Resource Analysis of Sony Corporation
Question :
Conduct a resource analysis on Sony
Include:
Tangible resources
• Financial Resources
o Internal cash flow
o Borrowing capacity
• Physical Resources
o Plant and Equipment
o Raw materials
• Human Resources
• Organizational Resources
Answer :
Resource Analysis on Sony Corporation
Tangible Resources
• Financial Resources
o Internal Cash Flow: Sony Corporation aims at generating a high level of internal cash flow by providing high standard customer service and enhancing the customer satisfaction level by providing real-time benefit, strengthening the solutions and differentiating technologies from its rivals. For the year ending 2019, the internal operating cash flow generates by the firm amounted to ¥ 753.4 billion (Sony.net. 2019). By division, the gross operating flow of cash and investing cash flow were positive in all the business excluding the Music, which was adversely affected due to the acquisition of EMI Music Publishing.
o Borrowing Capacity: Sony Corporation holds high borrowing capacity due to its exceedingly high revenue generation for all the consecutive years followed by a huge customer base. Further, Sony has the highest market share in the Electronics Industry with a market cap of 80.46%, which has increased its creditworthiness among all other rivals along with having top preferences among customers. The total liabilities of the firm for the year 2019 amounted to ¥12,811, 368 million, which is significantly high and entails is borrowing capacity.
• Physical Resources
o Plant and Equipment: For the year ending 2019, Sony Corporation spent increased its capital expenditure of plant and equipment to ¥777,053 million compared to the previous year of ¥739,470 (Sony.net. 2019). It suggests that the company is highly focused on investing in the active acquisition of fixed assets which provides long term value and boosts revenue through its operation. Further, the company's significant investment area is its manufacturing units which are located in various parts of the world and are responsible for producing millions of electronic gadgets to cater to the changing tastes and preferences of its mass consumers.
o Raw Material: Raw material plays an important role and is the primary focus of the management of the company. With sufficient raw materials, the company can produce a significant number of products and electronic gadgets which are distributed to various retail outlets to attract a large customer base (Alhashash, Alshammari and Al-Mnaies, 2019). Further, the company's team force is highly skilled in the technological front, which provides the advantage of implementing innovative ideas and producing out of the box gadgets for its customers.
• Human Resources
Sony Corp indulges in a broad range of businesses while maintaining the same HR strategic management throughout its divisions. Every division is given the authority to manage and delegate work as per the skills and expertise of its employees (Todd, 2018). The management follows the concept which entails that improving the competitive edge of the firm requires the most appropriate HR strategy for the business with its diverse expertise, HR and methods of management for generating values within the working environment.
• Organizational Resources
Owing to the declining environmental health resulting from human-made activities, Sony is working on minimizing its wastage of resources and maximizing recycling throughout its business activities and product life cycles. The items that are considered as critical resources for Sony is being aimed at achieving zero usage of virgin materials. Further, the management is also focusing on improving its packaging norms by making it lighter and smaller and utilizing the recycled materials for final packaging products (Sony.net. 2019).
Intangible Resources
Technological Resources
Patents, trademarks, copyrights and trade secrets
Sony is counted among the giants in the patenting world. In the year 2014, the company ranted 4th in terms of receiving patent grants from the United States Patent and Trademark office. According to a patent analysis website, Innography, Sony has been documented to earn 2489 US patents until the year 2015. Some of the noticeable technological changes that have taken place on Sony Corporation over the year include changes in the methods of delivery because of digital transformation and the gradual increase in the requirement of copyright management reform (Pawlicki, 2016).
Knowledge to leverage the above
Being one of the oldest players in the electronics industry, the corporation holds immense skills and expertise required to obtain patents and trademarks for its products. It has a dedicated team of professional who analyses the market competencies of its products against its rivals to assess whether the patenting of the product would be profitable in the future or not.
Resources and Innovation
• Technical Employees
Through the method of the materiality analysis, Sony has identified its employees and technology as a crucial factor in enhancing the foundation of its business along with creating long term value for the organization (Sony.net. 2019). Further, diversity in the industry is a significant value driver. Also, Sony considers the technical employees as the most valuable stakeholders of its organization. They are responsible for adding an innovative line of products, thereby maintaining the competitive edge of the firm (Zhao et al., 2018).
• Research Facilities
Sony conducts the majority of its research and development with the sole purpose of filling the world with emotions, trough the power of technology and creativity. Being a part of the creative entertainment industry, the customer-oriented strategies of the corporate enrich the people lives by getting close to them (Sony.net. 2019). Sony makes massive expenditure on research and development by integrating the idea of getting closer to the motivation that drives both creators and users.
Reputation
• With Customers
The purpose of Sony Corporation to 'getting closer to people' has enabled the business to create long term relationship with its customers, thereby enhancing its customer retention skills (Sony.net. 2019). The customers are considered to be the key financial drivers of the organization, and all their problems and queries are handled with utmost skills and expertise to provide the world-class customer service to its most important external stakeholders of the organization.
• Suppliers
Sony treats every supplier as an individual entity who work at par with the organization. The company makes itself highly reachable to suppliers which helps in building reliability, thereby building a relationship on mutual trust.
Capabilities
Sony is capable of producing both middle and high-end electronic gadgets for all income group of consumers. Further, it operates with global service operation, which is armed with high technological capabilities for preventing itself from third party attacks (Kikkawa, Saito and Miyazaki, 2018).
Core Competencies
The core competencies of the company include innovative designs, miniaturization with the help of electronics, excellent technical skills and expertise, manufacturing prowess, along with highly effective marketing strategies (Kunz, 2016)
References
Alhashash, F., Alshammari, T. and Al-Mnaies, A., 2019. Sony Corporation. Journal of the community development in Asia, 2(2).
Kikkawa, N., Saito, S. and Miyazaki, Y., Sony Interactive Entertainment Inc and Sony Corp, 2018. Providing apparatus, utilizing apparatus, communication resource trading system, providing method, utilizing method, and control apparatus. U.S. Patent Application 15/735,447.
Kunz, W., 2016. Sony Corporation. In Global Media Giants (pp. 253-268). Routledge.
Pawlicki, P., 2016. Re-focusing and re-shifting–the constant restructuring of global production networks in the electronics industry. Flexible workforces and low profit margins: electronics assembly between Europe and China, p.21.
Sony.net. 2019. Sony Global - Sony Global Headquarters. [online] Available at: <https://www.sony.net/> [Accessed 26 April 2020].
Todd, D., 2018. Routledge Revivals: The World Electronics Industry (1990). Routledge.
Zhao, Y., Sun, C., Li, J., Guo, X. and Kangyi, L.I.U., Sony Corp, 2018. Resource management device, resource management method, and device and method in communication system. U.S. Patent 10,136,332.
