Student Name

: THU YEIN OO

Student Number

: 000861196

Centre Name

: KMD COMPUTER CENTRE (YANGON)

Course Name

: COMP1646 INFORMATION SYSTEMS MANAGEMENT

Number of Words

: 3550 Words for Report

Submission Date

: 22th April 2015

Table of Contents

Description

Page

1. Introduction

4-5

2. Strategic Evaluation

6-11

3. e-Marketing Strategy

12-13

4. Legal and ethical issues

14

5. Conclusion

15

6. References

16

Strategic Evaluation Consultation Document for Sony Corporation

1. Introduction
Background
Sony is one of the leading manufacturers of electronic products for the consumer and
professional markets. Sony Corporation, generally known as Sony, is a massive technology and
media Japanese based Multinational Corporation with numerous sub-divisions headquartered in
Minato, Tokyo, Japan. Sony Corporations business comprises three main businesses:
Electronics (such as TV, refrigerators, Smart phones, game consoles etc.), Entertainments (such
as motion pictures and music) and Financial services (such as insurance and banking). These are
the reasons why Sony is one of the most comprehensive entertainment companies in the world.
The mission statement of the Sony Corporation is To become the leading global provider of
networked consumer electronic, entertainment and services.
Historic Information and Sonys Leaders
According to the facts in case study, Sony had already over 162,700 employees in 2012.
But Sony humbly began after World War II with a total of eight employees and $530. It is
founded by Masaru Ibuka as an electronics shop that repaired radios and made shortwave
converters and adapters in a department store of Tokyo. Later, Akio Morita, friend of Masaru
Ibuka joined and together they established Tokyo Telecommunications Engineering Corporation
(Tokyo Tsushin Kogyo). Later the company changed the name to Sony which is a combination
of Latin word Sonus (means sonic and sound) and the 1950s American slam Sonny (means
a boy). This is mainly because a Romanized name will be easier to remember and pronounce in
American markets.
Masaru Ibuka acted as the President and CEO of Sony from the start of company till 1971
when he handed the position to his friend and co-founder Akio Morita. It was during his
leadership that Sony recognized internationally for its electronic products. Next president was
Norio Ogha starting from 1982 to 1995. During his management, Sony moved into media
entertainment, purchasing CBS records and Columbia pictures. Nobuyuki Idei was selected as
resident and Co-CEO in 1995 after Ogha took the title of Chairman and CEO. Sony changed
focus to digital communication as the centre of its business strategy under his management. After
Idei, in 2005, Howard Stringer became the first foreigner CEO to run Sony Corporation. He tried

to make media business better by inspiring the production of new and excitement. It is during his
presidency, Sony tried to sell off some side businesses and focus more on the main electronic
products. Kazuo Hirai begins as CEO and president starting from 2012 to nowadays. Sony has
started to lose its electronic business to rival electronic companies such as Samsung, LG, Philips
etc. and so Hirai tried to rebuild the business by leading a corporate reorganization named One
Sony. Under his leadership, Sony introduced some popular high-end electronic gadgets such as
Xperia Z series smartphones.
Financial Performance
Due to the case study based on 2012 facts, Sony reported operation revenues of 6.5
trillion (-9.6%) with an operation loss of 67.3 billion and a net loss of 456.7 billion. Capital
expenditures in 2010 was 192.7 billion. It increased to 204.9 billion in 2011 and to 295.1
billion in 2012. In consumer products and services segment which is the main business segment
that includes TV, digital imaging, personal and mobile products and game business etc. sales and
operation revenue decreased 18.5% year-on-year to 3136.8 billion. The companys products
sales rates and income have been decreasing in the last few years due to the abundance of rival
companies, the negative impact of the Great East Japan Earthquake and the 2011 Thailand floods
and deterioration in market conditions in developed countries.
Key Products and Services
Sony is invested in a wide range of business sectors including the electronics businesses,
entertainment businesses and financial services businesses. Electronic businesses consist of
digital imaging, mobile communication devices, game and televisions. The entertainment
businesses compose of motion pictures and music. Sony Financial groups core companies: Sony
Life, Sony Assurance and Sony Bank provide high-quality financial services through an original
business structure.

2. Strategic Evaluation Situation Analysis

Sony introduced a new management structure in April 2012. Nowadays, there has been a
lot of competitors in these electronic business and it is hard for Sony to face these
competitors without marketing. For the e-marketing strategy, evaluation of the company
current position and industry analysis have to be make. For this purpose, the analysis tool
used are SWOT analysis tool and PEST tool.

SWOT Analysis Tool

SWOT tool is used to evaluate positions of the Sony Corporation. It is the cornerstone for
the success of e-marketing strategy.

