Strategic Management Practice of Sony Corporation - Assignment Example

Strategic Management Practice: Sony Corporation BY YOU YOUR SCHOOL INFO HERE HERE Strategic Management Practice Sony has not turned a profit between 2011 and 2014. Substantial losses of capital have made it necessary for Sony to reconsider its strategic management activities in order to put Sony in a better position in highly saturated global markets. Sony, a consumer electronics company, had once been a pioneer in the global market, most notably with the production of the Sony Walkman that revolutionised consumer music recreation. Today, however, Sony faces competition from Sharp, Samsung, Apple, Nokia and T-Mobile in many product categories who continue to erode market share for Sony. Examination of data and appropriate literature has uncovered that Sony maintains the most significant strategic issues associated with ineffective marketing strategies, a culture of power distance that forbids teamwork and collaboration, and poor positioning in its markets among competition. It is recommended that Sony work toward making a more decentralised and collaborative organisational culture, cease its process of quality and innovation positioning as part of brand management and marketing, and enact a performance management ideology that includes the 360 degree feedback mechanism as well as strategic and tactical dashboard to improve control and metrics production to guarantee more return on investment for the recommended changes. This should position Sony more competently among very diverse competitors worldwide. 2. Introduction Strategy is the process of determining the long-run aspirations and goals of a business and deciding on the specific action plans and resource allocations required to achieve determined objectives (Nag, Hambrick and Chen 2007). Strategy is inclusive of management activities whereby direction for the firm is established, guidance provided to subordinate support staff members, and where the structure of the organisation is established. Strategic management is the development and implementation of objectives issued by a firm’s management team in order to position a business in a desirable future state. Businesses consist of many inter-dependent divisions that assist a firm in achieving its strategic goals, the firm’s value chain, which consist of marketing, production, human resources, customer service systems, technologies and other operational business components (Maritz and Salaran 2010). Strategic management is the process of aligning these divisions in the most effective and productive methodology so that the business can achieve its mission and guide the organisation toward its long-term goals. Through the proper configuration and distribution of firm resources, strategic leadership is able to mould the organisation to thrive successfully in a changing market environment, satisfy the needs of customers, and fulfil all relevant stakeholder demands and expectations (Johnson, Scholes and Whittington 2005). Having provided a definition of strategy and strategic management, this report explores the potential strategic issues that are being faced by Sony Corporation, a multi-national business that produces a wide variety of consumer technologies. These technologies include smartphones, televisions, cameras and gaming systems, as well as other electronics. In the 1980s, Sony had established a very positive corporate reputation for being a pioneering and innovative company with the launch of its Sony Walkman device, a revolutionary technology that allowed consumers new flexibility and mobility for their music-listening convenience. However, with growth of competition in a rapidly globalised international market, Sony has lost this reputation as a pioneer and is now losing market share in many different product categories. In 2011, Sony reported an economic loss of almost 200 billion Yen. In the following year, Sony reported another massive loss of 67 billion Yen (Hirai 2012). By 2014, Sony reported that its net income was in the red, with a loss of 128.36 billion Yen (Sony 2014). Hence, year after year of substantial losses indicate that the firm has dramatic strategic issues which are preventing this large corporation from achieving a better competitive position. This report explores all factors driving such poor economic performance for a once-powerful technology leader. 3. The external environment It is critical to a business to understand the dynamics of the external environment in order to develop appropriate and profitable strategies. Businesses must be responsive to market conditions and market needs, which are in a constant state of evolution, in order to understand the threats that challenge profitability and the opportunities available to improve competitive position (Porter 1987). 3.1 PEST Analysis Sony is seeking global markets to sell its many different consumer technology products. In China, a major export market for technology, the government has been more instrumental in recent years in promoting domestic company growth. As a result, Sony faces import tariffs and other taxations in China (and many other markets) which raise the operational costs of logistics to distribute its products. However, Japan maintains a very low value-added tax which may promote more post-recession consumption domestically for many of Sony’s diverse products in its portfolio. The global economic environment is improving for Sony. The United States and the United Kingdom, large markets for Sony, have emerged from the recession and consumer disposable incomes and consumer confidence are up. Germany, the United States, the UK, and India have the most significant consumer confidence (Fenton 2014). When consumer confidence is improved, empirical studies have found that consumption increases concurrently (Oduh, Oduh and Ekeocha 2012; Heim 2009; Carroll, Fuhrer and Wilcox 1994). Hence, the