Sony Threats and Opportunities

1843 WordsFeb 15, 20138 Pages
Porter’s Five Forces Analysis 1. Threat of Substitute Products (LOW) The possibility threat of substitutes is moderately low; since there are few substitutes from other industries (if any); and most of them are seemed to be obsolete or have on foot out of the door, e.g. digit camera in the place of film camera and fax machines in place of overnight mail delivery. Consider that Sony has built a good reputation and strong customer loyalty, it effectively position the company’s products against product substitute to some extent; this is a surplus for the company. 2. Bargaining Power of Buyers (HIGH) The power of buyer is high due to almost no switching cost for customers to switch from one brand to another. The access to the internet also…show more content…
Weaknesses • Sony’s high debt ratio (highly leveraged)could put itself in danger if the company’s creditorsstart to demand repayment of debt. • Weaknesses of divisional structure that include: (1) Duplication of functions at the different "levels" that resulted in high cost in maintaining the management structure; (2) competing business units allow office politics instead of sound strategic thinking to affect its view on such matters as allocation of company resources; (3) Sony’s business units allow compartmentalization to settle in that lead to lack in communication and cooperation. This in turn runs the risk of incompatibilities of its products and services. Opportunities • Globalization trend provides opportunities such as entrance to new markets. • Privatization and deregulation suggests more opportunities to expand market and increase market share. • High growth video-game industry provides presents the opportunity to increase business globally. • Larger working age population; more disposable income. • New services such as Internet Telephony provide all media and technology companies with the opportunity to leverage on new technologies to increase sales. • Technology advancements provide opportunities to reduce operation costs. Threats • Unfavorable government policies. • Prolonged global recession. • Piracy. • Aggressive
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