Sony Innovation Past Present And Future Marketing Essay

In the competitive electronics market within the United States, Sony has managed to dominate. Sony Electronics is the largest segment of Sony America. The company has seen almost constant growth since 1960.

Throughout the company’s time here in the U.S., it has introduced numerous products that have revolutionized the electronics industry. The Sony Trinitron television and the Walkman personal stereo have become the industry leaders. There are future products on the horizon, such as the VIAO, CLIO, and Sony’s line of digital cameras, which stand to once again raise the bar.

Developing and producing these products for Sony is a 21,000 person workforce. Sony encourages these team members to innovate, take risks, and exceed the customer’s expectations. The work these talented individuals did led to nearly $14 billion in sales this past year. In a 2000 poll, Sony was recognized as the number one brand name in America, beating out Ford, Coca-Cola, and Disney.

Sony also invests a great deal in the community and their relationship with both their customers and their employees. Corporate ethics play a big part in every day at Sony. They have developed an Ethics-in-Action program which is designed to train all levels of Sony workers in how to remain honest, trustworthy and fair.

DEFINITION OF AUDIT

The defining and analysis of past, present, and future systems, programs, and structures which influence creativity and innovation – all in order to define changes and opportunities in innovation to further company success in the market.

This audit will focus on innovations concerning Sony America, and, more specifically, Sony Electronics.

AUDIT: SONY’S PAST AND CURRENT INNOVATION PRACTICES

A New Foundation – Changing Management Structure to Remain Innovative

The growth of IT and the shift from analog to digital technology have been continuous. Sony’s 50th anniversary was embarked as the start of a new digital age. Sony reorganized its management structure to enhance its divisional company system in order to respond more rapidly to market change and to create a structure that facilitated the development of new businesses.

Sony realizes that future product planning has to take the form of system planning. They have now restructured their corporate structure to a horizontal system rather than vertical system for the first time in their 50-year history in order to speed up decision making and market responsiveness. By internalizing much of the technological advances, Sony put itself in a strong position to fulfill its goals and objectives. Sony has only been able to achieve this by being prepared to change and adapt from within.

Sony Strength – Establishing New Venues for Innovation

In 1995 Sony announced the establishment of a long-term technology agreement with Intel Corp., the largest manufacturer of microprocessors for computers in the US. Sony’s strengths of AV hardware and software are now combined with Intel’s strengths of semiconductor and computer technology. Since this agreement in 1995, Sony has introduced the revolutionary DVD and DVD player.

Digital Dream Kids – Anticipation with Innovation

Digital Dream Kids reflects Sony’s commitment to realizing dreams through digital technologies. The “digital dream kids” are the future customers – at all levels of Sony, employees become “dream kids” to continue creating new products that will meet the future customers’ expectations with new and fresh aspirations. To harness the potential of digital technology, Sony will identify the dreams of the young and digitally literate to create unique, fun products and applications. They use the “Dream Kids” format in conjunction with market research to keep in touch with consumers’ dreams.

Progression – Pioneers of the Market

Marketing plays a vital role in the process of constant technological innovation. Sony has always held the view that good marketing involves pioneering the market, which comes down to market creation. Simply producing goods that meet a market’s current needs will lead to failure in the long run. Driving markets forward through its innovative research and development, Sony has been able to become a proactive force rather than having to react to changes.

Setting goals – Further Innovation

Sony has a continuous set of three challenges to face:

To further strengthen Sony’s leading position in the AV while developing IT business

To foster a deeper understanding among company management and employees of the entertainment industry so that Sony could secure a firm foothold

To integrate the Electronics and Entertainment businesses to create totally new business opportunities

Sony also believes that there are “3 creativities” which the company believes lead to true innovation:

Creativity in Technology: to bring out new products

Creativity in Product Planning: to make sure what the consumer wants is produced

Creativity in Marketing: discussed above

Next year, the company will release versions of its Wega televisions that let users download digitalized content.

Sony has developed software to enhance the copyright protection of music and movies available through the Internet. The program uses a technology called OpenMG-X to give distributors more control over how their digital content is used, Sony says. For instance, it will allow content providers to limit the number of times a song can be copied and played. The OpenMG-X technology also will be used in Sony’s audio and visual products and PlayStation 2 video-game console.

