Apple Inc vs Sony - SAFE Analysis of the Business and Corporate Strategy - Case Study Example

Apple Inc & Sony Name: Institution: Executive summary Apple Inc and Sony have been performing favorably in their respective industries. The report will undertake a comparative analysis of the two forms firm and in this case our two firms are apple and Sony. Establishment of Apple Inc dates back to the year 1976 while that of Sony dates back to the year 1946. Based on the analysis apple Inc seems to have a more foreseeable future as compared to Sony this is mainly based on the fact that the company seems to be more innovative and they also undertakes continuous research. With this they will be able to survive and thrive in the market for the next ten years. Future manager need to solve the challenges that are facing them in the implementation of the strategies they have put in place. This will ultimately ensure that they gain higher level of profits to their competitors in the market. The leaders also need to ensure that they analyze the business in which they are operating in an effective manner. By this they will be able to solve challenges that may come their way and thus achieve the required level of success of their companies. Introduction This report sets out to analyze two real life organizations that is; Apple inc. and Sony. The first aspect in the report will be brief background information of the two firms this will incorporate aspects such as the ownership, size, history, major products or services, major markets and the scope of the business. This will be followed by an evaluation of the performance of two firms since the year 2002 this will include the successes and the setbacks that the two firm a have encountered in implementing the strategy in that period. A SAFE analysis of the current business and corporate strategies will also be analyzed and the likelihood of each of the firms being successful over the next ten years. In relation to this a personal view will be offered on which of the two firms have the best prospect. The report will also offer an identification of the two major challenges that are faced by the each of the firms in their implementation of their current strategies. A conclusion will also be offered for the future careers as the manager from the comparative analysis of the two firms. Background information of SONY and Apple Inc Sony Corporation is commonly referred to as Sony; it is a Japanese transnational firm with its headquarters in Tokyo Japan. The corporation is amongst the leading manufacturers of electronics for both the professional and consumer markets all over the globe. The corporation offers products in four major product segments lines that are: electronics, financial services, motion pictures and music. Sony has a wide business scope that is despite from the electronic they also offer other products that go hand in hand with the electronics. The corporation was formed back in the year 1946 by Akio Morita and Masaru Ibuka. The company has over time grown and now has a global presence. As of the year 2009, the company had an employee base of 171,000. The corporation has a global presence but the major markets for the company’s products are America, the corporation has a subsidiary which is based in New York which makes the products more readily available to the American market. Apple inc. is a multinational company that is based in American and it is solely concerned with the design and sale of consumer electronic, personal computers and computer software’s. The corporations dates from the year 1976 by Ronald Wayne, Steve Wozniak and Steve jobs and it core function was to sell apples personal computers kit. Apple Inc has a number a total number of 364 stores which are located in thirteen countries in the world. The corporation also has some online stores (Apple Inc 2012). The corporation has a very wide business scope which ensures that they are able to offer their products to their customers globally. With the online store the corporation is able to offer products to other countries which they do not have any stores. The company has an employee base of 60,400 permanent employees while the temporary employee amounts to 2,900. The corporation offers a number of products to the customers the products include ipads, iPod, Mac and accessories, iphone apple TV and software (Apple Inc 2012). Performance since of the two firms since 2002 Despite the numerous restructuring in Sony the company has not been performing according to the expectations of the managers. For instance in the year ending 2001-02 the revenues of by almost 40.3%. On April the following year the company announced its quarterly results and the company had incurred a loss of about 116.5 billion. In June 2003 the company net income amounted to ¥ 1.1 billion it was said that this was 98% lesser than the profit of ¥ 57.2 billion that had been reported in the equivalent quarter of the 2002. Analysts claimed that the reduction on the profit of the company was due to the huge amount of money that the company had incurred in the implementation process of the restructuring plans that they were undertaking (Barney 2001, P. 45). In the following year the electronics department made a loss of ¥ 6.8 billion in the year ending 2004. The company’s sales drop by about 7.5% to ¥ 2148.2 billion while the other operating income dropped by approximately 13% to ¥ 138.2 billion the following year. The net profit of Sony in the July-September quarter of the year 2006 was to 1.7 billion Yen, and it was 94% lower than 28.5 billion Yen which had been recorded in the same period the previous year. Since the year 2002 immediately after the launch of IPod, apple outperformed its competitors in the industry. Apple seems to be gaining ground. In the year 2002 apple was rated as been the second lower ROA relative to its competitors in the industry. Since then the company has grown at a faster rate than that of the competitors as in the year 2007 the company was the rates as the second highest in terms of ROA. This apple Inc has had a strong performance as compared to the other competitors in the industry. Since the year 2002 apple profits and revenue had been on the rise. In the year 2002 the company had a net profit of 65 million US dollars, the profits reduced slightly in the next year and amount to about 57 million US dollar, in the preceding year the company profits amounted to 266 million dollars. It is also noted that after 2004 the profits have been increasingly tremendously and as the year 2011, the profits stood at 25,922 million US dollars. SAFE analysis of the business and corporate strategy of Sony and Apple Inc Sony has adopted a strategy that is aimed at restructuring the various aspects in their business so as to attain in the aim of attaining high level of performance. Despite the various restructuring that have taken place in the organization the company has incurred a lot of losses and this losses are mainly attributed to the fact that they have incurred a lot of expenses in the restructuring programs that have been adopted in the organization. Apple’s business strategy is aimed at bringing about the best portable digital music, personal computing as