MARKETING

Solved Assignment
Level: MSc/MBA

Copyright: Dr K S Sukon, Director-General Open University of

Mauritius
This document is meant to be used as a guideline for writing assignments. It is neither the ideal solution
for the assignment question nor the official format for submitting such work.
The content of this document should not be modified, copied, distributed, framed, reproduced,
republished, downloaded, scraped, displayed, posted, transmitted, submitted as solution, or sold in any
form or by any means, in whole or in part, without prior written permission from Open University of
Mauritius.
Open University of Mauritius Assignment Submission Cover Page
Students Name (SURNAME-given name SUKON Kaviraj Sharma
e.g. ROBERTS Julia)
Note: If this is a group assignment, please
include the name of all the group members.
ID Number
Note: If this is a group assignment, please
include the id of all the group members.
Email address
Note: If this is a group assignment, please
include the address of all the group
members.
Programme, Year of Study and Semester
(e.g. MBA Year 2 Semester 1)
Module Name (e.g. Strategic
Management)
Title of assignment: Strategic Management in a Global Context
Assignment Are you taking this First-time Re-sit*
Number for the module for the first time
module (e.g. 1st, or is it a re-sit? (tick as
2nd,....) appropriate)
Name of Lecturer/tutor (SURNAME-
given name e.g. DION Celine)
Date assignment is due Date assignment is submitted
(e.g. 31. 12. 2013) (e.g. 31. 12. 2013)
Number of Words (If applicable)
Note. Table of contents and list of references will not be included in the word
count. The use of appendices is not permitted in assignments and students
should be aware that work submitted as an appendix in an assignment will not
count towards the
final mark of the assignment
Plagiarism: Plagiarism means to take and use another persons ideas and /or manner of expressing them and to pass these off as ones own by
failing to give appropriate acknowledgement, including the use of material from any source, staff, students or the internet, published and
unpublished works.
Collusion: Collusion means unauthorised collaboration on assessable written, oral or practical work with another person. Where there are
reasonable grounds for believing that intentional plagiarism or collusion has occurred, this will be reported to the Head of the Academic
Affairs Division, who may disallow the work concerned by prohibiting assessment or refer the matter to the Discipline Committee for a
hearing.
Learners Declaration:
I certify that I have not plagiarised the work of others or participated in unauthorised collaboration
when preparing this assignment. No part of this assignment has been previously submitted as part of
another unit/course. (In case assignment is being submitted by email, the learner must type his/her
name in upper-case letters).
Signature ........................................................................... Date:.............................................................
* Note: If this is a group assignment, please state the name and student ID of all the group members who are taking this
module as a re-sit:

In case you are submitting your assignment (whether hard or soft except Elearn) directly to your tutor, you MUST submit a
softcopy at assign@open.ac.mu in order to maintain a proper record of all assignments. In all cases you MUST keep a copy of
the assignment submitted and produce them whenever you are requested to do so in future.
Everyone submitting their assignment by email MUST write the following in the Subject row of the email: SURNAME,
given name, module name and assignment number (e.g. EVANS Tom Strategic Management 1).
Module: Marketing

Assignment Question:
The managing director of Sony, Japan has asked you to write to him with a report based
upon an assessment of why his Sony Walkman brand lost out to iPod in terms of its
position and level of demand in the marketplace. Your task is to provide analysis such as
SWOT and different position mapping or other techniques, which will lead to an
understanding of the reasons the iPod product has remained strong over the past few
years. Also, it is important that you should discuss the strategic implications of your
assessment in order to provide for recommendations as to the future direction of Sony
personal player products.

The report should not exceed 2000 words excluding references and appendices. It will be
fully referenced (utilising journal articles from EBSCO and Science Direct etc.) and
contain a bibliography in Harvard referencing style. Marks may be deducted for poorly-
presented scripts and awarded for well-presented diagrams, layout to report style and well
referenced points in the body of the text. Do not utilise descriptive lists when these do not
add anything to the discussion.

Learning Outcomes:

The learning outcomes are based upon the student or group indicating transferable report writing
skills, which rely on argued recommendations from the literature and real life situations. The
student group will need to provide evidence of knowledge of marketing in an applied context and
therefore gain from this. Intellectual and cognitive skills will be developed through the sifting and
applying of research studies to a practical situation whereby the application of concepts has to be
shown. The group /student will also need to discuss and evaluate different approaches and
therefore will develop practical skills.
Table to be filled by Tutors/Lecturers

Basis of Assessment Weighting Marks Markers

% Awarded comment/s

Presentation and Style 10

Evidence of Reading/Application
20
of Theory
Logical Development/Discussion
30
of the topic

Development of Insight
30

Conclusion
10
Total Marks

General comment and recommendation

Table of Contents

1. Introduction ..........................................................................................................................1

