Case 5: Sony Shockwave
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...
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