Sony\'s SWOT Analysis Samsung\'s SWOT

Sony's SWOT analysis

Samsung's SWOT analysis

Sony Corporation's Strengths

Samsung's Strengths

Sony Corporation's Weaknesses

Samsung's Weaknesses

Sony Corporation's Opportunities

Samsung's Opportunities

Sony Corporation's Threats

Samsung's Threats

Technologies used in marketing Sony

Marketing technologies at Samsung

In this paper we perform a SWOT analysis for Samsung and Sony with the aim of identifying the nature of their internal and external environments. Also performed is an analysis of their e-marketing strategies. The paper is aimed at coming up with an appropriate recommendations for creating perfect marketing plans for both companies.

SWOT analysis is an important tool which was developed for the purpose of defining a company's strategies in light of the dynamic and competitive business environment. The tool's name is derived from the fact that is used in the examination of the strengths and weaknesses (internal environment) as well as the opportunities and threats (external environment) that affects a certain organization. Meyer (2003) indicated that a SWOT analysis is important since it suggests the need for a sound strategy matching a given firm's internal and external microenvironments. The aim is to bring about strategic insight via the distillation of fragmentary facts as well as figures into a backdrop which is coherent for the purpose of strategic planning as reiterated by Minzberg (1994).

Sony's SWOT analysis

SWOT Matrix

Strengths

Strong brand identity

Diversified geographical business strategy

A strong focus on Research and Development

Weaknesses

Very costly manufacturing base

Employees who are unfunded are also involved in the posting of benefits

Opportunities

Growing industrial electronic as well as consumer market

Networked Products and Services

Product and service diversification

Strategic mergers and acquisitions

A focus on the BRIC countries

Threats

Unfavorable and yet unstable exchange rate.

Poor economic conditions globally

Counterfeit goods

Government regulations

Stiff competition

Cyber attacks

Samsung's SWOT analysis

SWOT Matrix

Strengths

Improvements in its credit ratings

Diversification

Strengths in the telecommunication arena

Weaknesses

Decline in the memory chip business

Fluctuations in the demand of telecommunication gadgets

Poor profitability of Samsung securities

Opportunities

Growing industrial electronic as well as consumer market

Sale of its affiliated companies

International expansion

Threats

Unfavorable and yet unstable exchange rate.

Poor economic conditions globally

Government regulations

Stiff competition

Sony Corporation's Strengths

One of the biggest intangible assets that Sony has is its corporate identity (Datamonitor,2010,p.5). The Business Week's (2011) Top 100 Global Brands Scoreboard ranked it number 21. In 2010, Interbrand valued the company at $11 M. In 2009, a slight decrease of about 12% from the 2008 figure. Even though the brand value of Sony Corp has declined over the last couple of years, it still maintains its lead in the consumer electronic industry.

Sony Corp is also famous for its use of the umbrella branding strategy of effectively placing the name of the product with the corporate name. For instance, when marketing Sony Bravia. This strategy allows a given product to assume its unique and independent identity as well as positioning. There is also the drawing of strength from the important values that are contained within Sony's corporate brand. This in the end provided the consumers with an assurance. The merits of employing this strategy are based on the fact that the group can effectively leverage its corporate strategy for the sake of launching new products while adding brand extensions in the process. This strong brand identity provides the company and its subsidiaries with a competitive advantage.

Diversified geographical and business strategy

The company maintains a relatively large geographic coverage. Sony markets its electronic products worldwide under the "Sony" trademark, a trade mark which has been successfully registered in close to two hundred countries as well as territories. Its subsidiary, Sony Pictures Entertainment has succeeded to distribute its motion pictures (internally produced) in close to 130 countries. The company also enjoys a well balanced mix of revenues from its geographical markets (Datamonitor,2010).In 2011, Japan which is Sony's largest market accounted for 30% of the total revenue USA accounted for 20.1%, Europe accounted for 21.4%, Asian-Pacific accounted for 16.6% while other markets accounted for 9.4% of total revenue (Sony,2011).

