The background of this issue is that Sony Pictures encountered difficulties when releasing their “The Interview,” featuring stories of several North Korean officials. A hacker group, “Guardians of Peace,” stole terabytes of information, including the company’s unreleased products and the personal information of their employees. The issues discussed in this case are economic and legal difficulties, which Sony Pictures encountered as a result of threats and hacking. The main problem was the threat that an attack might happen if the movie is released, which prompted cinema theatres to cancel the screenings of this film. Sony had to find an appropriate way to respond to these threats to avoid legal troubles. Moreover, the breach of data security that results in a risk of losing money since the unreleased movies can be leaked by hackers.
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For the analysis, the generic strategies framework will be used to examine the issues and solutions. Sony’s CEO would have to evaluate the risk of releasing the film without changes and compare the outcomes that this move would have in regards to the company’s reputation with the overall strategic vision. According to this strategy, there are three main elements of a business strategy – cost, differentiation, and scope. Arguably, Sony Pictures developed a unique product, a film that would gain public attention because of its controversial nature. Focus on costs requires minimization of spendings, which in the case of Sony would mean canceling the film’s screening. This is because if a potential attack would occur, the company could be held responsible for proceeding with the release despite the threats. In addition, because many theatres refused to screen this movie, and Sony would be unable to gain a profit, while still having to spend money on promoting the film and ensuring safe screenings. Sony could also lower the prices to attract more people to the film’s screening.
Next, differentiation focus means pursuing a strategy that would allow for Sony’s differentiation within the United States market. This would require persuading the cinema theatres to proceed with the release and ignoring the data breach issues. However, arguably, the CEOs of cinema theatre chains would refuse to cooperate because of the risk of undergoing an attack that can damage property and result in victims. In addition, Sony would have to invest in altering its data protection systems to mitigate the risks of breaches in the future. In general, the differentiation strategy requires Sony Pictures to focus on effectiveness by offering new products and improving efficiency. Finally, the focus strategy requires choosing a niche, and in this case, “The Interview” highlighted issues of modern-day dictatorship, which is a controversial topic.
Recommendations for the short term would include responding to the possible concerns of Sony’s clients, who wanted to see the film and were scared by the threats, by the cost focus framework. Medium-term recommendations are connected to managing damage from the data breach and assessing the possible ways of minimizing the economic impact of losing the unreleased materials. The long-term recommendations would include better data control for Sony, which would eliminate the possibility of further data breaches. Besides, the company should develop and implement a strategy for evaluating risks and responding to threats that arise as a result of releasing controversial fils for the future. This can include cooperation with the government agencies, as the case study mentioned that the FBI was involved in the investigation.