global economic environment appears to be favourable for Sony if the firm can effectively motivate purchases through effective marketing practice. It has been established that the smartphone industry is substantially lucrative for technology companies. There is a growing trend with youth consumers to utilise smartphones (and personal computers) to access social media. In the UK alone, 76 percent of all smartphone owners regularly use their devices to access social media (Google 2011). This is relevant for Sony as research supports that when a consumer believes that their social standing in a society is significant and positive, their personal sense of well-being and their general self-concept improved (Suls, Martin and Wheeler 2002). It was iterated by Zhang and Chan (2009) that when a product brand sends a message that it can improve consumer self-expansion (in this case social), they develop very potent connections to the brand and builds the foundation of loyalty. Many consumers refer to others in their peer environments, especially true in collectivist nations such as China, when making consumption decisions. In fact, the literature on this phenomenon supports that social sentiment and opinion about a brand directly predicts consumption decisions (Schiffman and Kanuk 2010; Boone and Kurtz 2007). Consumers are regularly using technology products to gain important brand-related information for products and services and looking toward aspirational opinion leaders in social networking to make consumption decisions. This provides an excellent forum by which to promote the values of Sony, emphasise its products and benefits, and better interact with consumers. Goodson (2011) states that in order to build loyalty, a firm must create interactive discourse with consumers and build relationships. Hence, the global social environment is conducive to building more important lifestyle connections with diverse and disparate consumers that regularly refer to the social environment to make purchase decisions. Furthermore, with many collectivist nations sustaining cultures whereby group loyalty and social sentiment is very important psychologically (Cheung, et al. 2008), Sony appears to have many opportunities to be a more lifestyle-focused organisation. In reference to the technological environment, a globalised supply chain provides ample opportunities to procure business support software, develop web presence on social media, enhance production, improve R&D competencies and quality of new and innovative outputs, and generally provide the support technologies needed to be a successful competitor. The technological environment is not detrimental to Sony’s improvement or growth by any measureable means. 3.2 Porter’s Five Forces Model Michael Porter, a respected and renowned business theorist and strategist, identified five specific external market forces that impact business direction. This model is illustrated in Figure 1. Figure 1: Porter’s Five Forces Model Source: Modified from Porter, M.E. (1980). Competitive strategy. Free Press. Intensity of competitive rivalry is one of the most fundamental threats to Sony as its primary strategic issue. In this industry, it is becoming more simplistic for consumers to replicate the products being manufactured and distributed by competitors as a result of available global technologies that support research and development as well as production. Therefore, as soon as Sony develops a new product innovation, the life cycle of this product is significantly minimised when competitors begin offering similar products or slightly enhanced versions of Sony’s goods. In this type of environment, the only real asset that a firm has is its marketed brand (Nandan 2005). Sony is fundamentally lax in building a brand identity that can outperform its more marketing-competent competition, especially notable in the smartphone sector. In the UK alone, the smartphone industry is estimated to be worth, by 2017, $4.3 billion USD to companies providing this technology to consumers with a substantial growth rate of 23 percent (TechSci Research 2012). Globally, there are 6.8 billion mobile phone subscribers (MobiThinking 2012). Hence, the global market value for smartphones is substantial if companies producing this technology can create a product considered relevant and innovative to disparate consumer segments and build a brand that outperforms competing brands. Sony has failed to create a solid and profitable brand and is consistently outperformed by such rivals as Samsung, Apple, and T-Mobile (to name only a few competitors). Samsung is a company that has devoted more human capital and financial resources into the marketing function in order to capture the attention and loyalty of consumers throughout the world. Samsung, rather than positioning the business according to the product (which is quite similar to competitive offerings in terms of features and benefits) and, instead, focuses on building loyalty by creating a brand identity that makes important emotional connections between lifestyle and brand. Marketing research indicates that when a brand is able to promote the perception that the company or brand can enhance consumer lifestyles, they are more likely to develop strong emotional attachments to the brand over that of competition (Zhang and Chan 2009; Schiffman and Kanuk 2010). The most viable target market for smartphones is the 25 to 30-year old market segments. A study of 25 to 34-year old consumers indicated that their most important values were to explore fun in life and to purchase products that affirm their social identities (Executive Digest 2008). Samsung, therefore, utilises promotional imagery and messages that build a brand identity that is relevant and exciting to the most desirable market segments. Figure 2 illustrates Samsung’s approach related to televisions and smartphones which are targeted at the younger