A Strategic Analysis of Sonys digital camera division

Sources of Competitive Advantage Assignment 1

By Chengeta, Escherich, Kiebler, Tian & Zhao

30.10.2012

Agenda

Introduction

PESTEL analysis
5 Forces analysis Conclusion

Introduction

Corporative Goal Data

Fully leverage the global uniqueness through aggressive convergence strategy Emotionally touch and excite customers Headquarter Employee Tokyo 162,700 Revenues Net income 5 bn. - 0,7 bn. Founded Industry 1946 Conglomerate

Sony Electronics PC & Network Audio & Video Dig. Imaging Compact D-SLT Digital ...
11,1% 7,6%

Entertainment Sony Pictures Sony Music

Finance Fin. Service

Structure

Camera Market

Canon Sony

19,0% 17,9%

Samsung Panasonic

Nikon

12,6%

PESTEL analysis UK market

Factor

Trend
Taxation policy: tax reduction Low trade barriers: open and free markets

Impact

Political

Increase of wages - minimum wage Changing health & safety regulations Declining sales growth negative CF Credit crunch

Economical

Economic recession Expected inflation

Good reputation of Sony as a Brand

Social

Aging population Tourism: Camera a necessity

PESTEL analysis UK market

Factor

Trend
Dynamic market short PLCs / innovation cycles Competition on quality and innovations

Impact

Technology

Upcoming and growing 3D Market Device convergence [Cameras in Phones] Government regulation impact on electronic waste

Environment

Manufacturing facilities closed due to tsunami (199 million loss)

Hacker attack 2011 sensitive customer data

Legal

Age discrimination and disability discrimination

5 Forces Sony digital camera devision

Market Entrants
Large economies of scale Very high capital requirement Expected price and production retaliation Strong brand loyalty Low

Bargaining Power of customers

Medium / High

Bargaining Power of suppliers Degree of rivalry

Oligopolistic market Declining market sales growth Price competition High innovation in the industry High exit barriers High Various Joint Ventures

Low

Low/high switching costs (DSL vs. compact cameras) High price sensitivity Increasing prices through Yen No forward integration Large number of customers Small number of sellers

Low supplier concentration In-house production of high valuable components Low possibility of suppliers buying forward

Substitutes
Short product life-cycle High R&D costs Lack of Differentiation

Medium / High

Cameras in mobile phones

Conclusion

High Bargaining Power of customers

5 Forces

Highly competitive market Threat through upcoming substitutes

Summary
Increasing demand for CSR in Consumer Electronics

PESTEL

Fast technological changes New markets 3 D

Action
Focus on Design and Innovation

Effect
USP / Competitive Advantage Meet Environmental demands Cost cutting / bigger market share

Recommendation

Implement Sustainability Strategy Transactions and collaborations

Concentration on profitable products

Higher revenues

Do you have any questions?

By Chengeta, Escherich, Kiebler, Tian & Zhao

30.10.2012

References
Cornish: http://www.wired.co.uk/news/archive/2012-09/28/sony-and-olympus

accessed: 25.10.2012 Dpreview: http://www.dpreview.com/news/2012/09/28/Olympus-and-Sony-

confirm-yen31bn-397mdollar-collaboration, accessed: 23.10.2012 Euromonitor: http://www.euromonitor.com/cameras-in-the-united-

kingdom/report, accessed: 24.10.2012 Dpreview: http://www.dpreview.com/news/2012/09/28/Olympus-and-Sony-

confirm-yen31bn-397mdollar-collaboration, accessed: 24.10.2012 New York Times: http://www.nytimes.com/2011/07/29/business/global/sony-

earnings.html, accessed: 26.10.2012

References
Sony: http://www.sony.net/SonyInfo/IR/ Sony: www.sony.co.uk, Accessed: 25.10.2012 Sony: http://www.sony.com/SCA/press/110314.shtml, Accessed: 26.10.2012

Sony: http://www.sony.net/SonyInfo/IR/financial/ar/2012/message/
Department for Business Innovation & Skill: http://www.bis.gov.uk/policies/trade-

policy-unit Accessed: 24.10.2012 The guardian: http://www.guardian.co.uk/business/2012/aug/05/credit-crunch-

august-2007-recession.html, Accessed: 24.10.2012