Strengths
1. Multinational Corporation
Sony already have operations and markets in over 200 countries. So Sony dont have to rely
only upon a single market place and able to provide products with stronger difference to other
products. This also provide as a leverage in marketing because offline promotion can be done
throughout all markets at the same time.
2. Sony Brand
Due to Interbrand, Sony is included in worlds top 100 brands. Sony is recognized globally
and its products are quite unique among customers and creating a trend like Walkman series in
1990s and Xperia series of nowadays. And this provides Sony with the ability to use its own
brand identity in marketing and launching new products so that interest of new customers
increase with new products.
3. Environment friendly policies
Sony aware that their business activities are possible only if the global environment is
healthy. With this in mind, Sony is helping to address environmental issues such as resource
conservation and need for effective management of chemical substances. Sony is conducting

business in a sustainable manner and aiming to always provide environmentally conscious

products and services.
4. Research and Development Capacity
From the start of company, Sonys presidents and CEO knew the important of research and
development and provides skilled professionals with enough resources and research material.
These strong research and development processes are important for creating a popular brand with
unique advanced features.

Weaknesses
1. Financial Problems
The income of the company dropped from $112,667 million in fiscal year 2008 to $82,463.8
million in fiscal year 2012. This is due to various reasons including decreasing company
performances, negative impacts from disasters like the Great East Japan Earthquake and the 2011
Thailand floods and the global financial crisis. These financial problems can lead to reduced
development cost and slow down the companys respond to evolving economic conditions.
2. Too many sub business divisions.
Sony have lots of business operation and serving many sectors of the entertainment business
has its own drawbacks. Investing in too many business sectors might slow down the operations
of the core businesses. This is one of the reasons why Sony is having financial problems.
3. Over-trusting of income from certain markets and certain sectors
Revenue of Sony is mainly generated from developed countries markets. Sony has gained
32.4 percent of its income from Japan, 19.5 percent from Europe, 18.7 percent from US at the
end of fiscal year 2012. Also Sony has gained 47.5 percent of its income from electronic
businesses (i.e. game consoles, mobile communication products, multimedia electronic products
etc.). But it is a changing and growing world and putting too much trust in certain market places
and certain aspects of the business is sure to have some disadvantages.
4. Cost of manufacturing facility

Most of the manufacturing factories for Sony are in Japan which is an expensive place to
invest if compare with other countries. If the manufacturing facilities are move to cheap,
remote locations, the transportation costs for the manufactured products are a thing to
consider. Either way, these can affect the productions of Sony from making profits.
5. One Corporate governance structure
Having a sole board of directors, decisions makers is strengthening efficient management for
the corporation. If a risk or problem to solve in time, it might take some time and slow down the
decision making process of the Corporation of this magnitude.

Opportunities
1. Demands in Video Consoles
Sonys popular product in console game play, PlayStation series are sold around the world
with greater demand and it is an opportunity to extend this product and develop further more
features on gaming experience. Sony has its competitors in these consoles market but it can be a
sole provider in gaming consoles market if able to fulfil consumers, game players needs.
2. Joint Ventures and Partnerships
There are examples of Sony merging with joint ventures like motion pictures companies
to further success. It has already having good firm in entertainment business due to these joint
ventures. Sonys new partnership with Olympus and establishment of Sony Olympus Medical
Solutions Inc. is an opportunity for the Sony Corporation to further advance its business into
medical solutions sector.
3. Developing market of Tablet and wearable devices
Tablet is the new popularity among the mobile devices due to its vast screen size, portability and
processing ability of handling PC liked processes. Sony should use the brand identity leverage
from Xperia and PlayStation series to create an effective position in this developing Tablet
market. There has been a lot trends on smart watch and wearable gadgets that can be also used as
a supportive medical digital device for consumers that can sync up with the smart phones. Other

competitors like Samsung, LG and Apple are already in this market and so Sony should try to get
a permanent position in this market.
Threats
1. Abundance of competitors
In the 19ths, Sony had invented first tape recorder, transistor radio, video tape and other
things. But nowadays in every aspects of its business, Sony has many competitors trying to share
the market place. In gaming business, the PlayStation series has its competitor from Microsofts
Xbox and Nintendo Wii game consoles. In smart phones and other electronic business, Sony has
strong competitors such as Samsung and LG. These abundance of competition could create
pressure on profits if more resources are going to be needed for market competition.
2. Cheap fake products
Due to its popularity, Sony has to deal with the availability of huge amount of cheap
counterfeit products in developing countries and online statistics show that this will continue to
increase in coming years. This can greatly affect the sales rate of Sony products in these rural
areas.
3. Changing rules and standards on world wide
As Sony is a multinational company, it have to deal with changing rules and regulations in
different countries and ready to comply varying regulations as necessary. This might pose as a
threat to cause implications for the company.

