Sony PS4: Winning the Gaming War SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sony PS4: Winning the Gaming War
Sony has become one of the most successful innovators of technology. Recently, however, the company's significant setbacks have led analysts and investors to question its long-term viability. Sony's PlayStation 4 was launched in the North American market in 2013, to be followed by releases in the United Kingdom and Japan. After experiencing high sales and profits from the PlayStation 4's two precursors, Sony anticipates the new release will also attract high sales. This case focuses on the idiosyncrasies of the gaming console industry and Sony's strategy to ensure success for the launch of the PlayStation 4.
Swot Analysis of "Sony PS4: Winning the Gaming War" written by Dante Pirouz, Vibu Vimal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Playstation Sony facing as an external strategic factors. Some of the topics covered in Sony PS4: Winning the Gaming War case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Sony PS4: Winning the Gaming War casestudy better are - – there is backlash against globalization, supply chains are disrupted by pandemic , technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Sony PS4: Winning the Gaming War
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sony PS4: Winning the Gaming War case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Playstation Sony, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Playstation Sony 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 Sony PS4: Winning the Gaming War can be done for the following purposes –
1. Strategic planning using facts provided in Sony PS4: Winning the Gaming War case study
2. Improving business portfolio management of Playstation Sony
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Playstation Sony
Strengths Sony PS4: Winning the Gaming War | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Playstation Sony in Sony PS4: Winning the Gaming War Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Playstation Sony in the sector have low bargaining power. Sony PS4: Winning the Gaming War has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Playstation Sony to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Playstation Sony has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sony PS4: Winning the Gaming War Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Playstation Sony in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Playstation Sony has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Sony PS4: Winning the Gaming War HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Sales & Marketing industry
– Sony PS4: Winning the Gaming War firm has clearly differentiated products in the market place. This has enabled Playstation Sony to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Playstation Sony to invest into research and development (R&D) and innovation.
Learning organization
- Playstation Sony 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 Playstation Sony is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sony PS4: Winning the Gaming War Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Playstation Sony is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Sony PS4: Winning the Gaming War 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.
Analytics focus
– Playstation Sony is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Dante Pirouz, Vibu Vimal can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Sales & Marketing field
– Playstation Sony 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 Playstation Sony in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Playstation Sony 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.
Successful track record of launching new products
– Playstation Sony has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Playstation Sony has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Sony PS4: Winning the Gaming War | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sony PS4: Winning the Gaming War are -
No frontier risks strategy
– After analyzing the HBR case study Sony PS4: Winning the Gaming War, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Playstation Sony has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Sony PS4: Winning the Gaming War has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Playstation Sony 's lucrative customers.
Interest costs
– Compare to the competition, Playstation Sony 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sony PS4: Winning the Gaming War HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Playstation Sony has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Sony PS4: Winning the Gaming War HBR case study mentions - Playstation Sony takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Playstation Sony 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Dante Pirouz, Vibu Vimal suggests that, Playstation Sony 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sony PS4: Winning the Gaming War, it seems that the employees of Playstation Sony don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Playstation Sony products
– To increase the profitability and margins on the products, Playstation Sony needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Playstation Sony is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Playstation Sony needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Playstation Sony to focus more on services rather than just following the product oriented approach.
Opportunities Sony PS4: Winning the Gaming War | 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 Sony PS4: Winning the Gaming War are -
Loyalty marketing
– Playstation Sony 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Playstation Sony can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Playstation Sony can use these opportunities to build new business models that can help the communities that Playstation Sony operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Manufacturing automation
– Playstation Sony can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Playstation Sony 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 Sony PS4: Winning the Gaming War - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Playstation Sony to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Playstation Sony 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. Playstation Sony 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Playstation Sony in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Playstation Sony 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.
Building a culture of innovation
– managers at Playstation Sony 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 Sales & Marketing segment.
Developing new processes and practices
– Playstation Sony can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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 Playstation Sony in the consumer business. Now Playstation Sony can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Playstation Sony to increase its market reach. Playstation Sony 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Playstation Sony can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Sony PS4: Winning the Gaming War External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sony PS4: Winning the Gaming War are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Playstation Sony can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Playstation Sony is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Playstation Sony needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Playstation Sony can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Playstation Sony in the Sales & Marketing industry. The Sales & Marketing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Playstation Sony with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Playstation Sony needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sony PS4: Winning the Gaming War, Playstation Sony may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Regulatory challenges
– Playstation Sony needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
High dependence on third party suppliers
– Playstation Sony 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.
Increasing wage structure of Playstation Sony
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Playstation Sony.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Playstation Sony can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Sony PS4: Winning the Gaming War .
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. Playstation Sony 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.
Weighted SWOT Analysis of Sony PS4: Winning the Gaming War 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 Sony PS4: Winning the Gaming War 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 Sony PS4: Winning the Gaming War 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 Sony PS4: Winning the Gaming War 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 Sony PS4: Winning the Gaming War 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 Playstation Sony needs to make to build a sustainable competitive advantage.