STRATEGIC PLAN
SONY MOBILE COMMUNICATIONS INC.
UTKARSH RAO
MGT 490
PROF. ROBERT POWERS
11/22/2016
Company Background
Sony Mobile Communications Inc. is a multinational company based in Tokyo, Japan and is wholly owned by Sony. Sony is a well renowned manufacturer of audio, video, communications and information technology products for the consumer and professional market. Sony, a company that made its mark in the market for electronic goods with its introduction of the Walkman, is facing troubles in its mobile communications division. The company has failed to keep up with its market competition, Apple, Samsung and Google, due to lack of innovation in the consumer sector and is facing a downfall in its share prices. The company is inclined towards creating great hardware but lacks in providing new innovative technology for its consumers.
The company is just releasing its new Sony XPeria Z5, that has the patented Sony’s X-Reality camera technology and patented Mobile Phone Gaming Interface. It aims at revolutionizing the way we communicate with each other and interact with the world.
Vision
We see a future that would transform the way people interact with the world.
Mission Statement
With our patented Sony’s X-Reality camera technology, Mobile Phone Gaming Interface and management discipline, we aim at producing the world’s best smartphones that would transform the users’ digital entertainment experience and provide connectivity to individuals and businesses across the world. We prioritize in leading the industry towards a greener environment.
Justification for Mission Statement
Sony’s core competencies are the patented X-Reality camera technology and patented Mobile Phone Gaming Interface along with the management’s discipline in providing best quality products that cause the least impact on the environment. The philosophy of the company is to produce goods with the least amount of impact on the environment.
SWOT Analysis
Strengths
Weaknesses
Patents (Camera, Gaming)
Bad customer support
Management Discipline
Low capital
Brand Name
Distant Production facility
Opportunities
Threats
Higher Profit
Fewer Customers
Increased Sales
Bankruptcy
Opportunities
1. Patented Sony Camera Technology + Management Discipline + Consumer demand for high camera quality on smartphones = Higher Profit from sale of XPeria Z5.
2. Patented Mobile Phone Gaming Interface + Brand Name + Samsung Phone Recall = Increased Sales
Threats
1. Lack of Innovation + Bad customer support + Apple’s success in the market = Losing Customers
2. Low Capital Investment + Distant Production facilities + Impact of Strong Japanese Yen = Bankruptcy
Long-term Objectives
1. Profits of at least $300 billion by 2021 from the sale of XPeria Z5.
2. Sales of new XPeria Z5 smartphone of at least $500 billion by 2021.
3. Achieve 100% in Temkin Customer Service Ratings (TCSR) within 6 years.
4. 25 new production facilities around the world by the end of 2021.
Justification of Long-term Objectives
1. Sony’s patented camera technology and the company’s passion for providing best quality products, along with a high demand for high camera quality smartphones amongst consumers would result in $300 billions of profits by the sale of Z5 by 2021.
2. The new patented Mobile Phone Gaming Interface is integrated in the new Z5 smartphone and Sony’s reputation for providing best quality products, along with the failure of the new Samsung smartphone, the sales of the XPeria Z5 is expected to reach at least $500 billion by 2021.
3. Achieving 100% in the Temkin Customer Service Ratings, would avoid the threat of losing customers through bad customer support and would result in more customers through the heightened brand reputation.
4. Through investment in production facilities around the world, Sony would be able to have an improved supply instead of relying on the Japanese production facilities, and changing production costs due to fluctuations in the Japanese Yen. This would allow Sony to avoid the threat of bankruptcy.
Above, we see that meeting all long-term objectives means the achievement of all opportunities and avoidance of threats.
Strategic Analysis and Choice
In Exhibit 6.2,
Opportunities > Threats, because Sony has a greater possibility of gaining increased sales and higher profits by the help of Sony’s patents, management discipline and brand name.
Strengths > Weaknesses, because Sony owns patents that give them a competitive edge in the market. Brand name and management discipline would help Sony achieve more customers when Samsung users’ switch phones.
Suggestion- Cell 1.
In Exhibit 8.10,
Strengths > Weaknesses, as explained above.
Internal > External, because Sony possesses patents, management discipline and a renowned brand name required to achieve success. It needs to invest in capital and improve its customer support and build more production facilities.
Suggestion- Quadrant III
In Exhibit 8.11,
Top, because of the increase in consumer demand for smartphones with high quality camera and reliability.
Left, because Sony has patents, great management discipline and a well renowned brand name that gives it a strong competitive position in the market.
