Business Studies
I have been asked to do an assignment on Business Studies. The assignment must be 2,000 words long. The assignment has to be in for the 1st December and the tutor is Chaz Davies.
Sony is leading audio-visual electronics and information Technology Company worldwide. Sony is the second largest music company in the world. Sony is a leading motion picture and television production company worldwide. They are a co-developer of the CD, DVD, and the super audio CD. Sony is the developer, manufacturer, and the marketer of the Playstation and Playstation 2 consoles. Sony is a publicly held company, with shares listed on 16 stock exchanges worldwide, including Tokyo, New York and London. Sony is a company that has 1035 consolidated subsidiaries worldwide.
Most businesses are classified in different ways. The type of the organisation will usually reflect on the size of the business. Here are some of the different areas that a business might be associated with.
Sole Trader
Sole Traders is the most common form of business. A sole trader is owned by one person and it might employ several people. A sole trader is the easiest form of business to set up but they are also liable for their debts. If they can't pay their debts not only will they lose the business but they could lose their personal possessions such as homes and cars. This is called unlimited liability. Some examples of sole traders are mobile hairdressers, a gardener, a plumber or an electrician.
Sony P.L.C. might have to deal with sole trader and partnership organisations. Smaller businesses that might supply a small part of a product to Sony P.L.C. are likely to be sole traders and partnerships. They are likely to be operated in countries like China and Taiwan.
Partnerships
A partnership can have anything between two and 20 owners within the firm. When raising capital within a partnership it is much easier with the numbers within the firm and partners might be specialised in certain areas. In some circumstances partnerships could be the best form of business to set up. A 24 hour service might be able to be operated and if one partner goes on holiday or is sick then the business would still be able to cope. A partnership will still be affected by unlimited liability. Some examples of partnerships are accountants, solicitors, and doctors.
Public Limited Companies
For a company to start trading firstly it has to register and one paperwork has been approved the company will become a legal body. The owners of a company are the shareholders. Shareholders put money into the company and in return they get shares. The directors of the company can go to the registrar of companies to issue new shares. If the registrar agrees then this is called the authorised capital. Issued capital is the value of shares that is sold to shareholders. A company may choose not to issue the full value of the authorised capital. Shares can be bought over a period of time. Each stage is called a 'call' and it will take three or four call until the full amount would have been paid. The Sony Corporation is a public limited company quoted on the Japanese stock exchange. They trade in over 200 countries and this is only possible because they can raise cash quickly.
Private Companies
Private companies are usually smaller than Public limited companies. There must be at least two shareholders, but there is no maximum number. Shares can only be bought with the permission of the board and will not be traded on the stock exchange. The board of directors are set up to responsible and protect shareholders interest. The board of directors will choose a candidate to be managing director and they will be in charge of the day to day running of the business. Private companies will find it easier to raise cash through selling shares than ...
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Private Companies
Private companies are usually smaller than Public limited companies. There must be at least two shareholders, but there is no maximum number. Shares can only be bought with the permission of the board and will not be traded on the stock exchange. The board of directors are set up to responsible and protect shareholders interest. The board of directors will choose a candidate to be managing director and they will be in charge of the day to day running of the business. Private companies will find it easier to raise cash through selling shares than unlimited companies. Shareholders also have the protection of limited companies.
Economies of Scale
Internal economies of scale arise when an organisation decides to go bigger. When the organisation becomes bigger the organisation will experience and benefit from the average cost per unit of production is falling as output is rising. This will make the organisation more productive and efficient.
External economies of scale apply to industries where the organisation is operating and organisations can enjoy these economies as the industry expands. External economies are located round particular areas. For example, steel in Sheffield, shipbuilding in Newcastle, and textiles in Lancashire. External economies are sometimes referred to as economies of concentration.
Sony P.L.C. benefit from having large economies of scale. If the level of economies of scale dropped then Sony P.L.C. profit margin would drop. Sole traders or partnerships wouldn't be able to manufacture electronic products like Sony because they aren't large enough to deal with the economies of scale a multi national company can deal with.
Objectives
Every large organisation will need to set themselves objectives if they are too grow and get ahead of their competitors and Sony P.L.C. are no different. Sony has two objectives stated below.
* Increase market share
* Produce high quality products
Swot Analysis
Strengths;
* Good product
* Good management
* Leading brand
Weaknesses;
* competition
* Cost of research and development
Opportunities;
* Opportunity for the broadband era
* Diversification into a number of product lines
Threats;
* Growing competition from rival competitors
* Recession leading to poor demand in the economy
* Technological change
Sectors
Industrial activity is usually broken down into three stages:
* Primary sector
* Secondary sector
* Tertiary sector
Primary Sector
The primary sector deals with natural resources. These include jobs such as, farming, oil drilling and mining. Farmers grow and harvest crops while oil drillers take out fuel from the ground.
Secondary Sector
The secondary sector is the manufacturing process of products. Manufacturers use raw materials and most products go through several stages of production. Some examples of manufactured products are chocolate, cars, furniture, and oil rigs.
Tertiary Sector
The tertiary sector is important in Britain today. Services aren't actually physical goods. You can physically touch a car or a television but you can't touch life insurance or the NHS.
Although Sony P.L.C. is a manufacturing company they still rely heavily on the primary and tertiary sector. Without retailing Sony wouldn't be able to sell their electronic products and without the raw materials there wouldn't be any electronic products to begin with.
