Sony is a premium consumer electronics brand that we previously covered in a PESTLE analysis. Today, we’re going to use the power of a SWOT analysis to unveil Sony’s standings not only in the present market — in the form of Strengths and Weaknesses — but also in the future — in the form of Opportunities and Threats. Here’s what we think of the billion dollar cash-flowing giant.
Here are some of Sony’s most notable Strengths according to SWOT analysis:
One of Sony’s greatest assets is its well-recognized and highly-valued brand. Sony is a household name across much of the globe and its products are associated with luxury. In the consumer electronics industry, this is a huge benefit. Consumers purchasing products with the Sony label know they’re getting a product which will function as described, and which they can show off to friends without any shame whatsoever. To a small extent, Sony’s positive brand recognition is due to its being a Japanese label. Japanese products are typically associated with quality across most of the world.
History of innovation
The powerful Sony brand wasn’t built quick. Sony is extremely highly thought-of thanks to its history of innovation. Sony played a leading role in the development of dozens of household technologies and devices, such as DVDs and DVD players, video cameras, personal music devices, and more. In gaming circles, Sony is highly-acclaimed for its successful series of PlayStation consoles, which played a formative role in many children’s videogame journeys.
Like all brands in the consumer electronics industry, Sony has a bright future. Incomes are on the rise across the globe, and consumers have more and more money to spend on luxury items such as televisions, music players, smartphones, and games consoles. Even if Sony does nothing to differentiate itself over the next few decades, it will continue to grow as a result of the industry’s overall expansion. It’s worth mentioning that not only do consumers have more and more money to spend, but electronic devices are also playing a growing role in our lives.
Moving on with the SWOT analysis of Sony, it’s time to discuss its Weaknesses. As always, there are indeed a few of them!
High price tags
While Sony has a reputation for high-quality gadgets, that reputation comes with a price. For many consumers, Sony products are not the cheapest on the market. In fact, Sony electronics are often some of the most expensive electronics in their category. Previously this wasn’t such a problem, but now it is. In the past, there were very few — if any — low-cost alternatives to Sony products. Nowadays, electronics manufacturers are finding ways to produce their gadgets cheaper than ever, and with comparable quality to top-shelf brands. This means that Sony is losing out on a significant amount of business to their low-cost competitors.
Weak mobile presence
In this day and age, if there’s one accessory that stands above all others, it’s most certainly the smartphone. In richer countries, almost every consumer has some kind of smartphone — a device which is typically replaced every few years. In poorer countries, the demand for smartphones is growing rapidly, especially as cheap options are developed. Unfortunately, Sony has a very weak presence in the smartphone industry. It does offer the Xperia line of mobile phones, but these capture nowhere near as much of their respective market as Sony’s other devices.
Looking to the future, there are several Opportunities for Sony. From new markets to new products, let’s see what could be in store:
As discussed above, consumers have more and more money to spend. This is opening the doors to new, poorer markets in which consumer electronics were previously non-existent. The best example of these emerging markets is Africa. Previously, individuals in many African nations were too poor to afford consumer electronics. Thanks to growing incomes and increasingly competitive prices, these individuals can now enter the market. This presents an opportunity for all electronics manufacturer. Unfortunately, as a top-shelf brand, Sony will have a harder time capturing these new consumers than other low-cost alternatives.
Until now, Sony has focused its efforts on many entertainment-focused consumer electronics, such as televisions, music players, and gaming consoles. Many other electronics brands, such as Samsung or LG, have chosen to expand into other related markets, such as home appliances. Sony hasn’t yet made this move, but it could be something to consider for the future. By diversifying into these new areas, Sony would be able to protect itself from swings in its existing market, while opening itself up to boundless possibilities.
It’s not just Opportunities for the future; here are the Threats Sony needs to watch out for:
We already touched on the low-cost competitors draining away Sony’s market share, but they could be a serious concern for the future. As it stands, the rule of thumb “you get what you pay for” is still mostly true in the consumer electronics industry. However, numerous budget brands such as Huawei or Xiaomi are demonstrating that quality products can be purchased at extremely reasonable prices. If Sony is to survive, it needs to ensure that its high price tags are grounded in concrete advantages over low-cost alternatives.
Foreign exchange fluctuations
Sony is a Japanese brand that operates across the entire globe. As with all multinationals, Sony needs to watch out for fluctuations in foreign exchange rates. Sony does hold some cash reserves, and it would be silly to lose a significant portion of them in response to currency market swings.
SWOT Analysis of Sony: Final Thoughts
As we’ve seen in the SWOT analysis of Sony, Sony has a powerful brand thanks to its history of creating new, unique, and high-quality products. It’s perfectly placed in a growing industry, but has to battle with the growing numbers of low-cost electronics manufacturers. In terms of Weaknesses, Sony struggles with high price tags and a poor presence in the smartphone market. If it can beat the low-cost competitors while avoiding FX disasters, it has new markets to conquer across the world and in new product lines.
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