Businessmodel of Sony

Customer Segments

Sony’s principal market is the general population, providing consumer focused electronic products such as mobile phones, gaming consoles and networks, televisions, Blu-ray players and cameras. These products are aimed principally at affluent consumers, families, young professionals and early adopters.

The Company also provides more specialised products and services that serve more specific audiences. This includes the sale of semiconductors and batteries to industrial clients, the sale of original programming content to broadcast networks, the provision of financial to individuals and corporations, the provision of label and music publishing services to artists and composers, the sale of imaging equipment to the medical sector, and the sale of micro-batteries and computer hardware to professionals and businesses.

Value Propositions

Within the electronic and electrical goods market, Sony is a brand associated with quality. It is one of the world’s most well-known and respected brands, having provided reliable and efficient products for years.

The Company is also associated with innovation, providing additional functionality to existing products and developing new technologies. Sony’s products are also accessible and easy to use, allowing consumers to use advanced technologies with no need for technical expertise.

The Company also provides value to customers of its music publishing and financial services businesses through its expertise and experience in the fields.

Channels

Sony’s electronic products can be purchased by consumers through its regional online stores, such as can be found at http://store.sony.com.co for Colombia and https://store.sony.com.my for Malaysia.

The Company also operates a global network of sales outlets, and sells products additionally through a number of third-party distributors, authorised resellers and dealers and online retailers.

Sony music and entertainment properties can be consumed through various television networks, cinema chains and music streaming services, while the Company’s banking and financial services can be obtained online.

Industrial and professional products can be acquired from Sony directly or from authorised distributors.

Customer Relationships

Sony’s consumer electronics products can be purchased online with no interaction with the Company’s sales personnel, the Company’ gaming network also provides a self-service online marketplace where users can purchase content and alter subscriptions independently.

Products can also be bought through a network of Sony retail outlets, authorised dealers and resellers, where customers can receive a greater degree of personal care from sales representatives.

The Company’s more specialised electronic and electrical products can be acquired by contacting the Company directly or through third-party distributors.

All Sony customers have access to technical support resources through the Company’s various websites, which include user guides, FAQs and tutorials, and can receive more personalised assistance by contacting the Company directly. Sony’s services within the music, television and financial services sectors require direct interaction with the Company. Sony also interacts with customers through its social media accounts.

Key Activities

Sony is primarily engaged in the development, design, manufacture and sale of electronic and electrical products for the consumer, professional and industrial customers. This includes televisions, cameras, mobile phones, semiconductors, computers, and batteries, as well as games consoles for which it operates an online network. Sony operates manufacturing facilities across Asia and markets products worldwide through its own network of retail outlets, online retailers, third-party distributors and authorised resellers.

The Company also produces, acquires and distributes motion pictures and original television programming, including through its own broadcast network, and is engaged in the development, production, manufacture, and distribution of recorded music and the management and licensing of music and lyrics. Sony also provides a range financial services through subsidiaries of Sony Financial Holdings, including life and non-life insurance and banking operations.

Key Partners

As a diversified group of companies, Sony manages a varied network of partners, including software and hardware resellers, technology partners, affiliate marketers, suppliers, integration partners, education partners, original equipment manufacturers, software developers, banks and financial service providers, and broadcast networks.

The Company has numerous tie-ups. For example, as part of its gaming business Sony has partnered with Spotify to provide a music streaming service for PlayStation 4 consoles, and with Electronic Arts and Lucas Film to create a virtual reality version of the most recent Star Wars game.

Sony has also partnered with television networks – including MTV, Nickelodeon and Comedy Central – as part of its upcoming cloud-based television streaming platform, has worked with ESPN to launch two sports channels, and has collaborated with 3D Robotics to develop a drone that can map the world in three dimensions.

Key Resources

Sony’s key resources are its products and proprietary technologies, its manufacturing facilities, its sales and distribution networks, its online platforms and IT infrastructure, and its personnel.

The Company has numerous patent applications filed with the US Patent and Trademark Office, including applications entitled ‘Television receiver’, ‘Communication device and detection method’, ‘Micro flow channel chip for flow cytometer’, and ‘Vibration sensor attachment’.

Cost Structure

Sony incurs costs in relation to research and development operations, physical manufacturing activities, production of software and original content, marketing and advertising, maintenance of IT infrastructure, and retention of personnel.

The Company operates manufacturing facilities, a network of sales outlets and a number of regional offices that accrue fixed operating costs.

Revenue Streams

Sony is a diversified, multinational conglomerate and one of the largest companies in the world by revenue, as such it has a variety of revenue streams. In the year ending 31st March 2016 the Company recorded an annual revenue of JPY 8.1 trillion (approximately $71.7 billion).

Sony generates revenue through its eight principal business divisions: Mobile Communications, comprising the manufacture and sale of mobile phones and personal computers; Game and Network Services, comprising the development and sale of gaming software and hardware, and the operation of subscription-based online networks; Imaging Products and Solutions, comprising the manufacture and sale of digital cameras, video cameras and interchangeable single-lens cameras, as well as broadcast and professional-use products; Home Entertainment and Sound, comprising the manufacture and sale of televisions, home audio systems, Blu-ray players and recorders, and memory-based portable audio devices. Devices, comprising the production and sale of semiconductors, image sensors, batteries and data recording systems; Pictures, comprising motion picture and television broadcast production and distribution operations under Sony Pictures Entertainment; Music, comprising music publishing and label services under Sony Music Entertainment, Sony Music Entertainment (Japan) and Sony/ATV Music Publishing; and Financial Services, comprising the activities of Sony Financial Holdings and subsidiaries, such as Sony Life Insurance and Sony Bank.

For the year ending 31st March 2016, Sony’s largest business segment was its Game and Network Services Division, which contributed $13.7 billion to the Company’s total annual revenue. Home Entertainment and Sound contributed $10.3 billion, while Mobile, Financial Services, Pictures and Devices all contributed between $8.3 billion and $10 billion. The Imaging and Music divisions respectively accounted for $6.3 billion and $5.5 billion of Sony’s total annual revenue.