This website uses cookies to ensure you have the best experience. Learn more

Sony And The Yen Essay

639 words - 3 pages

This case primarily talks about the fluctuation of the Yen and U.S. Dollar over time and its impact on the global market place. It shows us the significant impact that foreign currency markets can have an effect on well diversified organizations such as Sony.

In their early years, Sony had the luxury operating in a currency that was weak against the dollar. Since the yen was so cheap, Japanese Foreign Exchange saw export levels extremely high and growing rapidly. Japanese Foreign Exchange policies favored organizations such as Sony which encouraged them to continue to expand in their export markets. First Endaka (High Yen) in 1986 became 150 yen against dollar. This led to serious problems for export companies and a potential pain for entire Japanese economy which was very dependent on international trade. Strong yen was due to strong Japanese economy, large trade surplus, and large foreign-exchange reserves in the world. However, ...view middle of the document...

Sony will lose market share to other Asian companies because of the price. The way to remedy this would be to sell more and improve profit margins. The one positive is that products that are imported into Japan for manufacturing are cheaper. This is also true for products that are manufactured outside of Japan. This will reduce the costs and improve the margins.

Sony’s biggest problem is pressure from other companies that have increased manufacturing outside Japan. Toshiba increased the manufacturing of its products outside Japan in comparison to 1995 with an increase from 17% to 30%. As well as South Korean companies such as Samsung and LG. They started to move plants oversea to produce cheaper products that also increased in quality and innovation. Sony was finding it difficult to keep a premium in the market. By building up plants offshore, especially in China, local competitors as such as Toshiba and Panasonic improved their cost advantage enough to reduce their exposure to a strong yen. Sony's production facilities are located far from its customer base, preventing them from benefiting the way other companies are.

Approximately 60% of the annual production in Japan must be distributed to other regions. Sony setting up plants offshore would lower their costs and give Sony a competitive advantage over its competitors such as Toshiba and Panasonic. Sony should also target Brazil, Russia, India and China for future growth. Since the earthquake and tsunami destroyed a number of their plants, their supply chains were disrupted and they had a dramatic dip in their domestic demand. The purchasing power of the yen rises as it strengthens compared to other currencies. Everything Sony imports into Japan or outside of Japan for its manufacturing is cheaper. Therefore, they can reduce more in the cost of production. Sony should also buy more from suppliers in other countries not just in Asia but also wherever they can receive cheaper supplies.

Sony has been ranked among the best of the consumer electronic market. If Sony take the right steps and implements the options provided, they will be moving towards securing their position in the global marketplace.

Other Papers Like Sony and the Yen

Collaborative Marketing Plan Essay

4045 words - 17 pages to use. 2. Company Description Sony Corporation had humble beginnings in May of 1946 as Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Company) which was also commonly referred to as Totsuko. Established in Nihonbashi, Tokyo with start-up capital of $530 and 8 employees, Totsuko was founded by Masaru Ibuka in an electronics shop in a bomb-damaged department store building. Sony Corporation is one of the leading manufacturers of

Csr Report

3929 words - 16 pages so as to ensure growth, Sony Global (2012). In the fiscal year 2011, the operating results more so in the electronics field, were adversely affected by the Great East Japan Earthquake as well as the Thailand floods of 2011. The situation was even more escalated by the economic crisis that saw so many currencies go down and this in turn reflected to low costs. The company recorded an operation loss of up to 67.3 billion yen in comparison

Marketing Mix Sony

951 words - 4 pages Marketing Strategies Segmentation Targeting and Positioning (STP) Sonja’s part Marketing Mix (4Ps) Product Firstly, product line extensions which Sony products supplement an existing product line with new features of Sony Smartwatch 2. Product line extensions allow the firm to keep its products attractive and exciting with minimal development costs and risk of market failure (Ferrell & Hartline, 2011). For example, Sony has introduced

Haha

445 words - 2 pages The Japanese economy unexpectedly shrank last quarter as a hike in the sales tax in Q2 continued to weigh on economic activity. As we have stated on numerous occasions, the lack of activity at the ground level in Japan and the failure of a weakening yen to significantly boost exports is killing economic activity. The yen initially weakened on the back of Japan’s all-important GDP figures as the Nikkei rallied, before Japanese equities began to