well as the best personal mobile experience to the educators, students, consumers, businesses as well as the government agencies. They aim to achieve these by offering innovative software, hardware, services, internet offering and also through peripherals (Johnson, Whittington & Scholes 2011, p. 678). The strategy that have been adopted by apple inc leverages the company’s exclusive ability to develop and design their own operating system, applications of software’s, hardware’s and high level of services that will offer the customers new solutions, products that are superior and at the same time easy to use. The new products will also offer seamless integration and inventive industrial design. The company has a high believe on the continuous investment in development and research and they view it as a core issue in the enhancement and development of the innovative technologies and products. Based on the evaluation of the two firms Apple Inc seems to have to have a higher probability of succeeding in the next ten years this is mainly based on the aspect that the company is innovative and they are also undertaking research of new aspect that they can incorporate in their business. Challenges facing Sony and Apple Inc in the implementation of the current strategies According to the Stringer the CEO of despite the numerous restructuring the company is been faced by a number of problems. One of the major challenges that are facing the company is related to the silo culture that is used in the organization. Most companies in the world acknowledge that collaboration between the various departments in the company is seen as been a key to the success in the current unstable business environment (Sony Corporation 2012). In this international and interlinked market there is a highly connected form of working, the collaboration becomes an imperative aspect to the company’s success. Nevertheless there are corporations that intentionally or instinctively endorse a culture that contains barriers to collaboration. In Sony the various departments work with their members and in most instances avoid the interaction with the other departments. Most of the divisions are reluctant to cooperate with others and at times they tend to have their own cultures which are unfit for the other departments in the organization. With these the system the employees at Sony the employee tend to keep secrets and are unwilling to work with the other employees in other departments. The employees are also reluctant to distribute information and ideas and they also tend not to reach out to the others in the organization. This aspect acts as a major barrier to growth of the organization and the employees (Kotler & Keller 2006, p. 123). Based on the culture the employees the leaders tend to have a parochial approach in regard to decision making. The leaders tend to make decisions without notifying the employees this may eventually lead to conflict within the organization. This will also impact on the employee participation and involvement negatively. Another challenge that is facing Sony is related to the attainment of profitability across the various businesses. Despite the major restructuring in the organization the company seems to be battling on various fronts against their competitors, the competitors are at times agile and more nimble (Markides 2004, p. 78). The company has for the long period incurred some losses and despite the numerous efforts that have been carried out by the organization. For example in the year 2002 the year incurred a loss of about 116.5 billion. The operating cost of the company have been increasing and this has in one way or another affected the revenue been generated by the organization. The numerous restructuring in the organization is said to contribute a lot to the losses been incurred in the organization. The company has incurred a lot of money in the implementation of the plans. Challenges facing Apple inc. in the implementation of the current strategies Like any other company operating in the modern day business world Apple Inc is faced by a number of challenges in the implementation of the current strategies. The major challenge that apple Inc faces is related to the management of growth that is facing is the management of growth. Apple inc. is getting bigger at a faster rate (Finlay 2000, p. 99). When compared to companies such as IBM and Microsoft the company seems to be faring on well for example when Microsoft was recording a revenue growth of about 4.67% while IBM on the other hand recorder a growth of 1.61% apple on the other had recorded a 75% revenue growth. A great amount of the money will be used in the expansion plans of the company to countries such as the china. Another challenge that is facing apple Inc is the competition challenge. So far apples barriers to competitors as well as to innovation are alarming and any organization such as Nokia, Hewlett Packard. The companies have in one way or another tried to challenge Apple Inc. the company has faced numerous challenge on two of its major products that is the iphone and the ipads. On the tablet bazaar, Apple competes with unlikely challenger like Amazon.com. Amazon intends to realize a new version of the kindle reader and this may seem a major blow to the apple ipads. In relation to the iphone apple faces numerous challenge form Google’s android phone in instances when Google is able to integrate with Motorola mobility (DeWit & Meyer 2004, p. 78). Conclusion Based on the analysis comparative analysis of Apple Inc and Sony, manager of the future need to analyze the environment in which they are operating in the right manner so as to achieve the highest level of benefits. Through the analysis they will be able to identify areas that may impede the profitability of the firm and take measure to ensure that the firm attains the required levels of profitability. Managers of the future also need to ensure that they identify and solve the challenges that are impending the success of the adopted strategies in the organization. With this the challenges will be solved and eliminated in the firm and thus the firm will be profitable and will have a competitive advantage over their core competitors in the market. References Apple Inc 2012, Apple corporate website, available at Accessed on 25th September 2012. Barney, J 2001, “Is the resource-based "view" a useful perspective for strategic management research? Yes”, Academy of Management Review, 26 (1), p. 41-56. DeWit, B & Meyer, R 2004, “Strategy: Process, Content, Context”, 3rd Edition, Thomson International Business Press, London. Finlay, P 2000, “Strategic Management: An introduction to business and corporate strategy”, Prentice Hall, New Jersey. Johnson, G, Whittington, R & Scholes, K 2011, Exploring Strategy: Text and Cases (9th Eds), Prentice-Hall, Sydney. Kotler P & Keller K 2006, Marketing Management, 12th Edition, Prentice Hall, New Jersey. Lynch, R 2000, “Corporate Strategy”, 2nd Edition, Prentice Hall, New Jersey. Markides, C 2004, “What is strategy and how do you know if you have one?”, Business Strategy Review, 15 (2), p. 5-12. Sony Corporation 2012, Sony corporate website, available at: Accessed on 25th September 2012. Read More