Through a comprehensive research on Sony’s industry as a whole, according to Wall Street Journal, “TVs are the core of the core for Sony (Dvorak P., August 29, 2005, Sony Plans Ad Blitz to Boost Ailing TV Unit)” because of the spirit of innovation, state of the art technology and superior quality imbibed in its corporate culture. Sony’s primary problem that was observed during the research process was its high pricing strategies especially in its ailing TV industry which has resulted in a decline of its sales growth and revenue though. A major drawback for the high prices of Sony TVs is due to the rise of the Yen in which consumers bear the brunt by having to pay higher prices for. This is done as such because Sony needs to recover its lost foreign exchanges due to international trade between foreign currencies and that of the Japanese Yen. The results of the research show that because of its high pricing strategy, fewer consumers are willing to purchase a Sony TV. This concludes that price is certainly an influential factor before considering purchase though consumers appreciate the quality and brand name of Sony
Literature review
Sony as a global leader in electronics, faces stiff and intense competition from its numerous and diverse competitors such as Matsushita Electric Industrial Co. and Samsung Electronics Co. According to Wall Street Journal, Sony’s Chief Financial Officer, Nobuyuki Oneda said, "The competition is considerably tougher than we thought, referring to the TV-set industry. Prices are coming down at a faster rate than we had expected, particularly in the U.S. (Kane Y., October 26, 2006, Sony Warns of Pricing Pressures for TVs as Profit Plunges 94%)" Sony has begun to realize the extent to which price deter...
... middle of paper ...
...ponse was that Sony TV warranty is effectual because its TVs are planned in such a way that the product lasts longer than the warranty which gives it a lower failure rate. However in the event of a failure past the warranty, a fee is charged for repairs.
How do you think Sony is doing financially? How can they improve their TV sales?
The rationale for this question was to determine its financial performance in the market amid all its competitors and also to establish the enhancement of its TV products. The most important response was that Sony is doing financially well given the global macroeconomic picture. For Sony to improve its sales, it should keep on developing and introducing more technologically innovative and unique products for instance the Bravia series and maintain the path of enhancing structural and operational efficiency to optimize production costs.
...s are doing well and over the many years have gone up. The company has not lawsuits currently pending which is good. The company as a whole seems to be growing even when the market is down.
The financial data for the company is convincingly good-to-great. Its revenues has been rising constantly since 1998 as can be seen on the exhibit. Net income for 2002 was the highest in 5 years ? $5,710 million, rising by 58% since 2001. Its total assets have increased by 13.6%.
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.
Barco N.V. was established in 1934 as a producer of radio broadcast receivers. At the end of 1970's, facing the economic recession owing to oil supply shock, the company altered its market strategy from consumer market to industrial niche market of projectors. This decision was based on firm and clear vision that Barco knew which market it had to serve. Pursuing top-of-the-line in the high-end niche market, Barco focused on R&D to retain the top quality and launched series of international expansion activities.
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!
After a 4 P analysis of the company one found that it found itself in a luxury market where product quality and constant innovation are key points for the success. That is why the production process and its design can take even months. Product line is extensive however it is only conformed of high priced products. Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of differentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its selective retailing division is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section. It is Important to note that the percentage allocated is higher than those of most competitors.
The result of all this is that Sony had a significant advantage over their competition, but let it slip away by not recognizing consumer needs and striving to meet them. Competing products that are not compatible with each other must accurately determine the most important element of success, which is having the majority of the market share and being the product of choice since they can not co-exist; in this case it was the stand-alone VCR unit. Sony failed to recognize that, and as VHS systems became the unit of choice, taking the full market share and consumers away from Betamax.
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.
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...
Realizing that fierce price war in China’s color television industry brought them ever-decreasing profit margins hard to bear, in 2000, some core members of the color TV industry formed a price alliance intended to stifle the price war and re-establish their leadership in the value chain of home appliance. Responding to the price control, Gome initiated its powerful strike by lowering the price of Prima’s (a member of the alliance) color televisions to an extent lower than the price laid down by the alliance. The consumers’ response confirmed Gome’s low prices strategy at the beginning, while the allied manufacturer’s once again signal of price control was obviously aimed at Gome’s defiant market strategy.
Sony’s problems continued and were ‘most obvious in its core electronics business, which accounts for two-thirds of its revenues’ as the consumer devices such as TV’s, DVD players and music players came under fierce price pressure and Sony failed to come up with any more trend-setting new gadgets to boost profits (The Economist, 2005). Idei resigned after a series of stumbles and handed the reins to Welsh-born American Howard Stringer, a former television executive (Dvorak, 2005, p.1). Prior to joining Sony, Mr. Stringer had a distinguished 30-year career as a journalist, producer and executive at CBS Inc (www.sony.net).
As the concept of a curved television that is powered by OLED technology is relatively new to the average consumer, most customers are currently either in the “awareness” or “knowledge” stage of buyer-readiness. Therefore, the producer must first inform the consumer the benefits of a television that functions on organic LEDs and proceed to persuade the consumer to believe that the value this technology brings to the customer is superior to the available substitutes. The responsibility of proactively advertising the OLED Smart TV predominantly falls on the retailers after consumers become aware of the OLED Smart TV and have a developed knowledge of the three different product levels.
Brand offers superior quality of the service to the customer’s expectation and satisfaction. Furthermore, people are much attached to the branded products, as majority of the people purchase the branded products with the belief that brands show their status and life style in the society. And also because they believe that they are purchasing quality when purchasing branded product. As duration of stay creates impact of brand on consumer behaviour, so verification of brand image, brand loyalty and personality should be considered as the significant factors in this regard. It can also be said that there is need to improve the product of a particular brand so that the impact of brand on consumer behaviour is more effective in comparison to the existing scenario. The study also reflects that the product features are very essential for consumers. Advertising plays a very important role in achieving growth for any product or brand. The right media for advertising products and services should be chosen to gain customer attention.
Panasonic Case Study (Graphics Not Included) Panasonic operates under the umbrella of the Matsushita Electric Industrial Co.