Sony Corporation: Vision, Mission, Objectives - Case Study Example

Sony Research Paper of the Executive Summary Sony Corporation, commonly known as Sony, is a multinational corporation based in Japan. The company has a diversified business portfolio, ranging from electronics and entertainment segment to games and financial services. The company operates under brands such as Sony Pictures Entertainment, Sony Music Entertainment, Sony Financial, Sony Mobile Communications and Sony Wonder, among others. The study has shown the principal objective of the company is to be one of the top electronics manufacturers and sellers of the world. The mission of the company is to “be the brand of choice in the hearts and minds of our customers by delivering the best customer experience”. Sony is often considered as one of the most prestigious companies of the world and is deemed as a company that complies with rules and regulations of the government. Despite a strong position in the market, the company needs to focus on certain areas for better outcomes. The company has, therefore, been recommended to launch online stores, integrate the global supply chain and improve customer service and also, consider line extension. Table of Contents Introduction 5 Vision, Mission, Objectives 5 Industry Analysis 6 Macro Environment 6 general economic conditions. 6 technology. 8 societal values and lifestyles. 9 population demographics. 9 legislation and regulation. 10 Analysis of the company’s Internal Standing 10 Immediate Industry and Competitive Environment 11 suppliers. 11 substitute products. 11 rival firms. 11 buyers. 11 New entrants. 12 analysis of the company’s industry standing. 12 Internal Analysis 13 Corporate Governance 13 Organizational Structure 13 Company Culture 14 Social Responsibility 14 Resources 16 Analysis of the company’s Internal Standing 17 Corporate Strategy 17 Analysis of the company’s Corporate Strategy 17 Evaluation and Control 17 Analysis of the Evaluation and Control Procedures and Successes/Failures 17 Recommendations for the Future 18 References 19 Introduction Sony Corporation, commonly known as Sony, is a multinational corporation based in Japan. The company is presently headquartered at Kōnan, Tokyo, Japan. Sony was incorporated in 1946 and was founded by Akio Morita and Masaru Ibuka (Sony, 2012). The company is presently headed by Osamu Nagayama (Chairman of the Board) and Kazuo Hirai. Sony is considered as one of the leading electronics goods manufacturers of the world, catering to both the consumer and business market. The company has a diversified business portfolio, which ranges from electronics and entertainment segment to games and financial services. The company operates under brands such as Sony Pictures Entertainment, Sony Music Entertainment, Sony Financial, Sony Mobile Communications and Sony Wonder, among others. This reflects the diversified business portfolio of the company. Sony is currently ranked at 87th position on the 2012 list of Fortune Global 500. Sony Corporation is the electronic commerce unit as well as parent unit of the Sony Group, which is involved in business through four key operating segments and some of their well-known products are semiconductors, telecom equipment and computer hardware and consumer electronics. The company has a global presence and employs around 146,300 people. In the financial year 2012-2013, net revenue of the company was US$ 72.349 billion, thus, reflecting high financial stability. In this report the prime focus will be on the analysis of the internal and external environment of the firm. Apart from that, the industry, in which the company is presently operating, will be analyzed; and on the basis of issues identified through evaluation, the study will suggest ways through which the company can overcome the present challenges as well as increase efficiencies of operation in the future. Vision, Mission, Objectives Although mission and vision statements do not act as an indicator of success, they play a crucial role in shaping the company’s operations. Through the mission and vision statement, a company generally portrays their intentions of existence in the marketplace. In the similar way, objectives of a firm act as a pathway and guide the same towards achievement of the goals. As given on the official website, mission of the company is to “be a company that inspires and fulfills your curiosity”. Apart from that, Sony also aims to “be the brand of choice in the hearts and minds of our customers by delivering the best customer experience” (Sony, 2014). The mission statements clearly reflect passion of the company in order to develop and deliver ground breaking and highly innovative products. It also reflects the company’s intention to create unique products and continuously deliver value that satisfies the need of customers. The vision statement of the company is “to experience the joy of advancing and applying technology for the benefit of the public” (Sony, 2014). This again reflects the company’s intention of using technology for public welfare and societal development. The tagline of the company (“Make. Believe”) reflects strong belief and confidence that the company has for its products and services. The principal objective of the company is to be one of the top electronics manufacturers and sellers in the world. In addition to financial growth and expansion, the company also attempts to develop the society and environment through various philanthropic initiatives. Industry Analysis Macro Environment general economic conditions. Despite a stern economic scenario, Sony Corporation continued to flourish and has been managing the operations efficiently. A majority of the players, belonging to the electronics industry, has suffered great losses during the recession phase; however, only few players, including Sony, have been able to embrace growth. As mentioned previously, in the financial year 2012-2013, net revenue of the company was US$ 72.349 billion and the company has been able