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Assignment 1: Discussion—Supply Chain
Understanding supply chain and how the consumer can play a critical role in the supply chain is an important part of developing and implementing a strategy. In this assignment you will explore the concept of the supply chain in business and the role of the customer in the supply chain.
There are many products and services today where the target customer is part of the supply chain. Wikipedia, Mary Kay Cosmetics, and Craig’s List are just a few examples.
Using the module readings, University online library resources, and the Internet, respond to the following:
- Give an example of a product or service where the target customer is part of the supply chain.
- Describe the types of innovations or improvements that have come from involving the target customer in the supply chain.
- Describe the types of information technology mechanisms that have been used to involve the customer in the supply chain.
Write your initial response in approximately 400 words. Apply APA standards to citation of sources.
By Sunday, May 27, 2013
, post your response to the appropriate
Discussion Area
.
Assignment 2: LASA 1—Preliminary Strategic Audit
The end result of this course is developing a strategic audit. In this module you will outline and draft a preliminary framework for your final product. This provides the student with the opportunity to get feedback before a final submission.
In Module 1
, you reviewed the instructions for the capstone strategic audit assignment and grading rubric due in
Module 7
. By now you have completed the following steps:
- Identified the organization for your report
- Interviewed key mid-level and senior level managers
- Created a market position analysis
- Conducted an external environmental scan in preparation of your final report and presentation
In this assignment, you will generate a preliminary strategy audit in preparation for your final course project.
Directions:
- In preparation for your course project, prepare the preliminary strategy audit using the tools and framework you have focused on so far including:
- Identify the most important (5–7) strategic issues facing the organization or business unit.
Analysis of the company value proposition, market position, and competitive advantageExternal environmental scan/five forces analysis
- You may modify the strategic issues in your final report based on the additional analysis you will conduct in the next two modules as well as the feedback you receive on this paper from your instructor.Keep in mind it is important to look at the strategic issue(s) from more than just one perspective in the business unit or company—speak to or research the issue from more than one angle to offer a 360° approach that doesn’t cause more problems/issues.Strategic issues arise from a mismatch between internal capabilities and external trends such that important opportunities are not being pursued or significant external threats are not being addressed under the current strategy.
- Include a preliminary set of recommended tactics for improving your company’s strategic alignment and operating performance.
- You may modify these recommendations in your final report based on the additional analysis you will conduct in the next two modules as well as the feedback you receive on this paper from your instructor.Keep in mind that recommendations can include but are not limited to tactics in marketing, branding, alliances, mergers/acquisitions, integration, product development, diversification or divestiture, and globalization. If you recommend your company to go global, you must include a supply chain analysis and an analysis of your firm’s global capabilities.
- Write your report as though you are a consultant to your company and are addressing the executive officers of this company.
- Make sure your writing is clear, concise, and in an organized manner; demonstrates ethical scholarship in accurate representation and attribution of sources; and displays accurate spelling, grammar, and punctuation.
Write an 8 pages report as though you are a consultant to your company and are addressing the executive officers of this company in Word format.
Use the following format:
- Cover page
- Executive Summary / Abstract
- Table of Contents
- Introduction to Company (each subsection should be an assessment)
- External Environmental Scan/Five Forces Analysis
- Strategic Issues
- Summary / Key Findings and Recommendations
Value propositionMarket positionCompetitive advantage
Current environmentAssessment of external factors applying five forces
Label each issue and provide a header and the reason for why it is an issue
Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2 .
By Thursday, May, 2013
, deliver your assignment to the
M4: Assignment 2 Drop box
.
This assignment will be graded using a rubric review the rubric to understand the expectations. (Rubric is attached), check Attachments
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Module 4 Overview |
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This module is designed to help you understand the consumer perspective in driving business results including the concept of creating a “raving fan” (Blanchard & Bowles, 1993). The importance of understanding the marketplace and consumer satisfaction is critical as an underlying theme in strategy development and execution. Key concepts in this Module · Customer Value Chain—The premise is that delivering a mix of services and products to the customer will create different economic factors. By doing so, each business manages its own value chain. · Customer Intimacy—The premise focuses on the relationship that is built between the vendor or supplier and the customer. Through marketing and acceptance, the supplier becomes increasingly aligned with what the customer wants and needs, thus becoming a part of the customer’s circle and creating an intimate-like relationship. · Customer-Driven Innovation—This strategy invites the customer into the process of product and service development by being an active contributor to the innovation process as opposed to being a passive customer. This is related to the perspective of taking a look from the outside versus believing it all has to come from within the organization. More often than not, your organization is not the only one in the marketplace offering a specific service or product. Therefore, understanding what creates and keeps a satisfied customer is essential. It should be built into the strategy process and not an afterthought. Too many organizations tend to make it secondary. Blanchard, K., & Bowles, S. (19 Retaining Customers Ken Blanchard and Sheldon Bowles said it best in Raving Fans: “If you really want to ‘own’ a customer, if you want a booming business, you have to go beyond satisfied customers and create Raving Fans.” The raving fan approach in tandem with Porter’s Five Forces can help business managers and leaders develop an effective approach. This element reminds us that you can get business and that is no inexpensive endeavor. However, keeping business and growing it is just as important. In fact, new customer acquisition is often more costly than keeping and growing a current customer. 