Executive Summary:
This report is designed to find a solution to poor sales of Sony televisions. Our research shows that Sony needs to develop a large, high quality, Internet enabled 3-D LCD television that easily integrates with competitor products for a competitive price.
Literature Review:
Sony is not making a television that meets consumer wants and needs. Sony’s television division is losing money and they don’t have a concrete plan to turn things around. Sony who was once the number two television producer in the world has fallen further behind Samsung and has been overtaken by LG (Hyun-joo, 2010). Sony has had to scrap plans to launch their new OLED televisions because of their projected losses which would occur from bringing these televisions to the marketplace (Wakabayashi, 2009). Sony is gambling that consumers will jump on the 3-D bandwagon; Sony has thrown all its weight behind producing 3-D televisions. These televisions will cost roughly 20% more than LCD TV’s of the same size. There is concern form industry experts that consumers whom have just made the switch to HD televisions will not be ready to purchase 3-D TV’s. (Wakabayashi, 2010)
Sony has not been able to compete with their competitors on price because of the current market conditions around the world. The yen rose sharply against the Korean won exacerbating uneven price competition between Sony and their main rival Samsung. A strong yen erodes sales from overseas and makes production costs in Japan highly inflated. Japan which is in the midst of a tough recession has forced Sony to shut down three of their Japanese factories(Tabuchi, 2009). Sony’s TV division lost 1.34 billion dollars last year which amounted to more than half of the company’...
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... spoils the relationship.
Quality is only slightly more important to cost with respect to televisions. Our question was, “What is more important to you and why, price or quality?” Aaron Adler (personal communication, March 6, 2010) said, “Quality. I'd rather spend a bit more for something that lasts a long time, than pay a little less and have to replace it sooner.” The importance of quality was demonstrated by this answer. It’s important to point that Aaron was only willing to spend a little more for high quality. Sony must delicately balance the fine line between making quality television that is affordable.
Action:
We recommend that Sony do further research to develop a television that is in line with consumer’s wants and needs. Sony must figure out how to adjust their operations strategy to build this product and successfully compete in the marketplace.
Science fiction movies have taken a leap with the use of its new technology: 3D. With the help of 3-D camera systems, projectors, sound effects, and shutter glasses, film makers have been able to improve science fiction movies, captivating audiences of all ages. It was not until 2004 when 3-D technology regained its popularity after having a thwarted emergence during the 1920s. The first 3-D movie was produced in 1922. Although Avatar is considered the best 3-D film ever made, several movie critics disagree, arguing that “House of Wax”, produced in 1923, has been the best 3-D movie so far. Many companies, such as Sony, Panasonic, and LG, are already selling TV screens with this innovative technology integrated in it. However, not everything about 3-D technology is as good as it seems; it has its drawbacks as well. And it has been recommended that children under the age of 12 should not watch 3-D television until their eyes are fully developed.
According to Martin, C. (2011) the consumers have already experienced the first and second screen revolutions in the past decades and are now in the middle of the third screen revolution.
Determining the right target segment requires an analysis of the customer, company and competition (fig. 2). TiVo's customer is defined by unmet needs in the market. While TV is one of the most ensconced and ritualistic elements of contemporary American life, there are still aspects of television viewing that do not fulfill customer needs. An estimated 68% of Americans complained that they felt "widowed" by their loved one during the Fall television season because their spouses were chained to their televisions during primetime from 8pm to 11pm. Additionally, parents expressed a difficult time getting their children to do homework during key television programming times. In general, this is evidence that consumers want greater control over their television consumption habits. Analysis of the TiVo Corporation reveals their core competencies, which include proprietary software, national distribution through established retail outlets such as Best Buy, Circuit City and Sears and product co-branding with trusted electronics giants Philips and Sony.
Two major competitors in the global consumer electronics industry, Philips of the Netherlands and Matsushita of Japan, both have extensive histories that can be traced back more than a century. They have each followed different strategies and have had significant capabilities and downfalls along the way. In general, Philips built its tenured success on a portfolio of responsive national organizations. On the other hand, Matsushita based its global strategy on a centralized and efficient operation through Japan. As they developed and reorganized their international strategies, each company was forced to undertake its strategic posture and restructuring as its competition position fell.
