In Search of the Next Hit Product
1. Discuss the importance of product innovation to the future success of Sony in regard to the changing marketing environment environment. 2. Conduct a SWOT analysis on Sony. 3. What are the strategic options available to Sony, in y , the wake of “Sony Shock”? Furthermore, recommend a course of action for Sony.
Q1. Importance of Product Innovation to Sony s Sony’s Future Success
Product innovation enables Sony to: • Retain its brand status • Benefit from innovative products – higher prices • Add to the brand’s reputation as innovative products are seen as technologically superior • Maintain dominant industry position • Reduce the risk of technological leapfrog • Set proprietary standards
Q1. Continued…Product Innovation:
• • • • • Creates demand Acts as a barrier to entry for potential new entrants Helps create new markets Helps reposition a business Helps in defending market share ma ket sha e
Q2. SWOT Analysis: Strengths y g
• • • • • • • • • • • Global Size and Market Share Presence in numerous markets Solid brand image Creates market-defining products Experience and strength of brand Level of vertical integration Strength of “Playstation” Brand Japanese Strength in Electronic Engineering Design Alliances with other manufacturers Alli ith th f t Exposure to global markets New l d hi N leadership
Q2. Continued... SWOT Analysis: Weaknesses
• • • • • • • • • Overcapacity Too broad a product range Low profit margins Collapse of Cathode Ray Television market Cathode-Ray Bureaucratic culture Sony’s development of new technology - too slow y p gy Failing to focus on its core operations Slow to market products Over reliance on ‘Playstation’
Q2. Continued...SWOT Analysis: Opportunities
• Expansion of global presence • Taking advantage of producing in low cost economies • New technology which could become industry standard, encourage upgrading to newer versions and...