Industry background
Essentially, international trade is often a characteristic of the computer industry, rather than a mere contributing factor (Bardhan, Jaffee & Kroll, 2004). Currently, even the smallest businesses have become active in marketing their products or services internationally. Personal computing has emerged to be the most important contributing factor to overseas labor employment due to production costs.
The continued increase in productivity within the computing industry is steered by the continued advancements in technology. Efficiency and other achievements result from the ever changing technology for the better.
Among the major product lines in the electronic industry are the computers which also form the core products of the electronic companies. However, Apple’s computers have lost significant demand due to the limitations the company experiences from complementary products.
Hewlett-Packard and Dell have continued to dominate the computer market with their products having a higher demand than other competitors. Compared to Apple, firms like Dell and HP are substantially bigger and provide substitute products which attract many consumers due to their compatibility. Sony, Samsung and LG have focused more on consumer electronics such as televisions, digital cameras, mobile phones, gaming consoles, DVD players and digital speakers.
Company background
Previously known as Apple Computer Inc, Apple store is a global company that produces computers, software and consumer electronics. Its major products are personal computers, iPhone, iPod, iPad and iTune Store. The company was established in 1976 by two electronic engineers, Wozniak and Jobs, who released the first computer called Apple 1.
Since then, Apple store has dominated the personal computer market through innovative products such as the Power Mac and Macintosh, but encountered marketing problems in the 90s. Through Steve Jobs, the firm seeded innovative technologies that led to the introduction of new products such as the iPhone, iPad and iTune music store.
The company became the new market leader in consumer electronics with the latest success coming from a range of products including the iPod Touch, iTunes, the iPhone, and the iPad (Apple Inc., 2011). Presently, the company is the global leader in technology with revenue of $60 billion after overtaking Microsoft in terms of market capitalization in 2010.
Sony was founded as a telecommunication engineering company by Akio, Masaru and Tamon in 1946 (Dogruer et al, 2001, p.4). The firm immediately adopted transistor technology to produce radios, home video recorders and microphones. Due to pressures from competition, Sony diversified beyond consumer electronics and started producing computer chips and computer peripherals. Later, the company entered the gaming machines after Nintendo became very successful in the industry.
Due to rapid growth through mergers, Sony expanded to other major markets for consumer electronics such as Europe and America. So far, the company has focused on consumer electronics and in particular televisions, digital cameras and game machines. The company is also a major producer of personal computers and computer microchips.
Product overview
There are four major product segments that defines Sony’s portfolio. They include electronics, games, computers and pictures (Tang, Misra & Shanholt, 2012, pp.16-18). The electronic product line consists of products like audio electronics, digital cameras, televisions and speakers.
In this line, advanced technologies like Blu-ray and LCD technologies are the key differentiating factors. The games product line consists solely of the Play stations which are differentiated through enhanced technology that allow for superior graphics and increased computation power. The pictures category involves movies while the computer segment includes PCs, computer peripherals and computer microchips.
Apple’s product and services segments involve a wide portfolio of Smartphone, personal computers, music store, book leaders and other applications. The key products and services include iPhone, iPad, iPod, Mac, software applications, televisions, iCloud, iOS and Mac OS (operating systems) as well as a variety of services, accessories and support services (USSEC, 2011, p.1).
In addition, Apple tenders moderator products for instance iPhones, iPads, iPods, Mac and attuned merchandises as well as PC appliances, imprinter, amplifiers, storage devises and supercomputer peripherals. The firm also offers digital content and applications via the App Store, iBook Store, iTune Store and Mac App Store.
Strategic marketing
Strategic marketing is a process that allows a business to focus its limited resources on the greatest opportunities in order to achieve sustainable competitive advantages and thus increase sales (Baker, 2008). The focus of Sony strategy is to ensure that its products are of high quality and develop profitable and long-term loyalty with customers.
The corporate marketing strategy of the firm is to build awareness before launching a product. International market success depends on standardization/adaptation to local markets. Sonny standardized its products by manufacturing Japanese electronics and adapted local promotions campaigns to build awareness.
Apple uses Apple brand as the competitive strength in the highly competitive market such as the PC industry with its Macintosh computers and associated software. The product strategy is to develop innovative products in line with a ‘digital hub’ strategy such that the firm’s products work as digital hub for other devices (Apple Inc.). The branding approach puts emphasis on sentiments such that the brand is about thoughts, routine, novelty, enthusiasm, dreams, autonomy and desires.
