Sony’s generic competitive strategy ensures profitability in the electronics, gaming, entertainment, and financial services markets. The company’s generic competitive strategy (Porter’s model) establishes how the business competes with the consumer electronics, video games, and entertainment products of other firms, such as Google (Alphabet), Samsung, Apple, Microsoft, and Nintendo, as well as Disney and Netflix. On the other hand, Sony adjusts its intensive growth strategies to continually grow the business despite competition and market changes. These intensive growth strategies specify the approaches for business growth. As one of the biggest companies in its industries, Sony is an example of success in implementing a generic strategy for competitive advantages and intensive growth strategies developed based on business needs and market conditions.
Sony’s generic competitive strategy focuses on product uniqueness. The company’s intensive growth strategies aim to grow the business through increased market share for electronics, video games, entertainment, and financial services. The generic competitive strategy corresponds to the business strengths shown in the SWOT analysis of Sony, and these strengths provide support for the success of the company’s intensive growth strategies.
Sony’s Generic Competitive Strategy (Porter Model)
Sony uses differentiation as its generic strategy for competitive advantage. Differentiation involves products that are unique in comparison to other products in the market. In applying this generic competitive strategy, Sony integrates features that make its products attractive and profitable. For example, novelty and uniqueness are among the success factors of the PlayStation. In using the differentiation generic strategy, Sony must continue innovating novel product features to maintain its competitive advantage against competitors, like Nintendo.
The differentiation generic competitive strategy highlights the importance of product uniqueness in ensuring profitable business. In applying differentiation, a strategic objective is to increase the rate of innovation to boost Sony’s competitive advantage. A financial objective based on this generic competitive strategy is to minimize production costs in all segments of the business, while allocating funds for research and development. Fulfilling this objective contributes to competitive advantages by increasing Sony’s business effectiveness, product attractiveness, and corresponding profitability. Sony’s operations management supports product design that satisfies this generic competitive strategy.
Sony’s Intensive Growth Strategies
Market Penetration (Primary). Sony’s primary intensive growth strategy is market penetration. This intensive strategy aims to grow the business by increasing sales in markets where the company currently operates. For example, Sony grows its business by intensifying its marketing campaigns to sell more PlayStation units. The objective is to attract more customers and obtain a larger market share. Sony uses its differentiation generic strategy to create competitive advantages to support market penetration. In implementing the market penetration intensive growth strategy, product uniqueness enables the company to attract and retain more customers. A strategic objective linked to this intensive growth strategy is to flexibly adjust marketing campaigns to ensure Sony’s competitiveness against other firms in the financial services, entertainment, gaming, and electronics markets.
Product Development (Secondary). Product development is applied as a secondary intensive strategy to grow Sony’s business. In this intensive growth strategy, the goal is to develop products better than the competition. For example, Sony continues to innovate its gaming products, which are a key growth driver that outperforms competitors. This intensive growth strategy supports the generic competitive strategy of differentiation in terms of product design. Sony’s innovation efforts ensure that novel and unique product features are emphasized. A strategic objective based on the product development intensive strategy is to grow the company by rolling out new breakthrough products. These products must possess competitive advantages based on novel features or designs that embody Sony’s mission statement and vision statement.
Market Development. Sony uses market development as a supporting intensive growth strategy. The company grows by entering new markets or market segments through this intensive strategy. For example, Sony can introduce its products to new markets where it still does not have a major presence. The company can also find a new application for its products to create a new market for them. Sony’s generic competitive strategy of differentiation supports this intensive strategy by making products attractive to new target customers. Based on market development, a strategic objective is to grow the company by entering new market segments.
Diversification. Diversification is the least significant among Sony’s intensive growth strategies. Growth through new business development is the goal of this intensive strategy. Diversification’s significance has decreased because of Sony’s decision to focus on fewer products. These products have the highest competitive advantages in the product mix element of Sony’s marketing mix (4Ps). For example, the company now focuses on three main businesses: (1) Devices, Game and Network Services, (2) Pictures, and (3) Music. The generic competitive strategy of differentiation is applied in this intensive strategy in terms of using product uniqueness to create the competitive advantage necessary for growing Sony’s core businesses. This intensive growth strategy leads to the strategic objective of finding new business opportunities to expand the company.
References
- Liang, X., Luo, Y., Shao, X., & Shi, X. (2022). Managing complementors in innovation ecosystems: A typology for generic strategies. Industrial Management & Data Systems, 122(9), 2072-2090.
- Sony Group Corporation – Businesses & Products.
- Sony Group Corporation – Form 20-F.
- Sony Group Corporation – R&D.