93). Raving fans. New York, NY: William Morrow and Company. Course Project Task: Preliminary Strategic Audit You will also submit your preliminary strategic audit as part of LASA 1 by the end of this module. Those with significant business experience understand the value of this assignment—that it is an important process related to business review and assessment and potential strategic realignment. For those with less experience, one way to approach this aspect of the course and the development of this project is to equate it to building a house. The land is always graded and essential plumbing and other internal organs that come from the outside to support the house have to be in place prior to laying the foundation and framing the house. The reason builders build in phases is exactly why successful businesses: (1) create a vision, (2) develop strategies around their vision, (3) plan for implementation or execution, and (4) assess. This methodical sequencing prevents problems. Review your preliminary strategic audit and make sure you have covered all the required elements for this phase of the project. You could also use a checklist, and possibly have someone review and ask them to question what you have presented or developed thus far. |
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Module 1 Readings and Assignments Complete the following readings early in the module: · Read the online lectures for Module 1 · From the Argosy University online library resources, read: Required Readings · Becher, J. D. (2005). Operational alignment: Bridging the gap between strategy and execution.Business Performance Management Magazine, 3(1), 11. (ProQuest Document ID: 218383095) · Bingham, C., Eisenhardt, K., & Furr, N. (2011). Which strategy when? MIT Sloan Management Review, 53(1), 71–77. (ProQuest Document ID: 896571132) · Efendioglu, A., & Karabulut, A. (2010). Impact of strategic planning on financial performance of companies in Turkey. International Journal of Business and Management, 5(4), 3–12. (ProQuest Document ID: 821297217) · Peterson, B., Cox, R., Udell, C., & Easton, T. (2011). Agile execution: Driving strategic results in a changing aftermarket. Retrieved from · Porter, M. (1996). What is strategy? Harvard Business Review 74(6). 61–78. Retrieved from Recommended Readings · Baines, T., Lightfoot, H., Benedettini, O., Whitney, D., & Kay, J. (2010). The adoption of servitization strategies by UK-based manufacturers. Proceedings of the Institution of Mechanical Engineers, 224(B5), 815–829. (ProQuest Document ID: 366296610) · Collins, J. (2009). From organizational challenges to real results: Getting beyond strategic planning. In Quality Digest Magazine. Retrieved from Assignment Summary: Module 1 Due Date Assignment 1: Opening Discussion—Introduction to Classmates and This Course Monday, May 6, 2013 Assignment 2: Discussion—Crafting a Strategy to fit the Business Tuesday, May 7, 2013 Assignment 3: Discussion—Better Ways to Get to Market: Formulating a Strategy that Works Thursday, May 9, 2013
Module 2 Readings and Assignments Complete the following readings early in the module: · Read the online lectures for Module 2 · From the Argosy University online library resources, read: · Bingham, C., Eisenhardt, K., & Furr, N. (2011). Which strategy when? MIT Sloan Management Review, 53(1), 71–77. (ProQuest Document ID: 896571132) · Lahovnik, M. (2011). Corporate strategies in the post-transition economy: The case of Slovenian companies. Journal of Applied Business Research, 27(1), 61–68. (ProQuest Document ID: 849563355) · Ting, C. (2010). Corporate competitive strategies in a transitional manufacturing industry: An empirical study. Management Decision, 48(6), 976–995. doi: 10.1108/00251741011053497 (ProQuest Document ID: 578010952) · Voola, R., & O’Cass, A. (2010). Implementing competitive strategies: The role of responsive and proactive market orientations. European Journal of Marketing, 44(1/2), 245–266. doi: 10.1108/03090561011008691 (ProQuest Document ID: 237032252) Recommended Readings · Cadwallader, S., Jarvis, C., Bitner, M., & Ostrom, A. L. (2010). Frontline employee motivation to participate in service innovation implementation. Journal of the Academy of Marketing Science, 38(2), 219–239. doi: 10.1007/s11747-009-0151-3. (ProQuest Document ID: 224871344) · Kim, E., Nam, D., & Stimpert, J. L. (2004). The applicability of Porter’s generic strategies in the digital age: Assumptions, conjectures, and suggestions. Journal of Management, 30(5), 569–589. doi: 10.1016/j.jm.2003.12.001. (ProQuest Document ID: 197137381) · Roberts, C., & Alpert, F. (2010). Total customer engagement: Designing and aligning key strategic elements to achieve growth. The Journal of Product and Brand Management, 19(3), 198–209. doi: 10.1108/10610421011046175 (ProQuest Document ID: 367186811) Assignment Summary: Module 2 Due Date Assignment 1: Discussion—Application of Generic Strategies and Models Tuesday, May 14, 2013 Assignment 2: Market Position Analysis Sunday, May 19, 2013
Module 3 Readings and Assignments Complete the following readings early in the module: · Read the online lectures for Module 3 · From the Argosy University online library resources, read: · Efendioglu, A., & Karabulut, A. (2010). Impact of strategic planning on financial performance of companies in Turkey. International Journal of Business and Management, 5(4), 3–12. (ProQuest Document ID: 821297217) · Heiba, F. (2011). Future global marketing negotiations: A strategic scenario. International Journal of Business and Social Science, 2(4). (ProQuest Document ID: 904523887) · Porter, M. (1996). What is strategy? Harvard Business Review 74(6), 61–78. Retrieved fromhttp://libproxy.edmc.edu/login?url=http://search.ebscohost.com/login.aspx? · Deeter-Schmelz, D. R., Ramsey, R. P., & Gassenheimer, J. B. (2011). Bleu Ribbon Chocolates: How can small businesses adapt to a changing environment? Marketing Education Review, 21(2), 177–182. doi: 10.2753/MER1052-8008210207 (EBSCO AN: 63968062) Recommended Readings · Deverell, E., & Olsson, E. (2010). Organizational culture effects on strategy and adaptability