A strong focus on Research and Development

The company has managed to maintain a very strong focus on research and development (R&D) as part of its business strategy aimed at extending its various brands as well as expanding into new technological realms (Datamonitor,2010). In 2011, the group spent a considerable sum of money on R&D. This has been the trend over the years. In 2009, it spent a close to $5 billion in research and development (Datamonitor,2010).The ratio the Sony's cost on research and development to sales was 6.9% in the 2009 financial year as compared to FY2008's 6.3% . This strong focus on research and development (R&D) has assisted the company in the launch of various technologically innovative products in the global marketplace. For example the launch of BRAVIA ZX1 that at one time was one of the thinnest as well as lightest LCD TV with cutting edge technologies like LED edge lighting marked one of its successes in the use of R&D. It also launched the VAIO P. Series of notebooks that was the lightest 8" notebook PC. The company also launched the Cyber-Shot HX 1 compact digital camera- allowed the capture of wide-angles of up to 224 degrees of view. The company has also forayed into Networked services (Sony,2011). In 2010, they launched two groundbreaking services under its Qriocity ™ brand name. The services included Video On Demand service powered by Qriocity™"* and the Unlimited powered by Qriocity™.(Sony,2011).Other networked devices that have been produced by Sony are BRAVIA ™ LCD televisions, PlayStationR3 (PS3R), PSPR (PlayStationRPortable), Blu-ray Disc ™ (BD) players as well as VAIOR PCs (Sony,2011).

Samsung's Strengths

Improvements in its credit ratings

The improvement to Sony's credit ratings that took place in 2002 (Moody's increased its rating to Baa1 and the Standard & Poors also improved its rating to A- in the same year ) have had a positive impact on the company's operations. The improvement in the company's ratings indicates that it has been able to recover from the Asian financial crisis and the 2008 global financial downturn (recession). These higher ratings help by positively impacting Sony's corporate image.

Diversification

One of the key sources of Samsung's competitiveness is pegged on its ever continuing transformation of its business structure through diversification.The company has achieved a surprisingly good results as a consequence of the competitive pricing strategy as well as the broadening of its product portfolio aimed at catering for the premium demand. This development is slightly different from the approach used by its competitors.

Strengths in the telecommunication arena

The company ahs over the years introduced products aimed at satisfying the needs of the global population. Samsung introduced very cutting edge technology in mobile phones, computing as well as entertainment industry. These developments have seen it increase its sales over the years. Its sales have more than doubled and so is its market share

Sony Corporation's Weaknesses

Expensive manufacturing bases

The facts that the company's manufacturing facilities are kind of located very far away from the markets (customer locations) at manufacturing locations such as chine (relatively expensive) means that a lot of funds are dedicated to logistics. The company has been sluggish in moving its operations to where its clients are located. In 2009, the company produced close to 50% of its electronics segment's annual production in its Japanese manufacturing facilities. This included the funds used in the production of video cameras, compact digital cameras, LCD TVs, semiconductors and PCs. Close to 60% of Sony's annual production from Japan was manufactured and destined for other parts of the world. The expensive manufacturing bases costs the company a lot and therefore interferes with its operating performance. The expensive manufacturing base also exposes the firm to financial risks.

Employees who are unfunded are also involved in the posting of benefits

Sony provides its employees with pension benefits as well as other forms of post-retirement health plus life insurance benefits to all of its employees. In 209, it incurred close to $0.25 billion for post retirement benefits as well as pension expenses. The fact that the pension liabilities are unfunded and are continuously increasing exposes the company to severe financial risks. The direct impact is the reduction of the cash which is available for various growth prospects.

Decline in the memory chip business

Sony faces a general fall in the price of its memory chips. The fact that the sale of memory chips constitutes a large proportion of the corporation's revenue means that a decline in price would adversely affect the company's profitability.

Samsung's Weaknesses

Decline in the memory chip business

Sony faces a general fall in the price of its memory chips. The fact that the sale of memory chips constitutes a large proportion of the corporation's revenue means that a decline in price would adversely affect the company's profitability.

Fluctuations in the demand for telecommunication equipment

Samsung Group can attribute a large part of its financial success its telecommunication arm. For instance in 2002, its telecommunication business sold close to 46 million items/units. The result is appositive impact on its revenues. A slight slump in the demand for the telecommunication equipment creates a real threat to Samsung's profitability. It therefore has to engage its competitors through innovations. The company must therefore strive to invest as well as improve its businesses so as to protect its market share and financial stability.

