Sharp - a Strategic Analysis

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1. Why has Sharp been so successful for so long? What are its business and technology strategies? Sharp’s market entry to the electronics industry was through low cost assemble. However, Sharp soon realized that it could not complete in scale the well-established industry leaders such as Sony and Mutsuhito by playing catching up. Sharp’s decision to abandon this strategy of catching up in sales volume was a sound one, as well as its refocus where it thought it could win. Sharp also realized that the electronics assembly industry was a lost cost industry and margins were very minute. The only way to make money was to concentrate on cost efficiency. Ultimately, in order to be profitable, Sharp had to go for product differentiation strategy and stand out amongst its competition. Rather than emphasizing on all electronic devices and appliances, Sharp’s technology strategy was to become a leader in crucial components of the overall solution. In order to do so, Sharp had to reorganize as a company to develop innovative and industry leading products. This resulted in the creation of products, such as the “New Life Products”, that met the consumer needs and had the potential of further product diversification. Sharp’s Business Strategies – Acceptance from its employees and buy-in with active participation were key to Sharp’s overall success. As a result, Sharp created a culture of entrepreneurship and innovation. Members of the company were often long-time employees as the company created a sense of family at the work place. It also created an open forum for new ideas and promoted employees to be more engaged through employee empowerment. Additionally, there were bonus and a strong merit system in place to promote performance. As promotion was perceived at the greatest level of achievement, Sharp allowed all employees to apply for management roles in a confidential manner. This was done due to the notion in Japanese culture that applying for management might be seen as a sign of disloyalty. The internal management coordination also played an integral role as leaders of various divisions met and often spoke about new innovation in order to eliminate duplicate efforts and to highlight important projects. To ensure that each of its divisions was profitable, Sharp had established profits centers. This gave each division freedom and accountability for its own sales and marketing and the ability to source its own components from outside suppliers where cost advantages existed. Manufacturing was an exception and was still a core functional area within the company as it closely tied into the organization’s R&D strategy. Sharp’s Technology Strategy – As a technology company, R&D was a very large part of Sharp’s technology strategy. Over the years its importance increased further. Sharp’s strategy was to consistently assess its technology capabilities and match them up with consumer needs. Matching technology seeds to the market needs. The company, as a result, was often developing technology that was not available in the market place as of yet. The strategy, however, was not to develop the entire product. It invested in technologies that were the core of an entire product or solution. To some extent it stayed away from routine R&D and commodity products. Instead it focused on emerging technologies making innovation its key focus. The company also emphasized on new breakthrough product development. It even took on new challenges that many other firms found too difficult (i.e. LCD panel technology). Once projects were identified to possess profound impact, they were given corporate priority through access to vital human resources and funding and labeled as Gold Badge projects. Funding for these projects came from the corporation in the early stages as it was believed that profit centers would not be willing to invest in projects that did not show promise initially. 2. Is Sharp at the time of the case an end products or a components...
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