Sony Corporation Case Solution & Answer

Sony Corporation Case Solution 


A Japanese multinational conglomerate – Sony Corporation was established in the year 1946 headquartered in Konan, Minato, Tokyo. It is one of the largest manufacturers of consumer and professional electronic goods. Sony is mainly engaged to develop, design, produce, manufacture, offer, and sale of wide-ranging electronics equipment,consumer, industrial and professional markets like mobile phones, video cameras, semiconductors, video and audio recorders and players, television, game hardware, and software, and network services. It is also engaged in the management of different financial services businesses which include non-life and life insurance operations through the insurance subsidiaries of Japan. To accelerate the business competitiveness, Sony had separated its business units within Sony Corporation for the formation and operation of distinct subsidiaries alongside the existing companies of Sony Group.

The electronic products and services expect those involved in the game business are marketed to approximately 200 countries and territories-across the world. It had a workforce of approximately 114,400 employees followed by a decrease of around 2900 employees from 2018 to 2019. The decrease in employees was despite a significant increase in the financial services and semiconductor segments. Similarly, the products and services offered by Sony mainly include Game and Network Services, Music (recorded music, music publishing, visual media, and platform), Pictures (motion pictures, television production, media networks), Home Entertainment and Sound, Imaging Products and Solutions, Mobile Communications, Semiconductors, Financial Services, and others. (Kaisha, 2019)

Vision and Mission Statement:


“To use our passion for technology, content, and services to deliver KANDO, in ways that only Sony can.”


“To be a company that inspires and fulfills your curiosity.”

The vision and mission statement of the organization represents the approach to allow people to move emotionally and is aimed to lead the creation of social value by the provision of a sense of enrichment among the people. In addition to the vision of the organization, the long-term vision is primarily based on achieving a “zero-environmental footprint.

3-year Review of business activities:


  • In April, the organization split out the business of imaging products and solutions and initiated its business operations as SIPS – Sony Imaging Products and Solutions Inc. which significantly led to the completion of a sequential separation of the business units of Sony into distinct subsidiaries.
  • In September, its battery businesses were transferred to the Murata Manufacturing Co. Ltd. Group.


  • In April, the merger of SVS and SVP was to form Sony Home Entertainment & Sound Products Inc. (SHES)

Porter Five Forces Analysis:


Considering the significant growth consumer electronics market, the intensity of competition is high because of high exit costs. This mainly because of the presence of leading players in the market that are known to make an increased investment in research and development, and high storage and fixed cost. Despite the presence of numerous players in the market LG and Samsung are the closest competitors with annual sales of around 55.7 and 206 billion US dollars in 2019.

Bargaining Power of Supplier:

Sony is completely dependent on the suppliers for the provision of parts, components, and materials. Because of the general policy for the maintenance of suppliers, Sony optimized the number of suppliers for the achievement of efficiencies and minimizing the procurement risk. But, the organization does not control the procurement of suppliers directly. In contradiction, suppliers tend to represent a small entity in comparison to Sony. Similarly, the development of the suppliers’ policy is to make sure a transparent and accountable supply chain.Due to such reasons, the bargaining power of the supplier is low to moderate.

Bargaining Power of Buyer:

Due to the low switching cost from one brand to the other like LG and Samsung, the bargaining power of buyers is high. Although the pricing strategy used by Sony, LG, and Samsung are premium pricing, cost plus fixed markup, and competitive pricing respectively. Based on this reason, the pricing approach of Sony is relatively high in comparison to other players. The other factor that greatly influences the bargaining power of the buyer is the availability of multiple options and the use of a digital shopping facility. But, the bargaining power of customers is also affected by the level of popularity and trust, innovative technology, and brand image.

Threat of New Entrant:

The threat of a new entrant in the consumer electronics market is relatively low-because it requires heavy investment and increased time to grow into a competitive player. The need for high investment is based on the acquisition of potential resources like the hiring of skilled workers, the use of advanced technological approaches, and the development of operational infrastructure. With increasing competition and the presence of leading players in the market, any new entrant would be required to introduce a high quality and compatible product in the market which is a bit challenging because of growing legal barriers.

Threat of New Substitute:

There are a limited number of substitutes available for Sony products. But, the low switching cost of products leads to an increased threat of substitutes. The threat of new substitute is reduced by strong brand image, product quality, and low level of differentiation. Thus, the overall threat of a new substitute is considered moderate.

SWOT Strategy Analysis:


  • Sony is one of the leading consumer electronics brands that offer wide-ranging products in its portfolio.
  • It has a strong brand image and an excellent reputation in the market because of the provision of high-quality products to its customers.
  • The production of its products is mainly based on the use of advanced and innovative technological approaches to remain competitive in the market.
  • It operates in more than 200 countries across the world with a strong and skilled workforce.


  • Being a premium product, only customers belonging to the high-end market afford to purchase the products.
  • Due to the high cost of media production, the pricing strategy of the organization is negatively influenced resulting in loss of market share to its competitors like LG and Samsung.
  • Increased diversification of business segments has led to the shift in the organizational focus from its core competency to make efficient consumer electronics products resulting in distortion of the brand.
  • The promotional and marketing efforts of Sony are low and weak in comparison to Samsung.


  • The efficient use of music and movie business followed by its experience in gaming service would allow the organization in delivering value-added content to support the product line.
  • The entrance of the organization in the health-care imaging sector and home appliances would assist in experiencing rapid growth.
  • The growth probability of the medical display market allows the opportunity to strengthen its imaging division.
  • Leveraging the financial resources would allow the organization to acquire innovative start-ups in profitable areas such as software development.


  • Considering the economic hardship, the need to purchase Sony’s premium product is not prioritized resulting in low demand and uncertainty.
  • The threat of substitute products is getting high because of the entrance of new players offering quality products at cheap prices.
  • The threat of competition is high particularly from LG in the sale of TV and Samsung in the sale of mobile phones.

Competitive Profile Matrix:

Based on the consideration of critical success factors, both the financial and operational performance of Samsung is highly competitive among all three firms i.e. Sony, LG, and Samsung. This is because the market share of the organization is increasing over years i.e. the highest market share for the 14th consecutive years based on the efficient utilization of the internet of things and artificial intelligence.(e, 2019)Similarly, LG had a high global market share and strong demand for premium home appliances. (SEOUL, 2020) Similarly, the organizational culture of LG is based on creativity and innovation, and Samsung has an innovation-centered organizational culture.

On the other hand, price competitiveness is relatively low among LG and Samsung but high with Sony. Because Sony offers premium price products to its potential customer base. But, the products offered by all three organizations represent high-quality based on the use of the advanced technological approach. Due to competitive pricing, Samsung customers tend to be more loyal towards the brand in comparison to the other two players in the market. This indicates the leading position of Samsung among all the players in consumer electronics followed by highest sale as shown in Appendix C.

Financial analysis:


Liquidity Ratios

Current ratio (times) = Current Assets / Current Liabilities

Leverage Ratios

Debt to Total Assets = Long Term Debt / Total Assets

Debt to Equity = Long Term Debt / Total Shareholder’s Equity


Total Asset Turnover = Sales/Average Total Assets

Profitability Ratios

Net Profit Margin = Net Incom / Sales

Return on Total Assets (ROA) = Net Incom / Average Total Assets

Growth Ratios

Earnings per Share = Net Income attributable to stockholders’ / No. of shares outstanding…………………

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