LOVELY PROFESSIONAL UNIVERSITY

Assignment on:

PEST Analysis of Sony Inc. (Make. Believe.)

SUBJECT NAME: Business Environment SUBJECT CODE: MGT511

Submitted To: Submitted By:

Mr. Deepak Sharma Rahul Attri

(Lecturer in Management) MBA-Q1103

Roll No-A04

Session: 2011 - 2013

OVERVIEW OF SONY

One of the most recognized brand names in the world today, Sony Corporation, Japan,

established its India operations in November 1994, focusing on the sales and marketing of

Sony products in the country. In a span of 15 years Sony India has exemplified the quest for

excellence in the world of digital lifestyle becoming the country’s foremost consumer

electronics brand. With relentless commitment to quality, consistent dedication to customer

satisfaction and unparalleled standards of service, Sony India is recognized as a benchmark

for new age technology, superior quality, digital concepts and personalized service that has

ensured loyal customers and nationwide acclaim in the industry.

With brands names such as BRAVIA, BRAVIA Theatre, Cyber-shot‚ Handycam®, VAIO,

Walkman®, Xplod, Memory Stick™‚ PlayStation®. Sony has established it self as a value

leader across its various product categories of Audio/Visual Entertainment products,

Information and Communications‚ Recording Media, Business and Professional products.

In India, Sony has its footprint across all major towns and cities through a distribution

network comprising of over 5000 dealers and distributors, 240 exclusive Sony outlets and 19

direct branch locations. Manned by customer friendly and informed sales persons, Sony’s

exclusive stores ‘Sony Center’ are fast becoming the most visible face of the company in

India.

Sony India also has a strong service presence across the country with 20 company owned and

190 authorized service centers and 16 exclusive demonstration centers. A distinctive feature

of Sony’s service is its highly motivated and well-trained staff that provides the kind of

attentive and sensitive service that is rare today.

Sony is committed to ensuring that both the products and the marketing activities employed

truly make a difference to people’s lifestyles and offer them new dimensions of enjoyment.

CORPORATE SOCIAL RESPONSIBILITY

1. Free Pollution Check Camp: Sony organised free Pollution Check Camp to minimise

impact of environment at National Highway as a pollution prevention method to

minimize impact on our environment.

2. Tree Plantation for clean and green surrounding: On 5th June 2007, World

Environment Day, Sony India donated Potted plants in few Governement Schools and

planted trees at various sites.

3. Delhi kids become scientists at the Sony Science Show: New Delhi, November 20,

2007, Taking its commitment towards the enhancement of scientific literacy forward,

Sony India has organized the Sony Science Show in Delhi from November 19 – 21, 2007.

Aimed at fourth graders (nine years), the Science Show held at Apeejay School, Sheikh

Sarai had an audience of over 7000 students from 28 participating schools.

4. Environment Policy: Sony India is Committed to comply with Sony Group Enviroment

Vision (SGEV) and to continually improve Environment Performance in our office.

PEST ANALYSIS OF SONY

Pest analysis is another marketing tool. Pest analysis examines the changes in the

marketplace caused by political, economic, social and technological factors.

Political factors changes involve one party to another who are in control. For example rises

in private healthcare and privatisations, which is under the conservative government.

Economic factors changes include changes such as a recession creating activity at the lower

ends of the product price ranges. Also for instance the rate of interest rates rising depressing

businesses, causing redundancies and lower spending levels

Social factors changes include changing lifestyles and attitudes. The increase in women

leaving work. , Also leading to the need for-time saving produces for home

Technological factors involves changes as the public see it, this creates opportunities for the

new products and product improvements and marketing techniques such as the Internet, e-

commerce.

Political factors within Sony

Political factors can have a direct impact on the way Sony operates. Decisions made by

government affect every day businesses and can come in the form of policy or legislation.

The political factors have a huge influence upon the regulation of businesses. Political

factors effecting Sony can include the government laws such as

1. The introduction to the minimum wage affects the employees of Sony as the hourly

rate increases each year, every time the minimum wage increases.

2. Increase in Taxation by government because of which Sony will have to pay more

taxes. This means less profit for Sony, unless they increase prices of items.

3. Introduction on euro makes trading easier, the exchange may drop in the UK, making

Sony easier to expand.

