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Sony Playstation 2: analysis of company in global market

Sony Playstation 2: Just Another Competitor?

INTERNAL ANALYSIS

1) What are Sony's 3-5 major strengths and 3-5 major weaknesses?
(In answering this question, assess its tangible and intangible resources,
primary and support functions, and capabilities. Also answer with respect
to the video game industry.)

2) To what extent does Sony have a sustainable competitive advantage? Explain your answer.

GENERAL EXTERNAL ANALYSIS

3) Explain how each of the general environment segments impacts the video game industry.
Give specific examples.

COMPETITIVE ANALYSIS

4) Using the Five Forces Model of Competition, perform an industry environment analysis.
Make sure to both identify the factor(s) and/or group(s) involved in each force as well
as the seriousness of each "threat" (e.g., what are the substitute product and/or services?
How likely are new entrants to enter the market?)

5) Based on your competitive analysis, is the video game industry an attractive industry?
Justify your response.

6) How would you describe the competitive dynamics in the industry?
Discuss how they have evolved over time using strategic management concepts?

7) How can Sony use promotion, pricing, and licensing to leverage its early mover
advantage over Nintendo and Microsoft?

Solution Preview

Sony Playstation 2: Just Another Competitor?

INTERNAL ANALYSIS

1) What are Sony's 3-5 major strengths and 3-5 major weaknesses?
(In answering this question, assess its tangible and intangible resources,
primary and support functions and capabilities. Also answer with respect
to the video game industry.)
Sony Corporation of America, based in New York City, is the U.S. subsidiary of Sony Corporation, headquartered in Tokyo. Sony is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets. Its music, motion picture, television, computer entertainment, and online businesses make Sony one of the most comprehensive entertainment companies in the world. Its music, motion picture, television, computer entertainment, and online businesses make Sony one of the most comprehensive entertainment companies in the world. Sony's principal U.S. businesses include Sony Electronics Inc., Sony Pictures Entertainment, Sony Computer Entertainment America Inc., and a 50% interest in SONY BMG MUSIC ENTERTAINMENT, one of the largest recorded music companies in the world. Sony recorded consolidated annual sales of approximately $67 billion for the fiscal year ended March 31, 2005, and it employs 151,400 people worldwide.
Sony Corporation of America lets you spin, win, and grin. As the US arm of Sony, the Japanese consumer electronics and multimedia giant, the company makes music, movies, and TV shows, as well as the products that bring them to life. Its electronics products include #1 video game console leader, PlayStation, as well as TVs, PDAs, DVD and MP3 players, digital cameras, camcorders, computers, CD players, and car audio products; musical artists range from classical to gospel to hip-hop; film and TV offerings include box office hits (Spider-Man, Charlie's Angels) and the popular game shows Wheel of Fortune and Jeopardy!
The new Sony PS2, unlike the original, comes with a built-in network card and modem. You'll now find an IR port that works with a remote for DVD viewing, and there are also dual USB ports, controller ports, and memory card slots. The FireWire port, which very few accessories used, is gone. The unit is top loading and has a manually controlled CD/DVD bay door, solving the problem many original units had with burned-out tray mechanisms

WEAKNESSES
Very high costs, measures could include large layoffs.
Continuing declines in recorded music sales.

2) To what extent does Sony have a sustainable competitive advantage? Explain your answer. To a great extent Sony has a sustainable competitive advantage. The strength of the Sony empire and its business size is important. Sony's principal U.S. businesses include Sony Electronics Inc., Sony Pictures Entertainment, Sony Computer Entertainment America Inc., and a 50% interest in SONY BMG MUSIC ENTERTAINMENT, one of the largest recorded music companies in the world. Sony recorded consolidated annual sales of approximately $67 billion for the fiscal year ended March 31, 2005, and it employs 151,400 people worldwide. Sony's consolidated sales in the U.S. for the fiscal year ended March 31, 2005 were $18.4 billion. Sony Corporation of America, based in New York City, is the U.S. subsidiary of Sony Corporation, headquartered in Tokyo. Sony is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets Sony's consolidated sales in the U.S. for the fiscal year ended March 31, 2005 were $18.4 billion.
Project USA, a Sony Corporation restructuring initiative announced in 2003, seeks to reduce costs through an ongoing reorganization of the entertainment and US electronics businesses. The company has also hinted at plans to diversify its entertainment operations, which it regards as being too "US-centric."

In mid-2004, after continuing declines in recorded music sales, Sony merged its music unit (Sony Music Entertainment) with BMG; the new company (Sony BMG Music Entertainment) is jointly owned and is now the #2 music company (after Universal Music). Sony is also leading a consortium to buy movie studio MGM; the deal would place the acquired company under Sony Corporation of ...

Solution Summary

In a 2582 word solution, the response thoroughly explores the market for Playstation 2 including comparisons to competitor products.

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