A major player in the global business industry, Sony Corporation is well known by its capacity of innovation and technological market supremacy. In 1994 Sony, decided to get in on the video game market announcing their new product the “PlayStation”. The company’s mission was to release the best hardware for a new market niche and innovate a way for people to play video games. The business goal was to create a new market and establish new boundaries with competitors. The company’s objectives were to penetrate into a market that had been abandoned by major companies in the past because of the fast changes in the gaming industry. Since the release of their first product Sony searched for a specific audience between the ages of 18 to 34 years old. This audience was not considered by its competitors. Sony’s strategy was very clear in capturing this age group. Therefore, to meet the customers’ expectations in the fast gaming market Sony introduced a new way to deal with developers. Part of the company’s strategy was to support the developers as a client providing customer service and any necessary tools to develop PlayStation games in a fast and effective manner. As a result, the company’s goals were to capture a new segmented audience by introducing several different game; automatically increasing their market share. Sony’s strategy worked very well and the company led the game market for several years. With their strategy and mission in alignment the company was able to have the enjoyment of incredible performance results.

The gaming industry is a fast market bringing new competitor’s every day with new product designs and ideas. It’s crucial for a company to be able to change their strategy and objectives when appropriate. One of the largest issues that Sony Entertainment division is dealing with is the amount of time taken for decision making. The hardware is expensive and they need to align the company’s business strategy not only in the gaming part but with other departments of the company. Their strategy is to have the best and most powerful hardware. But this comes with several risks, such as the customers can’t absorb the full price of the equipment. The only way for the company to profit was adopting economy of scale or splitting the products cost with other divisions within the company. For instance, analysts estimate that the launch cost of PlayStation 2 in 2008 was $474.00 this was one hundred dollars below its initial price. Nevertheless, being a corporation it is critical to take and understand these strategies because it involves several mechanisms such as budgets and procedures from different departments causing the decisions to take longer. The company will need to be prepared to deal with other issues besides internal problems. The external threats are a huge problem for the company. Having an undefined strategy with strong competitors such as Microsoft and Nintendo will generate damage to the company’s market share. The market is completely unstable, which makes it difficult to anticipate new trends and technologies. Proof of this is the competition between Sony and Microsoft and their highly powerful consoles fighting not only for the video game market but for the living room. This cast aside Nintendo and cost Sony and Microsoft millions of dollars and market share. As a result, Nintendo created a new strategy in alignment with a new product to capture a new audience. Sony and Microsoft didn’t make this a priority. This proved that you don’t have to have the most powerful console in the gaming market to have the largest market share. What is vital is to have a strong business strategy with a clear mission. Nintendo has accomplished this is the current market. The last results of market performance demonstrated that Nintendo sold 32.4 million units, Microsoft 20.9 and Sony 15.5 million. Nintendo hardware has 1/3 of the features compared to Sony.
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