sony - sources of innovation.docx

7/22/2019 sony - sources of innovation.docx

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Group Report

1.Topic: Explore Innovation Sources of Innovation

Types and Patterns of Innovation

Standards Battles and Design Dominance

Timing of Entry

Group Members

Rahman Mohamed M00459704

Janany Kumarasarma M00459341 (Group Leader)

Nayomi Ekanayake M00436434 Infaz Ismath M00459696


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Group ProjectMGT 3130

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Acknowledgement

We would like to express our gratitude to Mr.I.G.Perera who gave us the possibility tocomplete this assignment and for the guidance and support he gave in preparation of this

study.

Especially, we would like to give our special thanks to our senior batch that enabled us to

complete this work.

However, it would not have been possible without the kind support and help from our

friends. Last but not the least we would like to thank all our peers and staff at I.C.B.T and

specially Mr.Shalika our coordinator who were ready to lend a hand in whatever way he

could.

We are making this project not only for marks but also to increase our knowledge.

Thanks again to all who helped us.


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Table of Contents

1.Overview .......................................................................................................................... 3

1.1 Introduction ................................................................................................................. 3

1.2 Reasons for choosing topics........................................................................................ 4

2.Methodology .................................................................................................................... 5

3.Sources of Innovation ...................................................................................................... 6

3.1 Individual Creativity ................................................................................................. 6

3.2 Organizational Creativity ........................................................................................... 7

3.3 User Innovation .......................................................................................................... 7

3.4 Creativity to Innovation ............................................................................................. 8

3.5 Research and advancement ........................................................................................ 9

4. Types and Patterns of Innovation ............................................................................. 10

4.1Product vs. Process Innovation ................................................................................. 10

4.2Radical vs. Incremental innovation........................................................................... 10

4.3 Competence enhancing vs. Competence destroying Innovation .............................. 10

4.4 Architectural vs. component Innovation ................................................................... 10

4.5 Technology S-Curve ................................................................................................. 10

5. Standards battles and Design Dominance ................................................................. 14

6. Timing of Entry......................................................................................................... 17

Reference .......................................................................................................................... 20


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1.Overview

1.1 Introduction

We will be choosing Sony as our firm for this topic. The essay will be all about theinnovation of Sony. How they explore, execute and exploit innovation. Their methods

and types of innovation, how they first came into the scene, their barriers and obstacles in

doing so and the battles theyve had over the years with rivalry companies.

Our aim is to finish this as successfully as we can by finding correct and accurate

information. At the end of this essay we would have liked to have done a thorough and

meaningful research of Sony. Find out how Sony over the years has been so successful,

their tips and tricks and all their innovation process thats been going on throughout the

years.

Objectives would be to get whatever information we get through a solid and reliable

source, such as the Sony website. Sony also has their own forums and FAQ sites where a

lot of information is shared. We can also get information from other related websites such

as news websites and other rivalry company websites, and also from Sony retail outlets

where we could talk to them in person. And we hope to finish this essay with the best of

our ability, through fair practice.

The electronics side of Sony is known as Sony group, which is categorized into five

segments. Electronic, games, entertainment, motion pictures as well music, financial

services etc.

We have carried out this research to do a detailed study of the industry dynamics of the

innovation process of Sony. And during this essay we have evaluated the companys

Sources of innovation, Types and patterns of innovation, Standards battles and design

dominance and finally the Timing of entry.


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1.2 Reasons for choosing topics:

1st topic:

Sources of innovation The reason is to find out what is the source of Sonys success,

the source from where all the brilliant innovation ideas come from, and what is behind allthe success Sony has had throughout the years.

2nd Topic:

Types and patterns of innovationSony is a unique company, only few companies have

the success rate of Sony. So we are interested in finding out the unique types and patterns

that Sony use in their innovation process.