With a new color model featuring an ultra-slim design and double the internal memory of previous entertainment organizers, Sony Electronics today added more prestige to its standout handheld line with the CLIÉ PEG-T615C and PEG-S360 handhelds. Measuring a mere half-inch thin, the CLIÉ PEG-T615C handheld is now ranked as the world’s thinnest color Palm-Powered device.

Sony’s Research and Development

As a leader in innovation, Sony Electronics is a company that is focused on imagination more than manufacturing. While the drive of the business in the past has been manufacturing hardware, it is currently taking a new path to the future.

Sony Electronics is focusing its research and development efforts on integrating the broadband realm and finding synergy between hardware and content.

Behind the doors of its tightly guarded R&D Labs, dubbed Sony’s Creative Center, engineers are thinking up ways to “touch the hearts of consumers.” Sony’s main method of developing new products is foreseeing future trends. This means really getting in tune with what consumers want, and, more importantly, what consumers are willing to accept. Timing is another issue that Sony faces as it is currently producing products ahead of the market’s ability to use them.

It fosters creativity by encouraging engineers to integrate sexy and functional in its product designs. By keeping in constant contact with consumers, Sony is able to get insight on future trends and discover when consumers will be ready for, say, robots that help around the house. Their biggest challenge isn’t developing the technology that is capable of this, it is predicting when, in 15 or 20 or 30 years, that the public will be ready for such futuristic technology.

A recent Fortune article expounded on the happenings in Sony Electronics’ R&D labs, “. . . are such future wonders as a TV display not much thicker than a few sheets of paper, ‘grating light valve’ high-definition video projectors that turn entire walls into film screens, and ‘digital chopsticks’ — a pointer that allows a user to pluck a file or image directly from a computer or wallboard display and deposit it on another screen, say on the TV at home, just as one would use chopsticks to move a morsel of food from one plate to another”. And how do company execs formulate the kind of environment that fosters this kind of creativity? By instilling the company values and vision to revolutionize the world, and keeping employees open-minded, executives make engineers for what has been described as “the future’s toy factory.”

Sony.com indicates that “Sony’s vision is not necessarily about refrigerators talking to toasters. It’s about bringing to market products that capture the imaginations of consumers and enhance their lives in the process”.

Future success of the development of new products and technology will depend on how well the company reacts to change and times the release of new products. Part of the mission statement reads:

“Sony is a company devoted to the CELEBRATION of life. We create things for every kind of IMAGINATION. Products that stimulate the SENSES and refresh the spirit. Ideas that always surprise and never disappoint. INNOVATIONS that are easy to love, and EFFORTLESS to use, things that are not essential, yet hard to live without.

We are not here to be logical. Or predictable. We’re here to pursue INFINITE possibilities. We allow the BRIGHTEST minds to interact freely, so the UNEXPECTED can emerge. We invite new THINKING so even more fantastic ideas can evolve. CREATIVITY is our essence. We take chances. We EXCEED expectations. We help dreamers DREAM.”

One might wonder whether the engineers who created those revolutionary products that changed the way our society lives had that very statement sitting in front of him for inspiration.

Company Challenge – Globalization

Sony Electronics Designers are located in the US, Asia, Europe and South America, yet need to work together to design new products and interfaces for a global marketplace. A major design competition was to be held in Tokyo in less than 6 months. The designers had not worked as a single team on a project. The challenge was to have a large group of very talented designers in distant lands who have language barriers, ideological differences and cultural issues to use a Cross-Business Innovation tools to collaborate on one very important project.

BIC Approach – Beyond the Box

BIC developed and facilitated a Cross-Business Innovation summit titled “Beyond the Box” for Sony designers from around the world. The designers were given minimal information, and told to gather for a 3-day meeting in Connecticut. Industry experts on issues such as collaboration and creative abrasion came for “Fireside chats” with the group. BIC conducted activities that allowed the group to develop a high level of collaboration in a short period of time and then to continue a high level of collaboration once they returned to their locations through tools and techniques.

Client Results

Sony was able to pull the group together to successfully complete the design competition, and the designers are better able to collaborate on a global basis. A number of new product designs have been achieved by having the various design groups work together.

OPPORTUNITIES IN INNOVATION:

This section describes our initial research efforts when attempting to determine future innovation efforts for Sony America. Upon benchmarking, we tried to come up with various areas in which Sony seems to be lacking or areas in which Sony could greatly improve or change.

