Sony early successes
Let’s go back to 1979, the year Sony Electronics launched its first worldwide phenomenon the Sony Walkman. From having the top personal portable stereo in the electronics market Sony decided to enter the movie industry by acquiring Columbia Pictures in 1989 which is now Sony Pictures. Expanding at an insane rate the organisation broke into another market, the one of the games console with the launch of Sony PlayStation in 1995. The console was unmatched and so was its successor PlayStation 2 five years later, the games console market was official dominated by Sony. The next target was the mobile phone industry, the Sony Ericsson venture was a smash-hit especially with the Walkman MP3 feature installed on the mobile devices. The unstoppable Sony force entered the music world with Sony BMG Music Entertainment then came out with the Playstation Portable (PSP) to enter the portable game console industry challenging Nintendo.
Sony conflicting division
So how comes in 2008 Sony announced a £590 million loss? What happened to the dominator of many markets? Well, the answer is said to be in the question the ‘many markets’ are too many for one organisation to handle apparently. You may be wondering where the problem with having a presence in so many markets is. You see when the managing directors of the major divisions in Sony’s organisation come together to make the big decisions I guess they struggled to come to a compromise or solution because a product launch can benefit one but impede on another. The first example is how Sony allowed Apple to lead the MP3 player revolution. Sony was aware of the potential of MP3 files due it’s accessibility for consumers but also the impact it would have on the music industry a.k.a Sony Music Entertainment. It could please both the electronics and music divisions so they held back and held on dearly to it’s Walkman CD Players, wrong move. The I-pod is the Walkman killer and has changed the electronics industry forever.
Marketing myopia?
Since then Sony has gone downhill fighting competition on all fronts and it is just about coping, Sony has turned from a major brand to just ‘another’ brand in the market. Charging premium prices on products but struggling to communicate to consumers why they should invest in their product range when Samsung offers the same quality but more competitive prices. Apple is eating up market shares in the electronics industry ferociously with no intention of stopping. My marketing lecturer says it is Marketing Myopia all over again, this is obvious within the next-generation game console. Microsoft launched it’s Xbox 360 skipping development stages just to be the first which was evident with the mass Red Ring of Deaths crisis but it paid off. Sony pushed it’s customers loyalty to the limit with the heavily delayed launch and massive launch price of it’s PS3 which ended in the price being cut by nearly 2/3 to match the 360 and the Wii so it can sell more units. Sony simply forgot to listen to it’s consumers.
The problem is the solution? The next step of innovation.
So what is the solution? Sony are already cutting down it’s product range, bureaucracy and management layers and investing in more research and development. This is an obvious procedure which after all Sony has been through most professionals would have decided to do. It is now about finding the product innovation which would lead to the next big thing in the market. I believe Sony should turn it’s problem into the solution. Having so many divisions means having a diverse mass amount of knowledge they’re competitors don’t have. By combining the research of their different divisions Sony can discover product innovation in places which their main competitors are just unable to touch. No one else would have anticipated the success of the Blu-Ray player but Sony who has dabbled in the movie and home electronics sector. The Blu-Ray has the backing of the movie publishers with it’s anti-piracy technology which is a win-win with both industries and an alliance which Sony has use to push the product through. The PS3 is the better product compared to the Xbox 360 and with the slow increase in sales, Sony may be able to gain more market share back as soon as it realises a new differentiation strategy.
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