- Sony is a well-recognized and respected brand with consumers, and its products cover a wide spectrum of the entertainment and industrial markets
- new entrants are threatening sony’s position due to the industry shift from analog to digital technology. In the analog era, complicated functionality of electronics products was made possible through the combination of several complex parts, and Sony held a competitive advantage in the design and manufacture of those parts as a result of its accumulated expertise. In the digital era, however, complicated functionality has become concentrated in semiconductors and other key digital devices. Since, these semiconductors and key devices can be mass produced, they have become readily available to new market entrants, and the functionality that once commanded a high premium has become more affordable. This has led to intense price erosion in the consumer audio visual products market. Also, Sony is exposed to the pressure of declines in selling prices as a result of a concentration of market share among a limited number of dealers and retailers.
- In the pictures segment, the DVD format is now 11 years old and is showing signs of maturation. To meet these challenges, Sony is working to produce and acquire a diversified portfolio of motion pictures with broad worldwide appeal.
- Sony is confronted by changes in the financial services industry as a result of the deregulation and liberalization of additional insurance premiums, postal privatization, the complete lifting of the ban on the securities intermediary services by banks and others.
Even within the electronics division, there is an enormous variety of products and specialized markets. • Audio - Sony has lost its dominance in the lucrative market of portable audio. Its Walkman line of cassette and CD players has been superseded by a new wave of MP3 players and Apple's iPods. Sony's MiniDisc format, while initially promising, had failed to gain significant market share. Sony BMG, a division of Sony Music Entertainment, is one of the "Big Four" record groups, which include Universal Music Group, EMI Group, and Warner Music Group (WMG). • Video - Sony's video business consists of digital camera and DVD player sales. o Key competitors in the digital camera market are Canon and Nikon. In the past, the company has made only cameras for the consumer market, but it has acquired Konica Minolta's digital SLR assets in early 2006 in a move to enter the professional market. o Sony's next generation Blu-ray technology is a major gamble for the company. Blu-ray and HD-DVD, its competitor, both have the potential to win the format war. Both technologies use blue lasers, rather than the red lasers found in traditional DVD players, to achieve greater data density. The data layer in Blu-ray discs is located closer to the surface than in HD-DVD discs. This allows Blu-ray discs to store more data than its competitor (25 GB vs. 15 GB), but also makes the discs and player equipment more expensive. First generation Blu-ray players are approximately $1000, while HD-DVD players are half that price at $500. Movie studios prefer the Blu-ray format because the larger storage capacity allows for more features and bonus materials per disc, so currently the Blu-ray format has backing from studios. Sony has further pushed for adoption of the technology by incorporating Blu-ray players in its PlayStation 3 console ($599), effectively subsidizing the costs of players. • Televisions - The traditional CRT television market is relatively mature, and no longer very profitable. The fastest growing segments of the television market are flat screen, high-definition LCD TV's. Sony leads this market with its Bravia line of LCD products. The company holds a key advantage over competitors because the S-LCD Corporation, its...