Semiconductor, Optical pickup, Battery, Cathode-ray tube, Audio/Video/Data recording media, Data recording system, IC card, Entertainment robot
In this report, Basically, I would like to focus on its home video game product, PlayStation 2.
PlayStation 2 was released in Japan in 2000, and since then, it has rapidly expanded its market and become best selling home video game throughout the world. The most remarkable characteristic of PlayStation 2 would be the quality of its audio and visual. While it was supposed to be impossible to display such realistic image and sound in home video game (because of cost problem, capacity problem and others) by then, Sony technology enabled to make it.
It is equipped with a 128-bit Emotion Engine processor that enables lightning-fast game play and impressive graphic power. The console builds on its home entertainment value by doubling as a DVD player and accommodating most of the original PlayStation’s vast library of games. PlayStation 2 is known for its excellent selection of title for the older gamer.
PlayStation 2 has produced more than 12.5 million in Japan and shipped more than 50 million all over the world. About 2000 of its exclusive software have already released from each software maker throughout the world, and is being urged more spread.
1.3 Identify the current performance and market position of the company
For the three month ended December 31 2002 consolidated sales increased slightly year on year to achieve a quarterly record for Sony of \2307.7 billion, operating income increased \40.9 billion year on year to \199.5 bullion, net income reached \125.4 billion the highest quarterly net income Sony has ever recorded. He depreciation of the yen against euro had a positive impact on result.
In the game segment, the market penetration of hardware continued to expand as hardware unit sales, primarily in the US and Europe, increased significantly during the quarter. As a result, software sales worldwide increased and this enabled the segment to again achieve the high level of sales and operating income recorded in the same quarter of the previous year.
Today, Sony is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets. Its music, motion, picture, television, computer entertainment, and online business make Sony one of the most comprehensive entertainment companies in the world.
Sony has the leading position in game category as well. While there are 2 other competitors in this market, Xbox (Microsoft) and Nintendo 64 (Nintendo), PlayStation 2 has still dominated large share of the market.
1.4 Confirm the direction and goals of the business
As I mentioned above, PlayStation 2 has dominated its market. Therefore, most important thing for the business is to maintain the number 1 position of the market. Maintaining the number 1 position requires action on three fronts.
- Expanding the total market
The dominant firms normally gain the most when the total market expands, therefore the business should look for new users, new uses, and more usage of its product.
- Defense strategy
Position defense can involve building superior brand power making the brand almost impregnable.
- Expanding market share
Market leader can improve their profitability by increasing their market share, in many market on share point is worth ten millions of dollars.
1.5 Identify the existing structure and operation of the business
This diagram shows Sony group organizational structure.
GH = Global Hub
NACS = Network Application Contents Service Sector
PTC = Platform Technology Center
MSNC = Micro systems Network company
IMNC = IT & Mobile solutions Network Company
SEMC = Sony Ericsson Mobile Communications
PSBG = Personal Business Solution Group
Entertainment BG = Entertainment Business Group
Game BG = Game Business Group
BBNC = Broad Band Network Company
HNC = Home Network Company
It consists of 8 units to manage the business, 4 network companies (NC), 3 business groups, and Sony Ericsson Mobile Communication, and centering on Global Hub as a group headquarters
Addition to group CFO, Sony appoints individual CFO anew to each NC to grasp comprehensive managing condition of each NC. Accordingly, each NC independently manages their operation, and ties up with Global Hub strongly, and moreover; it has built management structure, which enables to grasp actual management condition swiftly.
1.6 Identify the current capabilities and resources
A total of 59 countries (25 countries in Europe, 13 in Asia including Japan, 2 in Middle east and Africa, 2 in Oceania, 2 in North America, 15 in Latin America) are involved in Sony corporation business, and it employs about 161,100 employees worldwide.
1.7 Give details of the organizations strategic plan
Sony strategic plan consists of 4 factors in its electronics and game categories. Those are;
- Solidifying No. 1 position in Audio/Visual categories
- Creating new product category through integration of electronics and game technology
- Eliciting the growth potential in IT/communication sectors
- Enhancing semiconductor business
And moreover, Sony will sustain their strategic plan of electronics projects by forwarding the development below.
- Development of competitive key devices to maximize added value in products
* Imaging devices and peripheral devices
*Devices for next-generation Flat Panel Displays (OEL and FED) and projectors
- Development of next-generation processors, centering on CELL. Potential applications include:
* Home Server
* Broadband-capable Television
- Core technology and components (architecture, OS, middleware, chipsets) to be standardized to create a strengthened, speedier development and engineering environment.
- Develop IT technology related to content distribution
In addition, Sony group is planning to invest a sum of 1 trillion yen ($ 12.5 billion) from 2003 for 3 years in development study and for intensification of goods (exclude cost for prototypes)
1.8 Give details of the organizations marketing plan
Sony encourages cross marketing between businesses by focusing on individual customer to provide new service and aims to acquire new customers and evolve new business opportunities. In near future, Sony considers to work in corporation with internal and external project to provide multiple services.
1.9 Confirm business needs
Home video game market is one of the biggest, profitable and progressive market in this modern society. As a leader of the market, Sony PlayStation2 has great influence in the market development. Develop of game market affects not only progress of game itself but encourages progress of digital entertainments, technologies and other technological changes as well.
REFERENCES
Philip Kotler, North Western University 2003
Marketing Management 11th Edition
Sony Australia Limited, Sony Australia
[Online] Available
Sony Corporation, Sony Global 2003e
[Online] Available
Sony Corporation, Sony Japan 2003
[Online] Available
