STRATEGY

Strategy



Executive Summary

Prior to liberalisation, the Consumer Durables sector was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market. They were first superceded by players like BPL and Videocon in the early 1990s, who invested in brand-building and in enhancing distribution and service channels. Then, with liberalization, came a spate of foreign players from LG Electronics and Sony.

Both rising living standards and easy access to consumer finance have fuelled the demand for consumer durables in the country. Also, the entry of a large number of foreign players means the consumer is no longer starved for choice. But this has also resulted in an over-supply situation in recent times as growth levels have tapered off.

Sony, whose core business is the manufacturing of electronics consumer goods, currently oversees many subsidiaries and affiliates that are responsible for particular business sectors such as movies, music content, video games and financial services.

Table of Contents

Industry Profile2

Demand/supply chain2

Segmentation4

Levels of market segmentation4

Segment marketing4

Geographic segmentation6

Demographic segmentation7

Targeting8

Positioning11

Operational business structure13

Conclusion15

Strategy

Industry Profile

Sony Corporation's current management team proposed the creation of a new management structure designed to expand upon its core strengths as a global electronics, entertainment and technology company.

Sony announced that the new CEO is a non-Japanese, non-engineer named Howard Stringer, 63 years old. Stringer is a corporate diplomat and media guy who charmed outgoing CEO (and former PR man). He will lead Sony on 22 June 2005.

Today the value of Sony's brand name has slipped drastically with the fierce competition in the industry including Panasonic, Apple etc. Unknowingly, Sony has fallen first to last, or near last, in many measures of growth in Japan's top 10 exporting multinationals.

Nobuyuki Idei announced his decision to hand over the rein to Howard hoping that he will be able to turn the company into a profitable growth. Six corporate officers who are directors of the board will join him in resigning. Many stakeholders are waiting for Howard to bring the company into new heights.

Demand/supply chain

In the case of television, a chunk of the sales are still in the direct cool segment as against the frost-free one, But replacement buyers tend to go for technologically improved models. Hence, sales of frost-free television have grown.

The consumer durables segment has benefited from the growth in high-income households, with higher purchasing power. However, this has been skewed more towards urban households rather than rural segments. While the good news is that high-income households will continue to increase, it will still be in urban households than in rural households.

As can be expected, the television market dominates the consumer electronics segment, followed by the white goods segment, with products like refrigerator, washing machines and microwave ovens.

The once unthinkable decline of many of the world's largest corporations has become all too common in recent years. There is intense competition between competing firms in electronics consumer products. The inability to adapt to the speed and turbulence of technological change has proved to more critical ...