3rd topic:

Standards battles and design - Sony is not the only company out there, naturally there is

competitors, and competitors mean battles for dominance. It could be for design or

otherwise. And so we are curious as to know how Sony have overcome all these

competitors to stay at the top of the tree.

4th topic:

Timing of entry Obviously Sony has made a very good entry into the market.

Especially regarding their most productive goods, like the P lay station series. And well

be looking deeply into this to find out the reason.

How the idea came about Sonys products are something which we use in our day today life. Our mobile phones, our gaming devices, our household items etc. So its an

interest of ours to find out in detail about Sony. How it started from scratch, and what it

has done throughout the years to achieve such a rank in todays world.


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2.Methodology

This group report mainly focuses on Exploring Innovations. So as we had a choice to

choose our company we chose SONY as they are the pioneers in technology and whooriginates with various kind of technology from time to time.

This study is based on secondary sources of information. The main sources of secondary

information are the internet, journals and articles. Internet is a suitable option as most of

the organization relies on providing their own website customized to serve the needs of

its consumers. Technological companies also have its own website which will provide a

great amount of information for the needs of this research.

Beside these there are numerous amounts of authors that have published their own

articles online to which others can refer and gather information from it. This can be a

valuable source of secondary information for conducting this research.

We as a group worked really hard to gather information and research on Sony

organization although it is a well-recognized organization.


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3.Sources of Innovation

SONY perpetually targeted to supply new hardware product which is able to be applied

into their computer code systems. For instance, in cameras, live station, blue ray disc and

Sony used 3D live product.

From this techniques SONY isn't solely focusing among their corporations and conjointly

Considering out of the box for contemporary technologies. Through linking each of the

internal concepts and with the assistance of external specialists they're aiming to step up

their analysis competency and with efficiency to act in response quickly to changes of the

client would like.

3.1 Individual Creativity

The SONY Play station was invented by the Sony

engineer, Ken Kutaragi in 1994, who was researching

from 1990 and did a smart move in 1994 and the play

station console was the best-selling console at that time.


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3.2 Organizational Creativity

Sony has always been the pioneers of creativity when it comes

to technology. Their motto is make .believe and its describedas shown. Sony as a company attempts to take the maximum

use of their employees to bring out their creativity. This has

been proven to us not only once but many times already.

Sony happened to become one of the best companies after the

war in japan. Sony Organization as a whole had a high amount

of knowledge about technology and creativity aspect as well.

They used to spend less on resources and labour and get more out of them and they were

gaining privileges from specific Asian countries. Their creativity leads to their

organizational success it is clear from TWOS analysis, PESTEL and so forth.

3.3 User Innovation

Many merchandise starts off with innovations.

All innovations return from serving to non-

customers fancy the merchandise.

An innovation actually originates from external

world the industry and comes from people

who don't have any information in any respect

concerning the industry or the merchandise.

Sony on the other hand starts to acknowledge

users as a supply of innovative concepts for

tangible and intangible goods. Sony gathers user information from various ways to

develop and gain an insight of what their next innovation should be by internet and other

sources.


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3.4Converting creativity to innovation

Some of the main innovations

1946Japans first tape recorder was built

1950Japans first commercially successful transistor radio was created.

1960The first fully transistorized television was released

1965The transistor radio was created Sony boy

1971The Colour video cassette player was built.

1975The Betar video tape recorder was created

1979Worlds first stereo cassette player was built.

1980Sony launches the beta cam

1982Worlds first cd player was introduced

1983Sony created the floppy disk

1989light weighted camcorder was introduced

1994Sony play station was released

1996Flat TVs were introduced

2003entertainment robot was created

2006Blue-ray disc were introduced

2009Sony vio netbooks were released


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3.5 Research and advancement

Sony continuingly got involved in technological innovation as to keep up the expansion

of the entire cluster. Sony also does believe that the technology has created possibilities

through our analysis and development is vital to product differentiation in existing

businesses and therefore the supply important creation in fresh business.

