Executive Summary:

Sony has been a leader in innovation since its creation in 1946. Sony has establishes itself as a permanent competitor in the electronics industry. Sony has a high level of brand awareness amongst most consumers. Although many consumers feel that Sony prices are amongst the highest on the market. Sony has become a widely recognized global brand. Sony, as of 2011, has total revenue of $86.64 Billion. Lastly, Sony should begin targeting the woman’s market to obtain an even greater market share.

Market Analysis:

Company History:

Sony was founded; in a bomb wrecked building in Tokyo, Japan, right after World War II had ended, by Masaru Ibuka and Akio Morita. They founded the Tokyo Tsushin Kogyo K.K., which in English, translates to Tokyo Telecommunications Engineering Corporation. During the 1950’s, Ibuka began traveling to the US because of the transistor, invented by Bell Labs, which he felt would be accessible to the communications field. They created the first commercially-produced transistor radio in Japan, known as the TR-55. Over the next several years, the Tokyo Telecommunications Engineering Corporation rolled out two more advanced models of the TR-55, the TR-6 in 1956 and the TR-63 later that same year. In 1958, Ibuka and Morita decided to change the name from Tokyo Telecommunications Engineering Corporation to, what it is known as today, the Sony Corporation. The TR-63 paved the way for the invention of the portable radio, which became very popular with the influx of rock and roll, by the end of 1960’s. Around that same time, Sony seen its’ sales top 5,000,000 units.

Products:

Video game consoles (PS3)

Computers (Vaio)

TV and audio equipment (Bravia, Sony Xplode)

Video and movie equipment (Sony Pictures)

Financial services

Mobile phones and music (Sony Entertainment)

Brands:

(1988) CBS Records Group was acquired and renamed “Sony Music Entertainment.”

(1989) $3.4 billion, Sony bought Columbia Pictures Entertainment from Coca-Cola and renamed it “Sony Pictures Entertainment.”

(2001) Sony Corporation and Ericsson AB launched Sony Ericsson, a 50-50 joint venture.

(2004) joint venture of Sony and Samsung Electronics Co. LTD, S-LCD Corporation, was established.

Competitor Environment:

As of 2007, Sony Corporation had revenues totaling $70,303 billion, making it one of the world’s wealthiest companies. The company is also acknowledged to be among the Worldwide Top 20 Semiconductor Sales Leaders.

Main competitors: Microsoft- $62,484 billion, Apple- $65,225, Dell- $61,494.

Consumer Trends:

Sales of PSP and PS2 are down. PSP sales dropped from 5.1 million to 4.2 million this year and PS2 sales have dropped from 2.5 million to 2.1 million.

Sales of the PS3 are up from 4.5 million to 6.5 million this year.

Macroenvironment Analysis:

Economy: The U.S. economy is estimated to be around 14.5 trillion dollars, the largest in the world.

Legal: Sony sues the individuals responsible for hacking the PS3 network.

Government: Sony has to abide by several governmental regulations in the different countries in which it operates, including regulations relating to various business/investment approvals, trade affairs including customs, import and export control, competition and antitrust, anti-bribery, advertising and promotion, intellectual property, broadcasting, consumer and business taxation, foreign exchange controls, personal information protection, product safety, labor, occupational health, and environmental and recycling requirements.

Technology: (Sony BrightEra Projectors) - Sony has a line of new more efficient, brighter picture projectors set to hit stores soon. Sony has also released the world’s first flexible OLED display, which was in 2008.

Ecological: Sony Green is a division of Sony that specialize in making sure Sony does it part to take care of the environment. Sony Green strives to make recycling your electronics as easy as it is to purchase them. Sony has created a recycling program that makes it easy to dispose of electronics in an environmentally-safe way. With the Sony Take Back Recycling Program, we offer locations nationwide where unwanted products can be dropped off and recycled for free. Please consider opportunities for reusing products, such as donating working products to a local charity, before recycling.