Sony Internal Analysis

748 words - 3 pages Division: Mobile Products & Communications Overview Sony Ericsson (Sony Mobile) is a joint venture owned equally by the telecommunications leader Ericsson and Sony corporation- the consumer electronics powerhouse. It was founded on October 1, 1987 as a joint venture between Sony and the Swedish telecommunications equipment company Ericsson, under the name Sony Ericsson. (Wikimedia) VRIO Framework As the fourth-large smartphone

Technology and Marketing Management of Sony Corporation

1714 words - 7 pages Technology and Marketing Management of Sony Corporation Company Description Sony Corporation is a multinational corporation and it is one of the world's largest media

International Business Case 10

530 words - 3 pages $17,365,824 | 3) Because Blades generates net inflows in Thai baht but net outflows denominated in Japanese yen the increased correlations between the Japanese yen and the Thai baht will reduce Blades’ level of transaction exposure if does not sign the agreement with the British firm but it continues its current importing and exporting to Asia. 4) I think that by importing components from Japan the transaction exposure will not be reduced

Sony Ps4 Strategic Management

4173 words - 17 pages production and sale price are reasonably aligned. In light of the weakening yen, Sony will also be offsetting production costs by focusing on PS4 sales in North America and Europe (Rob, 2013). Doing their best to remain on the technological ball, Sony Computer entertainment acquired Gaikai, a cloud-based gaming company (Sharif, 2012). As cloud-computing becomes more popular and its capabilities are better explored, physical consoles may be left in

Teamwork in Production and Operation Management

1453 words - 6 pages Sony Corporation is a multinational company whose headquarters are located in Tokyo, Japan. It is one of the world’s biggest media company with revenue of about US$40 billion(2011) and branches worldwide with over 200,000 employees. It is one of the largest manufacturers of video game consoles, electronics, communications, video and information technology products products. Its products are both for professional and consumer markets. The name

Management Business

1536 words - 7 pages detailed profiles of their company and each competitor in the market, focusing especially on their strengths , weaknesses , opportunities and threats.Now,I conduct a SWOT analysis of Sony Shockwave, include four factors : strength factors, weakness factors,opportunity factors and threat factors. One of Sony ‘s greatest strengths is new products with high technology,such as Blu-Ray disc, helps Sony win the war to be the next generation of DVD

Sony

368 words - 2 pages Miss: Winpicha Wilairat ID: 577-1013 MS6405 Strategic Management Assignment 2 2.1 What is the external environment scanning that Sony (TV division only) is misinterpreted on analysis? External environment scanning of an organization comprises social, economic, technological and regulatory forces. For Sony electronics and elaborates are the key factors and trends that impact the electronics industry. The external environment

Related Essays

The Historical Movement Of The Yen And Dollar Exchange Rates

1529 words - 7 pages The Historical Movement of the Yen and Dollar Exchange Rates Johan Floyd Omoso Boles 173812 International Christian University International Finance Heather A. Montgomery Abstract: This study finds the purchasing power parity (PPP) model of exchange rates to explain movements in the yen-dollar exchange rate over the long run of twenty two years. The results show that this theory does not necessarily provide a satisfactory explanation

Benefits And Drivers Proposal Essay

888 words - 4 pages exciting new digital entertainment experiences for consumers by bringing together cutting-edge products with latest generation content and services” (Sony, n.d.). Sony Corporation was created May 7, 1946 by Masaru Ibuka and Akio Morita. The company was established with a capital of 190,000 yen, which is about $ 1,600. The name of the company was originally "Tokyo Telecommunications Engineering Corporation". In 1958 the company changed its name

Assignment 4: Internet Technology, Marketing, And Security

1305 words - 6 pages products that it sells are televisions, digital imaging, audio and video players, personal computers, semiconductors, electrical components, professional solutions and medical equipment. The major offices and research centers for Sony Corp. are Tokyo, Kanagawa, and Miyagi, Japan. The latest head count was 162,700 people. Finally, the consolidated sales and operating revenue for 2011 was 6,493,200 million yen (Sony, 2011). The corporation also has

Case Study –

5321 words - 22 pages perception favorably towards its product or services so that consumer and organizational objectives are attained, i.e. marketing mix is a model of crafting and implementing marketing strategy. In this assignment, I will discuss the major marketing mix variables as classified by Prof. E. Jerome McCarthy which are: i. Product ii. Price iii. Place (Distribution) iv. Promotion. Throughout the assignment I will prefer to use my reference to Sony