Sony: Marketing and Business Analysis

What have been the key success factors for Sony?

Sony Corporation is one of the worlds’ most recognized and respected companies. Since its humble inception as a radio repair shop in 1957, it has now grown into a huge multinational with interests in electronic items, multimedia, music, films and televisions etc. Part of its success comes the vision of its founder (along with Masuru Ikura) Akio Morita who once said that marketing success depends on three types of creativity namely, invention of new products, creativity in product planning and its production and creativity in marketing. This sentiment is echoed in the words of the world famous economist Peter Drucker who said that the basic purpose of any company is to create customers through marketing and innovation. (Trout 2006). It is common knowledge that Sony is highly innovative and examples include the Walkman, PlayStations etc. The company marketing is also highly successful mainly due to the following factors. Apart from advertising and manufacture of quality products, they include market research, customer needs and satisfaction, understanding consumer behavior, and corporate consumer behavior. In fact the market research of the company is extremely strong and effective. Market research involves collecting information through primary and secondary sources. (Market Research Process. 2008, p.3). Market research is used to formulate business plans, develop and launch new products, change or fine tune existing products, understand individual/corporate customers, make sales forecasts, understand market demand and company demand etc. (Market Research Methodology: Overview. 2008). Sony has high capability in understanding consumer behavior also. They have online ads that promote some of their products like Walkman, PlayStations etc. they have even developed a software that will track user behavior when they browse the web. This application called ebridge ™ is so successful that Sony offers its services to organizations and individuals for a fee.

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Where is Sony vulnerable? What should it watch for?

Even though the company is well established, it faces a lot of problems over the years. During 2004, the company even made a loss of 300 million USD for its flagship consumer electronics division. (Sony picture looks brighter, BusinessWeek, 2004). This is mainly due to competition and also due to its huge size which makes it difficult to adapt easily. The company had to close down several of its units, lay off employees and trim its products and the results have begun to show. Another specific problem area is piracy of its entertainment and software divisions. According to the BBC, the company had incorporated anti-piracy software in its products which caused more problems. The software made the user vulnerable to hackers and the company had to recall products using it (like CDs). (Tangled tale, Anti-piracy CD problems vex Sony, BBC News, 2005). This proves that technology can be a high risk area for any organization. Another area was when the company was unable to keep up with competitors. It has been unable to compete with the lpod introduced by Apple Computers. The company has also been plagued by delays in launching its latest Playstation 3. A more general look at vulnerabilities that the company can face is given below. Every organization is in a way vulnerable and its success and even survival will depend on how it handles this vulnerability. This comes about due to the risks that exist in all markets. Such risks can be classified into controllable and uncontrollable factors. In a sense the marketing mix known as the 4 Ps which is an essential factor in the success of any company can be classified as controllable factors. They are the product, price, place and promotion. (Marketing: Marketing Mix. 2007). The products are the company’s electronic goods, its multimedia and traditional media products. The company has effective control on what the company should produce. But its success will depend on effective market research. Price is also a feature that can be controlled by the company to a certain extent. This is because there is a limit beyond which price cannot be increased or decreased. It cannot reduce too much because it will make a loss and it cannot increase it because demand will fall. Place refers to the market in which it operates and the distribution channels through which the company makes products available. This is also a very controllable feature. Promotion is also decided by the company, but will also depend on what the competition is doing to promote its products. Most importantly, all the success of all the above factors will depend on the market research conducted by the company. If the research data is faulty, the company can make wrong decisions regarding all of the above and will result in losses. The uncontrollable factors include political, social, economic and cultural environments. The company will not be in a position to control the decisions and policies of the government in the markets it has presence in. The company can understand the social and cultural environment it operates in through market research, but can do very little to change it. All it can do is to plan their strategies accordingly. Economic factors like the health of the economy are also outside the control of the company. The company should watch out for all these factors. But the main focus in this regard is competition. This field of electronics media and multimedia is highly competitive. Almost all products manufactured by the company have substitutes from competitors. Size of the organization can also be a cause for concern because it could become too unwieldy and unmanageable. Natural disasters, terrorism, political threats etc are also problematic. In the case of terrorism, a company as famous as Sony can be targeted for the publicity it will generate.

Recommendations and suggestions

The risks faced and the possible areas of vulnerability have been discussed in the previous section. There are many things that the company can do in the future to reduce the above risk factors. The first step is to continue strongly with the vision of its founder stressing on creativity in there areas (mentioned above). Market research is strong within Sony and they should see to it that it remains so. A lot of factors will be solved if the market information is relevant and accurate. Another factor is to understand and study the competitors. The book titled “Doing Business in Emerging Markets” advises a way of reducing risks. It says that any organization should adjust or mold the controllable risks or factors in tune with the uncontrollable factors. (Cavusgil, Ghauri and Agarwal 2002, p.40). For example, if the market is geared to accept its high end LCD TV’s then it should concentrate on such products in the market place. If the economy of a market (a undeveloped market) will not demand a large number of expensive products and the company can focus on its standard offerings. Sony Corporation is a well managed and professionally run company. It is also very strong, financially, strategy wise and product wise. Following the above mentioned broad strategies will ensure that the company will remain strong and continue to have robust growth in the future also.


Cavusgil, S. Tamer., Ghauri, Pervez. N., and Agarwal, Milind. R. (2002). Doing Business in Emerging Markets. 40. 2008. Web.

Market Research Methodology: Overview. (2008). [online]. BNET: The Go To Place For Management. Web.

Market Research Process. (2008). [online]. The Times 100. 3. Web.

Marketing: Marketing Mix. (2007). [online]. NetMBA: Business Knowledge Center. Web.

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Trout, Jack. (2006).Tales From the Marketing Wars: Peter Drucker on Marketing. [online]. Web.

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