Swot Analysis of "Competitive Dynamics in Home Video Games (I): The Sony PlayStation" written by Peter J. Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Home Sony's facing as an external strategic factors. Some of the topics covered in Competitive Dynamics in Home Video Games (I): The Sony PlayStation case study are - Strategic Management Strategies, Competitive strategy, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Competitive Dynamics in Home Video Games (I): The Sony PlayStation casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, there is backlash against globalization, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Competitive Dynamics in Home Video Games (I): The Sony PlayStation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Competitive Dynamics in Home Video Games (I): The Sony PlayStation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Home Sony's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Home 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation can be done for the following purposes –
1. Strategic planning using facts provided in Competitive Dynamics in Home Video Games (I): The Sony PlayStation case study
2. Improving business portfolio management of Home Sony's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Home Sony's
Strengths Competitive Dynamics in Home Video Games (I): The Sony PlayStation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Home Sony's in Competitive Dynamics in Home Video Games (I): The Sony PlayStation Harvard Business Review case study are -
Ability to recruit top talent
– Home Sony's is one of the leading recruiters in the industry. Managers in the Competitive Dynamics in Home Video Games (I): The Sony PlayStation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Home Sony's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Home 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 Home Sony's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Competitive Dynamics in Home Video Games (I): The Sony PlayStation firm has clearly differentiated products in the market place. This has enabled Home Sony's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Home Sony's to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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.
Successful track record of launching new products
– Home Sony's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Home Sony's 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.
Analytics focus
– Home Sony's 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 Peter J. Coughlan 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.
Strong track record of project management
– Home 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.
Cross disciplinary teams
– Horizontal connected teams at the Home 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.
Diverse revenue streams
– Home Sony's is present in almost all the verticals within the industry. This has provided firm in Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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.
Organizational Resilience of Home Sony's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Home Sony's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Home Sony's in the sector have low bargaining power. Competitive Dynamics in Home Video Games (I): The Sony PlayStation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Home Sony's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Competitive Dynamics in Home Video Games (I): The Sony PlayStation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Competitive Dynamics in Home Video Games (I): The Sony PlayStation are -
Skills based hiring
– The stress on hiring functional specialists at Home 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.
Interest costs
– Compare to the competition, Home 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 to strategic competitive environment developments
– As Competitive Dynamics in Home Video Games (I): The Sony PlayStation HBR case study mentions - Home Sony's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation, in the dynamic environment Home Sony's has struggled to respond to the nimble upstart competition. Home Sony's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Home Sony's products
– To increase the profitability and margins on the products, Home Sony's needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Home Sony's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Competitive Dynamics in Home Video Games (I): The Sony PlayStation should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Home Sony's, firm in the HBR case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Home Sony's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Home Sony's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Home Sony's has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation can leverage the sales team experience to cultivate customer relationships as Home Sony's is planning to shift buying processes online.
Opportunities Competitive Dynamics in Home Video Games (I): The Sony PlayStation | 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation are -
Loyalty marketing
– Home 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 Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Home 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. Home 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Home Sony's is facing challenges because of the dominance of functional experts in the organization. Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Home 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 Home Sony's to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Home Sony's can develop new processes and procedures in Strategy & Execution 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Home Sony's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Home Sony's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Home Sony's has opened avenues for new revenue streams for the organization in the industry. This can help Home Sony's to build a more holistic ecosystem as suggested in the Competitive Dynamics in Home Video Games (I): The Sony PlayStation case study. Home Sony's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Home Sony's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Home 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Home Sony's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Home Sony's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Home 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 Strategy & Execution segment, and it will provide faster access to the consumers.
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 Home Sony's in the consumer business. Now Home Sony's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Competitive Dynamics in Home Video Games (I): The Sony PlayStation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation are -
Consumer confidence and its impact on Home 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.
High dependence on third party suppliers
– Home 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.
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. Home 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.
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.
Shortening product life cycle
– it is one of the major threat that Home Sony's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Home 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 Home Sony's in the Strategy & Execution industry. The Strategy & Execution 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.
Technology acceleration in Forth Industrial Revolution
– Home Sony's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Home Sony's needs to keep up with the evolution of technology in the Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Competitive Dynamics in Home Video Games (I): The Sony PlayStation, Home Sony's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Home Sony's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Environmental challenges
– Home Sony's 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. Home Sony's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Home Sony's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Competitive Dynamics in Home Video Games (I): The Sony PlayStation 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 Home Sony's needs to make to build a sustainable competitive advantage.