in crisis management. Risk Management, 12(2), 116–134. doi: 10.1057/rm.2009.18 (ProQuest Document ID: 232626553) · Jüttner, U., Martin, C., & Godsell, J. (2010). A strategic framework for integrating marketing and supply chain strategies. International Journal of Logistics Management, 21(1), 104–126. doi: 10.1108/09574091011042205 (ProQuest Document ID: 367098166) · Peterson, M., Gröne, F., Kammer, K., & Kirscheneder, J. (2010). Multi-channel customer management: Delighting consumers, driving efficiency. Journal of Direct, Data and Digital Marketing Practice, 12(1), 10–15. doi: 10.1057/dddmp.2010.16. (ProQuest Document ID: 740324599) · Raja, I. S., & Raja, M. S. (2010). Managing technological innovation: China’s strategy and challenges. Journal of Technology Management in China, 5(3), 213–226. doi: 10.1108/17468771011086238 (ProQuest Document ID:757059093) · Tomomi, T. (2010). Environmental management strategy for small and medium-sized enterprises: Why do SMBs practice environmental management? Asian Business & Management, 9(2), 265–280. doi: 10.1057/abm.2010.6 (ProQuest Document ID: 325344030) Assignment Summary: Module 3 Due Date Assignment 1: Discussion—Factors and Trends that Influence Strategy Development Tuesday, May 21, 2013 Assignment 2: External Environmental Scan Sunday, May 26, 2013
Module 4 Readings and Assignments Complete the following readings early in the module: · Read the online lectures for Module 4 · From the University online library resources, read: Required Readings · Mascarenhas, O. A., Kesavan, R., & Bernacchi, M. (2004). Customer value-chain involvement for co-creating customer delight. The Journal of Consumer Marketing, 21(7), 486–496. (ProQuest Document ID: 220125989) · Osarenkhoe, A. (2008). What characterises the culture of a market-oriented organisation applying a customer-intimacy philosophy? Journal of Database Marketing & Customer Strategy Management, 15(3), 169–190. (ProQuest Document ID: 233312287) · Porter, M. (1996). What is strategy? Harvard Business Review 74(6), 61–78. Retrieved from Recommended Readings · Kahn, S. R. (2010). Capitalism at the crossroads: Next generation business strategies for a post-crisis world. Choice, 48(4), 738. (ProQuest Document ID: 818556268) · Shore, H. (2008, March). Are you creating raving fans? Biznik. Retrieved from |
LASA 1—Preliminary Strategic Audit
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Unsatisfactory 70 – 77% (C- to C) |
Emerging 78 – 82% (C+ to B-) |
Proficient 83 – 89% (B to B+) |
Exemplary 90 – 100 % (A- to A) |
Score To calculate score: (% / 100) x max pts. e.g. (80% / 100) x 12 = 9.6 |
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Value Proposition, Market Position, Competitive Advantage: Assess the organization’s value proposition, market position, and competitive advantage (Course Objective [CO 2, 5]) |
Assessment of organization’s value proposition, market position, and competitive advantage is inaccurate or severely underdeveloped or incomplete. Scholarly research is sparse or inappropriate. |
Assessment of the organization’s value proposition, market position, and competitive advantage is accurate but underdeveloped or vague. Scholarly research is present, but how it supports ideas is unclear. |
Assessment of the organization’s value proposition, market position, and competitive advantage is accurate, grounded in reason, and uses examples and scholarly research to support ideas. |
Assessment of the organization’s value proposition, market position, and competitive advantage is accurate, perceptive, grounded in reason, and uses a variety of scholarly research to support ideas. |
32 points |
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External Environmental Scan/Five Forces Analysis: Assess the external the external factors that impact the organization using Five Forces Analysis. CO 2, 5 |
Assessment of the external factors that impact the organization using Five Forces analysis is inaccurate, or severely underdeveloped or incomplete. Scholarly research is sparse or inappropriate. |
Assessment of the external factors that impact the organization using Five Forces analysis is accurate, but under developed or vague. Scholarly research is present, but how it supports ideas is unclear. |
Assessment of the external factors that impact the organization using Five Forces analysis is accurate, grounded in reason, and uses examples and scholarly research to support ideas. |
Assessment of the external factors that impact the organization using Five Forces analysis is accurate, perceptive, grounded in reason, and uses a variety of scholarly research to support ideas. |
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Strategic Issues: Identify the most important (5-7) strategic issues facing the organization or business unit. CO 2, 5 |
The strategic issues identified are common in the field, but not specifically tied to the organization. They represent low-priority issues that threaten the organization in some way. |
The strategic issues identified are ones facing the organization or business unit but are not significantly important to the organization. They represent only a few issues that threaten the organization in some way. |
The most important strategic issues facing the organization or business unit are reasonably significant issues and are clearly and completely discussed. They represent the main issues that threaten the organization in some way. |
The most important strategic issues facing the organization or business unit are clearly significant issues, and they are perceptively and completely discussed. They represent a variety of issues that threaten the organization in some way. |
32 pts |
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Preliminary Recommendations: Include a preliminary set of recommended tactics for improving your company’s strategic alignment and operating performance. CO 1 |
Preliminary set of recommended tactics for improving your company are inappropriate. How these tactics directly improve strategic alignment and operating performance is severely underdeveloped. Tactics likely will not reach those goals. |
Preliminary set of recommended tactics for improving your company are appropriate, but they do not specifically address company’s resources, market, or goals. How these tactics directly improve strategic alignment and operating performance is broadly discussed but needs more specificity. Tactics might reach those goals. |
Preliminary set of recommended tactics for improving your company are appropriate for the company’s resources, market, and goals. How these tactics directly improve strategic alignment and operating performance is discussed, and these tactics will reasonability reach those goals. |
