Sony Critical Success Factor And Value Chain Analysis


Sony Company’s Profile

In 1946, Sony Company was developed in Tokyo, Japan, with a small amount of capital 190000 yens and with only Sony Critical Success Factor And Value Chain Analysis20 employs. Now it becomes the most popular electronic and entertainment company which include in top 20 semiconductor sales leaders. In rank, Sony is 69th world’s largest business consider. Here we discuss critical success factors, Value chain, Customer delivered value, cost of controlling quality and theory of constraints of Sony corporation.

Sony Critical Success Factors:

If we talk about Innovation, Sony creates its image in their customer’s mind as a great industry. Many Brands equity is produce through innovation. Innovation is main part of Sony’s culture and creates a difference from other competitors. It’s a process of creating new ideas and converts them into physical form. It’s most important for those companies who want to grow and survive in the long period. Innovation should be sustain and continue at every step of products. Creativity should be present in their teamwork and between all functions. Supportive company structure is also very compulsory where we can easily apply innovative ideas. Innovation should be according to demands and needs of the market and consumers so that it cans conveniently apply at every step of producing different products.

Now we see the Quality, time and efficiency, Sony has too much concern about its quality management systems in this way that it applies this management system on its all process like planning, producing, design and manufacturing, sales, customers and their response. It clarifies the roles and responsibilities by checking the quality management. Sony is very active regarding the response and feedback of customers related to their products and customer services. It gives attention on feedback which helps to improve quality and demand of its products by using customer’s opinions. It properly make plan, design and quality management to raise its product quality, making strong product performance and give progressive report to top level as per need.

Sony also gathers product quality related information from their customers as well as their employees and work on this information. After applying reasonable principles of making quality better, it also take opinion of customers related to new change and benefits of them. Sony implements a big range of rules related to quality specifications to provide customer a product quality and services more than their expectations. To give customers true and clear picture regarding products, employees should have knowledge about all the policies and innovations and quality rules so that they give complete satisfaction to customers.

Four Perspectives of Balanced Scorecard:

  1. Learning and growth: Sony has growth opportunities and also offer better discount on all their products. It adopt the policy of continues growth which leads to forward thinking and globally shows positive impacts. In simple words, learning and growth related to information technology and capabilities of employees are also very important. Learning includes all the information we gather from market and verify the real demand of customers and then learn new technologies, adopt new process and procedures, apply new systems which helpful to increase their product’s importance in market. We also learn from customer feedbacks and their comments on our products. so that the learning process never ends. Now we move to growth capabilities, after learning new and advance technologies, we have to adopt latest growth procedures to make a high quality and latest product which compete the market with its competitors. Sony also give training to their employees all new techniques and methods so that they can give their better performance in this regard.
  2. Internal business process: by learning new technologies, Sony adopts latest innovative process. These processes are applicable in new innovative system where products can be produce according to latest ideas and latest demands. Sony applies innovative system setup which helps them to fulfill customer demands. It applies on every step of production to produce a latest product as compare to other competitors. Post sale process is also important. After selling their products what sort of response they receive, if customer not satisfied with product how can we deal with this, all properly manage by Sony Company. By coming latest products in the market , the value of old version is going to decrease but company use all their old products at those areas where the demand of that products still exist.
  3. Customers: An electronic company is totally depending on their customers, Just like Sony Company. Like and dislike of customers may change the profit ratio of company. Sony creates different places to get the feedback and response of their customers and check all those suggestions which may helpful to creating a better standard of products. All electronics and entertainment products like TV, Leds, sound systems etc are produce according to requirements of customers. That’s why they take the feedback so that they come to know whether they like our product or criticize our product. Customers considered as most important part of every company and every time company try to capture maximum number of customers.
  4. Financial Indicators: There are too much valuation ratios which are used in Sony company to indicate its financial conditions like price earning, price to sales, price to cash flow, different profitability ratios include gross profit ratio, net profit ratio, per share data and so on. Management efficiency can be measured by using return on equity, return on assets, and return on investment and so on. Growth rations like earning per share, quick ratio, current ratio, dividend growth ratio, payout ratio and so on. These all type of ratios shows the real financial status and condition of Sony Company.

Sony Value Chain Analysis:

Porter discuss that for taking competitive benefits s organization should include suppliers, firms, distributors ,consumers ,a complete supply chain as part of its huge system. It’s a complete system which is use for cost saving and clearly mention services. When we evaluate the strategic competences, an audit is helpful for open verity of competitive possibilities in an organization. Porter’s value chain model is used for this purpose. This value chain analysis help Sony to calculate its remarkable points of different activities from the point of view of cost and value added. When we apply SWOT and porter value chain analysis ,we find that Sony is highly focus on better quality products, better cost by offering customer a high standard service follow up. It give us suggestion that we have to focus on logistics and operation managements for reducing cost of production and delivery charges for creating a high margin of profit. These analyses also give advice to again organize the sector of technology development and engineering for the progress of industry. For achieving this goal, Sony should limit its portfolio of large products an give high attention on its best selling products. In order to acquire cost effective results, Sony should arrange again its warehouses and distribution sectors. SWOT and Porter analysis also advice Sony that it can easily advertise its product range by using marketing techniques on media productions such as Sony Entertainment without any cost. On the basis of SWOT and Porter ‘analysis, better recommendations can be given. Sony should perform great reduction in globally linked workforce which makes the communication easier, which results quick response of day to day dealing and strategic issues and also increase the profit of company. According to suggestion of technology development, if Sony reduces its portfolio of large number of products, it may give more time and effort to research department which goes to technology progress and can easily interact with new technologies. Henry advice that all activities related to supply chain should be interlinked so that their performance can give better results to company. Sony has a competitive advantage that its all process and activities are linked with each other not only internal but also external.

