Innovation Audit, Porter's Generic Strategy, Innovative Processes, Blue ocean Strategy, Lock-in Strategy, Kolb's Learning Cycle on Sony Playstation models.
2. SONY
Press Start ...
⢠May 7, 1946 and is headquartered in Minato-Ku,Japan.
⢠Operates three business units- Electronics, Entertainment and Financial
Services.
⢠Major products -Televisions, Digital imaging, Semiconductors, Electronic
components, Professional solutions, Medical
⢠Staff Strength of 168,200
⢠183 countries.
⢠Mission: "To experience the joy of advancing and applying technology for
the benefit of the public.â
⢠Brand Message: âMake. Believeâ.
4. SONY
Innovative Organisation
⢠Restructuring in its organizational structure.
⢠The quest to be innovative is one of reasons for the
restructuring.
⢠Latest Restructuring was on April 1st, 2012.
⢠Divisionalised and Adhocracy.
6. SONY
Innovative Organisation
⢠Visionary-Top-down identification.
⢠President Kazuo Hirai, Sony switches to a new
management structure with gaming - core
pillar.
⢠New structure - Revitalization and Growth of
Electronics Businesses and Deliver Compelling
User Experiences as âOne Sonyâ.
⢠Three core pillars: digital imaging, game and
mobile.
7. SONY
Initiatives to promote
innovation
⢠Lunch time learning aimed at encouraging
creativity and managing stress
⢠Sony University at nurturing talents anywhere
in the world
⢠High Potential Programme-Progresses the core
skills of Super Sony Folk
⢠âWork Smartâ-Designed to enhance an
individual's body, mind, emotions
8. SONY
Diffusion of Innovation Diagram
Nintendo
Entertainment
system (62 million
units sold)
1972
Nintendo N64
(33 million units
sold)
Nintendo Super
Famicon (49
million units sold)
Odyssey,
Magnavox
(330,000 units
sold)
Innovators
Sony Play station
(125 million units
sold)
1983
Nintendo,
Color TV game6
(3 millions units
sold, in Japan)
Nintendo Game
Boy (118 million
units sold)
Early
Adopters
Early
Majority
Source : http://dotpixelgames.com/wp-content/uploads/2010/04/video-game-timeline.jpeg
Sony PS 2
(138 million units
sold)
Sony PSP (76
million units sold)
Nintendo DS (154
million units sold)
Xbox
(24 millions unit
sold)
late
Majority
X Box 360
(76 million units sold)
Laggards
Sony PS 3
(77million units sold)
9. SONY
Innovative Timeline
Introducing New disc
format Blu-ray in its
new PS3, internet
gaming
Conflict with Nintendo,
Entering Game Console
Industry
1983 1994
2005
2013
2000
Introducing Dual-Analog
Technology, Shift in User
Experience
Persuading Game
developer to work
under their new
platform, CD-ROM
Introducing PS4,
Game Sharing, Face
Tracking. More?
10. SONY
Porterâs Generic Strategy
Lower Cost
Differentiation
SONY
Broad
Target
Cost
Differentiation
Leadership
SONY
Narrow
Target
Focus
Focus
Generic Strategy (Porter, 1980)
13. SONY
SONY Technology Lock-In Strategy
⢠Technically differentiate product (incompatible with
rival, so zero sum game)
⢠Introduce better quality products
⢠Form strategic alliances (catch-up)
⢠Develop more effective process technologies
⢠Price
⢠Target marketing in leading magazines and media
⢠Cross-leverage installed user bases in related markets
⢠Understand heterogeneous demand (distinct user groups)
⢠Build brand image amongst key socio-economic groups
⢠Improve / exploit distribution channels
⢠Exploit better organisational resources
⢠Exploit better access to key resources
15. SONY
Top management
commitment and
visible support for
innovation
Time based
strategies
Carry-over strategy
Linkages
CONTINUOUS INNOVATION AS
A MULTI ACTOR PROCESS
Research design and
commitment
Integration within the
firm,
Extensive networking
Incremental
development strategy,
Upstream with suppliers
Manufacturing
strategy
Process
MARKET
SUCCESS
Implementation
and launch,
Downstream with
demanding
customers
18. SONY
Learning: Kolbâs experiential learning cycle
ď Experience â Honest capture of
experiences (even costly failure) thus
having raw materials to reflect
ď Reflection â what happened, what
worked well, what went wrong etc..