Preliminary set of recommended tactics for improving your company are insightful, specific, and appropriate for the company’s resources, market, and goals. How these tactics directly improve strategic alignment and operating performance is thoroughly discussed and supported by research. These tactics will clearly reach those goals. |
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Academic Writing Write using ethical scholarship and proper grammar and mechanics. |
Writing is unclear and disorganized and rereading to solidify understanding is frequently necessary. Although an attempt at ethical scholarship is attempted, it is sloppy or incomplete throughout. Spelling, grammar, or punctuation errors severely interfere with readers’ comprehension. |
Writing is somewhat clear and is somewhat organized, although rereading to solidify understanding is occasionally necessary. It demonstrates an attempt at ethical scholarship in accurate representation and attribution of sources, but errors are occasional or minor. Writing has good spelling, grammar, and punctuation, but errors somewhat interfere with readers’ comprehension. |
Writing is clear, concise, and in an organized manner; demonstrates ethical scholarship in accurate representation and attribution of sources; and displays accurate spelling, grammar, and punctuation. |
Writing is clear, concise, and in an organized manner; demonstrates ethical scholarship in accurate representation and attribution of sources; and displays accurate spelling, grammar, and punctuation. |
12 points |
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Total |
/ 140 pts |
Page 1 of 3
Solutions to Organizational Challenges: A Capstone Experience in Integration and Strategy
©2012 Argosy University Online Programs
Page 2 of 3
Solutions to Organizational Challenges: A Capstone Experience in Integration and Strategy
©2012 Argosy University Online Programs
Running Head: EXTERNAL ENVIRONMENT SCAN 1
EXTERNAL ENVIRONMENT SCAN 7
External Environment Scan
External Environment Scan
The strategic management process of an organization initiates with the external and internal environment scan of the company. Scanning the external environment of the organization provides the necessary information on the industry trends and forecasts that would be affecting the business in short or long-term. External environment of an organization comprises of the political, economic, social, legal, technological and regulatory forces also known as PESTL analysis (Armstrong et al., 2009). Porter’s five forces analysis is also an effective tool for comprehending the external factors that impacts the business of an organization. This paper scans the external environment for Sony electronics and also elaborates on the key factors and trends that impact the electronics industry. Also, a preliminary classification of the factors and trends that are external to organization as threats or opportunity for the organization is included in this paper.
PESTL Analysis
The PESTL analysis of the Sony electronics involves the analysis of political, economic, social, technological and legal forces that constitute the macro environment of the industry.
Political – Sony is a multinational organization and its business could possibly be impacted by the governments of several countries. Because of globalization, the bilateral and multilateral trade agreements have been pivotal in the growth of electronics industry and in the event of military and political instability in world region or natural disasters, the industry could suffer major losses (Sony Form 20-F, 2010).
Economic – The global economy impacts the electronics industry and with the U.S. still recovering from economic recession, the electronics industry is subject to minimized sales. Sony in particular derives approximately 78% of its operating revenue from U.S., Japan and Europe and is therefore, vulnerable to the economic downturn (Sony Form 20-F, 2010).
Social – Electronics industry is influenced by the social factors such as changing lifestyle of the people and decision-makers in the family. The changing preferences of the customers present both, a risk and an opportunity to the various players in the industry depending on their ability to innovate and meet customers’ needs. Sony has been a leader in innovation and therefore, is expected to be benefitted by the change in customer preferences.
Technological – Advanced technologies dominate the electronics industry and are one of the determining factors that differentiate between the market leaders and average organizations in the industry. Technological innovations are well-adopted by Sony, leading to the strong presence and demand of Sony electronics in several geographical locations.
Legal & Regulatory – Intellectual property rights and patents are crucial in the electronics industry as evident in the case of Samsung and Apple lawsuit (Apple-Samsung Lawsuit: Apple Targets 4 Additional Products , 2012). Moreover, the multinational electronics organizations have to be cautious of the regulatory framework of the various countries they operate in.
Along with the PESTL analysis, Porter’s five forces analysis is required to assess the external environment of Sony electronics. Porter’s five forces analysis comprises of threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products and rivalry among existing firms.
Porter’s Five Forces Analysis
Threat of New Entrants – The barriers of entry for any new entrant is high in electronics industry because of the economies of scale enjoyed by existing players including Sony, differentiated products offered by the companies and huge capital requirements to sustain continuous innovation and research & development. Therefore, the threat of new entrants in electronics industry is low.
Bargaining Power of Suppliers – The electronics industry has suppliers scattered all across the world and their suppliers aren’t a part of specific conglomeration. This provides the opportunity to companies in electronics industry to better negotiate the quality and prices with suppliers. Because of elaborated supply chain, the bargaining power of suppliers is low for electronics industry.
Bargaining Power of Buyers – In the age of internet, the customers are well-aware of the range of electronic products available in market and the companies in electronics industry are price competitive. The customers are price-sensitive to a large extent as the electronics are luxury goods. Moreover, switching cost to other company is low and basic features of all the products in similar category are same. Therefore, the bargaining power of buyers is high.
