain competitive in a high-tech electronic industry, Sony Corporation tried to offer high concentration over R&D. It might help in fulfilment of the demands and needs of the customers in this changing environment. For this, the organization had to recruit highly efficient and skilled human resources. However, this became possible due to its high value of intangible assets and physical property of $ 12, 367 million. Therefore, due to this strategy of recruiting highly experienced and skilled work forces within the organization, Sony Corporation is able to present varied types inventive products each year like walkman within a phone (Xperia Textpro). Hence, the strategy of developing wide ranges of products proved extremely successful for the organization of Sony Corporation and helped in enhancing its strategic position and dominance among other rivals in this aggressive market (Sony Corporation of America, 2013). Intensity of Rivalry among the existing competitors- Sony Corporation comprises of numerous competitors such as Samsung, Apple and Hewlett Packard. However, all of them hold a significant amount of market share and brand value in the industry of electronics. Therefore, in order to dominate all the above mentioned rivals, Sony Corporation decided to offer qualitative products at competitive price (Sony Corporation of America, 2013). High range of fixed and storage cost- as the electronic products produced by the firms comprises of high rate of fixed and storage cost, so they decided to enhance the range of sales by reducing the cost of the products. Thus, this strategy of presenting qualitative products at a competitive price helped in enhancing its total sales by $ 23,234 million b 2012 thereby improving its position in the market among other rivals (Sony Corporation of America, 2013). Threat of substitute products- In spite of wide range of products, in the segment of electronics, the fear of substitute products always remains. So, in order to remain in the supreme position, Sony Corporation presents extremely inventive products to compete with its rivals such as gaming mobile Xperia against iphone of Apple (Sony Corporation of America, 2013). Bargaining power of the Buyers- as the bargaining power of the buyers in this segment is extremely high, so in order to retain its strategic position and image, it reduced the prices of its products. Side by side, Sony Corporation also implemented varied types of differences in the secondary features of the products such as camera, music, internet options and many others. This strategy helped the organization to retain its customers and loyalty in this aggressive scenario thereby lowering the rate of switching costs. Hence, in spite of high bargaining power the rate of profit margin of Sony Corporation remains higher (Sony Corporation of America, 2013). Bargaining power of the suppliers- in order to reduce the threat posed by the supplies, Sony Corporation tried to attain products from suppliers all round the globe. Therefore, the bargaining power of the suppliers for the brand Sony remained quite low as compared to others. This is because; it is one of the most important brands for the suppliers in this age and they don’t want to lose it. Thus, this strategy proved quite helpful for the brand to retain its position and equity in the market among others (Sony Corporation of America, 2013). Recommendation After analysing and evaluating the factors of Porter’s five forces, it might be revealed that Sony Corporation acted very cautiously to retain its position. Therefore, in order to remain competitive, it might try to offer more concentration over advertising and promotional practices so as to improve the awareness rate of the customers. Side by side, high degree of innovativeness needs to be implemented within the features of the products so as to attract more and more customers. Conclusion Conclusively, it might be stated that the position and image of Sony Corporation is entirely due to its high degree of concentration over research and development processes. It is done to satisfy the changing needs and demands of the customers so as to remain profitable and worthy among other rivals of the market. References Sony Corporation of America. (2013). About us. [Online] Available at: http://www.sony.com/SCA/ [Accessed on 15th November]. Sony Corporation of America. (2013). Our Businesses. [Online] Available at: http://www.sony.com/SCA/who-we-are/our-businesses.shtml#electronics-mobile [Accessed on 15th November]. Sony Corporation of America. (2013). Make. believe is more than just a marketing slogan. [Online] Available at: http://www.sony.com/SCA/who-we-are/make-dot-believe.shtml# [Accessed on 15th November]. Sony Corporation of America. (2013). Sony, make . believe. [Online] Available at: http://www.sony.com/ [Accessed on 15th November]. Sony Corporation of America. (2013). The power to Imagine. [Online] Available at: http://www.sony.net/ [Accessed on 15th November]. Sony Corporation of America. (2013). Global Marketing Partners. [Online] Available at: http://www.sony.com/SCA/who-we-are/global-marketing-partners/overview.shtml [Accessed on 15th November]. Sony Corporation of America. (2013). Technology. [Online] Available at: http://www.sony.net/SonyInfo/technology/ [Accessed on 15th November]. Sony Corporation of America. (2013). Giving Guidelines. [Online] Available at: http://www.sony.com/SCA/corporate-responsibility/giving-guidelines.shtml [Accessed on 15th November]. Sony Corporation of America. (2013). Corporate Governance. [Online] Available at: http://www.sony.com/SCA/corporate-responsibility/corporate-governance.shtml [Accessed on 15th November]. Sony Corporation of America. (2013). Investors relation. [Online] Available at: http://www.sony.net/SonyInfo/IR/ [Accessed on 15th November]. Read More