Organisation of choice: Sony - Strategic use of Design-Thinking - Essay Example

? DESIGN THINKING BY COLLEGE PRESENTED TO Design thinking Today, due to a highly competitive operating environment, organisations have devised new ways of ensuring competitiveness in a crowded market. Most organisations have realised that the traditional problem solving methods are no longer viable due to sophistication of organisations.Moroever, the increasing need to understand each and every problem that may limit the organisation from attaining its competitiveness motivates organisations to approach new methods.This has led to a new culture of identifying, analysing and putting in place measures to solve a problem towards achieving competitiveness in the market. Design thinking is a new approach in management that uses very close observation of an organisation, understanding the problems that an organisation may have not articulated, and which may have a considerable effect on the operation of the company and then decide on the best and most appropriate ways of solving these problems in making the organisation more competitive in the market. Design school had its origin around 2005, when SAP AG co-founder Plattner Hasso was inspired by the practice after reading an article in a magazine about the renowned global consultancy IDEO, an organisation that is regarded the leader in design thinking (Korn & Silverman, 2012). The main drive behind this school was instilling creativity and innovation attitudes in managers and employees. Organisations such as Bill Gates Foundation, JetBlue Airways among others have initiated methods of working closely with the school of thought as test phase study with impressive results already showing (Korn & Silverman, 2012). Design thinking entails passing of an idea in several stages. These stages are the inspiration stage where an opportunity surfaces or a problem is identified, ideation stage where ideas are developed, degenerated and tested with a view of leading to a lasting solution to the problem and the implementation stage where the path to the market is established (Brown 2008, 88). Therefore, design thinking is a way of thinking, which leads to transformative innovation with the future of an organisation in mind (Jeanne, Ogilvie & Liedtka 2011, 5). The entire process requires innovation and creativity in ensuring the concepts of consumers, market dynamics and the company’s interests are considered. In this report, design thinking will be performed on Sony, the electronic giant using the three stages as indicated above to solve a problem that eats into the competitiveness of the company. Problem identification Source http://markets.ft.com/research/Markets/Tearsheets/Summary?s=6758:TYO Problem identification In the recent past, Sony Corporation has been facing problems that have been eating into the company’s market dominance, especially with stiff competition from Samsung, its main rival electronic giant. For instance, in early 2005, Sony’s critical electronic division was almost falling into the red for the second consecutive year, mainly due to lack of a hit product and stiff competition from its rivals (Goodman, Andt & Michlisch 2007, 28). In addition, Sony’s woes seemed to be driven by a fragmenting Sony brand and tough price wars, with Sony’s competitors launching cheaper and equal standard products. By 2005, Sony was considering ways of making its brands more profitable and integrating its gadgets and media content in a profitable integration that would introduce a new product in the market and enable its consumer to pay a premium for such fashionable services (Goodman, Andt & Michlisch 2007, 28). As the figure above portrays, between 2011 and 201, the company’s share was in the dip, though the company showed signs of improvements towards early 2013. Although most of Sony’s problems are blamed on the management, Sony has been suffering from a rich mix of problems in all its areas of operations. An article in the Economist magazine indicated that by the first quarter of 2012, Sony was losing massively and had carved a niche in the loss making territory. For instance, on 10th April, 2012, the company announced that it predicted a massive loss amounting to 520 million yen, equivalent to 6.5 billion dollars, in the year ending March 31st 2012 (Anonymous 2012, 74). Sony’s shares had fallen by about 40% in year. Sony has lost money for about 8 consecutive years and the company needs to rethink its strategies to regain its fortunes, if it has to remain relevant. Sony’s poor performance may not be mainly in its management but in its products. For example, Sony’s digital imaging products, which include cameras, phones and gaming have not been doing well (Goodman, Andt & Michlisch 2007, 28). In fact, the launch of PlayStation 5 cost the company more than it benefited the company. The innovation could be considered to have been a wrong innovation due to the many problems associated with the innovation immediately after its launch. The effect was that, considering that Sony Corporation uses its brand name in all its products, poor performance in one brand will have an effect on the entire brand name of the company. In other words, the problems associated with PlayStation 5 had a huge effect on Sony’s products considering the brand name effect. The poor performance of one brand led to a shrinking market of Sony’s products, which makes the company to be edged from its market position by its main competitors (Brown 2008, 88). Lei, Dawar & Lemmink (2008, 111) explained that  the use of brand names to achieve relatedness of all products helps in attaining better advertisement, promotion and influencing consumer’s perception about the range of different items with the same brand name. However, such brand relatedness exposes brands to risks from related brands in cases where negative incidents are reported from one or more brands. Therefore, Sony suffers from the market boredom regarding its products in the market. Considering the company has not produced a hit product in the market for a long time, its products have been too monotonous leading to boredom among its prospective customers, which is aggravated by poor performing brands such as the PlayStation 5. Ideation As discussed Sony’s problems require a different formulation, but not the traditional products that the company launches in its niche market. To reinvent Sony’s fortunes with great impacts, there is a need to arouse excitement in the market by acting in a way that is out of the ordinary for the company. This may only be achieved through a hit product in the market. The perception of uniqueness and eliciting state of