New technologies today are emerging regularly and are usually the result of years of research. In the past ten years only 3 major innovations have made a marked impact globally, they are the flat screen, MP3 and the GPS.
The Blu-Ray Disc of Sony BD is the latest innovation in Sony's incremental cycle. This is why observers have long feared that the Blu-Ray is unfavorable as the market already has an installed base. Innovation is regarded as too incremental to get people or consumers to change their equipment.
Sony must make their users aware of the Blu-Ray, with its value added service as compared to the DVD that is already installed in consumers homes. Since the offer is above the market demand the company had to take more risks and put forward the asset quality of High Definition. This brought in more space per disk to make it interesting to the general public.
To put into effect its innovation, the company had to implement a strategy of alliance to become a leader in its market. The war between the HD DVD and Blu-Ray has largely contributed to the normalization of the disc from Sony. A horizontal alliance was necessary in obtaining the optimal size to win over the market.
The alliance is not limited to this particular sector alone and member firms continue competing in other areas. This seems to have a negative impact on the investment by Sony, already undermined by an exploitation phase that can be shortened in the near future with the arrival of new innovations in the market.
Initially there was a hard fought battle for a successor to DVD, Toshiba's HD DVD and Sony's Blu-Ray. Both these innovations are the result of extensive research and heavy investment.
Both companies chose to form an alliance in order to win over their rival at the earliest. With millions at stake they had in perspective three core types of buyers: the ultimate consumers, buyers of license or companies and majors.
The combination of Warner Bros. in BD which till then has remained neutral helped Sony gain 70% of the market automatically becoming the leader in the market. In February 2008, Toshiba announced its withdrawal leaving the market open to Sony.
Sony expanded its product singly without taking the risks of sharing its R&D with other firms in the sector. This has certainly helped to reduce the large sums of money involved.
Sony has expanded its product alone without taking the risks of shaisharing R & D with other firms in the sector, which would have certainly helped to reduce the sums involved.
Tags: Sony, features of Blu-Ray Disc, strategy used to manufacture Blu-Ray
[...] But in today's situation, one might want to override that fear and distrust of opportunism because business-to-business confidence is far more beneficial for companies. Conclusion At the moment, it is (due to the current financial crisis) it is difficult to assess the profitability of a product. The market for technology products has experienced its first decline in ten years. But we can still assume that the efforts made by Sony may not be sufficient irrespective of the limits stated above. In the race for establishing a standard, the strategy of making alliances employed by Sony was a major influencer. [...]
[...] The firm needs to overcome these barriers in order to impose the Blu-ray Disc as a stable model. Pai-Ling Yin, assistant professor of strategy at MIT's Sloan School of Management, believes that both HD DVDs and Blue-ray Discs were losers in this battle .The exploration phase was time consuming and expensive and the profitable use of this investment will require a long period of operation. In terms of its technology, it impossible to outperform the BD discs. The question that arises is whether the format is going to last long enough in the market to be profitable. [...]
[...] EasyBourse. Com Source: Moreau - Afplane F. (2003), The extended enterprise: new forms of organization, Ed Insep Consulting Source: www. Bbc. [...]
[...] bbc .fr/info/hightec/300326024-sony- rattrape-par-la-crise.htm (10/03/09) • (10/03/09) Howard Stringer: "One day my enemy is my enemy, my enemy next day is my friend" Appendix: History The company Sony was founded in the postwar period by two Japanese engineers, Masaru Ibuka and Akio Morita. In 1946, the company was a small store of electrical products and today, it has grown globally and is a giant in the electronics industry. The company has made the miniaturization its key area of expertise. It has developed, throughout its life, products that have experienced unparalleled success as. For example: the Walkman. Sony has taken advantage of Japanese management strategies to create an effective workforce that is loyal to the company. [...]
[...] The choice of an alliance was made mainly because of the size of Sony which was insufficient or small. The Blu-ray Disc Association allows for a consistent flow between the different members and coordinates that are involved in deciding the fate of the innovation. The association enables them to speak with one voice. The association has developed an implicit goal i.e. BD is firmly established as the standard in its industry. To achieve this, they had to create a horizontal alliance or ‘inbreeding', which would enable its members to achieve a critical majority. [...]
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