to earn a profit of $35 million. This clearly proves the ability of the firm to perform under unfavorable business conditions. The company has been able to achieve a growth of 4.7% in comparison to the previous year. When financials of the firm is evaluated, in context of business divisions, it has been observed that highest revenue generator for the firm is the mobile communication division. The Home Entertainment & Sound division follows with 14.8% share. Figure 1 – Proportion of Sales by Business (Source: Sony, 2013) Overall, it seems that without any major environmental shifts, the company will continue with the robust growth as well as development process and is also expected to get driven by innovation. technology. Technology is the integral part of Sony’s business and it is hard to imagine the latter without the former (Goleman, 1996; Boddy, 2002; Capra, 2002). The company is itself dubbed as a technology giant and believed to be one of the global promoters of technology. Studies have shown that, in the recent years, there has been a pragmatic shift in the way in which people seem to use technology. Individuals are increasingly sharing information that is bit-sized and Sony is actively seeking ways to support such expectations and desires of these users. The company basically wants to explore the impacts that these technological shifts have or will have on the company. One of the major strengths of the company is creativity and sophistication that is attached with each of their products. This enables Sony to function at par with the competitors. The company is continuously making investments so as to develop technology and further expand into new range of products, such as, sensor applications, 3D televisions and 4K-compatible cameras, to name a few. Reports have claimed that Sony invests about 6.1% revenue in research and development activities. Figure 2 – R&D Investment (Source: Schmidt, 2012) societal values and lifestyles. Sony has always been known as an eco-friendly company, which takes various initiatives to safeguard the environment and gives enormous importance to societal needs. Presently, the company is taking various initiatives to reduce the impact on environment. Although numerous oil-based plastic products manufacturing companies try to create a scalable carbon footprint, yet Sony is a shining example to other manufacturers as it has been able to reduce carbon emissions considerably (Goleman, 1996; Boddy, 2002; Capra, 2002). The company aims to completely expunge the environmental impact by 2050. The “road to zero” is one such initiative of the company. In this context, Sony is using raw materials that have least impact on the environment. Besides that, the company is also promoting product recycling, where it is manufacturing new items with recycled plastics (Rivington, 2012). Bio-batteries are another example that reflects Sony’s pro-activeness towards preservation of society. Though ‘zero emissions goal’ is a distant dream, but such initiatives would definitely help the company to accomplish their objectives. population demographics. Consumer demographics have always been a critical business aspect for the firms (Goleman, 1996; Boddy, 2002; Capra, 2002). In the similar way, Sony gives enormous importance when it comes to market segmentation. The diversified product range is an impression of the company’s desire to cater to every consumer segment. The highest revenue generates from Japan. Almost 30% of the overall revenue comes from Japan whereas US produces 20.1 % sales. Europe generates about 21.4% revenue. This shows that the company has a widespread business and the performance level is satisfactory in every part of the world. The company basically targets every group of customers starting from teens to aged population with its diversified product line. The company has devices for every group of people and hence it does not depend on age. For example, the company is offering gaming consoles which are targeted towards the teen population whereas other household appliances are targeted to the mass. Figure 3 – Region Wise sales of the company (Source: Sony, 2011) legislation and regulation. Sony is often regarded as one of the most prestigious companies of the world as well as one that complies with the rules and regulations of the government (Goleman, 1996; Boddy, 2002; Capra, 2002). The company gives emphasis on the local laws and regulations, before devising their operations strategy. Furthermore, reports have also suggested that Sony is committed to offer up-to-date and accurate information to the customers and take various initiatives in order to safeguard customers from getting deceived by the intermediaries. According to industry experts, Sony is the only company that considers environmental conservation as the central element of the management’s policy. Sony continuously strives to meet the expectations of consumers by being a good corporate citizen, which adheres to the laws, social standards and regulations of the countries (of operation) across the world. Analysis of the company’s Internal Standing Similar to the external business environment, the operations of a firm is greatly impacted by the internal environment. In this segment of the study, internal environment of the company will be studied. Here, the study intends to analyze the immediate industry and competitive environment of the firm, their suppliers, substitute products, buyers, rival firms and new entrants. The aim is to underpin the intensity of forces of the aforementioned domains. Immediate Industry and Competitive Environment suppliers. Suppliers are another set of organization that provides raw materials to the firm (Capra, 2002). Sony has entered into treaty with numerous suppliers across the globe, which reduces the power of suppliers. Moreover, Sony, as a global brand, has suppliers from all over the world and the switching cost is literally negligible. Despite availability of sufficient number of suppliers, the company only deals with