The ProblemFailure to position the product to appeal to two
different consumer mindsets (Japan and US)Unable to categorize the
product as consumer needs vary across societiesThe product remains
unprofitable for Sony at current production levelsPossible
Causes:High price tag American consumer sees robots as dangerous or
threatening and see little value in a robotic pet that performs no
functional tasks
Situational AnalysisStrengths: Association of Sony brand
nameSony is market leader AIBO is the first commercially available
robotWeaknesses: Not part of Sonys core competencieselectronic,
games, and entertainmentPrice tag of US$1500-$2500Sony often fails
to meet demand
Situational AnalysisOpportunities: Social: Baby boomers in the
US marketTechnological: The research holds the potential of being
extremely valuable to external high tech companiesPolitical:
Government agencies have a keen interest in how new technology can
improve its operationsTurn the robotic pet into a learning tool at
schools or an automated caretaker at aging homes
Situational AnalysisThreats: Competitors: Honda's Asimo uses a
platform recognition and network integration technologies similar
to the AIBOTechnological: A high-tech company such as Sony and its
competitors are always threatened by a high rate of technological
obsolescenceEconomic: By the nature of the product categories in
which they compete, Sony and its industry offers many high-end,
luxury products
The Two MarketsJapanUSConsumer NeedValue propositionGapA
companion for lifeA robot dog that would evolve with the
interactions the owner had with himThe secret need to take care, be
loved and responded to-Consumers more functionality driven;
Consumers averse to technology; AIBO had failed to convey the value
effectivelyPositioningA companion for lifeAn interactive robotic
dog could be used for emails, notifications
Methodology and CriteriaFour criteria were used to compare the
alternatives1) Short term to medium-term profitability (30%)2)
Alliance with Sonys core competencies (30%)3) Long term growth
potential (20%)4) Ease of implementation (20%)
AlternativesStop ProductionReasons:Sony AIBO is unprofitableDoes
not fit with core product strategyAmerican market has a history of
associating robots with enemies
AlternativesMarket PenetrationThe Innovator market has not be
saturatedSame product, same priceSame Distribution channelsThe
promotional strategy would eschew mass advertising and focus on
building word of mouth buzzTechnology trade fairs
AlternativesMarket DevelopmentAttract the early adaptors and
lead towards a mass market Functional AND emotional
positioningBuild primary demandMarket is large and will offer
long-term growth Short-term profitability because low R&D
AlternativesProduct DevelopmentExploit the tech-savvy, innovator
market that it currently targetedDevelop the AIBO to the point of
being less of a continuous innovation and more like a discontinuous
onePurchase because of the novelty
AlternativesDiversificationTwo diversification strategies a)
diversification towards a highly functional AIBO which performs
duties and is targeted towards adults Development of a highly
functional product that answers the question, But what does it do?
American consumer is pragmaticLow short-term profitsMost aligned
with Sonys core competencies of producing high-tech electronics
Alternativesb) a primitive-version AIBO that is geared towards
childrenDropping both the price and the functionality Mass
advertising campaign,Integrated componentsElement of luck when
attempting to create mass infatuation
