Sony
External Analysis
Dynamics of the Industry Using the 5-Forces Model
Sony is a company with wide-ranging businesses in video gaming, film making, electronics and financial services. The dynamics of the industry include the following five forces: 1) competition, 2) bargaining power of buyers and customers, 3) bargaining power of suppliers, 4) threat of substitution, and 5) threat of new entrants. The first two forces are the strongest in the industry in which Sony is part of. Competition is fierce in the gaming and filmmaking industries as well as in the electronics and financing industries. The bargaining power of consumers is also strong. With so many competitors in the industry offering a variety of quality products to choose from, and with customers determining which companies will get what market share, Sony’s top focus is on offering competitive products, such as the Xperia phones to the PlayStation at competitive prices, while offering top-notch franchise entertainment, such as Spider-Man and the company’s collaboration with Disney’s Marvel Studios (Sakoui & Pickert, 2017).
PESTEL
Political factors impacting Sony are minimal; the biggest political factor now impacting the tech sector is the preservation of data and data security needs. Sony itself was a victim of widespread hacking in 2015 that led to a major internal scandal among top executives whose private correspondence was leaked to the public (Fritz, 2015). In the wake of Facebook’s Cambridge Analytica scandal and Zuckerberg’s testimony before Congress, it is expected that governments will be requiring tech firms to provide better data security for their users.
Economic factors impacting Sony include a tightening credit cycle which means that servicing debt will be harder for companies with high debt-to-income ratios (Kim, 2018). Fortunately, Sony has been servicing its debt in recent years and is on the lower end of the spectrum of companies at risk (Culpan, 2016).
Social factors impacting Sony all show opportunities for growth as the...
References
Bhutta, M., Omar, A. & Yang, X. (2011). Electronic Waste: A Growing Concern in Today’s Environment. Economics Research International, 2011, 1-8.
Culpan, T. (2016). Moody’s says ‘game on’ to Sony. Retrieved from https://www.bloomberg.com/gadfly/articles/2016-12-14/sony-debt-upgrade-shows-hirai-s-playing-to-his-strengths
Fritz, B. (2015). Amy Pascal Steps Down as Head of Sony’s Film Business. Retrieved from http://www.wsj.com/articles/amy-pascal-steps-down-as-head-of-sony-pictures-film-business-1423157351
Kharpal, A. (2017). Sony profits rise. Retrieved from https://www.cnbc.com/2017/10/31/sony-earnings-q2-2017.html
Kim, N. (2018). S&P warns high corporate debt could trigger next default cycle. Retrieved from https://www.bloomberg.com/news/articles/2018-02-05/s-p-warns-high-corporate-debt-could-trigger-next-default-cycle
Pressman, A. (2017). Apple’s next iPhone is already facing a stronger field. Retrieved from http://fortune.com/2017/09/05/apple-iphone-8-samsung-lg-sony/
Sakoui, A. & Pickert, R. (2017). Spider-Man comes to Sony’s rescue. Retreived from https://www.bloomberg.com/news/articles/2017-07-07/spider-man-comes-to-sony-s-rescue-looks-to-shake-sequel-fatigue
Sony CSR. (2018). Green management 2020. Retrieved from https://www.sony.net/SonyInfo/csr/SonyEnvironment/ourvision/GM2020/
Sony Corporate Strategy. (2013). Sony corporate strategy. Retrieved from https://www.sony.net/SonyInfo/News/Press/201305/13-065E/index.html
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