Disruptive Technology Case study of Sony Company

Document Type:Thesis

Subject Area:Business

Document 1

DT occurs because of unestablished, non-mainstream businesses launching attacks on the commodities or market segment where established competitors such multinational corporations cannot target. Most of the business facing challenges as a result of disruptive technologies are the ones that do not acknowledge the potential and opportunity of such technologies, instead prefer to concentrate on the prevailing issues concerning their consumers. Further, most of the established firms view DT as unattractive and not in a position to offer “meaningful contribution to corporate growth” (Bower & Christensen, 1995). Therefore, such businesses will concentrate on investing in sustainable technologies which its present consumers value in the market as well as the continued provision of financial and managerial incentives that are technologically proven and have market acceptance.

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Disruptive business will be aiming at enhancing its margin and thus venture in innovation to attract another level of consumer needs. It is from 1999 to 2003 that Sony music products experienced a big blow when its market share reduced by almost 2% and the company operated on loss in 2002 as shown in the figure below (Sony Corporation, 2005). Assuming that the transformation of an organization is as a result of its operational management, most of the music downfall witnessed in Sony company was attributed to the “overly independent” mode of governance employed by the former Chief Executive Officer. His administration may have resulted in obstruction of the company’s process of innovation by refusing to consult the other top management officials in making decisions on operations of the division.

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His decision failed cost reduction to reducing sales of CDs and improving the relationship with recording acts. The challenges facing Sony Company never ended because a keen observer may recognize the declining power of its products in the market. Sony Company has not reevaluated its strategy despite the emerging technological advancements. It was from the 1950s when Sony was termed as a disruptive technology in the electronics industry when the company concentrated on producing hardware products that came with attractive sustaining innovations that made it succeed in the national and international market. However, as Sony focused on selling its hardware, consumer electronics started becoming commoditized because of different reasons. First, was the penetration of low-cost producers from countries like China and Korea who brought low-quality electronics but at reduced prices.

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Also, the industry started changing from hardware to software manufacturing to better services to the consumers (Steinlage, 2018). The underlying circumstance that made the company not to shift its technology to beat emerging disruptive technologies are not well known, but the outcome is undeniable. Moving forward, the company should consider its success in the gaming platform and the created value to its consumers through software and experience resulting from networking as a potential strategy for its extinction. Its competitiveness remains valid both nationally and internationally provided the company values presence of disrupting technologies such as Apple and Samsung corporations. Such companies keep pace with the changes in technology and innovation of their current products to suit consumer demands and present market standards (CIMA, 2009).

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