Sony's Environment Analysis

Topics: Mobile phone, Smartphone, Sony Ericsson Pages: 16 (5501 words) Published: November 18, 2012
Executive Summary
Sony Corp. acquired Ericsson’s shares in their 50-50 joint venture Sony Ericsson early this year and rebranded it into Sony Mobile, a wholly own subsidiary of Sony Corp. The aim of this audit is to analysis current situation of Sony Mobile and suggests how Sony Mobile could compete in such competitive market It started with analysis about the mobile phone market. It then gave an overview about Sony Mobile and STP analysis. This audit used Porter 5 Forces to analyse the current situation of Sony Mobile. PEST and SWOT analysis were used to determine the external macro and micro environment and Sony Mobile’s internal strength and weakness. It also analysed Sony Mobile’s main competitors in the industry and used the marketing mix to analyse its marketing strategy. Finally, the audit gave evaluation of the current situation and gave recommendations.

Industry Background
Market Size:

The global mobile phone industry consists of all analog and digital handsets used for mobile telephony (Marketline, 2009). Mobile phone industry is a very fast growing and competitive industry with many big players like Nokia, Samsung, LG, HTC, RIM, Apple, etc.

According to International Telecommunication Union (2011), total number of mobile subscriber worldwide has reached 5,981 millions. The breakdown of subscription by regions extracted from ITU is as follow:

Source: ITU
Gartner, the world's leading information technology research and advisory company, in its report in 2012 reported that total number of mobile phone shipped in 2011 is 1,775 million units. Total sales of smartphone in 2011 have reached 491.4 millions, around 27.7% of total mobile phone sales. (IDC, 2011)

Market Growth

In 2012, mobile phone industry operating profits rose more than 44% annually (Strategy Analytics, 2012). This is a very impressive growth for any industry thanks to the creation and expansion of 3G and 4G net-works. That led to the demand for 3G and 4G mobile handset globally. Total number of mobile phones rose by 11.1% (Gartner, 2012) and total number of smartphone rose by 61.3%. (IDC, 2012)

Market Trend

In 2007, the first iPhone was introduced to the market and it changed the game. Apple created a new trend to the mobile phone industry, the trend of smartphone. Since then to now, Apple has sold more than 200 million iPhones, customers started to pick up smartphone instead of feature phone and producer started to follow the trend. Samsung came up with its Galaxy series, Nokia with its N series, etc.

Currently, iPhone and Galaxy from Apple and Samsung are the two best-selling smartphone models worldwide. The two models are being priced quite high but multi-million of them have been sold. The two tech giant, Apple and Samsung continue to lead the market and enjoy the lion's share of global revenues and profits, thanks to the weak performance of other giant such as Nokia, Motorola and LG. Below chart showed the change in market share of top 5 smartphone vendors.

Market Share

Nokia’s market share is declining year by year but still, it is holding the largest pie of the cake. Taiwanese mobile producer HTC, Korean giants Samsung and LG are becoming stronger and stronger, Research in Motion has always has its certain share in the market and Apple with its Swiss army knife iPhone, is becoming a biggest threat to all competitors in the industry. The market share of the industry is as follow:

In such market, competing in this industry would be difficult enough, but to be a market leader will be even more challenging. Sony Mobile, successor of Sony Ericsson which has the financial support of Sony Corp. and the technology and market share of Ericsson, has always strived to be the top player in mobile industry.

Company Background – Sony
Akio Morita & Masaru Iuka founded the Tokyo Tsushin Kogyo in 1946. It was then renamed into Sony Corp. in 1958 due to the belief that a company’s name should be...
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