4. The policy Protectionism puts barriers on imports into a country to protect domestic

producers which can affect the imports of Sony product in a positive light.

Economic factors Affecting Sony

The economic factors affecting Sony includes:

1. Change in interest rates by RBI or any other central bank of a country, resulting in

increase or decrease in the interest on borrowings. When these rates decreases the

sony can raise more funds to expand or for any other business purpose at a cheaper

costs and when these rates becomes increases, sony will raise comparatively less

amount of money from the market.

2. Another issue that should be troubling is that Sony's products are quite expensive, and

there are a lot of substitutes on the market. In the developing economies with very low

wages Sony may lose its market shares due to outdated pricing strategies.

3. It is a good time for Sony to expand the business further. Analysed from statistics

unemployment rates have decreased each year from 2002 to current year. The fall in

unemployment rates may cause Sony some problems in the process of recruiting new

employees in to the business.

4. Due to world economic slowdown in 2008-09, the purchasing power of buyers

decreases, because of which the sales of Sony decreases resulting in losses to

company.

5. Change in trade policies by the government helps the other competitors to capture the

market share of sony. Like India-Japan new trade agreement helps japnese companies

to come in India and this affects the market share of china.

Social factors

Social factors include the demographic and cultural aspects of the external environment. The

social and cultural influences of Sony vary from country to country. These factors affect

Sony customers needs and size of potential markets. Social factors includes:

1. The older population may not be interested in the latest Sony products include more

features, and are very costly despite the greater income they may receive. The older

population tend to be interested in the simplicity of products. Sony’s products are a for

the next generation, so the older population don’t go for the products of sony.

2. Due to expensive products of sony as compared to its competitors products, some of the

people are not able to afford their products. For example some Asian and African

countries may not be able to afford to buy Sony products. So they go for cheaper

substitutes available in the market.

3. Brand reputation also matters, because Sony, as any innovative company focuses mainly

on young people and brand names matter a lot among the youth. Sony has to ensure that

its brand is associated with innovation, thus, it has to support youth scientific

competitions, provide technological solutions and create revolutionary gadgets.

4. Some of the people are old fashioned, they don’t want to change and adopt new products,

so they don’t buy new products launched by sony and they give their negative views

about products without even using them.

Technological factors of Sony

The technological factors include Mechanisation and automation, Processes, Invention and

innovation and Internet. Technological factors includes:

1. Within country there may be a shortage of IT worker which can causes a hinder to Sony,

within the IT department, shortage of IT worker can cause inconsistency when a

computer breaks.

2. The production, storage and marketing of Sony products can be affected by the increased

use of new technology such as televisions are now connected with the D2H service ,

which sony is not making.

3. Processes – the need to cut costs, speed up production and compete effectively is a huge

driver with Sony.

4. Invention and innovation – The need to create new technology and new productions

within Sony can be a major drive for the research and development department within the

company.

5. The Chinese electronic products are cheaper as compared to products of sony. So there is

a need for sony to make their products available at cheaper costs to various consumer

groups.

6. Rates of technological changes are speeding; besides, Sony is the pace-setter here.

Although this may be an advantage, it also produces a number of difficulties, like having

to introduce new products all the time and engage into wars with competitors over

consumer's preferences.

7. A business such as Sony who have achieved a breakthrough which is patented is a major

sustainable competitive advantage over other competitors. For example Sony are

spending millions on updating, adding new features onto products regularly.

8. Internet – the use of the Internet for business-to-business transactions, such as relations

with the suppliers and supply chain management of Sony is the most important

technological change currently affecting Sony. The way in which Sony respond to

developments such as creating new products can determine their competitive future.

CONCLUSION AND RECOMMENDATIONS

Sony is a leader in electronic products in world market, no doubt, due to its quality of

products. These products are made for the next generation users. Sony is not targeting the

consumer groups of older ages, they are targeting the young population.

Sony is having great demand in gaming, TV’s, Laptop markets in all over the world. But

there is a need to increase its sales in the world market to gain more market share and profits

as well. So keeping the above given factors in view, sony have to improve itself and it must

produce the products at a cheaper cost so that all the people, whom the sony is targeting, can

buy the products.

There is a need for sony to invest more in R and D works to make the cheaper technology to

produce products at cheaper costs. By keeping these factors in mind sony can improve more

to become the world leader in electronic products