Threat of Substitute Products – Electronics industries, though attempts to differentiate products on the basis of secondary features such as design or color, their primary features and functions remain same. The products in a category such as plasma screens are easily substitutable and therefore, the threat of substitute products is high in the industry.
Rivalry Among Existing Firms – Electronics industry is concentrated with few industry leaders such as Sony, Apple, Samsung, Dell etc. and these companies have to compete on quality and prices to ensure customer loyalty. The competitors in the industry also focus on continuous innovation and market research that leads to intense competition in the industry. Therefore, the rivalry among existing firms is high.
Other than the factors covered in the PESTL and Porter’s five forces analysis, there are some key factors and trends that impact the electronics industry. These key emerging trends in the electronics industry are; enhanced interaction with customers, providing holistic experience to customers and providing excellent online shopping experience to customers (Best Global Brands, 2013).
Key Emerging Trends
The key emerging trends in electronics industry are altering the dynamics of the business and for any organization to be successful, it’s essential to adopt them. The social media platforms such as facebook and twitter have opened new avenues for organizations to converse and interact with their customers (Best Global Brands, 2013). Moreover, the conversation is always two-sided on these platforms in contrast to marketing and advertising activities where communication is one-sided; from organization to customers. The companies have to adopt a proactive approach to interact with the customers and listen to their recommendations and complaints. This is an opportunity for Sony because the organization can not only gather significant information on customer expectation but also use these platforms for marketing their new launches and innovations.
Providing holistic experience to customers comprises of hassle-free combination of product and services to customers that enables them to utilize full benefits of the product. This strategy is well-adopted by Apple and Sony should move fast to adopt this trend or this will become a threat for the organization (Best Global Brands, 2013). Another emerging key factor is providing customers with excellent shopping experience online that suits fast lifestyle and changing preferences of the customers. Sony presently lacks in this with no online shop and therefore, this is a threat for the company.
Conclusion
The external environment scanning of electronics industry reveals it to be highly competitive with high bargaining power of customers. The industry is also prone to economic and political disturbances across the globe that makes organizations vulnerable to the economic downturn and political instabilities. Overall, Sony has moderate external business environment based on the threats and opportunities offered by the external environment.
References
Sony Form 20-F. (2010). Retrieved from Securities & Exchange Commision: http://www.sec.gov/Archives/edgar/data/313838/000114554908001104/k01608e20vf.htm
Apple-Samsung Lawsuit: Apple Targets 4 Additional Products . (2012, August 31). Retrieved from : http://www.huffingtonpost.com/2012/08/31/apple-targets-more-samsun_n_1848273.html
(2013). Best Global Brands. Interbrand.
Gary Armstrong, Michael Harker, Philip Kotler & Ross Brennan. (2009). Marketing: An Introduction. Financial Times Prentice Hall.
MARKET POSITION ANALYSIS
MARKET POSITION ANALYSIS
Market Position Analysis
Market Position Analysis
Introduction
Market segments for an organization comprises of potential customers that possess common needs and characteristics that differentiate the target market segment of an organization from other market segments (Armstrong et al., 2009). Identifying and defining these customer segments for individual products of an organization leads to creation of target market segments that enhances the marketing planning comprising of marketing mix, product positioning and segmentation strategies (Voola & O’Cass, 2010). An organization with diversified product portfolio has different target customer segment for each product portfolio. Sony Corporation is an organization that have diversified product portfolio comprising of entertainment, electronics, blu-ray, gaming and cell phones.
Entertainment portfolio of Sony, also known as Sony Pictures possesses motion pictures and television shows rights such as Spiderman and Stuart Little. The electronics portfolio of Sony consists of Vaio laptops, camcorders, mp3 players, cameras and television sets including plasma screens. Sony launched the play station series and home video gaming console. Blu-ray, an innovation from Sony was used to record the television shows digitally (Ovitez, 2010). The cell phones portfolio is another competing segment that comprises of mobile phones and tablets from the organization. The customer target segments for all the product portfolios differ and this paper discusses the target market segment characteristics, competitive position and marketing mix of Sony electronics.
Target Customer Segment
In the electronic market, Sony is one of the industry leaders comprising of whole array of products ranging from plasma screens to laptops. The products of Sony epitomize class for its consumers and the innovative products of the company are easily recognizable through their product names such as Bravia and Vaio (Elkin, 2012). The company has identified seven target customer segments for its electronics divisions that have specific and differentiated needs and wants. These customer segments along with specified needs and wants and the company’s ability to meet them are;
Affluent – This segment includes the customers with the annual income of $100,000 and above. These customers prefer classier products that could reflect their wealth (Elkin, 2012). The products for such customers are plasma screens, vaio laptops, handy cams and cameras that are popular as premium products.
CE Alphas – This segment comprises of customers that are early adopters and are willing to try new products. These customers prefer innovative products with new features and company meet their needs through incorporating new features in its product lines. Sony, to some extent is unable to satisfy this segment because the features in the electronics products lack innovation at large.
SoHo – This segment comprises of customers that are small business owners such as photography professionals. These customers require reliable and quality products of premium brand and Sony meets their expectations through its excellent quality products with extended warranty and after-sale service (Elkin, 2012).
Young Professionals – These are high income customers that have double income and no kids. These customers opt for trendy products that would elevate their living standard and prefer stylish and premium quality products. Sony captures this customer segment through its premium products that speaks style and trend.