Suggestion- Quadrant I
Grand Strategies
1. Market Development
2. Turnaround
Justification for Grand Strategies
From Exhibit 8.11, the quadrant selection on the basis of the SWOT analysis, is quadrant III.
1. Market Development- The new Z5 smartphone from Sony is targeted towards younger generations who enjoy gaming on-the-go and need high quality cameras to share information on social media. Due to the recent Samsung phone recall, Sony has the opportunity to make its mark in the market. This target market with our new patented technology would help achieve the long-term objective of $300 billion in profits and sales of $500 billion by 2021.
2. Turnaround- Sony needs improvement in its customer support department and needs more production facilities around the world to improve its distribution. With the establishment of 25 new production facilities around the world, Sony would be able to meet consumer demands promptly and would help in reducing the price of the products. A turnaround in the customer support department would lead to achieving the long-term objective of a 100% valuation in Temkins Customer Service Ratings within 6 years.
Concentrated growth, product development and innovation are inappropriate strategies Sony’s Mobile business. While turnaround strategy is not suggested by the analysis of the Grand Strategy Matrix, it is an appropriate strategy for Sony’s business.
Short-term objectives
LTO 1: Profits of at least $300 billion by 2021 from the sale of XPeria Z5.
STO 1: Profits of $60 billion by the end of 2017.
STO 2: Salesforce qualified within 8 months.
LTO 2: Sales of new Xperia Z5 smartphone of at least $500 billion by 2021.
STO 1: Sales of at least $100 billion by the end of 2017
STO 2: Factory ready to ship within 7 months
LTO 3: Achieve 100% in Temkin Customer Service Ratings (TCSR) within 6 years.
STO 1: Achieve 50% increment in Nielsen Digital Ad Ratings within 6 months.
STO 2: 500,000 membership customers by the end of 9 months.
LTO 4: 25 new production facilities around the world by the end of 2021.
STO 1: Setup 8 new production facilities in South-East Asia by the end of 2017.
STO 2: Invest $30 billion in production facilities by end of first year.
Justification of Short-term Objectives
1. With the establishment of a qualified sales force in 8 months, the company would be able to serve its strategy of market development which would result in profits from the sale of smartphones. With profits of $60 billion by the end of 2017, Sony’s expected profits of at least $300 billion by 2021 would be achieved.
2. Sales of $100 billion by the end of year 2017 would ensure the long-term objective of expected profits of $500 billion by 2021. Factory shipment within 7 months would ensure the steady supply to meet the demand for the product.
3. 50% increment in Nielsen Digital Ad Ratings within 6 months, would imply that a larger reach of audience is being influenced by the advertising to buy their products. Also, having 500,000 membership customers by the end of 9 months would provide for an improved customer support experience, and result in achieving the long-term objective of 100% Temkin Customer Service Ratings within 6 years and turnaround in customer support department.
4. The establishment of 8 new production facilities in South-East Asia by the end of 2017 would create new markets for distribution and sale. Investment of $30 billion in production facilities would help in market development across the new targeted areas. This would help achieve the long-term objective of establishing 25 new production facilities around the world.
Tactics
Market Development-
• The target market would be Latin America and Asia where there is a scope for rapid sale growth.
• Primary users would be the younger generation who actively use their phones to access social media and enjoy Sony’s gaming interface.
• The new Z5 will have great camera quality to serve the social media savvy and have the ability to access their favorite games on-the-go.
Turnaround-
• Hire new customer service staff to strengthen the customer service reputation and achieve top Temkin Customer Service Rating.
• Setting up new production facilities in in South-East Asia and Latin America in order to improve distribution channels.
• Setting up advertising campaigns to improve sales through mobile phone advertising.
• Provide training to employees so they are ready by the time distribution starts.
Justification of Tactics
1. Latin America and Asia have not been the major target market for Sony, therefore, establishing new facilities in these parts of the world would facilitate rapid market growth and improve the sales and profits.
2. Hiring new customer service staff and providing training to field employees would improve customer satisfaction with the products, which would directly result in increase in sales and profits.
3. Setting up advertising campaigns would allow the company to be recognized as a leader in smartphone technology and help in increasing the number of membership customers.
4. Providing high quality products that suit the trending generations, would help improve the brand reputation and improve the sales of the smartphones.
Critical Success Factors
• Re-establishment of customer support reputation
• Concentrating focus of target market to Asia and Latin America