Samsung’s cost advantage is clearly visible from the comparison of costs (and their elements) that were borne by the company and its competitors in 2003 (Tab. 3): Samsung’s overall cost was 24 per cent lower than the weighted average cost of the other four producers; two most significant elements of the cost structure, i.e. raw materials and labour, were 36 and 27 per cent lower respectively. When expressed by means of a relation of average selling price to costs (“productivity” of cost elements), the differences are even more visible (comp. Tab. 4 ): overall superiority of Samsung over its competitors exceeded 51 per cent!
Firstly, Philips’ main capability is the decentralised structure with strong local subsdiaries, which is the National Organisations (NOs). Philips established NO after the war to replace the destroyed industrial plant in Netherlands. During this period, electronics was seen as luxury good and trade barrier between nations was high. The decentralised structure supports Philips in competing effectively with local competitors and enables them to adapt with the diverse local market. Each NO had the their strength and resources to sense and perform adaptive marketing as well as develop their product to respond the local differences. It is reflected in its television product. The first color TV is created in Canada, while the first stereo TV is created in Australia and the teletext TV is created in UK (Bartlett, C. A., 2001). The strong independence of these local subsidiaries also reinforced by the communication barriers during that period (Bartlett, C. A., Ghoshal, S., & Birkinshaw, J. M., 1995). The decentralised structure gives high degree of independence in each international unit, including decision-making autonomy (Daft, R. L., 2009). In the case of Philips, NOs as local subsidiaries had more power over the Product Departements (PD), as Philips gave NOs financial autonomy as well as liberty to set their own target. Thus, the NOs ability of autonomous marketing and product development function had become Philips m...
27 Jan. 2012. Greenblatt, Alan. “Television's Future.” CQ Researcher, Vol. 17 (2007, February 16): 145-168.
The Digital Video Recorder used in modern entertainment systems can now be replaced with an easy to use streaming video devices. As the online video libraries grow to include more content, eventually streaming set top boxes will provide this functionality, without the need to schedule recordings or manage space used by previous recordings. One additional advantage, often referred to as TV Anywhere, allows viewing of online content from a variety of devices, as long as an Internet connection is available. Now the real motivation that drives many Americans to consider these alternative options is money.
Than fifty years, “Sony”, founded by: Honorary Chairman Akio Morita, has been leading the industry in a number of areas. Sony has changed everyone’s life as we know it. From producing batteries to the new wireless networking system, they are number one. Have you ever wondered who produced the system, they are number one. Have you ever wondered who produced the great games you love to play or the MP3 player you got from your husband? From DVD movies, to digital cameras and camcorders, Sony is leading the world into a new frontier. Electronics, games, music, pictures and insurance are just a few of the side products of the billion-dollar company.
N.V. Philips (Netherlands) and Matsushita Electric (Japan) are among the largest consumer electronics companies in the world. Their success was based on two contrasting strategies – diversification of worldwide portfolio and local responsiveness for Philips, and high centralization and mass production for Matsushita.
price as the major decision-making tool for customers (“Global Consumer Electronics”, 2013). This lack of
... viewing quality becomes and the more channels we can get, the more people are likely to stay inside. Don’t get me wrong, I love TV, and I feel that it is one of the most important inventions that this world has been blessed with; but I feel that it is taking away from some of the “realness” of our lives. People are becoming less healthy, they are developing eye and other health problems, and they don’t know what is real and what is not any more. I hope that in the future television designers and makers can develop so new technologies that would improve and not worsen our environment. The television is a very helpful and important tool that has had a great impact on our society, but we need to be aware of how this tool has also affected out environment as well, so next time you watch you television, think about what impact you might be having on our environment!
This case study analysis is on Samsung Electronics Company (SEC) and how it has climbed up the ranks in the past decade via calculated marketing strategies, extensive market research and analysis, and a risky bet on how the market will evolve. Samsung’s principle outlook took time and education from within and thereafter the general market.
Panasonic Case Study (Graphics Not Included) Panasonic operates under the umbrella of the Matsushita Electric Industrial Co.