astonishment among customers drives people to talk more about the product, motivating them to try the new product and encourage them to spread the message to others (Nagle & Riedl 2013, 7). Talking about a product and positive product reviews will make information about a product to spread in the global market. As Nagle & Riedl (2013) explained a consumer who manages to use items that others have not tried feels like a pioneer. Such consumers motivate others to try such items after their first experience and through spreading the Word of Mouse (WOM) in online platforms that many people rely on in making decisions on what to buy. WOM spreads from those who have tested and experienced a product to those who have not, suggesting that by introducing a hit product in the market; Sony will benefit from social platforms and other review sites that act as free promotional agents, and which encourage those who have not bought the product to buy. A hit product is nothing of the ordinary, but has something that elicits emotions and fascination among customers. Therefore, such a product has to exceed the expectations of customers in the market. Design thinking is a creative process that requires the management or persons involved to find ways of  eliminating the fear of failure, and encourages the company to ensure maximum input in developing a hit product , which entails the use of out-of- box and non-routine ideas (Johnstone et al 2011, 1208). In this context, considering that Sony has not made a good impact of late with its line of televisions, PlayStation and cameras, these products cannot revitalise its fortunes, but the company has to look beyond these products to launch a better performing product (Goodman, Andt & Michlitsch 2007, 29). Rejecting any fear and acting extraordinary suggests that, for Sony, a new product has to be launched, different from what customers are used to in the market. The new product has to hook customers in the market and drastically increase Sony’s revenues. Currently, the market is shifting towards the use of hand held technological devices in that people no longer carry laptops but need smartphones and tablets to facilitate their transactions and communication. Apple and Samsung have dominated the market in production of high-end smartphones, while Samsung elicits excitement in the global market due to the high end functionality that comes with a new release of a new smartphone. The diversity of smartphones has a positive impact on the perceived usefulness and ease of use of smartphones, while the intuition has a positive effect in perceived ease of use (Tsai & Ho 2013, 1248). This explains the need for Sony to use its huge innovation capacity in innovating a new smartphone, or a tablet that will hit the market similar to Samsung galaxy 5 or better. Implementation stage As observed, Sony’s brand name has been affected by lack of a hit product and poor performing products. As a result, a new hit product should not be related to the Sony brand but has to instil some awe in the market. To achieve this, Sony has to seek the help of chipset designers such as Intel, a company with a good market reputation due to the power and value of its chipsets and processors. For instance, the collaboration between AT & T and Apple has enabled AT & T to attain excellent performance in the market, considering the value of smartphones provided by the two companies. Likewise, Sony has to reject any fear and seal a deal with Intel to launch a high end market tablet whose performance exceeds those in the current market. As Tsai & Ho (2013, 1251) explained, design features are key in determining the failure or success of a smartphone in the market. Collaboration with Intel will ensure the two IT giants employ the expertise and skills in their design capabilities to come up with a product that hits the market, and redefines the smartphone and tablet market. Sony is an established company with a global presence. Therefore, distribution of the new product would not be a problem as it would be distributed by both Intel and Sony across the globe, with the European and American market as the first targets markets; there is a high demand of high-end smartphones in these markets (Tsai & Ho 2013, 1251). The name of the launched product has to be settled at with the agreement between the two companies with other details such as the ownership of the copyright and profit sharing discussed. Design thinking entails observing a situation to identify a problem, coming up with ideas, developing the idea on the most viable way to solve the problem, and finally implementing the idea. In this context, Sony Corporation was noted to be suffering from loss or market and making huge financial losses due to monotony of the brand and the negative effects of brand relatedness. As a result, the best way to bring back Sony’s fortunes would be to introduce a hit market that elicits awe in the market, different from its line of brands and with great design features and capabilities. A smartphone or a tablet would be the ideal product considering the increasing demand of these gets across the globe. Sony and Intel are to companies with sophisticated innovation and design capabilities; a new product from the two companies would certainly spur a storm in the market, which would increase Sony’s revenues and interest among smartphone users. List of References Anonymous 2012. “Back in Japanese hands; Sony.” The Economist, 8780 (403): 74. Brown, T. 2008. “Thinking.” Harvard Business Review, 86(6): 84-92. Goodman, S. H., Andt, M. P. & Michlitsch, F. J. 2007. Management: Challenges for Tomorrow's Leaders: Challenges for Tomorrow's Leaders. Mason, OH: Thompson South-Western. Jeanne, Liedkta & Ogilvie, T. 2011. Designing for Growth: A Design Thinking Toolkit for Managers. NY: Columbia University Press Johnston, W. J., Ilipinar, G., Montana, J., Spender, C. J. & Truex, P. D. 2011. “Design Thinking in the Postmodern Organization.” China-USA Business Review, 10(11): 1203-1212. Korn, M & Silverman, E. R. 2012. Forget B-School, D-School Is Hot. Wall Street Journal. http://online.wsj.com/news/articles/SB10001424052702303506404577446832178537716 [5th Dec. 2013] Lei, J., Dawar, N. & Lemmink, J. 2008. “Negative Spillover in Brand Portfolios: Exploring the Antecedents of Asymmetric Effects.” Journal of Marketing 72:111–123 Nagle, F. & Riedl, C. 2013.The Benefits of Product Quality Disagreement - When Divergent Reviews Drive Online Word of Mouth. Harvard Business School, Working Paper 13-091. Tsai, J. & Ho, C. 2013. “Does design matter? Affordance perspective on smartphone usage.” Industrial Management & Data Systems,113 (9):1248-1269 Read More