Description
part 2-case study-longitudinal management-Sony corporation
2011
STRETIGACAL CASE STUDY OF SONY CORPORATION
Zarmina siraj ul haq
[ LONGITUDNAL MANAGEMENT ]
Current Strategic Situation
CONTENTS:
CURRENT STRATEGIES 1. CURRENT SCENERIO
EMERGENT STRATEGIES COMPITENCE VIEW POSITIONINGVIEW
2. CRITICAL EVALUATION
CURRENT SCENERIO:
EMERGENT STARTEGIES:
Currently, Sony are implementing emergent strategies from both inside out and outside in Resources Based View Positioning view or so called Market Based View to secure its current position. and
Thompson & Strickland (2003) all suggested that an integrated approach of the resources-based and positioning view can maximize the capabilities of organization and sustaining more competitive advantages. Penrose (1959), Selznick (1957) and Hatch (1997) also suggested that competitive strategy requires both the exploitation of existing internal and external firm-specific capabilities and of developing new ones. In the changing business environment, Sony needs to cope with the external changes and find the right ways to deal with it by their own capabilities or resources. Markides (2004: p9) also agreed that unless organization take a holistic, big-picture approach in designing the activities of the company, their efforts will backfire .
COMPETENCE BASED VIEW:
INSIDE OUT VIEW:
As for inside out , also called the competence-based view Sony has been green-lighting asset sales to free up cash so they can rebuild the company around a tighter core of businesses. In December, Sony sold part of its 49% stake in retailer StyleLife Holdings to a group of investors. This managing for value strategy which concerned with maximising long-term cash-generating of an organization by disposal of assets to get more funds and reinvest back into different business units such as R&D, production and others can help Sony to strengthen its core competencies. As DeWit & Meyer) suggest, The real sources of advantage are to be found in managements ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities .Another strategy that Sony implement to boost its core competence is miniaturization. To bring miniaturization to its product, Sony must ensure that technologists, engineers, and marketers have a shared understanding of customer needs and of technological possibilities in order to become more customer-orientated with the aim to increase competitive advantage, as well as create more value added activities. Sony also implement a related diversification stategy which involve adding businesses
whose value chains possess competitively valuable strategic fits with the value chain of the company s present business. Related diversification among the different businesses provides Sony with sharper focus for managing diversification and is a useful degree of strategic unity across the company s various business activities . Lynch (2000: p71) also argue that it is the combination of resources that delivers competitive advantage, because such a combination takes years to develop and is therefore difficult for others to copy . Besides, in order to regain Sony s competitive advantages, they appoint the first foreign chairman, Howard Stringer to head the company with the aim to secure Sony s main ground and hope that an outsider will assist Sony to think outside the box. As Hamel & Prahalad (1994) suggest, intellectual leadership are essential to develop industry foresight, anticipating which trends are likely to emerge, so it is important to build Sony s new core competence to shape the industry.
However, Priem and Butler (2001) have shown that the Resources Based View, as currently constituted, contains a theory of sustainability but not a theory of competitive advantage (i.e., value creation).They argue that ³simply advising practitioners to obtain rare and valuable resources in order to achieve competitive advantages and, further that those resources should be hard to imitate and non-substitutable is not very helpful in providing practical help´ (Johnson et al, 2005: p155).
POSITIONING VIEW
OUTSIDE IN VIEW:
On the other hand, as for ³outside in´ which is the Positioning view, Mintzberg et al (1998) argue that positioning is important and had develop the Positioning School. Sony also believes that the external business environment will shift the strategy of the organization. Finlay (2000; p11) suggest that ³organization alter itself and the products and services it offers in order to match the needs of customers in its chosen marketplace which is a market-based approach, so called because the organization looks to the marketplace to see how it should act and how it should evolve´. Besides, based on the environmental factors, Mintzberg et al (1998) developed the environmental school which argues people in strategic management must consider the range
of decisional powers available, given the forces and demands of the external context. Sony insufficient in responding to the external market had caused them to lost ground in key growing areas and their strategy must be able to cope with the external environment. Moreover, Porter (1991) strongly believe that making choices about how organization position their company in its competitive environment is what strategy is all about and emphasize on the importance of positioning view. He argues that organization can sustain competitive advantages by implementing the generic strategies by position themselves either being cost-leadership, differentiation or focus (Porter, 1985). Sony had positioned them with a differentiation strategy which seeks to provide products or services that offer benefit different from those competitors and that are widely valued by buyers (Johnson et al, 2005). Sony are rewarded with a premium price with its uniqueness (DeWit & Meyer, 2004) that help them to gain greater competitive advantages.
CRITICAL EVALUATION
However, Bowman & Asch (1996: p36) critics that ³a final criticism of Porter¶s approach stems from our experience of trying to use these concepts with top management teams wrestling with the strategies of their organization. In addition to the lack of clarity surrounding the generic strategies, the generic strategies present an essentially static approach to competition´. Hamel & Prahalad (1994) also argue that ³the traditional competitive strategy paradigm (e.g. Porter, 1980) with its focus on product-market positioning, focuses only on the last few hundred yards of what may be a skill-building marathon.