existing providers in order to ensure management of quality (Goleman, 1996; Boddy, 2002; Capra, 2002). substitute products. The diverse range of products from Sony hardly has any substitutes. However, there are some products, which can be classified as substitutes, but intensity of these substitutes is a subject of discussion. For example, in case of Sony Mobiles, laptops or desktops and tablets can be adjudged as the substitutes of Sony. As a result of that, the bargaining power of suppliers is significantly low. rival firms. The key competitors of Sony are Samsung, i-Ball, Philips, Godrej, Hitachi, Apple and Nokia, to name a few (Boddy, 2002). Nonetheless, these competitors differ from one industry to another. For example, Warner Brothers is one of the major competitors of the firm in the motion picture segment. In the similar way, various financial and non-financial institutions act as a rival to the firm, when it comes to financial service division. buyers. The buyers are the most vital stakeholders of a firm as it literally becomes void without availability of customers. The buyers of the company include people from every culture, religion, age or sex. The products are such that the company does not require putting any extra efforts in order to specifically target a certain customer base. Apart from doing B2C marketing, Sony is also active in the field of business to business markets. Even so, due to the presence of various providers in the market, buyers exhibit a switching tendency; but, this switching cost is often high, which obstruct the buyers from making frequent shifts. Hence, from an overall viewpoint, the bargaining power of buyers is moderate. New entrants. New entrants are a major cause for apprehension for a firm as new comers are a source of competition for Sony in the future (Goleman, 1996). The startup cost required to operate in the electronic industry is huge and as result of that, new entrepreneurs do not consider it as a feasible option. Apart from that, there are various issues related to licensing. The need for constant innovation and high scale economy is another barrier for the industry. Hence, the threat of a new entrant is considerably low. analysis of the company’s industry standing. Sony is a global player and is also one of the biggest and most influential players of the industry. Sony is the market leader in many of the sectors, where it is presently operating. After analyzing the internal environment, following are the factors driving the company. It is also believed that if Sony succeeds to continue with the current system of operation and continuously upgrades it, then the company will be able to ensure long-term sustainability. • Continuous innovation and implementation of new technology. • Low cost of production and economies of scale. • Market leader in many of the sectors, in which the company is operating. • Eco-friendly operations. • Global presence. Internal Analysis Corporate Governance Sony has been committed to strong corporate governance for a long period of time and is one of their key management initiatives. Sony’s “Company with Committees” is one such initiative of the firm. In addition to complying with the corporate governance regulations and laws, Sony has introduced its own requirements so as to maintain and improve transparency and soundness of its governance. According to the official website of the firm, “the Board of Directors defines the respective areas for which each of the Corporate Executive Officers is responsible and delegates to them decision-making authority to manage the business, thereby promoting the prompt and efficient management of the Sony Group” (Sony, 2014a) . Organizational Structure Sony Corporation is administered by a board of directors, which is appointed on the basis of the resolution at annual shareholder’s meeting. The board is broadly divided into three committees, namely Nominating Committee, Audit Committee and Compensation Committee. (Source: Sony, 2014b) Company Culture The culture of Sony emphasizes on "a spirit of freedom and open-mindedness" and also, a spirit to innovate. The company always promotes a culture, where employees are free to think and present their valuable suggestions to the management. This makes the employees worthy and at the same time, constantly engages them in the development process. Sony basically aims at creating a workplace culture, which inspires employees to face new challenges and seek growth through realization of innovative and creative potential. The company also strives to motivate and foster personal growth through on-the-job method of learning. Some of the common initiatives taken by the firm are training and development aimed at enhancing personal skills and expertise as well as development of management and leadership skills Social Responsibility The company is involved in various social works and mostly intends to serve the welfare of the society and environment. The socially responsible activities of the company reflect their intentions towards betterment and well-being of the society as well as the environment. According to the company website, “we engage our corporate social responsibility with innovation, wholesome business practices, and diversity and inclusion, all with the single goal of realizing sustainability following our corporate philosophy – for the next generation” (Sony, 2013). Sony appears to believe that business have indirect as well as direct impacts on the societies in which they are operating. Some of the key initiatives of the firm are described below:- Environment Policy: - The company is highly committed towards abiding by and meeting the requirements of globally established environmental laws. Apart from that, the company has already implemented various pollution preventive measures and techniques, which help to minimize the environmental impact. Imparting training to the employees for the purpose of creating awareness among stakeholders and employees is also a vital initiative. Electronic