Customer Delivered Values:

Sony appoints customer service officer to interact with customer services in all the areas around the world where it sell products. As per the supervision of Corporate Executives of product quality, Sony give a specified time duration of repair the products to customers. At global level, for supply high quality services, Sony making a huge network in which it can provide service to all local customers. To fulfill the task of supply high quality services, Sony give proper training sections to its employees and service partners. It also focus on achieving new service technologies and answers of all expected issues are provided effectively to all employees so they help customers to properly enjoy the Sony products without any disturbance. In 1963, Sony made its first customer center in Japan to resolve the problems of customers. Now, all across the world a large number of customer information centers are established by Sony to give quick reply to customers as well as helpful to increase the quality if services. Sony focus on giving detail understanding to customers regarding Products, software and services as well as focus on providing smooth response of any customer quire. Sony provide different ways to getting information to customers which include instruction manual which is internet accessible to every customer and support on websites also use on mobiles. Sony available for customer service ac live internet chat sessions, social media platform and online community form where different customers discuss their same type of problems and also help each other. Sony also takes survey to customers regarding its services and products. From boring written manual, Sony converts to printed instruction manual and guide also available on internet. It not only increases the access of customers but also minimize the usage of paper. More than 4300 customer service stations are available all around the world also include repair agent. For providing more satisfaction level, Sony try to reduce minimum number of days to repair its product, minimize repairing price and give customer its product conviently. Sony work as one building system to fastest response to its customers and behind this, Sony only wants to improve its quality and sale ratio. Sony always focus on its customer needs and requirements and always try to give better services better facilities to its all customers so that they happily purchase its products again and again and get satisfied with the services of Sony , which directly improves its quality.

Cost of controlling quality and cost of failing to control quality:

Sony Company always focus on improving quality, here are some costs which adversely affect the quality of products: first is internal failure cost related to errors found before customer acquire the product or service. This cost occurs when the manufacturing of product didn’t match the standards of high quality of products. And their errors found before these products transfer to customers. For example, waste (excess of holding stock or unnecessary work), Scrap (error full products), Rework or rectification (repair the defective products), failure analysis. Next is external failure cost (this cost occur when product transfer to customer) for example; repair and services(cost incurred when customer return the product), Warranty claims (expired products received by customers) , complains (all costs related to service provided) and returns( after rejecting any product). The next is prevention cost, it include cost used to avoid issues. This cost related to implementation, maintenance and design of quality management system. They are occur before producing and already arranged. It include; product or service requirements, quality assurance, training and quality planning. Next is Appraisal Cost. It includes verification and check and balance of all those activities related to quality of product. These costs also related to customer and suppliers judgment regarding material, service, product and product according to required need. It includes; quality audits (checking the quality system work properly), supplier rating (verification and confirmation of suppliers of product and services) and verification (check the material, arrange process and product according to required need). The cost incurred for performing quality job, collecting quality improvements, and fulfill goals should be managed attentively because it shows long term effects on quality of the organization. These costs are true calculation for the quality of product and these costs can be calculated properly with the help of cost of quality. This kind of analysis gives a proper method to verify the effectiveness of quality management and different defective areas, facilities, cost saving and other actions. Cost of quality is considered as a best tool for measurement.

Theory of Constraints:

Theory of constraints is the process of verify the most limited factor in the organization which become hurdle in the path of achieving their goals. This theory is used as scientific approach for the improvement of organization. In case of manufacturing these hurdles are known as bottle neck. It is consider as every complicated system which also include manufacturing process have multiple interconnected activities, anyone from these activities consider as constrain for the whole system.

The theory of constrain give the strong bundle of tools which help to acquire the goal “The five focusing steps (it include very fine and removing constrain), through put accounting (a method used to calculate performance and give advice for management decision), the thinking process tackle for verify and solve problems.

The theory of constrain has an attractive quality which is naturally need improvement activities. The first option always presents constraint. The atmosphere where it needs a quick improvement TOC gives a better methodology for doing quick improvement. A beneficial theory of constrain follow up have the following benefits; fast improvement ( which cause to pay all attention on one specific area), increase profit which is the main goal of every company, reduce lead time (minimizing the problem and making the product flow fast and smooth), improved capacity ( constrain held to produce more products), reduce inventory (less number of working process.

The basic concept of theory of constrain is that every system has a single problem and the complete system may be better when the problem is removed. Therefore theory of constrain used to sustain and precise attention on betterment the current constrain. The power of POC flows move from one point to another which is to achieve a single goal (Profit) to removing the basic problem (Constrain) for getting maximum benefits.

Now we discuss a little bit about the nature of constraint. Constrains are anything or any activity putt off organization to achieve its goal in the way of progress. In case of manufacturing processes constrains are consider as bottle neck. Here we discuss some different types of constrains; physical (this include normally equipment but it may also include less material, lack of people or shortage of space), policy (it includes any hurdle or command in the way of working e.g. company use different procedure to calculate lot size, bonus plans, union contracts, government policies), paradigm (it includes some poor believes or habits, it is just like policy constrains), market (it includes the problems which incurred when the production capacity increases in sales). Many different opinions are still there which shows different types of constrains.

Sony company also facing different types of constrains and apply theory of constrains to resolve these issues.

Also Study: Sony Corporation 10-K Analysis

Sony Corporation 10-K Analysis


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