Sony pays a high amount of resources in order to research and keep up with the

constantly changing technology, to increase the consumer demand more. In the year of

2007 Sony spent a large proportion from its overall income which is 7.1% on R&D.

Sony has come up with an OLED which is efficient and thinner than LED thru R&D.


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4.Types and Patterns of Innovation

Innovations are a part in the output of the organization, it can be good or services.

Innovations are always improved effectiveness and efficiency of the products. It plays a

major role in organizations turnover. Innovation leads to success, Innovation is bringing

out something new to the market.

There are fourinnovation types can be listed as follows,

1. Product vs. Process Innovation

2. Radical vs. Incremental innovation

3. Competence enhancing vs. Competence destroying Innovation

4. Architectural vs. component Innovation

4.1Product vs. Process Innovation.

Process Innovation is a new way of marketing through delivering good or services to the

market. Even though the product innovation is more important than process innovation,

both are essential for an organization for its sustainability. For example Walk man was

invented by Sony for the first time which was a portable music player, and from the day

of beginning to up to now Sony has created so much of electrical products such as,

In the Electronics and Mobile category; Sony is the market leader of the audio and video

electronics in the United States.

Blu-ray Disc

CD,DVD

Super audio CD technologies

Sony sells a wide range of consumer products.


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Consumer products as;

BRAVIA high definition television

Cyber shot digital cameras

Handy cam camcorders

VAIO personal computers

Walk man digital music player

Under Sony Mobile Communications

Xperia smart phones

Sony entertainment network

Sony Creative software

Sound Forge Pro

ACID Pro Vegas Pro


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4.2 Radical vs. Incremental Innovation

Radical innovation is bringing out a completely new product type of production process;

it can be a totally new product and some state of diversifications. But, most of the radicalinnovations would be very new to the market and specially differs from the existing

product process.

Based on Sony Corporation an introduction of the Sony play station was a radical

innovation, it was far enough powerful to dominate the market for the video games. Sony

was aware of technology changes to present powerful processors with developed

graphics, it made Sony to become a market leader in the video games industry.

4.3 Competence enhancing vs. Competence destroying Innovation

Competence enhance and competence destroy are two different concepts in innovation of

the industry. For Sony Corporation manufacturing each generation of Intels

microprocessors of 286, 386, 486, Pentium, Pentium 2, Pentium3 and Pentium 4 are

implicit in its previous generation.

4.4 Architectural vs. Component Innovation

Architectural changes the connection which means transform the entire design of the

system. According to Sony Corporation, Walkman is an example of architectural

Innovation, which changed the shrinking of the radio technology, into portable music

player. It changed the music industry forever.


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4.5 Technology S curve

S- Curve illustrates introduction, growth and maturation of innovation. (Innovation Zen).

S- Curve if very flexible and convenient to analyze the industrys overall performance

such as, introduction, growth and maturation of innovations and it can easily

understandable.

At the beginning stage a specific amount of money was spent on research and

development and it took long time for the production. Earlier stage of the curve isadoption period since it is a new product or technology to the market the adoption is little

slow.

Sony Corporation moves forward with S-Curve, it introduces new technologies with

cheaper prices, E.g. PS2. S-Curve is useful to understand the value of the enhancement as

well as price restrictions.

Usually Sony when it comes to the S-Curve when introducing a technology to the market

they offer the product at a high price and of low volume for an example Blue- ray Disc.

Also when theres a market for the existing product and the volume goes in large

quantities, and Sony tend to pull the price down to increase reliability to the customers

and to increase their client base, this is also one strategy of Sony.


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5.Standards battles and Design Dominance

Sony throughout the years had many battles with rivalry companies, and more often than

not has come up on top. Usually their designs dominate other companies. Sony usually

has that knack of coming out on top as they have so often done in the past. And as most

know Sony has a very high standard set for itself in the modern world. They have

achieved so many standards in terms of their designs, devices and features etc. But they

also have achieved standards out of the box, like Sony green partner standards which

they established in 2001.

