Sony Playstation 3 Case Study

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Threat of Competitor7
Threat of Buyer7
Threat of Suppliers7
Threat of Substitutes8
Threat of New Entrance8
Other threats8
Lose of Market Share 9
Unethical Business Strategy9
Product Disadvantage/Defect10
Expensive Product, High Manufacturing Cost and Negative Profit11 Differentiation12
Over Confidence12
Longer Software Development Cycle12
Heavy Criticism from Media13
Market Strategy14
Product Strategy14
Promotional Strategy15
Pricing Strategy15
Distribution Strategy16
Exhibit 118
Exhibit 218

Sony Corporation was founded in Tokyo, in 1945, by Masaru Ibuka and Akio Morita, as the Tokyo Telecommunications Engineering Corporation (Tokyo Tsushin Kogyo (TTK)). The company built Japan’s first tape recorder called, the Type G. Then in early 1950s, TTK convinced Bell Laboratories to license its new transistor technology and became the first company to successfully apply the technology to consumer’s radios. In August 1955, TTK released the Sony TR-55; Japan’s first commercially produced transistor radio followed with Sony TR – 72 which was successful in both domestic and overseas market till early sixties. In 1958, TTK changed its name to Sony (derived from Latin word ‘Sonus’ for sound and English slang word sonny (to address a boy)). The company later expanded into televisions, stereos and home entertainment products with successful range of products such as Betamax (video recorder), Walkman (world’s first portable music player), Trinitron (television, Vaio (laptop) and the most successful Play Station 2. Over the years, Sony has introduced these standards: Standards| Years| Standards| Years|

Umatic| ~1968| Digital Betacam| ~1990|
Betamax| 1975| miniDV| 1992|
Betacam| 1981| DVD with others| ~1995|
Compact Disc with Philips| 1982| DVCAM| 1996|
3.5 inch Floppy Disk| 1982| Digital8| 1999|
Video8| 1985| Universal Media Disc| ~2003|
DAT| 1987| HDV with JVC| ~2004|
Hi8| 1988| Blu-ray Disc with Panasonic and others| 2006| MiniDisc| ~1990| | |

In 2006, Sony had an annual net income of $ 1 billion on 64.5 billion revenues. Their revenue in 2010 was $ 77.2 billion. Their highest revenue recorded in 2008 which is close to $ 90 billion.

Sony has a strong brand name with varieties of successful product such as Walkman, Trinitron T.V and PlayStation (PS). This was proved by Sony becoming the first company to successfully apply the technology to consumer radios. By the late 1950s, Sony also had become one of the world’s leading producers of radios. Then, Sony expanded into televisions, stereos, and other home entertainment product. Sony had a long history of product innovation that had resulted in well-known brands, such as Betamax, Trinitron, and Walkman. Sony’s PlayStation also well-known among consumer when PlayStation 2 (PS2) had become the world’s bestselling video game console with more than 100 million units sold.

Sony is financially strong and able to invest in new products and technologies. In 2006, their annual net income was $ 1 billion on 64.5 billion revenues. Their revenue in 2008 was close to $ 90 billion and in 2010 was $ 77.2 billion. The financial strength will make Sony strong and can withstand any circumstances.

One of Sony’s greatest strengths is their ability to produce innovative, quality products. Begin with tape recorder in 1945. Then, Sony had extended their product by producing the transistor radios by the late 1950s; Betamix tapes in 1975; the...
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