Stakeholders
A stakeholder is any party that has an interest in a particular organisation. The stakeholders that will affect Sony P.L.C. are;
* Shareholders
* Employees
* Suppliers
* Customers
* Trade Unions
* Banks
* Community
* Government
Analysis
Sony's entertainment systems are becoming ever so popular with middle aged families. Recent surveys have found out that this segment have time to spare, as well as disposable income available. It would make sense that Sony should target this segment in some way. The market for electronic products is expanding due to the technology available and the time consumers have at hand. Markets are now getting bigger and bigger by expanding due to larger sales and mergers.
Different organisations change inputs to outputs in different ways. It's possible to choose production methods into a number of different ways.
Job Production
Job production is when an organisation produces one or a small number of products, for example, a designer dress or a hand-made suit. The product would be made on the producer's premises and then it would be transported to the purchaser. The producer might be working on several projects and have different groups of customers. Organisations operating in this way need to make sure that there are new jobs coming in for the jobs that have nearly been completed.
Batch Production
Batch production is when a number of identical items are produced. The products aren't produced for a specific customer but are made in large quantities for the market. Batch production deals with work being passed from one stage to another and each stage of production are highly planned. Every now and then the production process will be shut down and rest for a different product to be produced.
Line Production
Line production involves products passing down a line of production. The same product will pass down the production line going through the same sequence as before. Car assembly lines are the best example of line production. Most line production plants have replaced staff from work for robots.
Sony P.L.C.s chosen method of production is line production. For each product made there will be thousand's produced along the same conveyor belt. This will apply to all televisions, videos, cameras and computers.
Technological Change
Sony P.L.C. is in a world wide multi billion hi-tech industry. It is important that Sony can adapt quickly to the changes in the world economy. If for some reason that they don't adapt quickly then Sony P.L.C. could be in trouble. They need to be ahead of technological change in their products and services. Sony will need to change their products quickly. By 2005 Sony are forecasting that the broadband era will achieve critical mass. They are concentrating on the electronics and game markets top of their priority.
Standards of Service
Sony P.L.C. must make sure that the standards of products up to a sufficient standard. Some parts might be brought in from developing countries so it's important that products are checked because most of them will be shipped to western countries such as the U.K., Germany and the U.S.A. If products aren't kept above a satisfactory standard then they might not be able to be transported to Europe and the U.S.A. All products that are made outside the E.U. must have an (CE) European commission mark. This mark is to say that the product has passed the standard to enter the E.U. There is also sometimes electronic interference. This will be between two products such as a television and a radio.
Sony P.L.C. is a manufacturing company and it can get dangerous at times. To make sure that there is no danger companies will draw up rules to keep the workforce safe which is health and safety legislation. It's important for large companies to make sure that they follow health and safety legislation because employees will get hurt and it doesn't look good in the world's media. If health and safety isn't above a certain standard then it is possible that they will be disciplined or even shut down in some cases by a governing body.
Production Schedules
Sony P.L.C. is largely involved in the entertainment industry. There are several business areas within Sony P.L.C.
* Electronics - the electronic business consists of audio, video, televisions, information and communications. Sales in this area during 2002 reached 5,310 billion yen.
* Game - Game console and software business is conducted mainly through Sony Computer Entertainment Inc. Sales in this area during 2002 reached 1,004 billion yen.
* Music - Music business is conducted mainly through Sony Music Entertainment Inc. (SMEI) and Sony Music Entertainment (Japan) Inc. (SMEJ). Sales in this area during 2002 reached 643 billion yen.
* Pictures - Motion picture and television business is conducted mainly through Sony Pictures Entertainment Inc. (SPE). Sales in this area during 2002 reached 636 billion yen.
* Financial Services - The financial services segment includes Sony life insurance, Sony assurance Inc, Sony Finance International Inc and Sony Bank Inc. Sales in this area during 2002 reached 512 billion yen.
* Other - The other segment includes location-based businesses, internet related business (So-net) conducted by Sony Communication Network Corporation, advertising agency business and other businesses. Sales in this area during 2002 reached 146 billion yen.
Sony P.L.C. has invested interest in U.S. businesses such as Sony Electronics Inc, Sony Broadband Entertainment, Sony Computer Entertainment, Sony Plaza Public Arcade and Sony wonder technology lab and Metreon. The annual sales for Sony P.L.C. for the fiscal year ending March 31st, 2003 were 62.3. billion dollars and sales in the United States were 20 billion dollars. Sony P.L.C. employs 161,100 employees for the fiscal year ending March 31st, 2003 and approximately 22,000 employees in the United States. Sony has major manufacturing sites in Dothan, New Stanton, Pitman, San Antonio, San Diego, and Terre Haute all in the United States and Tijuana, Mexicali, and Nuevo Laredo which are in Mexico. The entertainment production is Sony pictures studio which is based in California and Sony music studio which is based in New York.
Sony manufactures their products worldwide. They operate in most countries, wherever there is a demand for any of Sony's products they will be there to get a slice of the market share. Most of their manufacturing plants operate a flow line production system.
Bibliography
Chaz Davies notes
Sony P.L.C. annual report for the year ending March 31st, 2002
Heinemann AVCE, Advanced business, Dave Needham, Rob Dransfield.
www.Sony.com