Design is a very important thing in todays world. Every company has to have its own

unique design, and more importantly it has to have a much better design than its closest

rival, because the first thing a customer notices in a product is its design. There could also

be many problems with companies putting up their designs first in the market as other

companies could copy it, but not putting it out there first could have them lagging behind

in the market, and no company would want to have that, so there are quite a few issues

when it comes to design dominance.

Sony has had many battles over the years, battles with Sega, battles with Nintendo, and

with Microsoft. To overcome all these firms and to be one of the leading organizations in

the market had to have taken some serious thinking and some good skills as well. Timing

is everything for Sony. Like with their play station series, they unveiled all three at

almost the perfect time, whether it was in the seasonal time or waiting until Microsoft

released its Xbox first.


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Absorptive capacity is a method which Sony has used very wisely. After the initial

success with the play station 1, Sony then invested a lot of money in R&D and also into

the production of the plays station 2, and fair to say it has played of handsomely. Sony

also made the PS2 games backward compatible and vice versa, that also helped in

attracting a lot of buyers. After releasing the PS1 Sony only made minor changes in the

PlayStation 2, the functions were basically the same with a few changes, but with a

different design. Sony also introduced a slim version of the play station 2, and as the

name suggests it was obviously slimmer than the previous one, it also came with a

vertical stand and had more memory space as well. This is a good example of increasing

the revenue and increasing the products profit, minor changes such as this could make a

huge difference in the companys profits, the PlayStation 2 slim went on to be more

popular than the original PlayStation 2 even though the price was slightly higher and the

design and functions had hardly changed.

Sony had a memorable battle from 2003 to 2008 with Toshiba. The famous Blu-ray

versus HD-DVD battle. Sony however had the backing of its brand name, and its own

Sony pictures Entertainment to go with other studios to help them with the battle.

While Toshiba had the Warner brothers and Universal pictures with many others. And

Sony had one major advantage going their way. Sonys play station 3 used the Blu -ray

technology, Sonys play stations have always been a huge success, and a large population

used the play station 3, that there alone was a huge factor for Sony. And as time went on,

Warner brothers defected to the Blu-ray standard leaving Toshiba very little chance.

A little later after that Toshibas CEO announced that Toshiba would accept defeat and

no longer produce HD-dvd players.


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More than its Blu-ray technology Sony had a huge success with its play stations. And like

with the Blu-ray Sony had a battle for its play stations as well. Sega, Nintendo were its

initial contenders. And later on Xbox rose up to be its main concern. When Sony first put

its play station 1 in the market in 1995, Sega were the market leaders. And to get the

success that Sony did was a commendable effort; also at the time Sony did not have a

brand image in the video game market although they had other an image in electronics

and media. And with the help of some outsider like Bruce Stein (toy industry veteran)

Sony manage to really burst into the market.

They also managed to persuade game developers like Electronic Arts the largest game

developer in the US at the time to produce play station titles. With the play station one

being such a hit, the much awaited play station 2 was always going to be a real eye

catcher. The play station 2 kicked Sega out of contention and rose to become on the best

gaming device/console of all time, and sold like hot cakes at the time.With Sega out of the way came Microsofts Xbox and Nintendos Game cube.

When the Xbox came into the market its price was much less and also the technology

was slightly more than the play station 2, but the play station 2 already had a significant

lead in the market. And in the 2001 Christmas season the Xbox sold 1.5 million units and

the Game cube 1.3. The play station on the other hand had sold 2 million units in the

month of December alone. But in 2005 the Xbox 360 came out which happened to

overtake Sonys play station 3 which Sony expected to sell more than it actually did.

Not long after Nintendo came out with their Nintendo Wii, which overtook the playstation 3 as well as the Xbox 360 by a big margin, thus forcing Microsoft and Sony to

reduce their prices which resulted in a loss for each item sold.