Sociological: Sony has been hurt by the recent hacking of their PS3 network. Sony released a statement addressing the issue and the fact that many of their PS3’s were being returned and sales were starting to decline.

Supply chain: The Japanese earthquake required Sony to have to move production from two plants that were located near the epicenter to several of their other plants throughout Japan. The recent tsunami in Japan has also taken a toll on Sony’s supply chain. Sony stopped production in six of its northeastern factories, which produce Blu-ray discs, magnetic heads for hard drives, and batteries. That could affect games, movies, and computers.

SWOT Analysis:

Strengths:

(Substantial Brand Identity)

Sony is a corporate brand whose identity is deeply rooted and very well established in the minds of potential customers. The brand remains healthy despite dropping from 25th to 29 in name recognition according to InterBrands 2009 ranking.

(Global Diversification)

Sony products and services are available throughout the world in approximately 200 countries and territories. The United States market accounted for 17.9% of the revenues, Europe (13.9%), and others (25.8%), while Japan consisted of the largest segment at 42%.

Weaknesses:

( Falling revenues)

Four major Sony division experienced revenue losses in 2009, specifically Electronics down 17%, Games down 18%, Pictures down 16.4% and Financial Services down 7.4%.In the U.S Revenues were down 15.4 %, while revenues in Japan fell 15.2%.

Opportunities:

(Strong Positioning in Emerging Economies)

Sony is firmly entrenched in the so-called BRIC economies (Brazil, Russia, India and China). These regions are emerging markets and represent over 40% of the worlds’ population. The firm plans on following its model of success experienced in India where it emphasized its television film, and music product content. The company has a goal of doubling its revenues in the BRIC markets.

Threats:

(The Continued Economic Slump)

The negative economic conditions in The United States, Japan and Europe have had a disastrous impact on Sony. The company receives approximately 74% of its revenues from these markets. As the economic slump lingers, consumer confidence remains low and Sony has felt the impact in decreased revenues. Sony leadership has acknowledged that the downturn exposed weaknesses and vulnerabilities in the firm that have needed addressing for some time.

(The Impact of the Black Market)

Smuggled goods and counterfeit products have really plagued the electronics manufacturing industry in recent times. Counterfeit goods are projected to double to 18% of total world trade by 2010. In addition, China's growing share of electronics production represents an increase in the number of potential counterfeit products in the market. These knockoffs, although cheaper and of less quality steal the potential to divert revenues from Sony.

Market Strategy:

SONY BRANDS:

Playstation 3-The Playstation 3 is Sony’s third generation gaming console. There has been 54,738,855 total playstation 3’s sold worldwide as of 2011.

Sony Bravia HD televisions- Sony’s Bravia series of televisions are leading the industry in picture quality. It has a full vibrant HD screen and ethernet connectivity included on Bravia televisions.

Sony Pictures Entertainment- Recent movie releases: Ghostbusters (re-released), Anonymous, Jack and Jill. Television programming by Sony: Seinfeld, Jeopardy, and Days of Our Lives.

Vaio Laptops- Portable, High-performance laptop.

Sony is a diverse brand that provides products and services for a wide variety of people and will begin to focus on expanding their products in the women’s market, due to the fact that, women make up over half the sales in consumer electronics and influence over 80% of purchases. Sony continues to strive on innovative products that are easy for consumers to use. Sony is considered to be one of the world’s greatest brands in the eye of the consumer. Sony products are considered to be high quality, unique, and convenient.

Sony is set to begin several new promotional campaigns. One promotion states that no interest and no payments for 24 months if the customer applies for the new Sony Financial Services Card at point of purchase. Another promotion allows an individual to save up to $360 when they bundle the BRAVIA XBR9 series LCD HDTV with the new BDP-S360 Blu-ray Disc Player ($299.99). Sony is also introducing a new tagline “Now Life’s Better” rivaling target’s LG Electronics tagline “Life’s Good.”