Finally, Sony is still in a critical position where they need to be extra caution about all the potential crisis that they will be facing in the future. Finlay (2000: p451) argue that crisis control relies on both pro-active and reactive control. It is pro-active in that, although the precise form of the crisis will be unknown, broad elements of many crisis situations will be, and these can be planned for through risk management and particularly contingency planning. Crisis control is also reactive in that the specifics of the situations must be dealt with as they unfold . Thus, risk management and crisis control are also essential for Sony to implement in order to stay alert and increase their awareness to potential threats.
doc_760312312.docx
part 2-case study-longitudinal management-Sony corporation
2011
STRETIGACAL CASE STUDY OF SONY CORPORATION
Zarmina siraj ul haq
[ LONGITUDNAL MANAGEMENT ]
Current Strategic Situation
CONTENTS:
CURRENT STRATEGIES 1. CURRENT SCENERIO
EMERGENT STRATEGIES COMPITENCE VIEW POSITIONINGVIEW
2. CRITICAL EVALUATION
CURRENT SCENERIO:
EMERGENT STARTEGIES:
Currently, Sony are implementing emergent strategies from both inside out and outside in Resources Based View Positioning view or so called Market Based View to secure its current position. and
Thompson & Strickland (2003) all suggested that an integrated approach of the resources-based and positioning view can maximize the capabilities of organization and sustaining more competitive advantages. Penrose (1959), Selznick (1957) and Hatch (1997) also suggested that competitive strategy requires both the exploitation of existing internal and external firm-specific capabilities and of developing new ones. In the changing business environment, Sony needs to cope with the external changes and find the right ways to deal with it by their own capabilities or resources. Markides (2004: p9) also agreed that unless organization take a holistic, big-picture approach in designing the activities of the company, their efforts will backfire .
COMPETENCE BASED VIEW:
INSIDE OUT VIEW:
As for inside out , also called the competence-based view Sony has been green-lighting asset sales to free up cash so they can rebuild the company around a tighter core of businesses. In December, Sony sold part of its 49% stake in retailer StyleLife Holdings to a group of investors. This managing for value strategy which concerned with maximising long-term cash-generating of an organization by disposal of assets to get more funds and reinvest back into different business units such as R&D, production and others can help Sony to strengthen its core competencies. As DeWit & Meyer) suggest, The real sources of advantage are to be found in managements ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities .Another strategy that Sony implement to boost its core competence is miniaturization. To bring miniaturization to its product, Sony must ensure that technologists, engineers, and marketers have a shared understanding of customer needs and of technological possibilities in order to become more customer-orientated with the aim to increase competitive advantage, as well as create more value added activities. Sony also implement a related diversification stategy which involve adding businesses
whose value chains possess competitively valuable strategic fits with the value chain of the company s present business. Related diversification among the different businesses provides Sony with sharper focus for managing diversification and is a useful degree of strategic unity across the company s various business activities . Lynch (2000: p71) also argue that it is the combination of resources that delivers competitive advantage, because such a combination takes years to develop and is therefore difficult for others to copy . Besides, in order to regain Sony s competitive advantages, they appoint the first foreign chairman, Howard Stringer to head the company with the aim to secure Sony s main ground and hope that an outsider will assist Sony to think outside the box. As Hamel & Prahalad (1994) suggest, intellectual leadership are essential to develop industry foresight, anticipating which trends are likely to emerge, so it is important to build Sony s new core competence to shape the industry.
However, Priem and Butler (2001) have shown that the Resources Based View, as currently constituted, contains a theory of sustainability but not a theory of competitive advantage (i.e., value creation).They argue that ³simply advising practitioners to obtain rare and valuable resources in order to achieve competitive advantages and, further that those resources should be hard to imitate and non-substitutable is not very helpful in providing practical help´ (Johnson et al, 2005: p155).
POSITIONING VIEW
OUTSIDE IN VIEW:
On the other hand, as for ³outside in´ which is the Positioning view, Mintzberg et al (1998) argue that positioning is important and had develop the Positioning School. Sony also believes that the external business environment will shift the strategy of the organization. Finlay (2000; p11) suggest that ³organization alter itself and the products and services it offers in order to match the needs of customers in its chosen marketplace which is a market-based approach, so called because the organization looks to the marketplace to see how it should act and how it should evolve´. Besides, based on the environmental factors, Mintzberg et al (1998) developed the environmental school which argues people in strategic management must consider the range
of decisional powers available, given the forces and demands of the external context. Sony insufficient in responding to the external market had caused them to lost ground in key growing areas and their strategy must be able to cope with the external environment. Moreover, Porter (1991) strongly believe that making choices about how organization position their company in its competitive environment is what strategy is all about and emphasize on the importance of positioning view. He argues that organization can sustain competitive advantages by implementing the generic strategies by position themselves either being cost-leadership, differentiation or focus (Porter, 1985). Sony had positioned them with a differentiation strategy which seeks to provide products or services that offer benefit different from those competitors and that are widely valued by buyers (Johnson et al, 2005). Sony are rewarded with a premium price with its uniqueness (DeWit & Meyer, 2004) that help them to gain greater competitive advantages.
CRITICAL EVALUATION
However, Bowman & Asch (1996: p36) critics that ³a final criticism of Porter¶s approach stems from our experience of trying to use these concepts with top management teams wrestling with the strategies of their organization. In addition to the lack of clarity surrounding the generic strategies, the generic strategies present an essentially static approach to competition´. Hamel & Prahalad (1994) also argue that ³the traditional competitive strategy paradigm (e.g. Porter, 1980) with its focus on product-market positioning, focuses only on the last few hundred yards of what may be a skill-building marathon.
Finally, Sony is still in a critical position where they need to be extra caution about all the potential crisis that they will be facing in the future. Finlay (2000: p451) argue that crisis control relies on both pro-active and reactive control. It is pro-active in that, although the precise form of the crisis will be unknown, broad elements of many crisis situations will be, and these can be planned for through risk management and particularly contingency planning. Crisis control is also reactive in that the specifics of the situations must be dealt with as they unfold . Thus, risk management and crisis control are also essential for Sony to implement in order to stay alert and increase their awareness to potential threats.
doc_760312312.docx