What have microenvironmental factors affected Sony’s performance since 2000?
Due to the rigid engineering culture of the company, the performance of the company is not up to the mark. Interestingly, the firm’s capabilities to make a difference in the market are good and visible. However, some internal conflicts in several divisions created many problems. Also, many substitutes hit the performance of the company since 2000. In the competitive and dynamic business era, competitors contain a big brand product portfolio. Before 2000, the company contained high-quality goods for customers along with the limited portfolio. However, with the passage of the time, customers focused on different substitutes in the market. The product development process seems slow in this company, which changed the preferences of the customers.
What have macro environmental factors affected Sony’s performance during that period?
There are several environmental factors, which have affected the performance during that period. The main factor is the technology and its integrations. As compared to other big competitors in the industry such as Samsung, Apple, and LG, the company management has not integrated with the modern technological trends. It has been revealed that the company is not in the limelight in the digital entertainment, and it seems the main factor, which impaired the performance. The poor performance has been depicted in the financial statements of the company. The international economic recession and financial crises have hit the performance of the company hard, and due to ineffective strategies by the management, the performance is not up to the mark. For triggering the market and the customer, the uncompetitive cost structure was another factor regarding the poor performance. Even in the entertainment industry, the company has failed to come up with devices and systems, which can be protected. Hacking of computer systems is another external factor, and due to lack of development, the growth rate is not according to the expectations.
What stands in the way of Sony’s success today?
Several barriers stand in the way of Sony’s success today. For Instance, the company contains traditional culture, market leadership and ways of perceiving and doing different things. Despite having several capabilities regarding the research and development and technology integration, people do not contain the creative and innovative work. If Sony produces a new product, it produces it for a long run without any change, and on the other hand, the competitors take the advantage accordingly. Deriving insights from the case study, it has been revealed that the company does not contain good revenue stream, which is also a big barrier in the expansion process. Today’s market is concerned with the entertainment aspects, and Sony Company has not developed a breakout product for customers according to this need of the market. Even in the expansion process, the company faces immense competition in different countries. Innovative products are main preferences of customers a, and Sony is far behind in this regard.
Given Sony’s current situation, what recommendations would you make to Hirai for the future of the company?
According to the current situation of the company, it is highly recommended to initiate an effective research and development process to create some breakouts products. The need for change emerges in the company due to rigid practices, and adaptation of new trends of the market and technology can be a good approach. For regaining the image and reputation in the market, the company has to keep its profit margins lower than the competitors. Obviously, the company needs to create the perception that it can produce differentiated products, which can enhance the customer experience. Despite having the quality and capabilities, there is a need to focus on research and development investment to change the engineering culture. Along with this, new training and development practices are highly recommended to this company to make the difference in an effective and lucrative manner for a long run. Hirai can adopt or implement all these recommendations along with some improvisations to make the company’s future predictable.
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