MANUFACTURING

A large part of Sony’s success is due to rapid and consistent manufacturing of reliable, quality products. Starting in October of 1982, when Ohga became the president of Sony, a business group was developed and implemented. This plan split Sony into a number of sections, each with its own defined area of operation. The head of each of these groups would have control and responsibility for everything from marketing to manufacturing of the “mini-companies” area. With this revolutionary change, Sony Electronics was developed and set out on its own mission.

Since Sony Electronics became its own entity, the methods used to manufacture the products have seen some changes, but in large are still based upon the same principles. As technology changes the techniques used to assemble the product evolve as well. The basic principles, which have existed within Sony since the company’s start, still hold true. Executives have developed a successful method for building a quality product and have stuck to it.

When looking into Sony Electronics manufacturing procedures here in the United States, one thing becomes immediately clear. Sony doesn’t build products here. Sony’s consumer electronics plants are located throughout Asia. Almost all parts that Sony does not build in-house are purchased from companies who have manufacturing plants based in Asia, Central America, and the Middle East.

When thinking about the reasons why Sony does not have any manufacturing plants here in the United States, it is also interesting to consider what effects this may have on their success as company. The cost of labor in the United States is the primary reason for not building plants here. It is just too costly. It can be assumed however that a substantial number of sales have been lost over the years due to the fact that Sony does not have a “Made in the USA” label on its products. Would these increased sales, along with the elimination of import costs make it profitable for Sony to start manufacturing operations in the United States? There would most likely be increased product loyalty developed by building products here, which would lead to higher sales.

COMPETITION – BENCHMARKING INSIDE THE INDUSTRY

In the Electronics business, Sony believes that its attractive product planning, the high quality of its products, its record of innovative product introductions and product improvements, and its extensive marketing and servicing efforts are important factors in maintaining its competitive position.

Sony Electronics Inc. markets Sony’s electronic products for both consumer-use and broadcast- and industrial-use in the U.S. Sony Electronics Inc. has 18 sales and distribution branches and offices throughout the U.S. In Canada, Sony markets its electronic products through Sony of Canada Ltd.

Philips

Royal Philips Electronics is tenth on Fortune’s list of global top electronics corporations. They are active in about 60 businesses, varying from consumer electronics to domestic appliances, and from security systems to semiconductors. They are a world leader in digital technologies for television and displays, wireless communications, speech recognition, video compression, storage and optical products as well as the underlying semiconductor technology that makes these breakthroughs possible. They play a leading role in shaping the world of digital electronics by bringing meaningful technological innovations to people. Many of these innovations find their roots in the laboratories of Philips Research.

Philips is at the forefront of new technologies, offering an exciting range of products that enhance people’s lives. Philips anticipates people’s needs and develops new products to meet those needs. The Company is dedicated to innovation that is environmentally sound – both in terms of the products it makes and how it makes them. At Philips, the traditional design disciplines are integrated with expertise from the human sciences and technology through a multi-disciplinary, research-based approach that makes it possible to create new solutions that satisfy and anticipate people’s needs and aspirations. We call this new, enriched type of design High Design. High Design is both a philosophy and a concrete process, and it is seamlessly integrated in the Business and in the Product Creation Processes.

The mission of the design professionals at Philips is to design solutions that humanize technology. Philips’ design expertise in all fields is kept up-to-the-minute through research programs that investigate the latest developments – and take them several steps further.

Scientists from a wide range of disciplines, from electrical engineering and physics to chemistry, mathematics, mechanics, information technology and software, work in close proximity, influencing and broadening each other’s views, thus reaping the benefits of synergy and cross-fertilization of ideas.

Through its past and future innovations Philips Research creates breakthroughs in how people experience technology. In their vision of Ambient Intelligence, stand-alone devices will increasingly disappear from the foreground in the home and be replaced by a network of background devices that create the desired functionality. Inspired by this vision of tomorrow, researchers from Philips are now realizing the enabling technologies in the areas of Displays, Connectivity, and Storage.

Ever suffered the frustration of not knowing the title of a song that caught your ear, but you do remember part of the melody? No problem! Just hum the tune and your smart home entertainment system will look it up for you – just one of the potential applications for Ambient Intelligence.

