Sony corporation's five forces

Answer 1

PORTERS FIVE FORCES ANALYSIS OF SONY CORPORATION

a.

Threats of new Entry (Low):

Electronic industry needs huge amount of capitals. High scaleeconomy and constant innovation is another barrier to a new entrant. Moreover, thegovernment policy acts as entry barrier for a new company. [Appendix]

b.

Bargaining Power of Buyer (High):

For Sony Corp. product the bargaining power of buyeris very high as there is almost no switching cost from one brand to another. And theinformation technology provides the customers with wide range of alternatives. [Appendix]

c.

Bargaining Power of Supplier (Low):

Sony has a global band of suppliers giving thesuppliers no upper hand (bargaining power) over Sony. Moreover suppliers arecomparatively small entity than Sony so suppliers have weak bargaining power. Sony usuallynegotiates directly with its supplier to obtain high quality product in low price. [Appendix]

d.

Threat of Substitute Products (Low):

Sony’s varied range of products has no substitute or

a very few that seems to be obsolete or have on foot out of the door. Thus the possibilitythreat of substitutes is moderately low. Considering that Sony has built a good reputation andstrong customer loyalty, it effectively positions

the company’s products against product

substitute to some extent; this is a surplus for the company. [Appendix]

e.

Intensity of Rivalry (High):

Industry rivalry is high due to relatively intensecompetition and high exit cost. It is also largely due to the numerous and equally balancedcompetitors in the markets, generally short product life cycle as well as high R&D, fixed andstorage costs. The growth is slow and thus the intensity of competition.

Answer 2

Sony Corporation faces intense competition in the consumer electronics industry, with factors such as the bargaining power of buyers, threat of substitutes, rivalry among existing competitors, threat of new entrants, and bargaining power of suppliers influencing its market position and profitability. Sony's strategies must account for these forces to maintain its competitive edge in the market.