Macro-environmental analysis
Rivalry between competitors
While an industry characterized by few large manufacturers and very expensive products hunts a niche audience, the evolution of personal computers has caused an explosion in the industry which currently includes dozens of companies pursuing millions of consumers across the globe.
Due to the use of electronic equipments in day to day lives, the equipments are becoming more of commodities (Sony Corporation, 2010). For most consumers, economy is more important than performance specifications. This has forced many manufacturers to pursue best-cost and low-cost provider strategies.
The companies in the middle range compete for consumers by offering various options at varying prices. The similarity of electronic products because of industry standard setting leads to competition in prices that squeeze margins and drive prices down. Moreover, technological development presents increased competition on the industry.
Electronic products are becoming more and more sophisticated, efficient with less energy consumption. To hasten the situation, industry leaders like Apple, Sony, Microsoft and Nintendo have always kept to this pace.
Supplier power
Suppliers have significant influence over the manufacturers of electronic equipments. While many standards in the industry are open and made by collaborative or independent bodies like IEE, manufacturers also depend on standards owned privately. Often, the technology requires entrance or must be licensed to a paid-membership group. Additionally, the virtual concentration of suppliers puts some pressure on competitors.
For personal computers, Sony outsources central processing units from Intel. Thus, incompatibility in design does not allow the company to switch to other suppliers. However, microchip manufacturers are not present in computer manufacturing business and hence rely on computer manufacturers for their business. As a result discounts are placed on exclusivity agreements and bulk purchasing thus lessening some pressure from suppliers.
Buyer power
As in all businesses, customers have the last say and apply considerable leverage over manufacturers. The various buyers with many but differing needs impact manufacturers of electronics directly since they must react and adapt by offering extensive product-lines.
The notable characteristic between power user looking for the ‘greatest and latest’ and average user needing a product which is ‘just good enough’ presents an obstacle to manufacturers focusing on tapping the many customers possible. Manufacturers benefit from the wide use and acceptance of electronic products causing high demand for the products. Brand loyalty and proprietary systems are used to maintain customers.
Threat of potential entrants
Many avenues through which new entrants can enter the electronic market exist; however several hindrances may prevent the entrance. The current market is characterized by well entrenched players who have significant brand loyalty and recognition including Sony, Microsoft, Apple, Samsung and LG among others (Sony Corporation, 2010).
Thus developing a successful brand in the presence of such players is difficult. They also keep costs down and dominate with economies of scale that cannot be achieved easily by a new entrant unless a substantial capital is invested. Despite these obstacles, new entrants may still come from newly instituted lean organizations which depend on third party OEM (original equipment manufacturers) for production. This trend is increasing in popularity bringing companies such as Acer Inc. into competition with industry giants.
Threat of substitutes
The technology sector has substantially grown with the introduction of alternatives such as televisions, game consoles, Smartphone, virtual music stores and personal computers. There are now feature-rich smart phones and PDAs in an average living room.
Such developments have resulted in consumers focusing their “technology money” away from computers, televisions, radios and game consoles. However, despite the focus it is not likely that smart phones will diminish the importance of other products significantly. The only thing that the substitutes have influenced is elimination of monopoly in the electronic market.
Micro-environmental analysis
Apple and Sony are leaders in the electronic industry but market their products in the same markets. The firms are probably influenced by the same micro-environmental factors. They are expected to respond to the dynamics of both individualistic cultures of the west and collective cultures of the east.
This is probably achieved by creating organizational cultures that support both team work and individual efforts in the respective areas of operations. As the firms become increasingly global, Du Plessis and Beaver (2008) insist on the need to develop an effective International Human Resource Management (IHRM) in order to respond to labor sourcing and expatriation issues.
Consumers are also becoming more sensitive to prices and quality hence compelling Apple and Sony to be more responsive through effective quality control systems. Involvement in Corporate Social Responsibility (CSR) is also a strategy that Apple and Sony are using to improve their relationship with consumers.
SWOT analysis
Sony SWOT analysis
Apple SWOT analysis
Market segmentation
Sony Corporation segments its market in three divisions namely the consumer, professional and devices segment, networked products and services segment and financial services segment. Televisions lead in the first segments while game and PCs lead in the second segment.
Sony Corporation has also segmented its markets according to geographic regions. These regions include Europe, America, Asian-Pacific, Africa and Latin America. For the Asian-Pacific, European and American markets, the firm markets its major product categories including household electronics, computer hardware and software, computer microchips, mobile phones and gaming consoles. For the rest of the markets, the firm markets only its household electronic goods and computer hardware.