Poor profitability of Samsung securities

Sony Corporation's Opportunities

Growing industrial electronic as well as consumer market

The global consumer as well as industrial electronics market is experiencing a considerably high level of growth.By 2008, the global consumer as well as industrial electronics had reached a staggering $92,000M. The market is also expected to expand at a rate of 7.2% annually in order to attain a value of 137,000 Million by 2014. Sony is one of the largest industrial electronic product manufacturers worldwide. The company provides a diversified range of products which ranges from audiovisual devices to information communication equipment. It also specializes in the manufacture of home appliances as well as other components. Sony is therefore positioned to benefit from the predicted growth in future electronic markets.

Networked Products and Services

According to s Sony (2011) networked products and services provides the next growth frontier for the corporation. One of the company's goals is to provide, via a wide range of high-end products, the most exciting and compelling content as well as entertainment to its customers worldwide. One of the latest technological frontiers that it is exploring is the integration of hardware content with various services via the network. An example of an initiative aimed at the realization of this is the integration of various networked products on the Sony Tablet. This is based on the Android ™ 3.O operating ssyetem. Tis device will target the market segment which is rapidly growing (Sony,2011)

Strategic mergers and acquisitions

Sony has entered into several strategic alliances as well as made some very important acquisitions in the past. In 2009m the company acquired a small and medium sized company that specializes in the manufacture of TFT liquid crystal display (LCD) from a company called Epson Imaging devices. In the same year is formed a joint venture with Sharp in order to produce as well as sell the large sized LCD panels as well as modules. Sony also formed a strategic alliance with Hon Hai Precision Industry, a Taiwanese company for the sake of producing LCD TVs for the U.S. market.

A focus on the BRIC countries

A review of the 2011 annual report indicates that the largest regional growth/economic activities exists in the emerging markets. The BRIC countries which includes Brazil, Russia, India and China . The BRIC countries form part of the globe's fastest growing economies. They also presents close to 40% of the world's population. Sony has already seen a considerable level of success in the Indian market. The company hopes to replicate a similar model in the rest of the BRIC countries as well as other emerging markets.

Samsung's Opportunities

Growing industrial electronic as well as consumer market

The global consumer as well as industrial electronics market is experiencing a considerably high level of growth.By 2008, the global consumer as well as industrial electronics had reached a staggering $92,000M. The market is also expected to expand at a rate of 7.2% annually in order to attain a value of 137,000 Million by 2014. Samsung is one of the largest industrial electronic product manufacturers worldwide. The company provides a diversified range of products which ranges from audiovisual devices to information communication equipment. It also specializes in the manufacture of home appliances as well as other components. Samsung is therefore positioned to benefit from the predicted growth in future electronic markets.

Investment in Supply Chain

The company can increase its investment in the supply chain through heavy investment in research and development aimed at improving its production as well as marketing.The company had intended to construct a twenty four -hour research and development system that is to be used for the continuous development as well as stimulation of demand.

Sale of affiliated companies

In the recent years, Samsung has sold off most of its affiliated companies in an effort geared at the reduction as well as restructuring of its debts. By 2002 alone, the number of companies affiliated with the electronic giant dropped from sixty one to twenty five. Its restructuring program is what has seen it overtake Hyundai in order to become the biggest company is South Korea.

International expansion

The company is currently warming up to enter into the international markets. A review of the 2011 annual report indicates that the largest regional growth/economic activities exists in the emerging markets. The BRIC countries which includes Brazil, Russia, India and China . The BRIC countries form part of the globe's fastest growing economies. They also presents close to 40% of the world's population

Sony Corporation's Threats

Fluctuations in the exchange rate

The operations of Sony Corporation are heavily affected by the fluctuations in the global economy. Factors like the Eurozone crisis and other factors that influence the exchange rate could negatively affects the operations of the company since it is a multinational that operates in different foreign currencies. The performance of Yen against Dollar and Euro can adversely affect the prices of Sony Products. A stronger Yen makes the products extremely pricey.