Is Sony Turning Around? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Is Sony Turning Around?
Instead of adopting more commonly used standards that appeal to consumers' taste, Sony's traditional focus on its own technologies has trapped the company in the state of "Galapagos-ization" (garapagosu-ka) that segregates the company from global competition. Since the mid 1990s, the company has been struggling with unstable profit and sales in its core electronics business while it aggressively expands into the entertainment content sector. A number of restructuring strategies had been implemented, but the effect was not sustained due to various internal conflicts within the company. In mid 2005, a non-Japanese, Sir Howard Stringer, was appointed as the first Western CEO and chairman of Sony. Stringer pushed forward a series of operational restructurings and placed a greater focus on software and content development than on Sony's traditional business, hardware technology. Even though Stringer's change efforts had brought a blink of hope for Sony's comeback, the situation turned sour in early 2009 when the company announced its first operating loss in 14 years. While different voices about the problems of Sony arose and the leadership of Stringer was questioned, another round of restructuring attempts was pushed forward by Stringer. How could Stringer overcome the deep-rooted internal resistance that his predecessor had failed to overcome? What had gone wrong with the iconic electronics giant? Were all those restructuring and change efforts necessary and useful to Sony's turnaround?
Authors :: Marcus Schuetz, Atsushi Sumi, Claudia H. L. Woo
Swot Analysis of "Is Sony Turning Around?" written by Marcus Schuetz, Atsushi Sumi, Claudia H. L. Woo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stringer Sony's facing as an external strategic factors. Some of the topics covered in Is Sony Turning Around? case study are - Strategic Management Strategies, Leadership, Organizational culture, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the Is Sony Turning Around? casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Is Sony Turning Around?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Is Sony Turning Around? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stringer Sony's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stringer Sony's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Is Sony Turning Around? can be done for the following purposes –
1. Strategic planning using facts provided in Is Sony Turning Around? case study
2. Improving business portfolio management of Stringer Sony's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stringer Sony's
Strengths Is Sony Turning Around? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stringer Sony's in Is Sony Turning Around? Harvard Business Review case study are -
High brand equity
– Stringer Sony's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stringer Sony's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Stringer Sony's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stringer Sony's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Stringer Sony's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Stringer Sony's in the sector have low bargaining power. Is Sony Turning Around? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stringer Sony's to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Organizational Development field
– Stringer Sony's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Stringer Sony's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Is Sony Turning Around? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Stringer Sony's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Stringer Sony's is present in almost all the verticals within the industry. This has provided firm in Is Sony Turning Around? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Stringer Sony's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Stringer Sony's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Is Sony Turning Around? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Stringer Sony's is one of the leading recruiters in the industry. Managers in the Is Sony Turning Around? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Stringer Sony's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stringer Sony's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Stringer Sony's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Is Sony Turning Around? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Is Sony Turning Around? are -
Workers concerns about automation
– As automation is fast increasing in the segment, Stringer Sony's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stringer Sony's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Is Sony Turning Around? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Stringer Sony's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Stringer Sony's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Stringer Sony's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Stringer Sony's is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Stringer Sony's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stringer Sony's to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Is Sony Turning Around? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Is Sony Turning Around? can leverage the sales team experience to cultivate customer relationships as Stringer Sony's is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Stringer Sony's supply chain. Even after few cautionary changes mentioned in the HBR case study - Is Sony Turning Around?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stringer Sony's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Marcus Schuetz, Atsushi Sumi, Claudia H. L. Woo suggests that, Stringer Sony's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Stringer Sony's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Low market penetration in new markets
– Outside its home market of Stringer Sony's, firm in the HBR case study Is Sony Turning Around? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Stringer Sony's products
– To increase the profitability and margins on the products, Stringer Sony's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Is Sony Turning Around? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Is Sony Turning Around? are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Stringer Sony's in the consumer business. Now Stringer Sony's can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stringer Sony's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Stringer Sony's to increase its market reach. Stringer Sony's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Stringer Sony's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stringer Sony's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Stringer Sony's to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Stringer Sony's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Stringer Sony's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Stringer Sony's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Stringer Sony's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Is Sony Turning Around? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stringer Sony's is facing challenges because of the dominance of functional experts in the organization. Is Sony Turning Around? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Stringer Sony's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Stringer Sony's has opened avenues for new revenue streams for the organization in the industry. This can help Stringer Sony's to build a more holistic ecosystem as suggested in the Is Sony Turning Around? case study. Stringer Sony's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Stringer Sony's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Is Sony Turning Around? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stringer Sony's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Stringer Sony's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Is Sony Turning Around? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Is Sony Turning Around? are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Stringer Sony's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Stringer Sony's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Stringer Sony's in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Stringer Sony's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Stringer Sony's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Stringer Sony's.
Technology acceleration in Forth Industrial Revolution
– Stringer Sony's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Stringer Sony's needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Stringer Sony's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Stringer Sony's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stringer Sony's in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Stringer Sony's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Is Sony Turning Around? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Is Sony Turning Around? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Is Sony Turning Around? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Is Sony Turning Around? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Is Sony Turning Around? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Stringer Sony's needs to make to build a sustainable competitive advantage.