Gen Y – These customers are young and under the age of 25, with the preference for brands at affordable range. Sony launches the affordable products in its premium range to capture these customers. However, the company significantly lacks in attracting this segment because of lack of range of products in price-effective range.
Competitive Positioning
The three major competitors of Sony electronics are Apple, Samsung and Dell. Apple competes with Sony electronics on laptops and mp3 players specifically. The quality of Apple products is comparable to Sony whereas Samsung and Dell are comparatively lower in terms of product quality. Sony differentiates its products from other three competitors on the basis of product features and functionality along with maintaining the premium price range (Elkin, 2012). Also, Sony is market leader for cameras and camcorders because of its fine lens resolutions. The image of Sony is also of premium products that are only next to Apple. Brand-conscious customers prefer Sony because of the brand name representing quality and expensive products.
The competitive advantage of Sony electronics is driven by its innovative features, premium quality and affordable prices for upper-middle income group. Sony electronics offers convenience and availability to its customers with an excellent after-sales service. This competitive advantage is sustainable in long-term as well because company continuously innovate its products to retain its leadership position in market and is also retaining customers through excellent customer service.
5 P’s of Marketing Mix
The 5 P’s of marketing mix for Sony electronics are;
Product – The product range of Sony in its electronics portfolio is extensive and has innovative features. The products such as Vaio laptops have unique features such as color range, face detection and hardware that provide the users with increased satisfaction. The products have stylish accessories that complement the products.
Price – Sony electronics has prices that are affordable for upper middle income group and high income group. Customers at lower middle and middle income group are not able to afford the products of Sony electronics. The company targets the customers with high or upper middle income group based on its product positioning strategy.
Position – The Company positions its products in market as premium with excellent quality and innovative features. The market positioning of the company is to maintain its brand status and to attract the brand-conscious customers that are willing to pay a higher price for premium products.
Place – Sony electronics has a wide network of manufacturers, wholesalers and distributers. The company also has direct selling stores, Sony World where all the products of Sony are available. The companies attempt to reduce the distribution costs by adopting an efficient supply chain.
People – Sony electronics across its stores creates an excellent selling experience for its customers. The after sales customer service is also excellent that justifies the premium brand status of the company.
Conclusion
With the changing dynamics of business and companies competing at aggressive rate, it’s essential to ensure that the customers are the focus of an organization while designing, promoting and selling the product. Sony is able to maintain its leadership position in consumer electronics market because it segments its customers based on their needs and wants and satisfies them.
References
Elkin, T. (2012, march 18). New Approach: Sony marketing aims at lifestyle segments. Retrieved from Advertising Age: http://adage.com/article/news/approach-sony-marketing-aims-lifestyle-segments/52579/
Gary Armstrong, Michael Harker, Philip Kotler & Ross Brennan. (2009). Marketing: An Introduction. Financial Times Prentice Hall.
Ovitez, L. (2010, March 10). Sony Corporation of America Product Markets. Retrieved from InfoBarrel: http://www.infobarrel.com/Sony_Corporation_of_America_Product_Markets
Voola, R., & O’Cass, A. (2010). Implementing competitive strategies: The role of responsive and proactive market orientations. European Journal of Marketing, 44(1/2), 245-266.
Appendix A
Annotated Summaries of Interviews
Interview with James McCenna, Store Manager at Sony World
James McCenna specifies that the walk-in customers in the Sony World are aware about the whole range of the Sony electronics and have done prior research using internet. Usually, the customers have made their decision regarding the product they want to buy and want to see the product physically before buying it. McCenna also states that the customers are willing to spend more money if they are told about new features in the product. Most of the customers are brand loyal and prefer Sony over other brands because of its durability and stylish designs.
Interview with Ronald Anderson, Product In-charge for Vaio Series
Ronald Anderson states that Vaio series of Sony laptops offers premium laptops that are preferred by customers for not only its unique features but also for the brand image. Vaio is comparable to Mac and offers an enhanced user experience to customers. He specifies that the customers want to buy Vaio because they know that they would receive excellent after sales service. However, 99 percent of the customers never return to the showroom because of any defects or complaints on the laptop. The laptops are known to be of high quality and require minimal maintenance. The USP of the Vaio laptops are their excellent features, low maintenance and good quality.
Interview with Anna Cleveland, Associate Manager at Sony Electronics
Anna Cleveland specifies that the Sony products are rightly placed in the market to face the competition. The company adopts proactive approach to ascertain the changing needs of the customers with the changes in their demographics such as age, income and lifestyle. The company conducts customer surveys and marketing research to identify the gaps in customer needs and product offerings and continuously work on the identified changes to create better products. The company has launched series of products such as handy cams and plasma screens to meet the extended needs of young professionals. The higher prices of the products are based on the product positioning and the company wants to retain its premium status in the market.
Appendix B
Market Position Analysis: Product Position versus Competitor Product Position
Needs of the Consumer
Rating of Sony Electronics
(Use a scale of 0–2*)
Rating of Apple Mac
(Use a scale of 0–2*)
Rating of Samsung Electronics
(Use a scale of 0–2*)
Rating of Dell Electronics
(Use a scale of 0–2*)
Quality
2
2
1
2
Price
1
2
2
1
Availability
2
2
1
2
Features
2
2
2
1
Functions
2
2
1
2
Brand Image
2
2
2
1
Total Score
11
12
9
9
Narrative/Comments
Some products of the Sony are not in affordable range as required by its Gen Y customer segment
Apple is a premium brand, focusing on customers who can purchase expensive products and is market leader
Though the features are competitive, their functioning is not comparable to premium brands
Easily affordable and good in quality, not in premium products range
* On the scale of 0–2: 0 indicates “need not met,” 1 “indicates need partially met”, and 2 indicates “need fully met.”
