Choice Between Market Share and BrandFor Sony TVs, a New Downscale Front
by Kenji Hall who is BusinessWeek's technology correspondent in Tokyo on May 15th, 2008
Owing to economic downturn and stiff competition in their industry, Sony has begun to selling its models through US mass merchandise chain Wal-Mart, and electronic-specialty stores like Best Buy and Circuit City. Just a few years ago, Sony avoided selling their products at a discount stores or Wal-Mart. As a result, Sony lost out to Samsung, LG and Philips. The product line also became entry level model from premium model. Market researchers expect that in the long term those movements will hurt Sony’s premium image.
Due to all its effort, the volume Sony sold rose 8.7%. Despite of its sales growth, the revenues they made was proved flat. It reflects a harsh reality in the TV business.
My opinion
I agree on how Sony executives decided. These days, the competition occurring in TV industry is far beyond the description. Not only domestic competitors, Sharp, Panasonic but also global competitors like Samsung, LG, Philips are struggling to win the competition. To play in this environment, Sony didn’t have many options but joining the bargaining race.
One interesting thing about this article is that author
contrasted Sony’s strategy with Toyota’s premium line, Lexus. However, I wish he brought better model to contrast. TV and automobile is too different things to directly contrast. TV is something to put in our house and enjoy using for customers by themselves while the car is something shown to other people and often people judge people by their car. If they have to choose one of items that they have to cut their budget, it would be the TV. In other words, people seem to be sensitive about price for a TV. Therefore in this economic downturn, people who are involved in TV industry should catch consumer’s purchasing capability faster and react faster than the people who work in car industry do.In addition, the portion that TV takes in our life is also decreasing because of excessive use of internet and widespread TV’s alternatives like PMP (Portable Multimedia Player), DMB (Digital Media Broadcasting). However, car business is still firmly secured. Alternatives of car like private aircraft, motorbike or just bicycle are too much different means of transportation from what people used to. Car is relatively very safe from those substitutes.
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