Master of Science International Business 2010
Presented by: Fahad Ishaq Student-ID-Mainz: 905202
Student-ID-London: 3000235 Lecturer: Prof. Randolf Schrank Unit: International Strategy
Sony has successfully created an incredible brand name. It is all about high-technology, innovative products and state of the art gadgets. Sony was founded after post-war of Japan 1946 by two innovative thinkers Masaru Ibuka and Akio Morita, who wanted to step in the business of electronics. They setup a small facility in the bombed area in Japan by the name of “Tokyo Tsustin Kenkyujo”. Sony has also used innovation and new technology when it comes to their products. Innovation has been used as a core important thing when building their markets, making billions and a multinational electronic empire. The initial products that company started with, the first electric seat warmer and electric rice cooker, later on the transistor radio, the Trinitron, the portable walkman and the Betamax VTR. The quest since birth is having excellence through constant innovation and capturing the consumer’s heart and retaining them, instead of gaining huge profits. Furthermore, being a tough competitor for others in electronic industry, company spends huge amount of capital on research and development. Sony was the first company who opted for miniaturization and portable products. The Corporation had diversified in field of film industry, music industry and later on revolutionizing the entertainment industry. The essay will answer the question how Sony had the competitive advantage as compared to its competitors and had always opted for the differentiation strategies (Chapter 2). Later on when company wanted to internationalize, they had invested huge through FDI’s all over the world and had also faced different kinds of risks (Chapter 3). The entire risk taking diversification of Sony as a success or failure would be discussed in (Chapter 4). After going through the detailed analysis of the case study, we can say either Sony strategies were involved to be evolutionary or not, followed by the recommendations that will be given (Chapter 5). Finally the conclusions will be drawn (Chapter 6).
COMPETITIVE ADVANTAGE & DIFFERENTIATION STRATEGIES
2.1 Competitive Advantage:
Sony’s dynamic rise in the field of electronics is due to their innovation and high technology products. For their dynamism in this regard we need to talk about the competitive advantages that Sony has over other competitor. A company needs to define its strategy and then the ways to achieve it. To have a competitive advantage at one’s end is indispensible to life for a company. The competitive advantage guarantees’ the higher profits as compared to rest industry. According to porter, there are two kinds of competitive advantages; * Differentiation Advantage
* Cost Advantage
If a company has a cost advantage as compared to its competitor, they produce same product at a lower cost and through differentiation they can make higher profits. The competition in electronic industry is very tough. Patent protection lacks and Sony had to face these problems not only from Japanese firms but also from the electronic industry of Korea, Taiwan and Hong Kong. In actual the electronic products launched were copied by others more or less at same time. This rivalry was called “Survival of the fittest” meaning technology that comes out victoriously becomes an industrial standard and other have to follow it. Sony always won this battle due to the innovation and creativity that led to first mover advantage with every product they launched. Among innovatory visions, one was in 1950 when they opted for miniaturization and portability which resulted in first blockbuster in 1979;...
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