5 Forces sony
PORTERS FIVE FORCES ANALYSIS OF SONY CORPORATION 1. Threats of new Entry (Low):
Electronic industry needs huge amount of capitals. High scale economy and constant innovation is another barrier to a new entrant. Moreover, the government policy acts as entry barrier for a new company.
2. Bargaining Power of Buyer (High):
For Sony Corp. product the bargaining power of buyers very high as there is almost no switching cost from one brand to another. And the information technology provides the customers with wide range of alternatives.
3. Bargaining Power of Supplier (Low):
Sony has a global band of suppliers giving the suppliers no upper hand (bargaining power) over Sony. Moreover suppliers are comparatively small entity than Sony so suppliers have weak bargaining power. Sony usually negotiates directly with its supplier to obtain high quality product in low price.
4. Threat of Substitute Products (Low):
Sony’s varied range of products has no substitute or a very few that seems to be obsolete or have on foot out of the door. Thus the possibility threat of substitutes is moderately low. Considering that Sony has built a good reputation and strong customer loyalty, it effectively positions the company’s products against product substitute to some extent; this is a surplus for the company.
5. Intensity of Rivalry (High):
Industry rivalry is high due to relatively intense competition and high exit cost. It is also largely due to the numerous and equally balanced competitors in the markets, generally short product life cycle as well as high R&D, fixed and storage costs. The growth is slow and thus the intensity of competition. Sony’s high rivalry is causing them to lose profitability though the suppliers give them advantage over cost. There is no threat from substitute but still buyer find alternative as they have bargaining power. And the high entry and exit barrier gives them high risky returns
Electronic industry needs huge amount of capitals. High scale economy and constant innovation is another barrier to a new entrant. Moreover, the government policy acts as entry barrier for a new company.
2. Bargaining Power of Buyer (High):
For Sony Corp. product the bargaining power of buyers very high as there is almost no switching cost from one brand to another. And the information technology provides the customers with wide range of alternatives.
3. Bargaining Power of Supplier (Low):
Sony has a global band of suppliers giving the suppliers no upper hand (bargaining power) over Sony. Moreover suppliers are comparatively small entity than Sony so suppliers have weak bargaining power. Sony usually negotiates directly with its supplier to obtain high quality product in low price.
4. Threat of Substitute Products (Low):
Sony’s varied range of products has no substitute or a very few that seems to be obsolete or have on foot out of the door. Thus the possibility threat of substitutes is moderately low. Considering that Sony has built a good reputation and strong customer loyalty, it effectively positions the company’s products against product substitute to some extent; this is a surplus for the company.
5. Intensity of Rivalry (High):
Industry rivalry is high due to relatively intense competition and high exit cost. It is also largely due to the numerous and equally balanced competitors in the markets, generally short product life cycle as well as high R&D, fixed and storage costs. The growth is slow and thus the intensity of competition. Sony’s high rivalry is causing them to lose profitability though the suppliers give them advantage over cost. There is no threat from substitute but still buyer find alternative as they have bargaining power. And the high entry and exit barrier gives them high risky returns