Running head: ASSIGNMENT TWO 1
SUPPLY CHAIN 9
Assignment two
Executive Summary / Abstract
The performance of a company in both national and international market is dependent on various factors. These factors are both internal and external. To further analyze the factors that affect the performance of a company in the market, we interrogate the performance of Sony Corporation a Japanese Multi National Company which majors in the production of electronic equipment. The analysis is based on the competitiveness of Sony and its performance against that of its competitors. The ability of the management at Sony to comply with both the national and the international regulations is also analyzed. Key to the viability of the strategies that are applied by a company in its marketing is the competitive advantage that is held by the company. For this reason, the competitive advantage that Sony holds forms the basis of analysis of the paper. The market of products that are produced by Sony can be classified into different categories (Michael, & Mark, 2013). Each of these categories is analyzed to gauge the performance of each of the market segments and even answer the popular question; could the management have done better to improve its markets. This is done so as to value the optimization of the ready market. The paper adopts the LASA analysis model to come to its conclusion and recommendations.
Introduction to Company
Sony Corporation is a multinational Company that is based in Tokyo Japan. As noted earlier in this paper, the Company which is owed fully by Sony Group operates in Electronic products. The Company also operates in entertainment products as well as financial services. By the fall of 2012, Sony Corporation was ranked 87th among the 500 Fortune Global. The company has grown from the eight employees and its initial worth of $530 since its incorporation in 1946. The word Sony is an acronym for sound in the Japanese language. The entrepreneurs who came up with Sony needed to be sound in their investment and were ready to take the market head on. To start with, they took advantage of the wreckage that was left after the war and came up with a refurbished store house (University of Portsmouth, 2013). After its first product Type-G which was a tape recorder, the proprietors were convinced on the future of their business (Michael, & Mark, 2013). Acquisition of the license of Bell Lab’s transistor gave them a boom in the radio market in America and from there the success story never stopped a bit. The acquisition of the license was also a step that helped the management of Sony to believe in the new technologies. The company has thus been in the frontline both in the research on new technology and in the usage of the technology. As note earlier most of its products are information based.
Value proposition
The value of Sony speaks a lot of the fortunes of the company. At the end of 2012, Forbes an international company that is recognized for near accurate valuing of companies rated Sony at $83 billion. This was relatively far higher than Forbes rating of Nintendo at just below $19 Billion. The value of a company is attained from the total shares that the company is floating at the market multiplied by the fair market value of its shares at that time. This means that if all shareholders are willing to sell their shares, a single seller could buy it at that amount.
The value proposition is important factor in the market. It shows how liquid the company is and is indeed a factor of consideration for the financiers of the company. The ability to maintain high share value is also a relative advantage to the company as the customers as well as the investors are lured into trusting the company all the more. According to the published financial report of the company, Sony Corporation had total assets of over 161 billion by the end of 2012. 75% of the total assets were fixed assets. This just showed that the company was firm on its investment tradition. The only worry is the low proportion of the owners’ equity in the financing of the assets which fall below the fifteen percent mark. However, the trust of the company by the financiers makes the assets of the company safe though they are collateral for the financing.
Market position
The production of smart phones has been the hot cake in the market in the 2012 2013 financial period. After the closure of the deal with Ericson for a joint venture, Sony has been planning on ways to regain its trust on the customers who were dissatisfied from the deal. However, the company has been able to deal with that efficiently currently being rated third in the sale of smart phones worldwide. On the other hand, the company has been able to beat its main competitor in entertainment Nintendo by clinching the first position in play stations and online games (Sony Group, 2012).
The demand for other electronic gadgets is however low. While Sony does not major with the production of computers, it loses out to the market that is dominated by Compaq and Dell. The electronics market is however a favorite for Sony Corporation which is rated fourth in electronics sales.
Competitive advantage
Competitive advantage refers to the advantage that a company holds that other companies do not have. It is a quality that puts the company on the winning end should all the factors that determine the market be kept constant. Sony has a variety of competitive advantages as analyzed below.
1. The closeness with the people. As noted above, Sony stared when Japan was restructuring itself from the effects of war. This placed Sony at a strategic position in the History of both Japan and the whole of Asia (Michael, & Mark, 2013). The people can be able to relate to it as part of country position. This gave Sony a good relationship with the Home government and thus an advantage over its competitors (Satya, 2009).
2. Involvement in financial products. Most of the information based companies only offer products that are related to their trade. However, the acquisition of a life insurance Charter has been an advantage for the company. The customers can be able to relate with the company beyond the office orientation of the information based services. In fact, the life insurance trade has seen the company gain more trust among its customers than before it started offering the product (University of Portsmouth, 2013).
External Environmental Scan/Five Forces Analysis Current environment
Threat of new entrants
Currently, the financial position and the market position of Sony as previously discussed in this paper make the company not wary of the new entrant in the market. The cost structure of information based product in most cases favor the large scale producers. Indeed, research has shown that information based products market is mainly dominated by few but large companies. Thus, for a company to enter into the market and get a share of the market it needs to invest a lot and have massive advertisement. For this to be attained the company would have already exposed itself for the companies in the market to have any market lost (Michael, & Mark, 2013).