PEST Analysis Tool

PEST is an easy to use business environment analysis tool that is widely used to analyse the
Political, Economic, Social and technological changes in the business environment. PEST tool
provides visions upon business opportunities. PEST Tool is used for analysing Sony Corporation
environment to consider organisation current position. Other thing is we used PEST tool to
analysis Sony to provide an input to the e-marketing plan.

Political Factors
Governments are changing tax rate to higher level both in developed countries or
developing countries due to global financial crisis. This can result in more corporate targeted tax
policy making. Sony is a multinational electronic corporation have markets in most of the
countries world-wide and so this threat of increased corporate taxes in most countries need to be
considered. And also due to this global financial crisis, there are new terms and standards to
improve the intensity of financial firms. So, Sony also have to follow up its financial services
meet with these standards And nowadays, there has been news about free trade agreements
between countries are increasing and most likely to continue within developing countries. This
might provide an abundance of competitors in Sonys key markets and emerging markets.
Economic Factors
Global financial crisis recovery is going slowly with an increase of 3.6 percent in 2014.
This is a factor need to consider that can impact Sony in a way in which it will take longer to
regain net profits. Due to International labour organization, there were nearly 202 million people
unemployed around the world. This kind of unemployment rate can lead to low demand in Sony
electronics products. Another thing that is effected by this high unemployment rate is the slow
progress in global economic growth. This mean reduced long-term income for Sony Corporation.
These are the economic factors effecting Sony business environment.
Social Factors
From the start of Walkman series to nowadays electronic products, Sony aimed at the
younger age group as their products audience and this should be change to all age groups and
need to consider the requirements of mature consumers. And there have been an income gap
between developing and developed countries from the start of 1990s and this is going to increase.
This may impact Sony products sale rate because people with lower income might not be able to
buy branded electronics products and satisfy with cheap counterfeit products. Sony should focus
their research and development on wearable devices and digital health care because these are the
current consumer trends. Like Walkman series and Xperia Z series, Sony should develop a
unique device match with this current trends and get a place in the consumer minds. These are
the current socio-cultural factors effecting Sony Corporation.

Technological Factors
Using robots instead of human labour in manufacturing facilities might reduce labour
costs for Sony but implementing the robots is expensive at first and other things like
maintenance cost need to be consider for long-term use. Broadband internet connections are
becoming more and more available in rural area populated with low income and literacy. This
provides opportunities for Sonys mobile communication devices in these markets. And
additionally, using the current common digital marketing methods and a structured e-market plan
can decrease Sony Corporations marketing costs while providing global reach of consumers.
Only because of the research and development facilitys technology inventions, products such as
4K resolution systems and mobile devices such as Xperia series are possible providing the
customers with a unique way of experience. So the research and development facility of Sony
have to be keep strong with skilled professionals. These are the technological factors concerning
with Sony Corporation.

3. e-Marketing Strategy
Marketing mission statement and challenges
Sony can be considered as one of the worlds greatest brand and Sony products are
trusted by customers mainly due to their high quality with unique features and styles
products. Sony marketing objective is simple. To increase sales for the Sonys core business
products, and deliver a corporate value to the customers. Sony has been unsuccessful and lost
profits from core businesses and so Sony Corporation has to eliminate more than 16,000 jobs
and cessation of a total of six production facilities. This is mainly due to the intense
competition in global market of Corporations core businesses including electronic business
and entertainment business. Another challenge is the increase in global price rate of raw
materials. And varying exchange and tax rates across different countries can also be a
challenge for marketing.
Marketing Strategy
To increase sales in electronic products and stand out among other competitors, Sony use
the leverage of its popular brand identity and putting corporate brand name after the product
name. This creates a brand strategy for Sonys marketing and help to attract particular group
of brand royal consumers. They are the customers royal to the same Sony brand and always
buy products only from the Sony and usually resist on buying products from Sonys
competitors. Putting the product name along with the corporate name produces a way of
creating products unique identity while drawing leverage of Sony identity to brand royal
customers to buy and try new products. From the company strength of strong focus on
research and development activities, Sony can produce user friendly products that have
unique features and style composed with Sonys corporate value.
Sony offers the availability of same products from different countries to provide the
needs of worldwide consumers. For this reason, Sony has a website that delivers information
on products and their prices. Web marketing can be considered as the most common of Sony.
The products style, information and detailed information can be explored through video
clips and pdf brochures. Sony used slogans and tagline in marketing their products and the
current slogan is Be Moved. Sony has an e-commerce system for the convenience of