demographic: Figure 2: Samsung competency in promotional rivalry through lifestyle marketing Source: Deviant Art. (2014). Samsung Plasma TV Print Ad. [online] Available at: http://jackimx.deviantart.com/art/samsung-Plasma-tv-print-AD-161119388 (accessed 7 November 2014). Source: Euro Droid. (2011). Samsung Galaxy Apollo coming to Orange UK. [online] Available at: http://eurodroid.com/2010/06/14/samsung-galaxy-apollo-coming-to-orange-uk/ (accessed 8 November 2014). As shown in Figure 2, Samsung emphasises the values of consumers in its integrated marketing communications which differentiates the firm not through product, but through psychographics. Samsung has created a brand personality that tells consumers that the brand can promote the values of its buyer segments by consuming Samsung’s products. Apple accomplishes the same success in promotional strategy, aligning the values of the company with the lifestyles and needs of its consumers rather than focusing on the tangible product. Figure 3 illustrates Apple’s approach: Figure 3: Apple competency in competitive promotional rivalry Source: Palmer, D. (2013). UK iPhone 5S sales three times that of iPhone 5C – but both fall well short of android, Computing. [online] Available at: http://www.computing.co.uk/ctg/news/2316443/uk-iphone-5s-sales-three-times-that-of-iphone-5c-but-both-fall-well-short-of-android (accessed 7 November 2014). Apple conducts considerable market research into what drives lifestyles, needs and values of its desired customer segments. Through this knowledge, has created a brand personality focusing on innovation, regaining personal liberties, and empowering sophisticated buyer segments through technology (Robinson 2012). Both Apple and Samsung, as only two relevant examples, fully understand the dynamics of what drives consumer behaviour and motivations and aligns promotional strategy effectively to achieve improved market share in their respective technology sectors. In the UK alone, Apple holds 27 percent of market share in the smartphone sector, Samsung 19 percent, and Sony only eight percent (Word Press 2012). Sony is a trailer in terms of global market share as well. Figure 4 illustrates Sony’s approach to marketing. Another element of Porter’s Five Forces model that impacts Sony is the threat of substitutes. Whenever Sony innovates a new product, such as creating the high definition television with superior pixilation, consumers can view similar media content on smartphones and laptops and personal computers in an environment where global Internet usage has exploded. Sony, promoting a new high-def television at a premium pricing structure to herald its innovations, has constant threat of lower-cost (and very effective) substitute products offered by competition. With major competitors such as Samsung capable of producing high-def televisions, and even 3D televisions, Sony is having difficulty making consumers believe that Sony innovations are superior to competing products and substitutes that allow for video media content to be accessed in a very convenient and lower-cost competing business model. Figure 4 illustrates the strategic incompetency of Sony to provide incentives to purchase Sony products and dismiss substitutes. Figure 4: Sony ineffective advertising approach for televisions Source: YouTube. (2013). Sony Bravia Tv Commercial for the most magical colour experience. [online] Available at: https://www.youtube.com/watch?v=gUXi9ir9HdA (accessed 7 November 2014). As shown by Figure 4, Sony provides consumers with no rationale or motivation to choose its television products over that of competing substitute products. The basic concept of “be moved” does not effectively alter consumer behaviour or illustrate how Sony television products are superior to lower-cost smartphones and laptops. This failure in marketing, again, represents how substitute products by major competitors with considerable loyalty continue to pose threats to gaining market share. Figure 5: Sony incompetency in promotional strategy Source: TechWhack. (2012). Sony India deceptive advertising. [online] Available at: http://techwhack.co/52gb-memory-sony-india-deceptive-advertising-xperia-tipo-smartphone-india-5084/ (accessed 9 November 2014). Sony still attempts to promote the company as a pioneer, referencing the once-innovative Walkman and the tangible features and benefits of its products, rather than aligning promotional communications to the lifestyle and attitudes of its important target segments. As shown in Figure 5, the memory capacity of Sony smartphones, its camera capabilities, and screen size (which here are being used as a competitive rivalry strategy) are very comparable and nearly standardised with competing smartphone products. Hence, by illustrating to consumers that Sony is still a pioneer and focusing on product attributes, the company fails to make potent socio-psychological attachments with consumer segments and the firm continues to lose market share. Buyer power in the global market, in multiple product sectors, is highly relevant as a threat to Sony. With so much competition in smartphones, televisions, cameras, and other technology products, the switching costs to consumers are low and they can seek out comparable products from lower-cost competitors, such as Sharp, Nokia and Sanyo. Sony continues to demand a premium price on its products, still attempting to assert that the company is an innovator with top quality products. Hence, when consumers are faced with high quality, lower-cost options, it is not surprising that Sony continues to lose profitability and market share in multiple technology sectors. The switching costs for providing raw materials, from a supplier perspective, also provides suppliers with power in the global supply market. If Sony were to demand pricing, it would be simplistic for components manufacturers to simply procure larger-scope projects with competition. Hence, suppliers can force a type of backward integration on Sony that erodes its ability to better control supply chain costs. Unfortunately, Sony has been unable to create barriers to market entry. New innovations provided by the firm in multiple product categories can be protected with intellectual property laws, however minor modifications by competition to this existing product model makes each new competitive, innovated offering exempt from legal action. Hence, any up-and-coming technology company, such as the new Vizio company, can simply add a new feature to a product comparable to that protected by Sony’s intellectual property rights, and then call this a new product and set a lower competitive price. 