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Porter's Five Forces Analysis Of Sony

901 Words4 Pages

Five forces allow industries to identify their external environment. We use Porter’s Five Forces to conduct an industry and competition analysis for Sony. We find that Sony faces high internal rivalry, high buyer power, low supplier power, and high threat from substitutes. The electronics and game industry has high barriers to entry. We are going to discuss each as follows:
Internal Rivalry
Sony operates in several industries, and thus faces intense competition across sectors. Sony’s main market segments include Electronics, Game, Pictures, Financial Services, wireless Mobile Mirroring/ Paring, and Joint Ventures. While no other business deals with all five segments, the most prevalent competitors in these industries are Samsung, Apple, Canon, Microsoft and LG Electronics. Sony has internal rivalry is greatest because all competitors are roughly in equal size, growth is slow, and exit barrier are so high. (www.academia.edu/8037203/Sony, 2012)
Threat of New Entry
Entry divides the market demand amongst more sellers and decreases each …show more content…

Buyers in these industries have substantial power. A potential buyer’s ability to gain information is very easy with online reviews of products. With this information, a buyer can switch from one brand to another without high switching or transaction costs. Especially if consumers buy online, which is becoming increasingly popular, transaction costs practically drop to zero. While the size of each individual order may not be substantial, price sensitivity is high, as buyers have the ability to influence companies by choosing a better-priced substitute. Sony tries to separate their product with better technology and graphics, but in general, products in these industries are fairly undifferentiated. This difficulty in differentiation leaves price elasticity high and buyer power

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