providing direct sales of its electronic products and solutions from the internet. This system
targets at both B2B and B2C. The pricing strategy include of market-skimming, product
package pricing and product line pricing. Normally Sony starts with high prices when selling
out new products and after that slowly reduces prices. Sony will focus its products marketing
on womens because due to the trusted research, women are responsible for buying half of
the products in electronic market and have influence over 80 percent of the buying.
Online and offline promotion balancing methods
For Sony Corporation, online promotion is done through Sony website and banner
advertisements. Due to its brand identity and unique culture, online promotion is only focus
on its Sony website. There are wide range of offline promotion activities to support the
online promotion and Sony brand. One example is Sony let to use its electronics products in
motion pictures sponsored by Sony. Another offline promotion include using seasonal
discounts. These discounts ranged from a reward point discount, $50 card credit to free gift
items example (buy 1HDTV, get 1 Blu-ray player). Sony has a customer relationship
management system and the research and strategy development of Marketing is based on
customers feedback.
Impact of the implementation of strategy
After the use of its e-commerce system and usage of its Sony website, more than the half
of sales are done through online and this create a new way for Sonys electronic products to
be sold. The success of this system will create Sony to be trustworthy in e-commerce solution
and encourage the development of new e-commerce systems that take Sonys technical
requirements into account.

4. Legal and ethical issues

Nowadays, globally, different governments are issuing varying policies about working
environment conditions and wages related issues and these are becoming more and more strictly
for corporations and are Sony must have to adhere with these varying rules and regulations
whether these are in its interests or not. And lately, there has been awareness about product
safety standards and Sony have to meet with at least minimum standards. For these reasons,
Sony Corporation established the Compliance division responsible for overall control over
compliance with laws, standards, rules and internal policies of the Sony Corporation worldwide.
For the information used and processed on the Internet and internal network, Sony has an
organization called Information Security and Privacy. Sony has already adopted global
information security policies, rules and standards and global privacy policies and standards.
Sony aims to become the leading global provider of networked consumer electronics,
entertainment and services. And due to eMarketing strategy, so information of the consumers
might be gathered, processed, distributed and used either on the consumers network or on the
internet. Ethical issues about personal information can be summarized into four areas according
to Mason (1986). These are Privacy, Accuracy, property, accessibility. Sony is aware of the
ethical business conduct and compliance with laws and standards are necessary. With this in
mind, Sony Corporation established its own code of conduct and has already implemented since
May 2003. These code of conduct called, Sony Group Code of Conduct sets the general
internal standard to be followed by all personnel of Sony Corporation. Along with the code of
conduct, Sony has also implemented a compliance hotline system in which employees can look
out for support and guideline about probable abuses of rules or internal policies. This system is
available worldwide and linked directly to the executive ranked officer responsible of
compliance division.

5. Conclusion
Sony can be considered as one of the worlds greatest brand and it is one of the leading
manufacturers of electronic products for the consumer and professional markets. It can be clearly
seen that Sony used the leverage of its advanced technologies from research and development in
addition with its strength of having multi business sectors in creating new high-end electronics
products with unique features. Sony used its professional skill in design of electronic products
and merged the products with entertainment feature of its entertainment businesses such as
motion pictures and music. Under the management of Kazuo Hirai, Sony has extended its market
range to emerging market areas. With the new initiatives and reorganization of One Sony, One
Management, Sony has been moving forward with focus on its core businesses of electronics,
entertainments and financial services.

6. References
Sony Corporation, 2015. About Sony Group http://www.sony.net/SonyInfo/. Accessed April 20,
2015
Sony Corporation. 2015. Annual Report 2012 Business and CSR Review. Japan. Sony
Corporation:
Sony Corporation, 2015. Annual Report 2013: Business and CSR Review. Tokyo. Sony
Corporation.
Zoe S. Dimitriades, 2015. Business Ethics and Corporate Social Responsibility in the eEconomy: A Commentary EJBO (Online) http://ejbo.jyu.fi/articles/0701_1.html Accessed April
21, 2015
Einhorn, B., 2014. Sony Makes Big Profits, Just Not on Electronics. (Online)
http://www.businessweek.com/articles/2014-02-10/sony-tv-unit-loses-moneywhile-sonyfinancial-exceeds-profit-forecasts [Accessed April 20, 2015].
Interbrand, 2013. Best Global Brands 2013, New York: Interbrand.
Wikipedia. 2015 Sony Corporation, (Online) http://en.wikipedia.org/wiki/Sony Accessed April
20, 2015
Case Study: Sony Corporation: Reinventing Itself to Rediscover the Technological Edge
Authors: Dheeman Chatterji, Hayes Shildwachter, and Jeffrey S.Harrison.
PDF downloaded from http://robins.richmond.edu/documents/cases/Sony.pdf Accessed April 15,
2015