4. Internal environment Sony, a Japanese company, is a slow-to-change culture founded on centuries of hierarchical control systems in very centralised organisations with many performance metrics and regulations guiding internal stakeholder behaviours. Japanese companies often have dysfunction as it pertains to participatory leadership and maintaining focus on human resources development. Japanese business leaders are highly risk-averse and do not like to make decisions without clearly-defined metrics that support the rationale and logic of a decision. The Hofstede Centre (2013) iterates that Japanese firms invest substantial financial capital and labour investment into producing feasibility studies and senior managers want detailed reports and quantitative data before introducing change into the organisational model. However, not all global situations dictate this level of comprehensive analysis if a business is to make moderately-risky decisions that provide higher payout. Literature on entrepreneurship regularly reinforces that the most successful managers are those willing to absorb risk and take chances (Macko and Tyszka 2009). Additionally, the Japanese culture is one that has respect for leadership which translates into considerable power distance between management and employees. It is not common for Japanese managers to consult with employees to gain input and suggestions about how to innovate or better position the business competitively. The painstakingly-slow decision-making process (Hofstede Centre, p.1) prohibits Sony from making rapid responses to competitive actions in the external market. Romijn and Albaladejo (2002) assert that collaboration internally is critical to determining and correcting business weaknesses throughout the entire business model. This could be a significant contributing factor to why Sony has reported losses for the last four years as the company maintains a culture of exclusion (which inhibits creative outputs) and decisions related to market change must be substantiated with an unrealistic volume of metrics and feasibility reports which are time-consuming, laborious, and not always practical in an environment where technology products are experiencing decreasing life cycles as a result of competitive innovative behaviours. Sony’s core competencies and resources, however, are a benefit for the firm. The company maintains core understandings about foreign markets and how to service customers effectively. Long-standing presence in developed nations has given the internal management team knowledge of all value chain aspects, ranging from marketing competency to logistical decision-making. Key stakeholders, including customers and investors, are effectively serviced through these competencies with efficient distribution systems and long-run opportunities for portfolio diversification. 5. SWOT Analysis The SWOT Analysis framework provides an analysis of internal and external conditions that influence a firm’s strengths, weaknesses, opportunities and threats. This analysis framework provides valuable knowledge that underpins mission, strategy developments as well as objectives and goals needed to make Sony a leader in a very saturated, global competitive marketplace. Strengths Available manufacturing capacity and research and development teams to produce new product concepts A very recognised, global brand identity. Product portfolio diversification Well-defined business units that have the ability to focus strongly on performance without reliance on a centralised headquarters. Foreign market foothold that supports substantial distribution opportunities. Strong brand positioning in emerging economies. Weaknesses Over-reliance on quantitative data and feasibility studies even for minor decision-making. Poor proximity of production systems to customer segments which increases distribution prices. Over $3 billion in pension commitments. Revenues downward trending in developed markets Very poor credit rating of BB- (Reuters 2014). This represents that lenders see Sony as having a substantial solvency risk. Opportunities Substantial growth rates, internationally, in the consumer electronics industry. Seek joint ventures and strategic alliances to improve capacity and knowledge needed to innovate and share financial resources with partners. Further diversify into other sectors, including financial services and non-electronics products Increase marketing expenditures Threats Volatility in many global capital markets impacting hedging ROI and stock-related investment ROI. Rising competition in the lower-range brands creating more global competing product distribution. Substantial brand loyalty with competitors such as Samsung and Apple. Tightening credit restrictions with lenders throughout the world as a product of lessons learned through the global recession of 2008-2010. A changing consumer dynamic with emphasis on thrift and frugality. Increasing global supply chain prices. Substantial corporate downsizing at Sony as a result of cost-saving measures depleting human capital talent. 