Environmental Factors

Topics: Sony, International trade, Masaru Ibuka Pages: 6 (1821 words) Published: December 1, 2013
Environmental Factors
MKT421 Marketing
University of Phoenix

Environmental Factors
The Sony Corporation is a leading manufacturer of video, audio, communications, and information technology products for consumers and professional markets. Naval lieutenant Akio Morita and defense contractor Masaru Ibuka founded Sony in 1946 by establishing a partnership with $500 in borrowed capital and named their partnership as Tokyo Telecommunications Engineering Corporation (TTK). During the first year TTK made a profit of $300 and total sales of $7,000. In the next few years, Ibuka and Morita abandoned the home-appliance market and focused on new electronic goods Constantly looking for new technologies, TTK started the production of transistors radios, called "Sony" in 1954.

The popularity of the radio "Sony" encouraged Ibuka and Morita to change the name of the company to Sony Corporation in 1958. Since then Sony climbed the ladder of the success and reached its top in 1990 when it registered a record earnings of 58.2 billion yen, which is an increase of 38.5% compared to the previous year. Sony's success was a direct result of its founders who could anticipate the demands of consumers and develop products that have met their wants and needs (Funding Universe, n.d.). Additionally, with the arrival of faster communication, transportation, and financial flows, Sony could expand into international markets and become a global firm.

A global firm is "one that, by operating in more than one country, gains marketing, production, R&D, and financial advantages that are not available to purely domestic competitors" (Armstrong & Kotler, 2009, p. 451). However, global firms such as Sony are exposed to environmental factors (e.g. economic, political, cultural, technological and so forth) that increase the risk and jeopardize the company's success. In this research paper several environmental factors that affect global and domestic marketing decisions will be discussed with a closer eye to those factors affecting Sony Corporation.

Effect of Political Systems and the Influence of International Relations
The political legal environment may differ from country to country. A firm, that is considering conducting business in a specific country, should certainly consider the government bureaucracy, political stability, monetary regulation, and country's attitude toward international trades. Many countries are in favor of foreign companies; however, a few others are not so accommodating. Sony and other large corporations do not have any interest in promoting their products in those countries with unstable and weak governments because it increases the risk of conducting a business. Sony should also consider the monetary regulation of the country in where it wants to promote its products. The idea is to make profits in a currency of value to Sony Corporation. Furthermore, some emergent countries may not have sufficient monies to pay for their purchases from other countries. So, Sony should familiarize with practices such as countertrades to exchange goods with other goods instead of using cash (Armstrong & Kotler, 2009). Influence of Cultural Differences

Another environmental factor that affects global and domestic marketing decisions is the cultural environment. Indeed, each country has its own norms, taboos, and folkways. Global firms should comprehend how culture influences consumers' reactions and how they think of a products and how they use it. Sony's culture is centered on a spirit of freedom, open-mindedness, and a fighting spirit to innovate. Indeed, Masaru Ibuka always has wanted to create innovative products that motivate new lifestyles. Additionally, Ibuka inspired a spirit of challenge by making products that had not yet existed and a strong will to make people happy. This is Sony’s DNA that still thrives nowadays and tries to pass to its employees and customers (Sony...

References: Armstrong, G. & Kotler, P. (2009). Marketing: An introduction (9th ed. ). Upper Saddle River, NJ: Pearson.
Asia Economic Institute (2011). Sony struggle in midst of Japanese recession. Retrieved on May 26, 2011 from http://www.asiaecon.org/special_articles/read_sp/12095.
Bateman, T.S. and Snell S. (2009). Management: leading and collaborating in the competitive world (8th ed.). New York, NY: McGraw-Hill/Irwin.
Cengage Learning (2004). Globalization of human resources. Retrieved on May 26, 2011 from http://www.swlearning.com/management/hrm_news/hrm_news_globalization.html.
Fujitsu Corporation (2004). Customer success. Retrieved on May 26, 2011 from http://www.fujitsu.com/downloads/PRMPWR/casestudy/casestudy-20051207.pdf.
Funding Universe (n.d.). Sony corporation. Retrieved on May 26, 2011 from http://www.fundinguniverse.com/company-histories/Sony-Corporation-Company-History.html.
Global World Check (n.d.). FCPA - Foreign corrupt practices act. Retrieved on May 26, 2011 from http://www.fcpa.us/.
Miner, T. (2010). Sony shoots for zero environmental footprint. Retrieved on May 26, 2011 from http://www.sustainablelifemedia.com/content/story/strategy/sony_shoots_forzero_footprint.
Sony Corporation (2011). Compliance. Retrieved on May 26, 2011 from http://www.sony.net/SonyInfo/csr/compliance/index.html.
Sony Corporation (2011). Culture. Retrieved on May 26, 2011 from http://www.sony.net/SonyInfo/Careers/culture/index.html.
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