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6.Timing of Entry

Timing is considered as one of the most significant step to be taken by any company

when launching a new product to the market. Most of the successful business point of

view is common towards the idea that for a success of a product it is very much importantto be the first on the market to launch a product. Because it opens a great chance for the

company or an enterprise to gain profit as mostly consumers gets attracted to new

findings and new innovations which comes into the market. This is not only to gain profit

but it has also other advantages such as obtaining plentiful competence and a better

market plus there is more opportunity to get patent registration which will prevent a new

competitor to the market.

However it is true that this does not sound as easy as it says to obtain a consumer demand

for a totally new product. It can only be done with advanced planning and research on the

similar products in the market which would help the company to establish new

techniques to bring it to an advanced level than those which are already in the market.

Thus timing of entry has become a major task for the company when launching a new

product. It does not depend on one or two features of the product but many features are

attached in it.

For instance it is very much important to find out the demand for that particular product.

This can be known by comparing it with a similar product and research on that product in

the market as to how consumers have accepted that particular product and how much

demand is there in the market. This also involves technology and development of theproduct. It is important that the product has new technological innovations or advanced

features which could create a demand in the market and also it should maintain certainty

as it is a new product. The consumers have to be given the belief that it does not deceive

them with any feature in that which they could be discouraged after use of the product.


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There are number of times where products come into the market at the same time which

increases high competition. One of the much known product example is Coca-Cola and

Pepsi Cola which usually introduce their innovations in to the market simultaneously

after the competitors. This is referred as parallel entry which is to be given high attention

since every project or venture comes with great planning and expectations as each of

them will have strong innovations as there are leading enterprises in the market. Since a

high competitive atmosphere is created when there is a parallel entry as every company

will bring up their best innovation by a strong venture to establish a something new to the

market and also to be first on the market.

One of the well-known brands of products in the market comes from Sony which is

known as for its high quality consumer electronics. For example products such as DVDs,

laptops, televisions, personal digital assistants and with a high demand for its PlayStation

Sony is known as one of the leading technologies for many years by winning differentawards for its technological innovations. Once it was announced that Sony was awarded

Consumer Electronics Brand of the Year by a survey carried among U.S consumers

which resulted in achieving 35,000 customers in a year.


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One of the greater achievements for Sony was when it launched its PlayStation Portable

(PSP). It was a great success which showed a huge demand among the consumers that

there were shortages of the product in stores across the countries as it gained around

200,000 units after a month of its launch. As Sony got to know that they need to bring out

more units to the store they decided on the time they would launch it which was closer to

time of Christmas which was considered to be the point where their decision of time of

entry seems to be an advantage for the product. Also they decided to launch their next

version console the Xbox 360 before Christmas because at the same time Nintendo was

launching the latest console Revolution box at the same time. This timing of entry was

decided on competition of the market.

This pressure of competitiveness is one of the most important factors to be taken in to

account when deciding the time of entry of a product as there are some many features

attached with it.One is to keep up with the rivals where the company has to make sure

that their competitive product does not go one step ahead. Another feature is the need ofthe consumers which is very important for the company to keep it up to date and also the

aware of the technological changes. Thus it is very much important for the business to

maintain consumer interest in its products and develop the product in order to satisfy the

different needs of the consumers as there are so many competitors who launch their

product at the same time. Thus it is important for the business to launch its product by

new developments and strategic planning specifically when it is a new product. It could

be aimed to increase sales on the new product and minimize on existing products in the

market by focusing on the competitive products.


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Reference

Schilling, M.A. (2010) Strategic Management of Technological Innovation (3rdEdition). McGraw-Hill, New York.

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%20Timing%20of%20competitive%20market....pdf. [Accessed 11 July 2013].

Seanmalstrom.wordpress 2009 [The Source of Innovation, Malstrom's ArticlesNews] [ONLINE] Available at:

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