For several years, Apple has identified four major segments within its customer profile including business, education, creative professionals and high-end consumers. At the turn of the millennium, the company’s core product strengths were in the product segments of Computer Aided Design (CAD) and Desktop Publishing (DTP) (Ashcroft, 2011, p.5).
By the end of 2010, the situation turned upside down. The core product strengths were now the Personal computers, Smartphone, book readers, iTune store and applications. Market segments widened to include households, celebrities and sports fanatics. All these segments are continuously pursuing whatever information technology offers to their careers and lifestyles.
Target markets
Apple store sell its products to a wider range of markets and across many parts of the world. The company uses retail stores and online sites, to offer its goods and third party goods to the consumer and business segments. Apple has invested in programs that promote reseller sales such as the ASCP which focuses on certain reseller locations and APRP which provide expertise in products and customer service (USSEC, 2009).
In addition, the company offers its computer products in the government, business and creative markets within its locations. The markets are particularly crucial to third party developers of computer applications and hardware that are compatible with Apple’s computers.
The superior expansion and computing performance of Apple products are the major attractions for consumers within this market. Moreover, Apple offers its computer products to customers in scientific market as well as information technology markets.
Positioning strategy
Through product differentiation, Sony is positioned as the most convenient, quality-focused, value-added and technological producer of consumer electronics goods. The focus of Sony strategy is to ensure that its products are of high quality and develop profitable and long-term loyalty with customers.
Indeed, this positioning strategy has enabled the company to sell its products at premium prices even in primitive markets in Africa. The corporate marketing strategy of Sony is to build awareness before launching a product. International market success depends on adaptation to local markets. Sonny standardized its products by manufacturing Japanese electronics and adapted local promotions campaigns to build awareness.
The success of Apple Company has been credited to its effort in innovating new products. In fact, while many companies experienced decreased revenues during the depression period, Apple continued to increase its revenues throughout. Up to date, the company has invested generously in innovative development of its products.
Apple has continually put innovation ahead of all its plans and strategies. This can be witnessed in the current wave of touch screen technology in most of its devices. They have come up with not only iPhones, iPods and iPads with touch screens, but laptops with no keyboards (Apple Inc.). These laptops use a very unique technology in which a user can complete computer tasks like printing or typing with just a few spins of a disc.
However, this is not the only new innovation; just recently the company released the world thinnest laptop challenging all of its competitors. The Macbook Air is so thin that it can fit inside an envelope. For the last several years, the company has surprised the market with new innovations starting from its iPhone, iPad, ipod, laptops, desktops, iTunes, and the recent Macbook. This is a clear indication that innovation is the core positioning strategy for Apple.
Recommendation
The changing consumer trends and market shifts are requiring many companies to institute strategies that will respond to these dynamics and ensure that the firms achieve competitive advantages. Among the trickiest industry is the electronic industry which is characterized by big firms that are swift in responding to the marketing changes.
In this industry, Apple Inc. and Sony Corporation can only adopt the best-cost strategy to increase their competitive advantages since consumers are increasingly becoming price sensitive and many competitors are pursuing low-cost strategies. This strategy demands the integration of developmental and marketing plans which focus on the best value while reducing the prices of products.
Within this strategy, the firms should retool their products to attract a wider range of consumer segments while maintaining low prices for the majority low income earners. Avoiding unexpected risks such as those from natural calamities is important. Therefore, the firms should include stakeholders such as OEM partners to distribute the impacts caused by such calamities. But the best way for the companies to position themselves better in the marketplace is to stay ahead in terms of price and quality.
Reference List
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Baker, M 2008, The Strategic marketing plan. Cambridge Strategic Publications Limited, London.
Bardhan, A, Jaffee, D & Kroll C 2004, Globalization and a high-tech economy: California, the United States and beyond. Springer, New York.
Dogruer, B, Ferzly, M, Nguyen, H, Roach, D & Ward, R 2001, Report on Sony Corporation. Web.
Du Plessis, A J & Beaver, B 2008, “The changing role of human resource managers for international assignments.” International Review of Business Research Papers, vol.4 no.5, pp.166-181.
Sony Corporation 2010, Annual Report 2009. Web.
Tang, H, Misra, R & Shanholt, E 2012, Sony Corporation. Web.
USSEC 2009, Form 10-K: Apple Inc. Web.
USSEC 2011, Form 10-K. Web.