Sony Corporation or also known as Sony internationally has been a booming success across the world and is well known for its production of electronics in the entertainment industry. Sony is a multicultural conglomerate corporation that has been known as one of the leading manufacturer of electronic products of consumers and professional market. Their production is also known to be a much diversified type of business with the productions of electronics, game, entertainment, and financial services sectors. The company was found way back in World War II. The founder, Masaru Ibuka opened an electronic shop in damaged building caused from a bomb. With a capital of only $530 and only a total of eight employees and was later joined by his colleague Akio Morita and both of them founded a company that was known as Tokyo Tsushin Kogyo a Tokyo Telecommunications Engineering Company with a first production of a tape recorder called the Type-G. The company name was then changed to Sony in 1958. In the early 1950’s, Masaru Ibuka then travelled to America and was told about a licensed transistor inventor firm that was known as Bell Labs. He then convinced bell to license the transistor to his company back in Japan to produce a communication production for the market of the company. Ibuka then successfully produce the first transistor radio which was called the Sony’s TR-63. The production was such a big success that it cracked open the American Market and automatically launched an industry of microelectronics consumer. Later on in the stages, the company was passed down to Ibuka’s colleague Akio Morita. Today Sony’s main Headquarters is located in Minato, Tokyo with a successful production of many different types of electronics in our everyday life. Sony products are also introduced sometimes in movies and many more entertainment influences. I personally believe that this is a very good way of marketing the products of the company. Despite of a big loss in the early years of 2000’s, Sony then try to solve their economic problems by going into the gaming industries and producing their first gaming system named the Sony PlayStation. Their production for the PlayStation was a sensation around the world that they manage to sell around a 100 million consoles in the gaming market. Other than that, Sony has also produced a camera that was also successful investments despite their huge losses they were manage to solve their economic problems with their entertainment market.
There are so many Sony productions that has been analyse economically in the market but I will now analyse the market on one of Sony’s greatest investments in the entertainment productions which is the Sony PlayStation. The Sony PlayStation is a gaming system which stood an interest to media and entertainment companies all around the world. But there were some dilemmas that were faced by the company in the short term and long term of the company. It is known that the gaming industry is a very competitive area for a company to actually get involve into. In the recent years, Sony has been very competitive with another gaming company Microsoft who produced the Microsoft Xbox. Sony is known to be as an oligopoly type of company in which they are able to set a price market for their product to maintain their profits in the long run therefore making them more secure in the long run and they would also maximize their profits by producing where marginal revenue are equal to their marginal cost. In the dilemma for Sony’s short term strategies, the company faces a problem of manufacturing imperfect products. This can be identified as one of the weaknesses of the product for instance, during the launch of the Sony PlayStation 3 back in 2007, there were major issues concerning of the product. Consumers went through a series of problems with the console in terms of its quality therefore damaging their sells in the early year of 2007. But Sony was cunning enough to fix their bug problems by using the method of consumers as bug testers. This means that every single player automatically happens to be bug testers for their consoles without even knowing it. After players finding out about the problem of the product, the consumers will then post most of the major problems of the product in a forum in which the company will fix it as soon as possible as a part of their research and development for the product. This will then solve all of their short term problems and help in their long run as they will manage the product properly.
In the case of the demand of the product when
it comes to the Sony PlayStation 3, it has been determined that Sony has sold
over 68.3 million units across the world as it was one of the most demanded
product back in the year 2007. The demand shifted to a success after all of the
hype that was given for the product. With a high profit reaching almost $6.3
million worldwide. There was a minor problems due to the price of the product
as consumers were not happy. Many buyers were outraged by the price that was
set for the PlayStation 3 and therefore making the demand for the product in
the early stages was not profitable. But as the years goes by, the demand
slowly rises as the company reduces the product’s price to a more reasonable price
for the consumers. Today as we speak Sony is working on a new product which is
the PlayStation 4 which will be launching early next year of 2014. It is stated
that the demand of this product would be higher comparing to the selling
profits of the PlayStation 3.
Sony has stated that due to the problem of the
products price on the PlayStation 3 early 2007, they have made a decision in which
they would lower down the price early for the upcoming PlayStation 4 just in case if
there would be a lot of minor problems in the early stages. This way they would
maintain the level of demand of the product as well as the supply to an
equilibrium level as they move forward on fixing any major problems that might
occur. Sony also stated that they are worried that the demand for the product
might be affected due to history of their short term problems. Lowering down
the price would also make a movement along the demand curve. This will also
maintain the demand curve from shifting as when the prices are lowered down,
therefore the consumers will not have any problems when it comes to their
income. As we know this drastic changes in income or taste or maybe even amount
of consumers in the market will shift the demand curve.
So the Question here lies, how will Sony fix
the demand problem in the Upcoming Sony PlayStation 4 next year? In my
opinions, the company should take a careful step this time by learning from
their mistakes that have been happening from their previous dilemma by
decreasing the price of the product and increasing the amount of people to work
on the bugs. This will insure that the demand and supply for the product will
be better than the previous year. By increasing the quality of the product and
reducing the prices and a chance to increase the demand, the company will have a higher chances of a shifting in
the demand and supply curve.
This way the company will insure that their
short term problems might not be much of a problem then it was back in 2007. And
they can ready themselves with any other major problems from the consumers in
the long run. The recent product from this company before was only targeted to
the younger generations of the people but because of the competitive situations
of Sony and Microsoft, Sony has targeted a more wider range of customers by
making their product a more family oriented type of console. This way, the
company will not only gained profits from the recent consumers who were familiar
with the product before but they will also gained many new type of buyers
therefore increasing their chances of making a higher profit in the market.
Sony may have many issues back in the past not
only in terms of profit but also in terms of workers in the company due to the
debts but if they could maintain the quality of their product, the demand and
supply level will always maintain in a more equilibrium level. And personally
to my opinion, I'm sure that Sony will make great profit for this production or
maybe even better than any of their profits before
.