6.0 The most significant strategic issues This report has identified the three most imperative and consequential strategic issues facing the firm, which include: Poor brand management strategies leading to competitor outperformance in marketing. A slow-to-change, hierarchical internal structure complicating innovation production and more competent decision-making related to the external market. Attempting to position the business in terms of innovation and quality – an outmoded and no longer relevant strategy in a market where the firm is no longer viewed as a pioneer. 7.0 Goals and strategies to improve firm positioning A. Brand management and repositioning First and foremost, Sony needs to invest more financial and labour-based capital into redeveloping and restructuring its marketing function along the value chain. Sony is consistently outperformed by Samsung, Apple, and even Sharp that have developed a brand management strategy that effectively positions their business according to the needs of their desired target consumer segments. For instance, Sharp provides mid-level quality products with a lower price structure on many consumer electronics which is relevant to its lower-resource, price-sensitive buyer segments. Apple, in areas of personal computing and smartphone technology, has built a promotional communications strategy that emphasises quality and innovation and actually delivers on these brand promises by being a true pioneer in research and development. Samsung, as identified, manages to create important emotional connections with its 25 to 30 year-old markets, thus providing the firm with a positive brand personality. Marketing literature asserts that creating a positive and relevant brand personality is central to effective competitive positioning (Keller and Richey 2006). This is the process of giving a product human characteristics to personify the product and give it human-like features that are likable and aspirational to consumers (Aaker 1997). Sony needs to revamp its quality-based communications strategies in promotion and instead focus on the end user whilst providing its products with these characteristics. Figure 6 illustrates this type of strategic personification as part of the marketing function. Figure 6: T-mobile brand personality example Reference: Dougherty, T. (2010). New T-Mobile ad must be more single-minded. [online] Available at: http://www.stealingshare.com/blog/index.php/new-t-mobile-ad-must-be-more-single-minded/ (accessed 16 November 2013). T-Mobile, a potent smartphone industry competitor in the United States, utilises an attractive female with a lust for life and propensity for danger in order to capture the interest and attention of its desired youth markets. Through this consistency in a variety of integrated promotional mediums, T-Mobile insinuates that its technology brands can enhance consumer lifestyle and make it more exciting, which Zhang and Chen (2009) referred to as attachments and loyalty related to self-expansion through consumption of a brand. This action strategy will require Sony to create more fun and engaging promotions (e.g. television, print and billboards) that are relevant to the socio-psychological needs of its desired consumer segments. Brand repositioning will remove emphasis from quality and innovation (no longer believed by consumers) and shift all brand management efforts toward building a likable and engaging personality for Sony products. B. Internal leadership deconstruction and redevelopment Sony does not operate solely in Japan, but has manufacturing facilities and other support resources operating overseas; in conjunction with servicing foreign markets with distinctly different needs and characteristics to the Japanese sales environment. With such a hierarchical structure of business and slow decision-making competencies, the firm needs to decentralise the business in order to foster more collaboration and creative innovation productions. It is recommended that Sony hire a human resources consultant from a country such as Australia, the United States or the United Kingdom with experience in Western HR and leadership ideologies to assist Japan in becoming a more participative and collaborative environment. Japan needs to be more proactive in identifying opportunities and then making rapid, yet rational, decisions to better exploit new market opportunities. Managers that are demanded to produce in-depth and detailed feasibility reports and produce quantitative metrics before senior-level decision-makers move toward an opportunity is detrimental to corporate success. The hired consultant can provide valuable and realistic strategies to deconstruct the hierarchical, power-distance-based organisational structure and encourage more equality and lower-level collaboration. Sony has managed, in recent years, to create very little legitimate and market disrupting innovations which is likely a product of its power distance culture. Literature consistently reinforces that a cohesive and participative organisational culture can improve problem-solving and generates more quality innovative outputs and ideas (Cameron and Quinn 1999). Through this participation, Sony can implement a Six Sigma Quality System that focuses on reducing waste and enhancing quality of products and processes whilst also allowing Japanese managers accustomed to metrics to have substantial quantitative data by which to make decisions. The Six Sigma process requires internal support and training by organisational members who are trained as black belts, orange belts and green belts which determine the extent to which they have been trained on quality improvement ideologies. Common strategies include use of Pareto Charts, Cost-Benefit Analyses, and Statistical Process Control. It is unrealistic to believe that a culture built on centuries of hierarchical beliefs will change overnight, therefore more collaboration in improving quality whilst still using quantitative metrics for decision-making can better position Sony to reduce waste, allocate