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MARKET POSITION ANALYSIS
Market Position Analysis
Module 2 Assignment 2
Misty Dawn Varco
B6028-P Solutions to Organizational Challenges: A Capstone Experience
Dr. Richard Dool
09/13/2013
Abstract
This paper will talk about its new product Sony Play station, Play station 4, which is a huge relief for the gaming industry. The paper will describe its target market, why customers must purchase Play station 4 over its competitive advantage. It also discusses it marketing mix for Play station 4.
Key Words: Compact Disk, Digital Versatile Disc, Megabyte, Microsoft, Nintendo, People, Place, Price, Product, Promotion, Sony Play station 4, Wii, Xbox.
Introduction:
The selected company to talk about is Sony Corporation, a multinational conglomerated, located in Tokyo, Japan. It is the one of the leading manufacturer of electronics, video communications, video game consoles, and other information technology products for the professional and consumers market
Target Market
The current generation video game consoles are past the average iteration of console generations. Its target is the core gamers’ crowd. These core gamers are the loyal Triple-A title patrons whose lives begin with games and ends with game. This is called the cream crowd for video game industry on which major business of video games industry relies upon. There are casual gamers who are just ready to spend sixty dollars on boxed games on a console and will try to switch to their tablets and mobiles for playing games. This target market has given confidence to Sony to launch Play station 4 which becomes a huge success. It has kept at affordable price with integrated social features and Gaikai’s streaming functionality, secondary chip that makes the background loading faster and also make downloading possible while playing. All these features brought a smile on core gamers’ face.
Reasons to Buy Play Station 4
Play station 4 primarily focuses on power. It has the processor, memory, and graphics specification that makes Play station 4 powerful. It carries all gamers that are compatible with these specifications and are tend to be more realistic, immersive and encompassing. It promises to translate the gaming experience for betterment and also improves all storytelling experiences for gamers. It also carries “Triple A games that provides an experienced of full-fledged, “playable movie” and you get the feeling of playing a game only when you hold the controller in your hand”.
This new console is not compatible with any of the previous three generation of Play station. Even the memory data, controller, and peripherals are not compatible with Play station 4. It’s a completely new version of its own. It has: Play station 4 Eye and Dual chock four. Play station 4 is a technologically advance play station that is free of Digital Versatile Disc (DVDs) and Compact Disk (CDs), or read data from eight megabyte (MB) memory cards. It is just a head of all these and just focuses’ on the next generation. Play station 4 will allow gamers to play used games. In contrast to their no-backwards-compatibility move which was just a minor issue, not even Sony can get away with blocking used games. It requires an always-on internet connection to play. Sony appears to be taking alternative measures to stop piracy, however, with a revealing new patent to an anti-piracy process.
Product Position in Relation to the Competition
Considering all the factors specified above, the Play station 4 is just focusing on the delivery of power and few demanded features to its core gamer crowd that forms its target market. It also encourage the gamers to look forward and promise the next generation gaming industry the new console but not at the cost of outright opposition to such a prevalent trend as playing used games. Play station 4 contains everything we can project for the next generation gamers. Today, the core gamer crowd, despite being loyal to the Triple-A side and their titles, is not providing enough to keep the industry from faltering. Play station 4 is moving towards the reinvigorated industry like a defibrillator shock trying to stop a conclusive flat line.
Its main competitors are Microsoft, Wii, and Nintendo. Microsoft delivers excellent competition that is bringing an exciting rise in the Triple-A video game industry sales. Although it is true that gaming industry has increased by ten times but still core gamers remain few. If the Play station 4 and the next generation Xbox can help casual gamers “graduate” to Triple-A games, then they may slow the inevitable shift. Wii offers and caters a wider range of gamer demographic. The Wii was its radical new idea, and it paid off (Dino, 2013).
Competitive Advantage
There are three advantages of keeping Play station 4 over its competitors and help it to attain competitive edge over its competitors. These three buzzwords are: power, price, and games. This is the most powerful machine at most flexible and cheaper prices as compared to the competitors in the gaming industry. Play station 4 promises to give best gaming experience to its consumers with all its exclusive features. This launch will reinvigorate the industry and is the biggest launch in history. Play station 4 is described as the new machine as the “crowd jewel” of Play station (Blair Inglis, n.d.).
Marketing Mix
Marketing mix is a modern concept of marketing that includes everything that can be sued by marketing for to influence its customer’s perception towards its products, services, and consequently; it helps to achieve organization objectives. The five P’s of marketing are: Product, Price, Place, Promotion, and People.