2. Sony Walkman Background and Evolution...........................................................................1

3. Digital Portable Player Market Analysis ................................................................................3

4. APPLEs IPod Product Analysis & Marketing Strategies ......................................................6

5. Sony Walkman SWOT Analysis ...........................................................................................8

6. Strategic Recommendations ................................................................................................9

7. Conclusion .........................................................................................................................10

8. References ........................................................................................................................11
1. Introduction

Innovation is the lifeblood of commerce and being at least one step ahead of competitors
is the route to survival (Strategic Direction, 2008, p. 21). The one time market leader, Sony
Walkman brand has nowadays become a mere market follower and is desperately trying to
catch up with its rival, Apple and its product line IPod.

This report provides an insight of the history and comparison of both brands. By analyzing
the market forces, the main success factors of the portable music player industry and using
the Swot technique, a strategic recommendation plan has been formulated to revitalize the
Sony brand.

2. Sony Walkman Background and Evolution

The first Sony Walkman was sold in Japan on July 1, 1979. This personal portable stereo
created an upheaval in the concept of audio packed technology, which eventually became
an icon of modern pop culture (Uggla and Verick, 2008). The most attractive feature of the
walkman was the availability of a personal stereo system, at anytime and anywhere. All the
barriers imposed by the heavy music systems, Ghetto Blasters vanished giving the user
the freedom to enjoy his/her music at his/her convenience.

However, in 1979, Sony did not imagine that despite its innovations ,as shown in Diagram 1,
22 years later it would have to face a tough competitor like IPod,.The Walkman line
broadened into several generations of products that played tapes, the radio, Compact Disks
(CD), Mini-Discs and eventually the digital portable music players.

1|P a ge
 1979: World First Portable Personal Stereos

1984: The world's first portable CD player.

1992: First MD Walkman mini-disc recorder.

1999: Memory Stick Walkman, supporting

2001: NetMD High Speed Music Transfer

2005: MP3 Walkman

Diagram 1: Sony Walkman Product Timeline (AKA Group, 2009)

Sony is well positioned in the music industry due to its major global record label Sony Music
Entertainment (Wikipedia, 2009). It distinguished itself from its competitors due to the shorter
downloading time of music from CD, its highly user-friendly software with big buttons, the
availability of USB port to ease plug and play, and longer battery charge time. However, instead
of using its features and position as assets to expand its services, Sony was more concerned to
prevent piracy and thus continued to impose the digital mini disc player as the successor of the
CD (Ivan, 2008). This shows the failure of Sony to understand the need of the mp3 market. As a
result, the door was left wide open for competitors to crop into its arena. Apple was one of the
first to seize this golden opportunity by providing the market with a new product, the iPod. It
exploited the situation rapidly and successfully secured its place as the leader in both the
market share and perception (Weisbein, 2001)

Sony eventually re-entered the digital portable player (DPP) market three years after Apples
IPod, however its product failed to attract new customers. In an attempt to counteract Apples
ITunes, Sony created its online Music Store Sony Connect, but once again its conflicts with
Sony Music Entertainment led to its closure (Pegoraro, 2004). Thus Sony finds its back
increasingly against the wall and has to invoke its basic instincts to fight and win in order to
thrive in this hypercompetitive world.

2|P a ge
 3. Digital Portable Player Market Analysis

Using Porters Five Forces model as shown in Diagram 2, an analysis of the degree of
competition in the Digital Portable Player Market (DPPM) industry was carried out. This analysis
provides an insight about the strength and weaknesses of the industry and can be used to
forecast possible threats and limitations that may affect it.

New Entrant
Weak

Suppliers
High Intense Buyers
Low Rivalry
Weak

Subtitutes
Average

Diagram 2: Porters Five Forces Model of the Digital Portable Player (AKA Group, 2009)

Internal Rivalry: Strong

The digital music player industry consists of about 100 companies (CNET, 2009) and the rivalry
among the current market competitors is high. Currently, Apples IPod is the market leader with
about 71 % of market share (Life beyond IPOD, 2008). However, there have been several new
players from current market competitors, for example, Microsoft, SanDisk, Creative labs and
Sony which have been able to gain market share by innovating and providing new players with
added features such as Wi-Fi, radio and Bluetooth. Diagram 3 on page 4 shows the market
share among portable digital music players.

3|P a ge
 Market Share

2%
12%
4% IPOD
SanDisk
11%
Zune
Creative Labs
71%
Other Brands

Diagram 3: Market share among portable digital music players (Group AKA, 2009)

According to Barney and Hesterly (2008), high levels of rivalry are indicated by such actions as
frequent introduction of new products by firms in an industry. Therefore, the digital music
industry remains a highly dynamic one with a high intensity of competition.