Ambient Intelligence consists of a cluster of ’embedded devices’ with a user-friendly interface that functions as an extension of our natural movements, through, for example, touch panels, heat and weight sensors and intelligent cameras with eyeball tracking. Simplified it means that your home can keep track of what room you want lights in, how much and when.

Matsushita

MEW is a globally exceptional company in that it offers a range of products unparalleled in their extensive variety, including lighting products, information devices, wiring products, home appliances, building products, automation controls, and electronic and plastic materials. Hand-in-hand with their diverse product lines, their markets span a wide range of fields, including residential housing, office buildings, commercial facilities, public facilities and factories. They closely monitor trends such as the IT revolution, global environmental concerns, and Japan’s dual challenges of a low birth rate and aging population. This enables them to promote reform of their existing business while creating new markets, products and services as part of their R&D and new business agendas under their corporate slogan, “Smart Solutions by NAIS.”

Under their corporate slogan, “Smart Solutions by NAIS,” they are aggressively engaging in new businesses that are focused on the future yet meet current trends in four areas: IT-related products and services; elderly care and support care products and services; stock renovation solutions for residential, commercial and public facilities; and “Green & Clean” environmentally sound products. With this multifaceted approach, they are seeking to create new corporate value.

They have been achieving steady progress by sparking demand through innovations that are far ahead of their time. In recent years, they have been contributing to greater convenience by making an effort to improve homes and the quality of daily life in Japan.

Against this background, they have been crafting a carefully considered response to market needs, refining their core competencies while further enhancing their broad technological specialties and strengthening their organization. Through this approach, they have stimulated demand in the areas of building products, home appliances, automation controls, and electronic and plastic materials. What is equally important, they have been increasing the company’s value.

Today, they are experiencing major changes in their social structure as a result of several trends: the IT revolution, global environmental concerns, a falling birth rate in Japan and the aging of the Japanese population.

INNOVATION ACROSS INDUSTRIES – BENCHMARKING OUTSIDE THE INDUSTRY

As suggested by our in-class innovator speaker John Stinson, our group decided to go outside the electronics industry to determine benchmarks for innovation as a general idea throughout all companies and industries.

The two companies of BMW and Teknion were named Outstanding Corporate Innovators for 2002 by the PDMA (Product Development & Management Association). Since 1987, PDMA’s annual Outstanding Corporate Innovator (OCI) Award has provided global recognition for companies demonstrating sustained excellence in the development and profitable commercialization of new products and services.

Both of these companies use the “VOC” strategy, or “voice of customer” system to continuously identify workplace trends, workflow patterns, and individual user preferences in the market. They are then translated into new ideas for highly functional and appealing products. As a result of this approach, high percentage revenue results from products introduced in the past five years. This approach is obviously one that works, one that reaches customers’ expectations and fulfills dreams, and is a strategy that other companies should attempt to follow.

According to a BMW executive, “All the information in the world will not let you see the world as your customer sees the world. What you need is a well-developed capacity for intuition and empathy with your customer. What you need is not more information, per se, but true insight into how your customer’s mind works.” He also states that it is important to align the corporate mind with the minds of your customers, allowing them to guide your development but not define it. You must lead, and they will follow. Sony takes a different strategy than this — Sony tends to depend on customers to actually define development, letting the customers lead while Sony follows. These two different views on innovation and development are areas in which to research the best strategy for Sony, and whether their current strategy is really the best technique to use.

But this is not enough, by itself, to lead to great products. You also need something too many companies lack: an intuitive, empathic understanding of how your company’s mind works. Therefore, it is important to have a mix of both corporate understanding and customer understanding, to mix needs and wants to create a mutually beneficial product.

Customer service is also key in retaining customers and creating an innovative market and environment. One innovator states: “70 percent of lost customers hit the road not because of price or quality issues but because they didn’t like the human side of doing business with the prior provider of the product or service.” Customer service is an area in which Sony could really step it up. While they are always taking into account the “future” customer needs and wants, their actual service to the day-to-day customers could be pushed up a notch. Providing innovative, fun, and competitive service to these consumers will create a different aspect of Sony that has never been brought to the table before.

In conclusion, research indicates that the following findings are prevalent for all industries regarding innovation:

In order to succeed, companies need frequent communication between the reengineering team and senior management, and senior management needs to heighten awareness of the importance of change.

Most commonly- no formal goals were established for the reengineering effort, customer-supplier involvement was minimal, and teams primarily consisted of only engineering and manufacturing personnel.

