Sony & its new business strategy

The famous technological company Sony has just revealed its new business strategy, with a financial objective of achieving an operating profit of at least $4.3 billion in the company's 2017 fiscal year. But how is the company planning to reach this goal?

Sony has decided to focus on a narrower band of products. This means, that it will concentrate on business areas that really bring profits. During the last years the company had to struggle a lot with the intense competition of dominant companies such as Apple and Samsung, which is why Sony will no longer concentrate of growing in the business area of smartphones. According to Porter’s Five Forces Model the rivalry is stronger when one or two rivals have powerful strategies and other rivals are scrambling to stay in the game. This is exactly the case of Apple and Samsung confronting Sony. Obviously, the Sony can response to the rivalry with lower product prices, higher levels of advertising, higher quality or other strategies. Nevertheless, it is very difficult to compete against these giants and so Sony has decided to focus on other production areas.

The strategy will therefore see Sony shift to more profitable business areas, such as camera sensors, videogames and entertainment products. Sony will employ aggressive capital investment in these areas, with the aim of achieving sales growth and profit expansion.

In our opinion, Sony does a great job in changing strategies and focusing on the segments, where the company is really good at, the videogames and entertainment. Apple and Samsung are the leading companies in the mobile industry and lots of other mobile business had to shut down, due to the intense rivalry. We believe, that the companies should prepare themselves for this, finding new strategies in order to not only to survive, but to obtain greater profits.