Research Paper on Sony's Business Development

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As one of the most respected electronics companies in the world, Sony has continuously fought off competitors to maintain its stronghold in a variety of industries. This sample business paper explores Sony's contemporary struggles in the marketplace.

Sony struggles to stand out

Thirty-some years ago Sony became the platinum standard in consumer electronics when it unveiled the Walkman. It earned its place as a global business entity on the shoulders of portable music and remained there for decades. But its star has dimmed in recent years, most notably because of Apple's business strategy, iPod, and Sony’s failure to respond with an eye-catching technology of any kind. The company’s continuing failure to address this problem may very well be a death sentence unless a dramatic turnaround is made. To this end, there are several possible strategies for Sony to consider.

Sony’s troubles are not sudden or unexpected. The Walkman had its 30th birthday in 2009 and even then it was in trouble:

“The Japanese electronics and entertainment company lost 98.9 billion yen ($1.02 billion) in the fiscal year ended March [2009] – its first annual loss in 14 years – and is expecting more red ink this year” (Kageyama).

Any loss in a company that once ruled the roost is a sign of rough times, but the problem went beyond a bad year.

Not only had Sony lost its dominance, but it could find no way to reclaim it“The manufacturer, which also makes Vaio personal computers and Cyber-shot cameras, hasn’t had a decisive hit like the Walkman for years” (Kageyama).

For a technology company to lose the edge like this is like blood in the water for nervous stockholders. And the situation has only gotten worse.

The losses of just over $1 billion in 2009 have skyrocketed, “Sony more than doubled its projected net loss for the past financial year to [$6.4 billion], its worst loss ever” (Tabuchi).

These problems are attributed to a number of external factors like tax hits, the value of the Yen, and natural disasters, but the issue is internal as well. Not only is the inferiority of the Walkman still a factor (due to the impact of the internet and digital downloading) but also:

“Sony’s television business, which has not been able to recover from a delay in developing flat-panel models and has more recently been badly hurt by price competition from rivals, has not posted a profit in years” (Tabuchi).

It is a wonder that the company has survived at all with two major divisions suffering such heavy losses with no correction in sight.

Should sony develop a better business strategy?

What Sony needs is an aggressive strategy to restructure their situation. Losses must be cut and profits must be found. If reinvigorating their sales was a simple matter they would have done so by now, but as an example for speculation, they will serve for forming hypothetical solution strategies. One possible strategy is to assert a distinct image. Sony has faded into the background of electronics, especially portable music and TVs. Apple released products in 2015 that are the very definition of quality in portable music and trying to change that would be virtually impossible. The only alternative to quality is value. If Sony could offer a significantly cheaper product, and more importantly a cheaper service than iTunes to support it, they might find a market in the customers who buy Apple despite its high price because it seems like the only viable choice.

This strategy seems like it would be especially well received given the global economic recession. People are reluctant to give up their little luxuries like portable music, but there is no such thing as a cheap iPod and iTunes bills can add up fast despite all those deceptive decimal points. The challenge is in providing this product at a low enough price to make a difference while still making a profit. Though taking a loss for the time it takes to establish a footing in the value corner of the market does not seem like such a terrible thing when the company is already posting record losses with no reason to expect any better.

Changing focus to new ventures

Another strategy would be a complete change of focus. TVs and portable music may be the foundation that Sony was built on, but those stones are crumbling. Rather than shoring them up, it might just be time to cut losses and focus on something different. Sony’s video games fare much better than their other divisions and even though the Playstation and PS Vita are not clearly dominant in their respective markets, they are generally well-received.

If Sony were to sink the manpower and capital that is being wasted on failing divisions into their gaming products, they might just be able to overcome the limitations they have thus far faced in that quarter, namely a lack of exciting games to give customers a reason to buy the platforms.

A third strategy could be finding an innovative business strategy, like Uber, to expand their customer base. Certain demographics, particularly the elderly, have little interest in electronics and less motivation to get interested. Finding a way to tap this market the way certain cell phones and computers have done might be a way to reinvigorate their portable music and television departments.

Technology is generally content to ignore the people who are unfamiliar with it, but a company that made a point of catering to the timid and inexpert might find a whole new pool of revenue to dip their corporate toes in. The con to this strategy is that even after reaching out to those demographics, they may find that there is genuinely no interest no matter how easy they make it to buy and use modern technology, thus making it a wasted effort.

There is no surefire strategy to success and if there were these kinds of situations would not happen. The only sure thing is that when something is so obviously broken as Sony, it needs to be fixed. Leaving it be is no solution and since existing strategies have failed, it is time to get outside the box and take some risks.

Works Cited

Kageyama, Yuri. "Sony struggling as Walkman hits 30th anniversary." ABCNews.com. N.p., 9 June 2009. Web. 4 Oct. 2012. ;http://abcnews.go.com/Technology/story?id=7979893page=1#.UG3_ClFKWZQ.

Tabuchi, Hiroko. "Sony Revises Expected Loss to $6.4 Billion." NY Times. N.p., 10 Apr. 2012. Web. 4 Oct. 2012. www.nytimes.com/2012/04/11/business/global/sony-revises-expected-loss-to-6-4-billion.htm.