Threat of Entry: Weak

The digital music player market is one where there are high barriers to entry. Firstly, it is
practically impossible for new companies to achieve economies of scale, which are reaped
through mass production. Secondly, Apples reputation and strong position in the market act as
a barricade, deterring possible entrants. Other barriers would include digital rights management,
copyright issues as well as contracts with record companies and artists.

Threat of Substitute Product: Moderate

Although there is a number of credible substitute products namely CD players, Mini Disc, DVD
and radio, none of them pose a real threat to the industry because of their outdated nature.

However, the possible threat to the industry might come from the mobile phone and Portable
Digital Assistants industry

4|P a ge
Bargaining power of Suppliers: Low

As a result of globalization, outsourcing is now being done on a large scale and the digital music
industry is no exception. Many manufacturers outsource the production of products parts.
Moreover, the demand for digital music players is on the rise; therefore, the growth of the
market compelled many companies to produce their products in high volume in order to serve
markets need. Thus, suppliers lost bargaining power because large production forces
companies to order materials in high volume.

Bargaining power of Buyers: Very Low

Buyers power in this market is almost non-existent. Consumers do not have any control over
production volume. Furthermore, the wide range of product differentiation leaves consumers
with little power in price determination. The bargaining power of buyers is thus very low.

5|P a ge
 4. APPLEs IPod Product Analysis & Marketing Strategies

Know the enemy and know yourself, in a hundred battles you will never be defeated (Sun
Tzus 400 BC, quoted in Drummond and Ensor 2005, p.183). In Marketing, this can be
translated as competitive intelligence (CI) (Drummond &Ensor, 2005). Analyzing of Apples
product and marketing strategies provides an insight of the driving forces of the industry and at
the same time, it helps to identify the lacunas from which Sonys Walkman brand suffers from.
Diagram 3 below shows the main assets that Apples IPod have.

Broad
Distributio Apple's
ITunes
n Channel Economy
Effective
Advertising of scales

Brand, Positioned
Personality in Each
and Segment
Recognition
Simple Continous
Design and Innovation
User s
Interface

Stylish and Inspirational

Elegant Leader

Diagram 3: Apples IPod Assets (AKA Group, 2009)

Apples IPod entered the market on October 23rd 2001, that is, three years after the first
portable player was created by Saehan (Abel I, 2008). Apple vertically integrated the market by
identifying and solving the problems faced by market competitors at that time. The combinations
of software, hardware and design ingenuity created a stylish and elegant player with a user
friendly interface.

However, Apple did not rest on its laurels. As competition grew, it continued to innovate and
release new players with added features so as to stay ahead of competitors. By innovating and
adapting its product to the market, Apple was able to target the different segment of the portable

6|P a ge
music player industry as shown in diagram 4 below. Thus each one could afford an iPod
matching his/her means and requirement. Unfortunately most of Sonys products are
concentrated in the quadrant of up to $ 200 and a maximum storage capacity 16 GB (Sony
Store, 2009).

IPod Positioning
140
Classic
120
Storage Capacity/Gigabyte

100

80

60

Touch
40
Nano Touch
20 Nano Touch
Shuffle
Shuffle
0
0 100 200 300 400

Price/$ ( Apple Store,2009)

Diagram 4: Apple Product Positioning (AKA Group, 2009)

Moreover, by addressing the issue of illegal download through its music service ITunes, Apple
managed to provide the contents (songs) to the listeners at the great dismay of its competitors.
Till date, ITunes represents 80% of the market share of legally downloadable music (Ivan, 2008)
and is available to IPod customers only.

Another highly effective marketing strategy was to keep the exterior design almost exactly the
same for many years (Weisbein, 2008). In addition to that, Apples communication strategy
managed to grab the attention of customers via a broad range of creative advertisement and
very attractive names. By doing so, Apple was able to build up a strong brand image and
appreciation.

7|P a ge
Another marketing strategy adopted by Apple initially was to control its distribution channel by
carefully selecting stores to sell its IPod (Ivan, 2008). Thus, it managed to maintain high-quality
image, control over pricing and avoided discounting. Finally, as demand increased, Apple
expanded its distribution through mass merchandisers such as Wal Mart. Hence, it was able to
target a broader range of customers.

5. Sony Walkman SWOT Analysis

According to Kotler and Keller (2009), SWOT analysis is a way of monitoring the internal and
external marketing environment. Richard, Wilson, Colin (2005) noted that SWOT analysis is a
useful input to strategic marketing planning process. Diagram 5 shows the results of the SWOT
analysis of Sony.
Strength Weaknesses
Well established vertically integrated Lack of cooperation amongs business
organisation. unit ( sony music entertainment V/S
30 years experience in the portable portable music player unit).
Audio Player. Innefficient R&D.
World largest Music label. High reaction time to market changes
Market leader in the headphone. and adaptation.
Closure of sony connect music store.
Low market share compared to apple.
Succession problem .
Incompatibility of products.
Lac k of an inspirational leader .