Experience
Experiment
Reflection
ď Conceptualizing â capturing and
codifying the lessons learned into
framework and eventually procedures
to build on lessons learned.
Concept
ď Experimentation â the willingness to try
and manage things differently next
time, to see if the lessons learned are
valid.
19. SONY
Learning
ď Capturing and re-using past experiences:
- SCE in 1993 - Nintendo project
- Collaboration - SMEâs R&D & Business Development
- Incentives to third-party software developers
- Indirect knowledge sharing
ď Experimentation:
- Using CDs .
- Using DVDs in PS2.
- High price and still sales.
- High speed core processor âCellâ in PS3
- Promoting independent game developers
20. SONY
Learning
ď Conceptualizing:
- Releasing PS4 - lower price
- Utilization of all Sonyâs resources (intelligence and
information).
ď Learning and Adaptability - Main strength
- Cutting edge technologies into PSsâ hardware.
- Improvising on the product even after its release there by
finding new ways for price reduction.
- Reasonably pricing of PS4.
- Enabling offline mode in PS4.
- Encouraging independent game developers.
Thereâs always a clear leadership (eg,Yoshihide Nakamura(1968.....) and Kazuo Hirai(2012... to date).The company encourages on the job training though their hosts of scholarships programmes available.2012 Corp Strategies includes Creating new businesses & accelerating innovation Sonyâs continuous emphasis on restructuring exercises, rather than concentrating on cutting down on unnecessary product lines, and its continual focus on the consumer electronics business at a time when the industry itself was going through a slump period, could be cited as the primary reasons for its continual dismal performance
A blend of Eastern and western culture(Beamish 1999)A mix of âvery Japanese thinkingâ and ânot very Japanese thinkingâThe company encourages innovationInnovative staff are given new opportunities to enable them realise their dream.Eg,Head
- Sony previously worked with Nintendo under partnership agreement, started back in 1983Nintendo developed games and add-ons, Sony developed core technologyLater, Sony successfully developed CD-ROM but there were conflict between Nintendo, Sony stepped outSony then entered gaming market on its own, possessing CD-ROM technology as Core competence
I will mention that once Sony enter Game console market, itâs strategy was differentiation, try to completely differentiate itself from Nintendo. With the entrance of Microsoft, which using similar strategy as Sony has lower the uniqueness of Sony. So itâs current position, as in PS3, is a differentiation focus where the firm looks to typically gain it competitive advantage through product innovation and brand marketing rather than efficiency.
-From the model, we can notice that Sony PS3 and XBoX360 have very similar Strategy. The consumers would not have a clear choice when it come to decision making between either on of these consoles. Oppositely, Wii differentiate itself from the other 2, its unique gaming that cannot be found in PS3, or Xbox can overcome its advantage of poor graphic and additional feature such as movie player.-Only thing that Sony console manage to stand out from other product is its graphic and special disc format which offer optimum memory capacity of 25 GB
-CD-ROM become core competence of Sony as it entered the market due to its much larger memory, resulted in better graphic and user experiences.However, it faces the problem in persuading game developer to work under their new platform, due to its position and experiences in game console market Moreover, Sony spend largely to be in consumer mind by advertising in every major game magazineMicrosoft enter Gaming market in 2001 and introduce Xbox using DVD platform which offer higher memory than CD-ROMSony countered by Massive R&D and come up with Blu-Ray technology which offer better performance than DVDFrom several attempt in adding internet feature into Game console by Nintendo and Saga but failed due to technical error, only allow user to download some game on internet. Sony is the first one that brought the full potential benefit of internet to its PS3, allow people to fully download games, share games and play multiplayer mode only.