resources more efficiently, improve the quality of its research and development projects, and generally eliminate costs which is so critical to a company losing substantial revenues. Sony should also assign a change champion in its business units that are responsible for encouraging dialogue between employees and managers, identifying opportunities for more effective communications, and gaining the emotional and psychological commitment of employees for new decentralised change processes. The change champion approach is regarding as one of the most effective ways to ensure smooth change transitions in an established culture (Burke 2008). Such champions are critical as Ford, Ford and D’Amelio (2009) assert that when change is implemented in slow-to-change cultures without experience in being flexible, managers are often subjected to irrational and extreme emotional resistance that conflicts making positive change. It is likely that prideful and stoic management teams, more than employees, will provide resistance that decentralisation of structure and human resources will not be viable and attempt to regain their power distance levels. However, for true innovation and problem-solving to occur in a large multi-national organisation, interaction with others is critical (Stover 2007). What this action plan will accomplish is creating a more market-oriented, creative organisational culture in which teamwork is the primary vision for the internal environment. The hired consultant in HR and leadership, as well as independent managerial investigations into empirical studies illustrating effective cultural change strategies, can provide knowledge about using management-by-objectives ideologies, more effective reward systems, and general motivational strategies to boost performance and collaboration intentions of support employees. A strict, top-down decision-making business model is not relevant for a multi-national firm with multiple business units that require unique strategies to service disparate and diverse market characteristics. 8. Using performance management as a key strategy for change The implementation of a 360 degree feedback system would be very viable and lucrative for Sony to consider as a means of fostering more consultation and collaboration between management and employees. This system provides feedback from not only the line manager responsible for an employee’s job role, but from customers, peers and other managers who interact with the employee as well. This would provide a theoretical foundation for getting managers accustomed to working more intimately with employees and provide a more well-rounded and fair system by which to measure and reward/punish non-performance or enhanced job role performance and outputs. Managers and executives at Sony are not accustomed to working and consulting with employees, hence less emphasis has been placed on building human capital competencies with individual employees. This performance management tactic would improve the quality of communications and even motivate employees to achieve strategic goals, as expectancy theory indicates that employees will be more committed to high performance in the anticipation of receiving appropriate rewards for this performance (Montana and Chernov 2008). The utilisation of strategic and tactical dashboards is another performance management strategy that can assess not only the impact of cultural change practices, but also provide metrics and analyses opportunities for whether new marketing strategies are achieving anticipated ROI. These dashboards consist of meetings with lower- mid- and senior-level management to collaborate and collect metrics related to determined criteria and investigate the performance indicators and success ROI of new strategies implemented throughout the organisation (Armstrong 2007). Vertical cascading is part of this process where strategies dictated by senior executives trickles downward and metrics are forced upward related to gathering metrics about whether key performance outcomes have been achieved. This structure would ensure more managerial-level collaboration and invite employees to be actively participative in creating metrics reports and collecting important data related to their job role experiences. For instance, if sales increase in a certain region, metrics would show whether new marketing strategies and communications were valid contributors (such as through consumer survey data) which would dictate innovations that make the marketing process more cost-effective and efficient. 9. Conclusion Sony is facing considerable revenue reductions throughout its many global markets, leading to substantial credit rating drops and a need to downsize to control expenditures. However, the strategic issues facing the company in terms of ineffective marketing, a poor team-focused, slow-to-change culture, and ineffective brand personality/identity are not substantially difficult to correct and improve upon. It will require commitment on behalf of management, both mid-level and senior-level, to work diligently on decentralising the business and using people as a valuable input resource rather than simply dictating control systems to drive performance and productivity. It will not burden Sony with substantial costs to develop a new performance management system whilst building a culture of equality and cohesion, it will instead require a socio-psychological change of attitude (which occurs over time) with the assistance of champions that can facilitate more effective power distance deconstruction. Major competitors, such as Apple, Nokia, Samsung, Sharp and T-Mobile understand that the competency of marketing and gaining consumer connections is critical to strategic management and positioning a firm in saturated competitive markets in a fashion that provides substantial return on investment. 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