Sony Corporation's Aibo: An Intelligent Decision? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sony Corporation's Aibo: An Intelligent Decision?
In November 2017, the chief executive officer of Sony Corporation was preparing to announce the company's release of its rebooted robo-pup, the Aibo-a robot equipped with sensors and actuator technologies, and powered by artificial intelligence that allowed this virtual pet to behave like a real dog. Sony Corporation, the 70-year-old iconic Japanese manufacturing company, had diverse businesses. After significant restructuring since 1999 to address its financial troubles, the company was expected, in March 2018, to post a record operating profit for the first time in two decades. How did a virtual pet business, especially one that had already proved unviable in the past, fit into such a restructuring exercise? Was Sony Corporation's Aibo an intelligent decision? Tulsi Jayakumar is affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "Sony Corporation's Aibo: An Intelligent Decision?" written by Tulsi Jayakumar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aibo Sony facing as an external strategic factors. Some of the topics covered in Sony Corporation's Aibo: An Intelligent Decision? case study are - Strategic Management Strategies, Manufacturing, Risk management, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Sony Corporation's Aibo: An Intelligent Decision? casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Sony Corporation's Aibo: An Intelligent Decision?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sony Corporation's Aibo: An Intelligent Decision? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aibo Sony, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aibo 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 Corporation's Aibo: An Intelligent Decision? can be done for the following purposes –
1. Strategic planning using facts provided in Sony Corporation's Aibo: An Intelligent Decision? case study
2. Improving business portfolio management of Aibo Sony
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aibo Sony
Strengths Sony Corporation's Aibo: An Intelligent Decision? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aibo Sony in Sony Corporation's Aibo: An Intelligent Decision? Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Aibo Sony 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.
Training and development
– Aibo Sony has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sony Corporation's Aibo: An Intelligent Decision? 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.
Operational resilience
– The operational resilience strategy in the Sony Corporation's Aibo: An Intelligent Decision? 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.
Innovation driven organization
– Aibo Sony is one of the most innovative firm in sector. Manager in Sony Corporation's Aibo: An Intelligent Decision? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Aibo Sony is one of the leading recruiters in the industry. Managers in the Sony Corporation's Aibo: An Intelligent Decision? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Aibo Sony is present in almost all the verticals within the industry. This has provided firm in Sony Corporation's Aibo: An Intelligent Decision? 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.
Superior customer experience
– The customer experience strategy of Aibo Sony in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Aibo 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 Aibo 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 Aibo Sony
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aibo Sony does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Aibo 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 Corporation's Aibo: An Intelligent Decision? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Aibo Sony has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aibo Sony to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Aibo Sony digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aibo 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.
Weaknesses Sony Corporation's Aibo: An Intelligent Decision? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sony Corporation's Aibo: An Intelligent Decision? are -
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 Aibo Sony supply chain. Even after few cautionary changes mentioned in the HBR case study - Sony Corporation's Aibo: An Intelligent Decision?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aibo Sony vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Aibo 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.
Low market penetration in new markets
– Outside its home market of Aibo Sony, firm in the HBR case study Sony Corporation's Aibo: An Intelligent Decision? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Aibo 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.
No frontier risks strategy
– After analyzing the HBR case study Sony Corporation's Aibo: An Intelligent Decision?, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Increasing silos among functional specialists
– The organizational structure of Aibo Sony is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Aibo Sony needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aibo Sony to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Sony Corporation's Aibo: An Intelligent Decision? HBR case study mentions - Aibo 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.
High cash cycle compare to competitors
Aibo 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Sony Corporation's Aibo: An Intelligent Decision? 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 Aibo Sony has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Sony Corporation's Aibo: An Intelligent Decision? 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 Corporation's Aibo: An Intelligent Decision? can leverage the sales team experience to cultivate customer relationships as Aibo Sony is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Aibo 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 Corporation's Aibo: An Intelligent Decision? | 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 Corporation's Aibo: An Intelligent Decision? are -
Building a culture of innovation
– managers at Aibo 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aibo 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.
Loyalty marketing
– Aibo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aibo Sony 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 Aibo Sony to increase its market reach. Aibo 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aibo 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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aibo 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 Corporation's Aibo: An Intelligent Decision?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aibo Sony is facing challenges because of the dominance of functional experts in the organization. Sony Corporation's Aibo: An Intelligent Decision? 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 Aibo 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 Aibo Sony to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Aibo 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.
Using analytics as competitive advantage
– Aibo 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 Corporation's Aibo: An Intelligent Decision? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aibo Sony to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aibo Sony can use these opportunities to build new business models that can help the communities that Aibo Sony operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Aibo 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.
Threats Sony Corporation's Aibo: An Intelligent Decision? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sony Corporation's Aibo: An Intelligent Decision? are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aibo Sony in the Leadership & Managing People industry. The Leadership & Managing People 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 Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aibo Sony can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aibo 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 Corporation's Aibo: An Intelligent Decision? .
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 Aibo Sony business can come under increasing regulations regarding data privacy, data security, etc.
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 Aibo Sony.
Technology acceleration in Forth Industrial Revolution
– Aibo Sony has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aibo Sony needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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. Aibo Sony needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Aibo 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 Leadership & Managing People industry regulations.
Shortening product life cycle
– it is one of the major threat that Aibo Sony is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Aibo 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 Aibo 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 Aibo Sony.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aibo Sony with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Aibo Sony in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Sony Corporation's Aibo: An Intelligent Decision? 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 Corporation's Aibo: An Intelligent Decision? 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 Corporation's Aibo: An Intelligent Decision? 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 Corporation's Aibo: An Intelligent Decision? 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 Corporation's Aibo: An Intelligent Decision? 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 Aibo Sony needs to make to build a sustainable competitive advantage.
