Sony Playstation 4: Aim and Fire SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sony Playstation 4: Aim and Fire
Kazuo Hirai, president and group CEO of the Sony division charged with manufacturing the PlayStation, is faced with a strategic crossroads as he decides which functional elements and target demographics to focus on with the PS4. He reviews the history and dynamics of the video gaming industry-including the importance of first-mover advantage when it comes to new technology-in an effort to predict its future. What's next-both for gaming in general and for home game consoles in particular-and what place should Sony be vying for in the minds and pocketbooks of the gaming public?
Authors :: Mike Lenox, Jared Harris, Rebecca Goldberg
Swot Analysis of "Sony Playstation 4: Aim and Fire" written by Mike Lenox, Jared Harris, Rebecca Goldberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gaming Sony facing as an external strategic factors. Some of the topics covered in Sony Playstation 4: Aim and Fire case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sony Playstation 4: Aim and Fire casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, supply chains are disrupted by pandemic , wage bills are increasing, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of Sony Playstation 4: Aim and Fire
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sony Playstation 4: Aim and Fire case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gaming Sony, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gaming 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 Playstation 4: Aim and Fire can be done for the following purposes –
1. Strategic planning using facts provided in Sony Playstation 4: Aim and Fire case study
2. Improving business portfolio management of Gaming Sony
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 Gaming Sony
Strengths Sony Playstation 4: Aim and Fire | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gaming Sony in Sony Playstation 4: Aim and Fire Harvard Business Review case study are -
Training and development
– Gaming Sony has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sony Playstation 4: Aim and Fire 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.
Low bargaining power of suppliers
– Suppliers of Gaming Sony in the sector have low bargaining power. Sony Playstation 4: Aim and Fire has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gaming Sony to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Gaming Sony 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 Sony Playstation 4: Aim and Fire - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gaming Sony digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gaming Sony 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.
Ability to lead change in Strategy & Execution field
– Gaming 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 Gaming Sony in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Gaming Sony
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gaming Sony does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Gaming 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 Playstation 4: Aim and Fire HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Gaming Sony is present in almost all the verticals within the industry. This has provided firm in Sony Playstation 4: Aim and Fire 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.
Innovation driven organization
– Gaming Sony is one of the most innovative firm in sector. Manager in Sony Playstation 4: Aim and Fire Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Sony Playstation 4: Aim and Fire firm has clearly differentiated products in the market place. This has enabled Gaming Sony to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Gaming Sony to invest into research and development (R&D) and innovation.
High brand equity
– Gaming Sony has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gaming Sony to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Gaming Sony in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Sony Playstation 4: Aim and Fire | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sony Playstation 4: Aim and Fire are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sony Playstation 4: Aim and Fire, in the dynamic environment Gaming Sony has struggled to respond to the nimble upstart competition. Gaming Sony has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Sony Playstation 4: Aim and Fire, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gaming Sony is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sony Playstation 4: Aim and Fire can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Gaming Sony has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Mike Lenox, Jared Harris, Rebecca Goldberg suggests that, Gaming 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.
Lack of clear differentiation of Gaming Sony products
– To increase the profitability and margins on the products, Gaming Sony needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Sony Playstation 4: Aim and Fire 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 Sony Playstation 4: Aim and Fire can leverage the sales team experience to cultivate customer relationships as Gaming Sony is planning to shift buying processes online.
High cash cycle compare to competitors
Gaming 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.
Increasing silos among functional specialists
– The organizational structure of Gaming Sony is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Gaming Sony needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gaming Sony to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Sony Playstation 4: Aim and Fire HBR case study mentions - Gaming 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 Gaming 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.
Opportunities Sony Playstation 4: Aim and Fire | 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 Playstation 4: Aim and Fire are -
Creating value in data economy
– The success of analytics program of Gaming Sony has opened avenues for new revenue streams for the organization in the industry. This can help Gaming Sony to build a more holistic ecosystem as suggested in the Sony Playstation 4: Aim and Fire case study. Gaming Sony can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Gaming Sony to increase its market reach. Gaming 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.
Learning at scale
– Online learning technologies has now opened space for Gaming 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.
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 Gaming Sony in the consumer business. Now Gaming Sony can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gaming Sony is facing challenges because of the dominance of functional experts in the organization. Sony Playstation 4: Aim and Fire 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.
Buying journey improvements
– Gaming Sony can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sony Playstation 4: Aim and Fire 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.
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 Gaming Sony 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.
Using analytics as competitive advantage
– Gaming 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 Playstation 4: Aim and Fire - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gaming Sony to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gaming Sony can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Sony Playstation 4: Aim and Fire, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gaming Sony can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Gaming Sony can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gaming Sony 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 Gaming Sony to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Gaming Sony 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.
Threats Sony Playstation 4: Aim and Fire External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sony Playstation 4: Aim and Fire are -
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 Playstation 4: Aim and Fire, Gaming 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 Strategy & Execution .
Increasing wage structure of Gaming 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 Gaming Sony.
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.
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. Gaming Sony needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Gaming Sony business can come under increasing regulations regarding data privacy, data security, etc.
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 Gaming Sony in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Gaming 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gaming Sony 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.
Environmental challenges
– Gaming 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. Gaming Sony can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gaming Sony can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Gaming Sony 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.
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. Gaming 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gaming Sony 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 Sony Playstation 4: Aim and Fire 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 Playstation 4: Aim and Fire 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 Playstation 4: Aim and Fire 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 Playstation 4: Aim and Fire 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 Playstation 4: Aim and Fire 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 Gaming Sony needs to make to build a sustainable competitive advantage.
