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PESTLE Analysis of SONY Corporation: Is brand recognition enough?

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SONY, a Japanese based business, quickly transformed into one of the leading entertainment companies in the world. If you’re on the lookout for video games, consoles, music, laptops, and movies — SONY has it.

But even such an influential company has its flaws. For instance, SONY hasn’t successfully integrated into every industry (looking at you, tablets). And they face a number of complications the larger they grow.

See how this brand still faces pressure in the marketplace despite, their brand recognition, in this detailed PESTLE analysis of SONY corporation.

Political factors: SONY is at the mercy of numerous political parties

Political and governmental influences affect how every business runs. Political stability is connected to economic stability. And if the economy is struggling, it’s not far-fetched to assume policies and regulations are in disarray too. Because SONY is a global brand and operates in several countries, the political circumstances in each location directly influence SONY’s success.

For instance, SONY’s supply chain is in China. Any political instability in China will have direct consequences for SONY. For example, they may have trouble distributing products in Chinese consumers. If this happens, SONY may witness stifled profits in China — perhaps even in countries who have close ties to China.

Although operating in different countries means SONY can distribute products to various cultures, it also means the company is at the mercy of the political parties in each of these countries.

Economic factors: SONY products aren’t a necessity

SONY corporation isn’t just an electronics company. The brand also operates in three other categories: motion pictures, financial services, and music. Because they’ve dipped their toes in these industries, SONY is one of the leading entertainment businesses and manufacturers in the world.

But there’s a problem.

SONY products are “luxury” purchases. They’re the type of thing you buy when you want to splurge on yourself. For instance, no one needs a PlayStation 4 or SONY VAIO laptop to survive. The PlayStation costs $299 USD but each game costs anywhere between $10 – $60+. And the VAIO laptop cost $300 – $2,199+, depending on the model.

Suffice to say, if you’re hurting for cash, a SONY product won’t be high on your list of necessities. And here lies the issue: in places where the economy is unstable, or where the unemployment rate is high, SONY products will sit on the shelf. Because people who worry about job security or are scrambling to find a job have other priorities. Like paying rent. Or eating. So, anything that doesn’t fit into these needs is pushed aside.

This means SONY depends on stable or growing economies to sell their entertainment products. And in countries where the economy isn’t reliable, like in Russia, profits for SONY are likely to be on the lower end.

Social factors: Supplying entertainment customers crave

SONY can only grow if they’re mindful of customer desire. As I mentioned above, when people are struggling to find work, they make every penny count. But when the economy is stable, people have more extra cash. They’re more willing to spend it on entertainment, like music and video games.

People crave entertainment to relax. Or to escape reality. This is exactly what SONY offers. From movies to music, SONY offers several ways for customers to enjoy themselves. Not every country values the same type of entertainment though. And that’s why SONY needs to keep updated records of customer buying trends. With it, they can tailor their offerings and marketing to fit customer needs.

Technological factors: SONY should thank the internet

At its heart, SONY is a technology company. Every one of their products uses technology in one or another. For instance, the gaming consoles are a bundle of hardware transmitting visual data onto TV screens. The laptops connect users to social media and similar websites on the internet.

SONY must use the latest technology for their products. If they don’t, it won’t take long for consumers to know. Word travels fast online. And once they realize SONY is skimping out, the criticisms will flood in. Customers might go somewhere else for their entertainment. After all, consumers have endless options nowadays.

SONY should also appreciate technology like the internet. You can find online discussions about SONY products from years ago. These discussions may encourage the reader to buy a SONY product. Unfortunately, it works the other way too. All it takes is one bad review to make a customer decide not to buy.

But that’s not the point of the internet. A few decades ago, the only way to discuss SONY products was face-to-face. This limited SONY’s influence. But with the internet, you can find reviews or discussions from all over the world — in any language. With the internet deleting most communication barriers, it’s easier for SONY to announce new products, regardless of location.

Legal factors: Regulations in many countries

SONY is a big corporation and has many legal regulations to follow. From taxes to labor laws, the company needs to abide by the laws in every country. If only this was simple.

Laws and regulations can change overnight. In a day, taxes can increase. Or operational costs can skyrocket. So, even if SONY takes every precaution, they can still wind up in legal trouble. Forgetting to abide by these regulations may lead to lawsuits or massive profit loss.

Environmental factors: Green management 2020.

Many businesses are finding ways to become eco-friendly. It’s not so much out of the goodness of their heart, but rather to appease consumers. Many consumers are looking to reduce carbon footprints to help the planet. And SONY is expected to help out.

And they are.

SONY is investing in methods to reduce their carbon footprint. In fact, they have devised an environmental plan called Green Management 2020.

Image “Sony A9/35mm F2.8 Zeiss” by Jim Makos is licensed under CC BY-ND 2.0