What Sony needs to do is concentrate on creating a mobile Web-enabled series of devices, supporting services, and segmented digital content in both music-based and video content. In short, Sony needs to create an economic ecosystem that rivals the Apple ecosystem as shown in Figure 2, Apple Digital Content Ecosystem:
Figure 2: Apple Digital Content Ecosystem
Source: (Apple Investor Relations, 2009)
The most critical objective for the three-year planning horizon for Sony is to emulate the model shown in Figure 2 and apply entirely new series of metrics to how they evaluate integration and cross-model compatibility of their entire product line. The strategic objective for the coming three years has to be centered on creating a scalable ecosystem that can deliver a continual stream of revenues through the licensing of digital music and video content in addition to the introduction of entirely new devices into this ecosystem that have not yet been invented yet. The strategic objective is to create a scalable, profitable and easily modifiable economic ecosystem that can deliver exceptional revenue opportunities for Sony over the next three years and beyond.
Goals for 2011
To create a cross-compatibility framework to evaluate existing products that needs to be integrated into the Sony ecosystem.
Determine the percentage of products that meet cross-compatibility guidelines as defined as part of this process.
Percentage of products to be discounted as they are too dated in terms of technology to integrate into the ecosystem.
Cross-connectivity matrix for new products used as a decision point of launching the new product or not.
To define integration technologies that are both over wired Internet connections and over WiFi.
To define a Sony-specific TCP/IP protocol that can unify all products' to allow for uploading and downloading of content from any device, anywhere using WiFi or wired Internet connections.
To measure the baseline of performance for existing devices that has WiFi connections and measure their levels of compatibility with other Sony products on a network.
To define corrective action and preventative action strategies for alleviating bottlenecks on networks by measuring the percentage of traffic that does not reach the intended device.
To re-vamp the distribution channel strategy to concentrate on an ecosystem-based selling strategy.
To measure and audit the resellers for their ability to deliver value in this new framework.
To gain a forecast from the top resellers as to their ability to sell additional products and services based on this framework.
To create a benchmark to evaluate distribution and retailer experience and the variation in best practices vs. worst practices in working with the proposed Sony ecosystem framework.
Goals for 2012
To align the digital content that Sony owns so it is highly compatible with the proposed Sony ecosystem.
To measure the performance of Apple MP4 files relative to mainstream MP3 files in the Sony ecosystem, in addition to comparing the performance of consumer-generated digital media.
To measure the velocity of transactions that can occur and scale for the Sony ecosystem over time.
To test security for the entire ecosystem and measure the relative level of redundancy built into the system; define auditing approaches for ensuring a high level of security over time.
To create pilot ecosystems for specific products in key geographies to test the systems' performance.
Define country- and region-specific benchmarks for the ecosystems for specific first-generation products to be included in its structure.
Define and measure the performance of supply chain integration technologies as they relate to coordinating with integration and cross-compatibility to ensure suppliers are creating standards and products that align with the needs of the Sony ecosystem.
Measure the level of failure rates and complete failure analysis of the ecosystem across the sustainability, stability, security and profitability standpoints.
To define supply chain objectives for the revised Sony ecosystem and measure performance to a common set of benchmarks with suppliers.
Create a pilot Collaborative Planning Forecasting and Replenishment (CPFR) system to measure the level of inventory velocity that is attainable using a single order hob to support the Sony ecosystem proposed.
To define metrics of performance for measuring the NPDI process mentioned earlier in this plan as it relates to the development of new product collaboration and coordination on product introductions.
Goals for 2013
To launch the Sony ecosystem and evaluate its global launch according to customer satisfaction metrics and contributions to long-term customer loyalty.
To create a voice of the customer program and customer advisory council to measure overall customer satisfaction with the new ecosystem over time.
To create an internal portal that allows Sony management to view these metrics over time and chart them on their own laptops.
To correlate customer satisfaction with profitability by product within the framework of the Sony ecosystem as proposed.
To create an ancillary service for supply chain coordination and consultation based on the experiences in creating the Sony ecosystem with partners.
To define shared risk targets for supply chain performance including the Perfect order levels of performance for the supply chain in shipping the right product at the right time, to the right location.
To create a build-to-order strategy for coordinating with suppliers and distributors to ensure a high level of responsiveness and accuracy in reporting across the distribution network.
To define a supply chain scorecard that will allow for the development of incentives Sony can deliver to suppliers for exceptional performance.
To measure the effectiveness of the online applications on the Sony ecosystem portals to ensure they are staying in alignment with the unmet needs of customers.
To define the key performance indicators for application performance of portal-based applications for each specific area of the company's core distribution strategies.
To maintain a best practices methodology for evaluating the level of performance of the ecosystem in aligning with the unmet needs of distribution channel partners and measure their relative level of loyalty on profitability.
To create a maturity model that illustrates how the effectiveness of Sony ecosystem portals contribute to greater levels of profitability and growth over time by keeping resellers more informed.
The long-term objectives of this strategic plan are as follows. First, to explore and quantify the opportunity of creating a Sony ecosystem that integrates all products and allows for quick, transparent and reliable transfer of digital content, whether purchased or produced by consumers, across the entire spectrum of products. By going after this objective it is strongly believed that higher levels of customer loyalty will result over time.
Strategy Analysis and Choice:
The generic strategy is to concentrate on a high value-add strategy of integration across all product lines to ensure customer expectations are met and exceeded over time. / the minor strategy is to continue leading by innovating over time by introducing entirely new and completely new products and services into the proposed Sony ecosystem.
Plan Goals and Implementation:
The goals and implementation of this business strategy capitalize on the existing culture of embracing innovation as a competitive advantage and furthering it to create a framework on which to build greater levels of customer loyalty over time. Second, the culture needs to confront those products that are not integrated and therefore not compatible with the Sony lifestyle that is being built over time. This is a very critical issue and a benchmark all future products must be considered against. All products need to contribute to the ecosystem so that the Sony platform can propagate, grow and become more valuable over time.
Critical Success Factors:
The most critical success factors for this strategic plan are the critical need for having very rigorous benchmarks for evaluating if the Game business unit needs to continue being part of the company as the integration at the platform level may not be as easily accomplished as with subsequent generation products. The development of the gaming platform is a critical success factor and there are lessons learned there that can be extrapolated to the Sony ecosystem level, a key take-away from the painfully unprofitable business games are in Sony today (Altinkemer, Shen, 2008). Another critical success factor is the level of customer loyalty attained through the integration of all products into a Sony integrated network that ensures complete and plug-and-play compatibility. In using Apple as an example and the extremely high repurchase rates the American computer company has, it is imperative to keep in mind that this was accomplished through deliberate decisions to not charge for integration either. This is a critical point in the development of the Sony ecosystem; there must not be an up-charge for integration to other devices. Finally, the critical success factor of how regional and country-by-country requirements will impact the performance and personalization of the ecosystems to these diverse geographic regions.
Controls and Evaluation:
The evaluation controls will center on accuracy of the ecosystem in meeting or exceeding customers' expectations through the use of Voice of the Customer Programs, customer advisory councils. At the technical level…