Threat of substitute products or services
The substitute products that are offered by the other companies are indeed a worry for the management at Sony. The fact that the deal with Ericson did not materialize as expected is an enough proof of the damage that is already caused by the joint merger. Both of the companies are thus in a restructuring moment and there is vulnerability of being caught unawares by other competing companies (University of Portsmouth, 2013). The market leaders Nokia and Samsung have been producing products that have been performing better than Sony products. On the other hand, Sony is yet to be beaten in the production of play stations and online games. While the latter market is flooded by many producers, the ability to maintain the market is dependent on the creativity of the Sony team which has already proved competent in that field (Shin, 2003).
Bargaining power of customers (buyers)
Perhaps the most worrying factor in the external factors that determine the competitiveness of the company is the bargaining power of the customers. The influx of information products in both the developed countries and the developing countries has pushed the prices of the products to extreme low. Worldwide, there are yet to be laws to govern the pricing of the information products. This has been to the advantage of the customers and to the displeasure of the suppliers. The ability to sustain the profit maximization goals is thus dependent on the mass production which helps the company to cut costs through economies of scale and mass sales. Apart from the low prices, there have been many companies that have been allowing free download of the online games to the consumers. While the quality of the products that are given by these producers may be wanting, the market that is potentially lost is not negligible (University of Portsmouth, 2013). The free online games give the customer of such products to have an upper hand in bargain table.
Bargaining power of suppliers
The tradition that is adopted by Sony is to buy from the best offer. The same tradition has been adapted by most of the players in the electronic market. This reduces the bargaining power of the supplier as the power of competition among the suppliers overpowers the will to bargain. On the other hand, Sony has been able to cut deals with some of the suppliers by helping them to solve conflict battles. Most of the raw material that is used by some is extracted minerals. The company has been involved in settling mineral disputes (case in DR Congo) giving Sony an edge in the pricing of the products (Michael, & Mark, 2013).
Intensity of competitive rivalry
Due to the participation of Sony in wide range of product, the company has its rivalry been tackled differently. The products that are offered by each category of rivals define the competitive strategy that Sony takes. For example, Sony has noted that the movie industry is mainly driven by quantity ands has thus come up with a variety of series movies which makes the consumer acquainted to their products and this has really given Disney World and other competitors a run for their money (Sony Group, 2012). On the other hand, the content and individualization of the smart phones wins the consumer more, with this Sony has been focusing on smart phones that have more features and are less complex. While this has been moving the product turnover very high, the strategy has been helping in maintaining the customers (University of Portsmouth, 2013).
Assessment of external factors applying five forces
While the above analysis of the external factors is true, it is good to note that they are not aggregate due to the various markets that the company is involved in. On aggregate, the company performs well when rated amongst its competitors- this analysis has been done earlier in this paper. The fact that the company is still ranked third even after the closure of the joint venture with Ericson and the ability to consolidate both the markets in developed and developing countries gives the company competitive advantage (Michael, & Mark, 2013). The tradition of rising against the storm acquired from its initial stages has indeed helped the company to grow steadily even when there is economic crisis. The position of the company at the market was notable high even in the 2008-2010 international economic recess.
Strategic Issues
The current issues that the company has to look at are as below
a) The issue of mineral conflict is evident mostly in the third world countries where the developed countries are accused of encouraging illegal mining. This is an issue that the manufacturers using these products must be aware of so as to maintain the trust of these governments. While Sony has been involved in these conflict in the past more needs to be done (Sony Group, 2012).
b) The market is in high demand of smart phones. On the other hand there has been a high product turnover for these products. There has to be a research on the viability of any product otherwise the production of smart phones will lead to companies doing business at a loss (University of Portsmouth, 2013).
c) The red tape; one of the issues that is affecting the competitiveness of businesses is the red tape effect- rigidness and complexity in expansions. While expansions cannot be assumed where competitiveness is a factor, the management of Sony has to be aware of the challenges posed by administration during expansion.
d) Dominance of market leaders; as it has been noted earlier in the paper, information products market is favorable to the few large companies. The management should be confronting of the fact that it ranks third in overall business. There is thus a need to remain relevance and competitive as compared to Nokia and Samsung.
e) The lost confidence due to flopped merger with Ericson; in business not everything goes on well. While this is so the customers may not be at a position to understand all the propositions of the deals gone sour. In the case of Ericson, Sony lost some trust among its customers. More needs to be done so that any future business cannot be affected adversely.
f) In the rise of free online games in the market. There is a need to examine the profitability of the product in the future and the ability of the Sony Corporation to face a market that is already flooded with free products. There is thus a need for the management to engage various regulatory bodies so that it is not pushed out of business.
Summary / Key Findings and Recommendations
From the paper it is evident that Sony is still a company to beat in electronics, and information product. While there are challenges that have not been exhaustively dealt with, the company has a going concern which is dependent on the way the management deals with the five factors of external environment. It is recommendable for the management to look at the strategic issues as not above since good research will lead to productive business.
References
Michael, S., & Mark, C., (2013). How Sony strengthened its supply chain and added value. New York: Green Biz
Satya, S., (2009).
Business Policy And Strategic Management
. New York: CengageBrain
Shin, L., (2003).
Business the Sony way
. New York: SAGE
Sony Group, (2012). Environment, Labor, Human Rights and Conflicts in the Procurement of Raw Materials. Tokyo: Author
University of Portsmouth, (2013). Sony Electronics as The Leading Consumer Electronics Company in The World. Portsmouth: Author
