Internationanl Business

Topics: South Korea, Sony, Globalization Pages: 9 (3276 words) Published: January 20, 2013
The organization that I have chosen is Sony Corporation. Sony Corporation is one of the most successful multinational Corporations in the world; it is also one of the best-known names in consumer electronics industry. Since it was established shortly after World War 2, Sony has introduced a stream of revolutionary products, including the transistor radio, the Trinitron television, the Betamax VCR, and the Walkman portable cassette player (FundingUniverse, 2000). Over the years Sony has successfully developed into one of the biggest player in the consumer electronics industry, producing a wide range of products including Audio system, Video cameras, Television, gaming system, Semiconductors and also electronic Components. Valued at $17.12 Billion in the market (Forbes, 2011), Sony Corporation is a great example of successful Multinational Corporation that has competitive advantage in the global market place. Daniel Spulber’s Star Analysis is an analytical framework that helps strategy makers in gathering and processing data about global market (D.F.Spulbur, 2007). By identifying the culture, feature and structure of the business environment in different country, Spulber’s Star Analysis can assist the manager in developing a global strategy that provide their organization with the competitive advantage to succeed in the international market. Star Analysis is based around five major components, which is the features of the company’s home country, supplier countries, customers countries, partner countries and competitor countries. In this case, Star analysis will be used to evaluate the competitive strategy of Sony Corporation and how Sony Corporation improved their global competitiveness.

Home Country
A company’s home country refers to the country where the business has its headquarters (D.F.Spulber, 2007). In this case, the home country for Sony Corporation is Japan. D.F.Spulber (2007) stated the features of home country are often a good guide to the company’s business practices, corporate culture, and core competencies. D.F.Spulber (2007) also stated that a company can benefit from home-country strengths by using the home country as a launching pad for international expansion, and this is the case for Sony Corporation. Benefiting from the culture and features of Japan, Sony Corporation has developed a strong foundation for their international expansion. This can be justified using the Porter’s diamond theory. M. Porter states that basic factors of endowment, such as natural resources, climate, location and demographics, can provide an initial advantage that is subsequently reinforced and extended by investment in advanced factors, examples of advanced factors are communication infrastructure, sophisticated and skilled labor, research facilities and technological know-how. Conversely, disadvantages in basic factors can create pressure to invest in advanced factors (Charles.W.L.Hills, 2010). That is the case in Japan, where they lack arable land and mineral deposit, and yet through investment from government and organizations has built a substantial endowment of advanced factors. Japan government’s subsidies and investment in education system, has created large pool of engineers, which is vital to Japan’s success in many manufacturing industries (Charles.W.L.Hills, 2010). This environment provides Sony Corporation with sufficient workforce and skilled labor. Japanese’s constant investment on Research & Development has developed the technological know-how of the country. This practice can also be seen in Sony Corporation’s strategy, which spent approximately 6.99% of their revenue, which is $5.5 billion on R&D annually and the percentage of employees engaged in R&D is 32.49% (TechnologyReview, 2012). This gives Sony Corporation the competitive advantage in the global technological market. Another attribute in Porter’s Diamond is demand condition; In this case, the pressure from Japan’s sophisticated and...
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