Case 5: Sony Shockwave
In Search of the of the
Next Hit Next Hit Product
1. Discuss the importance of product innovation to the1. Discuss the importance of product innovation to the future success of Sony in regard to the changing
marketing environmentmarketing environment.
2. Conduct a SWOT analysis on Sony.
3. What are the strategic options available to Sony, in the wake of "Sony Shock"? Furthermore, y , recommend a course of action for Sony.
Q1. Importance of Product Innovation to Sony's Future SuccessSony s Future Success
Product innovation enables Sony to:Product innovation enables Sony to: • Retain its brand status • Benefit from innovative products - higher pricesBenefit from innovative products higher prices
• Add to the brand's reputation as innovative products are seen as technologically superior
• Maintain dominant industry position • Reduce the risk of technological leapfrog • Set proprietary standards
Q1. Continued…Product Innovation:Innovation:
• Creates demand• Creates demand • Acts as a barrier to entry for potential new entrants • Helps create new markets• Helps create new markets • Helps reposition a business
Helps in defending ma ket sha e• Helps in defending market share
Q2. SWOT Analysis: Strengthsy g
• Global Size and Market Share• Global Size and Market Share • Presence in numerous markets
• Solid brand image• Solid brand image • Creates market-defining products • Experience and strength of brand• Experience and strength of brand
• Level of vertical integration Strength of "Playstation" Brand• Strength of "Playstation" Brand
• Japanese Strength in Electronic Engineering Design Alli ith th f t• Alliances with other manufacturers
• Exposure to global markets N l d hi• New leadership
Q2. Continued... SWOT Analysis: WeaknessesWeaknesses
• Overcapacity • Too broad a product range• Too broad a product range • Low profit margins • Collapse of Cathode-Ray Television marketCollapse of Cathode Ray Television market