We are using Technology lock-in Strategy, Arthur (1998)Sony use its own platform, CD-ROM for its PS1 and 2 and Blu-Ray in PS3, totally incompatible with other consolesSony Introduce
Top management commitment and visible support for innovation Timing : Explicit time based strategiesAdopting a âcarry-overâ strategy (use inventions for multiple products). âThe innovation process is defined as the development and selection of ideas for innovation and the transformation of these ideas into the innovationâ (Jacobs and Snijders 2008). The main idea of SCE was to develop a next generation game console as a âSuper family computerâ along with Nintendo. But after getting betrayed by Nintendo, SCE decided to move into own project. In 1994 Rothwell, a key researcher in the field of innovation management identifies four key principles of Fifth Generation (5G) innovation process namely: integration, flexibility, networking and parallel information processing. These are fundamental principles underlying the innovation process of SCE. SCE integrated hardware developers from central lab, software-related image processing developers from Kihara institute, Sony Music Entertainment (SME), recording media division to work on PlayStation. Flexibility in research department has improved innovating thinking of all engineers. Upstream networking with small electronic component suppliers and downstream networking with demanding customers provided huge benefit in manufacturing process. SCEalso developed indirect knowledge-sharing mechanisms among the software developers byoffering software development support to third parties.SCE used incremental innovation process approach for Playstation2 and PlayStation3. By using latest technologies of the time, such as DVD media, an ultra- high-speed core engine (EE + GS),and ultra-high-speed memory system architecture (co- developed with Rambus), SCEsignificantly enhanced the hardware performance for PS2. For PlayStation3 SCE used a Cell processor by IBM and Toshiba which was based on the Power architecture and combined with NVidia graphics chip, high storage memory, full HD quality and blue ray drive along with minor changes in other components. To avoid long delivery times SCEstrategically chose to utilize a direct sales channel instead of the wholesaler channels in its distribution channel. Direct channels offered a substantial advantage in terms of shorter lead-time in taking orders and responding to additional orders from retailers. High quality business ideas were developed based on Sony's rich knowledge of the CDbusiness, while the hardware design for PS1was created bysharing all of Sonyâs intelligence and information resources. PS2succeeded because of its internal development and production of the semiconductor for its core technology, which enabled SCEto achieve both high performance and lower cost. With these two successes in process innovation, Sony dominated the game industry. In short Sony have learned how to manage process (both in âdo-betterâ and âdo differentâ variants) so that they can sustain innovation (Foster and Kaplan, 2002, Geus 1996).
The Making Of: PlayStation(http://www.edge-online.com/features/making-playstation/)The Psygnosis Story: John White, director of software (http://www.edge-online.com/features/psygnosis-story-john-white-director-software/)Verant Interactive (http://uk.ign.com/companies/verant-interactive)ennifer Johns. (2006). Video games production networks: value capture, power relations and embeddedness. Journal of Economic Geography. 6 (1), p151-180.
- Created SCE in 1993 after being excluded from Nintendo project - Collaboration with SMEâs R&D and business development for PlayStation - SCE offered incentives to third-party software developers that Nintendo did not provide. - Developed indirect knowledge sharing mechanisms among the software developers by offering software development support to third parties. Experimentation: - Using CDs in gaming consoles. - Using DVDs in PS2, although the technology was just developing at that time. - Releasing PS2 at high price and still maintaining sales - Trying to implement new high speed core processor âCellâ in PS3 and other products of Sony. ( This was a failure as the processor manufacturing was delayed) - Promoting independent game developers
REFERENCES Tidd, J., and Bessant, J.(2009) 4th Edition, Managing Innovation: Integrating Technological, Market & Organisational Change, John Wiley &Sons, Chichester.MIT Link: https://mitsloan.mit.edu/LearningEdge/CaseDocs/07-046-Sonys-Battle.pdf?v=20120410Business article: http://www.gamesindustry.biz/articles/2012-10-05-sonys-steep-learning-process
From the innovation audit in Appendix ___ strategy and learning were given a high score of 6 whereas processes and links were given