Waste (“E-Waste”) Management: - The company believes that “Saving environment is a shared responsibility” and as a result of that, Sony seeks cooperation and understanding from its consumers. The e-waste management is an initiative of the firm towards reduction of environmental impacts of the products and services. The Sony e-waste management reestablishes the commitment to ensure compliance of environmental rules and laws in the world by securing appropriate management of electronic waste. “In order to promote and encourage electronic waste recycling, we would advise consumers to deposit your electronic equipments and accessories at any of the collection centers mentioned in the list attached” (Sony, 2013). Resources Financial Resources (Source: Sony, 2014c) The figures clearly reflect strong growth that the company has experienced. With such stability, it is expected that the company will continue to innovate and offer ground breaking products and services. Human Resources The company gives enormous importance to the human resource and it presently employs around 146,300 people across the globe. Physical Resources The company owns numerous manufacturing plants and buildings across the globe. Apart from that the physical resources of the company also includes more than 1000 Sony owned retail outlets. Intangible Resources The biggest intangible resource is the brand name and reputation of the firm in the market. Sony is adjudged as one of the global market leaders. The logo of the company itself acts as an identity and reflects generations of trust. Analysis of the company’s Internal Standing The strong hierarchical structure and an encouraging culture are key drivers of the company. The success of the company has been largely due to the organizational culture, which has always promoted innovation and creativity in the workplace. Based on the human resource, financial resource, intangible resource and physical resource, the company has been able to create a streamlined business as well as a smooth value chain. Corporate Strategy Analysis of the company’s Corporate Strategy The company is actively pursuing multi-brand as well as multichannel strategy for a number of years now. The company has been operating in diverse business segments and this has allowed them to target various customer segments. The strategy to expand globally has also paid off for the company as it allowed them to experience comprehensive development. Nowadays, the company is seen to actively use digital platforms for the purpose of strengthening their electronic segment, thereby creating a new revenue generation channel. Evaluation and Control Analysis of the Evaluation and Control Procedures and Successes/Failures Sony spends lot of time in devising the most relevant and appropriate strategy in order to ensure smoother business flow and higher level of customer satisfaction. The company also makes strong efforts for the purpose of delivering quality products and services. Apart from that, Sony also has installed an internal control system, which enables them to measure the performance of the firm. Alongside that, implementation of techniques, such as, balanced scorecard, has allowed the management to measure employee performance; and on basis of the same, employs corrective measures. Recommendations for the Future The following are recommendations for the company: - 1. Online Store: - The Company is strongly recommended to launch online stores, which are one of the key requirements in the present business scenario. A company owned store would be really beneficial for them as profit margins will continue to remain high and will also act as a new sales channel. 2. Global Supply Chain: - Integration of global supply chain is another feasible decision for the firm as it will allow them to procure raw materials in timely manner, besides reducing the cost significantly. In addition to that, it will also help the company to mitigate risks of market volatility. 3. Improvement of Customer Service: - The only concern for the company is improper and sub-standard customer serving. The company has been facing issues pertaining to poor customer service for long. As a result of that, the company is recommended to improve their customer service. This can be done by offering on-site services, 24*7 telephone and e-mail support and establishing higher number of physical servicing points. 4. Line Extension: - The Company can extend their product line as well as explore areas such as, kitchen appliances and cleaning tools. Exploration of these areas will enable Sony to strengthen their market position. References Boddy, D. (2002). Managing Projects. Edinburgh Gate: Pearson Education. Capra, F. (2002). Life and Leadership in Organizations: The Hidden Connections, Random House. Connecticut: Cengage Learning. Goleman, D. (1996). Emotional intelligence: Why it can matter more than IQ. London: Bloomsbury. Rivington, J. (2012). How Sony is trying to save the world. Retrieved from http://www.techradar.com/news/television/tv/how-sony-is-trying-to-save-the-world-1063363. Schmidt, H. D. D. (2012). You cannot buy innovation. Retrieved from http://www.asymco.com/2012/01/30/you-cannot-buy-innovation/. Sony. (2011). Sales by Region, Year ending March 31 2011. Retrieved from https://presscentre.sony.eu/ImageLibrary/detail.aspx?MediaDetailsID=203311. Sony. (2012). About Sony Electronics. Retrieved from http://discover.store.sony.com/sonyjobs/pages/about/about.html. Sony. (2013). Fiscal Year 2012 Earnings Release. Retrieved from http://www.sony.net/SonyInfo/IR/financial/ar/2013/highlight/p1.html. Sony. (2014). About Sony. Retrieved from http://www.sony.net/SonyInfo/. Sony. (2014a). Corporate Governance. Retrieved from http://www.sony.net/SonyInfo/csr_report/governance/. Sony. (2014b). Governance Structure. Retrieved from http://www.sony.net/SonyInfo/csr_report/governance/index2.html. Sony. (2014c). Sony: News & Information. Sony. Retrieved from http://www.sony.net/SonyInfo/IR/financial/fr/13q3_sony.pdf. Read More