While the companies had planned on a 1-2 year implementation, it was estimated that actual implementation would take 5 years.

FUTURE INNOVATIVE IDEAS

Our team collaborated and plowed through a variety of ideas, ranging from new products to complete overhauls of Sony’s current innovation structures. However, we have narrowed our creative efforts down to the following three issues to come up with ideas that actually focus on where Sony could not only be innovative, but where it could improve as well.

Environmental issues

Competitors and the environment are both demanding innovative practices in this area.

Time to market

Timing to the market is critical to consumers as to whether or not they will accept the product yet. Innovation in introduction of the products will help to not only speed up time to market, but will familiarize consumers with the latest technology.

Customer service

One of the most important parts of success, customer service entails retaining customers while adding value. Sony could really step this up a notch to even further innovate and compete, and our team is confident that we can combine innovation efforts to incorporate service.

INNOVATION SUGGESTIONS!!!!

The following suggestions will enable Sony to remain innovative as well as improve in areas in which they are lacking. In the field of technology and electronics, it is critical to consistently innovate and constantly improve. We are confident that the following suggestions will be effective in keeping Sony on the top of its market and continue to bring success in the future.

1- A PLASTIC SUBSTITUTE

Sony uses hard plastic in all of its electronics manufacturing. As mentioned previously, Sony’s competitors focus many efforts on environmental issues. We thought that a change in Sony’s production materials would be an innovative leap forward over all other competitors as the first in the market to do so. Environmentally, this change would attract “green” customers as well. Research in plastic alternatives has shown us that there are many alternatives to the traditional hard plastic that Sony currently uses. This traditional plastic is called thermosetting, which cannot be resoftened when subjected to heat and pressure. A better alternative is thermoplastic, which can be repeatedly softened and remolded by heat and pressure. However, when heat and pressure are applied to thermoplastic, it can still result in hazardous fires that emit toxins into the air, can clog the incinerator’s grate, and/or can emit very harmful fumes and as well as enable chemical exposure from the resin use of plastic production. At the very least, Sony should begin using the recyclable thermoplastic alternative. Even better would be a plastic alternative that is actually biodegradable, which would decompose slowly when exposed to sunlight by adding certain chemicals to them. There are options like these available. Greenpeace states that while traditional plastic for production is cheap, easy to install and easy to replace, alternatives to harmful plastic will be a huge new opportunity for all business as well as a niche for future success. Tokyo has already begun the use of these plastic alternatives in other industries, as have companies in Europe and Southeast Asia.

2- A NEW MARKETING CONCEPT

When one buys a new vehicle, he or she will most likely receive some sort of factory package for an am/fm cassette and cd player, with 4-6 factory speakers. Many times, a customer will, upon the purchase of the car, go out and replace these factory cd players and speakers with higher-end products. The most well-known and popular of these high-end automobile electronics are Pioneer, Alpine, Bose, and Monsoon. Many times in more expensive automobiles, some of these products are standard -already provided in the car. For example, a Monsoon system is standard in the new Hummer H2. For lower-end automobiles, the package is a sub-standard factory produced system, which has low-grade sound and minimal options. Our team thought that Sony could contract with the corporations of Volkswagen, Pontiac, and Saturn to make a Sony sound system a standard feature in their cars. This would be the first time that an electronics company like Sony would provide a sound system as a standard feature in the production of these cars. No one in Sony’s market does this, and it would be a benefit for both Sony and the car company since Sony would gain access to an entirely new venture, and the car companies would have an added feature to boast. Sony and the car companies could then market and advertise these features together. It would also be an opportunity for Sony to create additional revenues as well as to increase customer satisfaction.

3- SONY RESTAURANT

Our last suggestion is our strongest and most proud.

SOURCES

http://news.sel.sony.com/corporateinfo/overview/

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http://www.panasonic.co.jp/global/top.html

http://www.mew.co.jp/e-index.html

http://www.philips.com/InformationCenter/Global/FHomepage.asp?lNodeId=13&lArticleId

www.hoovers.com

“Speakers: Company’s Future Lies In Creating Plastic Alternatives” By Marcia Granado. The Independent, August 29, 2002.

http://www.arches.uga.edu/~jamie22/threats.html

http://www.encyclopedia.com/html/section/plastic_compositionandtypesofplastic.esp

www.greenpeace.com