· Product: Play station 4 is exclusively design to meet the needs of next generation and consumers preferences for games. It is a powerful console that brings a revolution in the industry.
· Price: It alters this segment quickly. Prices are variables like dealer price, retail price, discount price, allowances, and credit terms etc.
· Place: Sony uses Zero-level channel, one level channel, and even two channel for the distribution of its products. It offers the retail stores through which customers can easily get their products.
· Promotions: Sony uses a promotional mix of advertising, personal selling, sales promotion, direct marketing, and publicity. All these elements will help the company to communicate its marketing strategy to its target customers to influence their perception that satisfied both customer and the company (Sheikh, 2008).
· People: Sony will ensure that the workers are honest and helpful to the customers and have a positive attitude and a pleasant appearance.
Conclusion
Sony is moving towards the upgrade console power by moving towards social and streaming facets of gaming. The console shows a lot of potential, hopefully the game developers and publishers are ready to impress and appeal to a greater target market. It is being expected that Play station will bring huge responses in the gaming industry (Dino, 2013).
Interview Analysis
After interviewing three managers on their views concerning Sony’s Play station 4 value propositions, market position, and competitive advantages the following was revealed: Two of the managers agreed that the firm is a market leader especially in the video gaming industry. But the other manager holds an opinion that Microsoft was the market leader. In terms of value proposition, again two of the managers were of holds of an opinion that the firm pleads to most of its clients because of its commitment to providing quality entertainment and its diversification strategy of offering a wide range of products and services. The other manager was of the view that the firm’s value proposition lies only in its strong popular brand name. In terms of the competitive advantage, the three mangers agreed that Sony gets its competitive advantage through its strong brand name which has helped it to make a lot of sales, to attract, retain many customers, and thus staying ahead of its competitors.
Reference:
Blair Inglis. (n.d.). Tretton Discusses PS4’s “Three Key Advantages” In The Next Generation.
Retrieved on September 13, 2013, from
http://www.thesixthaxis.com/2013/09/12/tretton
discusses-ps4s-three-key-advantages-in-the-next-generation/
Dino, G. (2013, February 28). An Analysis of the Sony PS4 and Its Role in the Video Game
Industry. Retrieved on September 13, 2013, from
http://leviathyn.com/games/editorials/2013/02/28/an-analysis-of-the-sony-ps4-and-its
role-in-the-video-game-industry/
Sheikh, M. U. (2008, October 21). Sony. Retrieved on September 13, 2013, from
http://www stoc.com/docs/10545346/Sony-And-Its-4ps-of-Marketing-Mix
Lunny, D. (1994). Checklist for going into business. Toronto: Productive Publications.
Kalb, I. S. (1993). Marketing your legal services. Los Angeles: K&A Press.
EXTERNAL ENVIRONMENT SCAN
External Environmental Scan
Module 3 Assignment 2
Misty Dawn Varco
B6028-P Solutions to Organizational Challenges: A Capstone Experience
Dr. Richard Dool
09/18/2013
Abstract
This paper is on the external environmental analysis of Sony Play station 4, which is powerful and amazing piece of hardware which provides a cutting edge in the gaming entertainment industry. The hard core gamers will be the target customers for Play station 4.
Key Words: Bargaining power of customers (buyers), Bargaining power suppliers, Intensity of competitive / industry rivalry, Pan European Game Information (PEGI), Political Environment Social Technologist and Legal (PESTL), Porter’s five forces tools, Sony Play station 4, Threat of new competition, Threat of substitute products or services, Unterhaltungssoftware Selbstkontrolle (USK).
Introduction:
This external analysis is significant for the console gaming industry and make it highly competitive. External analysis requires two tools, Porters five forces tools and Political, Environment, Social, Technologist, and Legal (PESTL) analysis.
Porter’s Five Forces Analysis
To analyze the competitive forces in the industry environment, Porter developed a framework called as Porter’s Five Focuses Model. This framework contains five forces that, define the competition in the industry. The Five Forces are: Threat of new competition, Threat of substitute products or services, Bargaining power of customers (buyers), Bargaining power suppliers, and Intensity of competitive / industry rivalry.
1. Threat of new competition: It is the risk of entry by potential competitors.
Threats
of new entries are low in the gaming industry because today gaming industry has reached advance levels which are complex for new companies to match. These advancements prohibit new entrants to enter the gaming industry and they are also demonization because of large investment required for research and development. Another reasons for the lower risk is that gaming industry has already reached it saturation level by producing numerous products by already existing companies. In addition, game developers will hesitate to make new games for new players because they are not sure about their products sales (Bohm, 2008).
2. Threat of substitute products or services: Its major substitute of Cloud gaming. There is a huge potential that is not measurable yet, since it is still in beta status.
3. Bargaining power of customers (buyers): Customers enjoy higher bargaining power because Play station 4 consumers are electronic consumers and they know that they gaming companies depend upon the sale of the product. Further consumers also know that gaming console market is also increasing and this has increased the number of casual gamers. It was notices that consumers have shown interest in purchasing Play station 3 only when the company has reduced its prices (Bohm, 2008)
4. Bargaining power of suppliers: Its suppliers are H / W Game Publisher Game. In this industry, suppliers are bit leverage over console developers. The hardwire that supplied to these console developers will help them to decide the price. Earlier in a case of Play station 3, the hardware was supplied by International Business Machine Corporations (IBM), so its prices are kept very too high but this high price has reduced its sales. In addition, another reason for Play station 3 prices hikes was a shortage of the blue Light-Emitting diode (LED) used in blue-ray drives. Sony kept its game developers and publishers at priority and meets their demands at any cost because company needs exclusive games to remain in the market. If the company has less number of compatible games for console lesser will be the demand and lower will be the revenue.
5. Intensity of competitive industry rivalry: It faces intense competition from Nintendo, Microsoft, and Gaming Personal Computer (PC). Nintendo is ruling this industry by keeping its prices lower and being the first to introduce: innovative gaming (motion gaming). In its national market Japan, Sony remains the leader but in the Unites States of America (USA), and X-box 360 gains popularity (Bohm, 2008).
Key Factors and Trends: PESTL Analysis
Political, Environmental, Social, Technologist, and Legal (PESTL) are a tool of importance for an organization in developing strategy with macro-environment framework. In this tool, the last section “L” stands for legal analysis because gaming industries requires lots of copyright privileges: Political, Economic, Society, Technologist, and Legal factors and trends.
· Political factors and trends: As gaming industry produce games which are global products and hence involved lost of currencies and hence impacts the company’s revenues. For this gaming industry has to create certain restrictions like Unterhaltungssoftware Selbstkontrolle (USK) and or Pan European Game Information (PEGI).
· Economic factors and trends: Earlier industrial countries do not give importance to gaming industry but now they also have identified the importance of gaming consoles and has developed a potential growing market for console gaming. But still the developed countries have very less demand for such games and therefore this issue has to be tackled and overcome.
· Society factors and trends: To use Play station 4 additional and advance televisions and other equipments are required so that consumers can experience a rich digital effect of the game. Video gaming industry is gaining large acceptance from society and all ages of people are joining this industry that developed the growth of digital natives (The Hollywood Reporter, 1994).
· Technologist factors and trends: The gaming companies are introducing new inventions in their game to make the games more interactive and use friendly. These games are playing huge role in connecting people in the society. The gaming consoles have gone through new advancement like Blue-ray three-dimensional (3D), High-Definition or Density Digital Versatile disk (HD-DVD), and also make use of different computing units like Central Processing unit (CPU) and or Graphic Processing unit (GPU).
· Legal factors and trends: The gaming industry give different and multiple restrictions on the content and age. For instance in Germany: Unterhaltungssoftware Selbstkontrolle (USK) but Pan European Game Information (PEGI) for the rest of Europe and North America. The gaming industry requires compatibility with international standards (The Hollywood Reporter, 1994).
External Factors
and Trends as Either
Opportunities
or Threads
| External Factors | Opportunities | Threats |
|
Social Factors |
Declining Market |
|
|
Competitive factors |
Lowering Prices |
Duplicity of games by the competitors |
|
Technologist Factors |
Leader in Technology |
Competitors can use advance technologies |
|
Economical Factors |
High Consumer Income |
Saturated and Exhausted Market for Products (Bohm, 2008) |
Reference:
Böhm, A. (2008). The Swot Analysis. NorderStedt: GRIN Verlag. Odies C. Ferrell, M. D. (2011).
The Hollywood Reporter. (1994). Sony latest to toss hat in vid game arena. Marketing Strategy 5th Edition. Mason, Ohio: Ceneage Learning. Los Angeles, California: (Hollywood Reporter, Inc.