Sony

Opportunities Threats
Emerging markets like asia. More innovative product from
Integration with other products e.G cars competitors.
players. Changing needs and taste.
New market segments. Current financial difficulties .
Online music service. Fast evolving technology reducing
product life cyle.
Entry of imitators.

Diagram 5: SWOT analysis of Sony (AKA Group, 2009)

8|P a ge
 6. Strategic Recommendations

Customer
Oriented,
Advertising &
Market
Development

Lower
Switching
Cost

Improve R&D

Diagram 6: Strategic Recommendation Plan (AKA Group, 2009)

Based on an analysis of the market forces, the main success factors of the portable music
player industry and the Swot analysis, a strategic recommendation plan has been elaborated to
revitalise the Walkman brand and reposition Sony in the DPPM. The recommendations are
summarized in Diagram 6 and comprises:

a) IMPROVING RESEARCH AND DEVELOPMENT ACTIVITIES.

The main driving force of the industry is innovation. The rapidly evolving technology render
products obsolete in short time. The Sony R&D main role is to ensure that the company never
lags behinds when it comes to give customers of every segment what they desire. Therefore the
rule of the game is to continuously innovate and ensure the production of new portable digital
players with unique design, attributes and more importantly simpler user interface. By
continuously modernising and ensuring a breadth of product line, Sony will eventually target a
broader base of customers and will surely regain its brand recognition of the glory days.

b) LOWERING SWITCHING COST

Sony has to pursue the concept of inter-operability. As a means to lure IPod users, Sony
should aim at reducing the high switching cost. One strategy that Sony could employ is to create
multi format players, which are compatible to both brands. By so doing ITunes users will be able
to play their downloaded songs on their Sony portable player.

9|P a ge
 c) CUSTOMER ORIENTED, ADVERTISING AND MARKET DEVELOPMENT

The focus of a company should be centered on achieving overall customer satisfaction in order
to be a market leader (Holden, 1997). Sonys main target should be to operate a customer
driven strategy, which incorporates both the tangible and intangible benefit. Sony should
differentiate itself from market competitors by providing added value intangible benefits such as
longer guarantee period and highly effective and efficient customer & after sale service.

Another strategy that Sony should adopt is to advertise more aggressively. It should strive to
develop appropriate and effective communication channels, thus ensuring that the message is
passed on to existing customers and to the maximum number of potential customers.

Moreover, with the predicted rate of growth (Lewis, 2008), there is plenty of market left to
conquer. Sony has to capitalize on the Asian markets where it originates and reposition itself in
the global market. However, it needs to provide a broad distribution channel to ensure
accessibility of its players to customer.

Finally, Sony should use its major assets that is the Sony Music Entertainment to create a
complementary integrative product. Broadly speaking, an online music store should be created,
which provides its contents to its portable digital players. Last but not the least, the online music
store should provide songs in multiple formats so as to target a broader range of customers and
especially IPod users.

7. Conclusion

Darwin introduced his ideas of variation, specialization and collaboration as tactics for survival in
a complex and uncertain environment (Verweire , K. & Van den berghe , L. (2004), Sonys
failure to understand the needs of the market, stubbornness to adapt and inability to innovate
has led to the downfall of the brand. Nevertheless, from an optimists perspective, it can be said
that it is not too late for Sony to regain power in the digital music player industry. The right
market mix coupled with the right strategies will undoubtedly enable Sony to reposition itself in
the market as the leader.

10 | P a g e
8. References
Books

Armstrong, M. (2004) Performance management: key strategies and practical guide. 3rd
ed. London, Kogan Page.

Barnely, J & Hesterly , W (2008)Strategic Management and Competitive Advantage:

Concepts and Cases. 2nd ed. London, Prentice Hall.

Drummond, G. & Ensor, J. (2005) Introduction to marketing concepts. Chennai, Elsevier

Butterworth-Heinemann.

Kotler, P & Keller, K.L. (2003) Marketing Management, 13ed. London, Pearson
Education International.

Richard, M., Wilson, S. & Colin, G. (2005) Strategic marketing management: planning,
implementation and control. 3rd ed. London, Elsevier Butterworth-Heinemann.

Verweire , K. & Van den berghe , L. (2004) Integrated performance Management:

a guide to strategic implementation. London, Sage.

Journals

Holden, P.A (1997) Success through service, Management Decision, 35(9), pp.677-
681.

Olson, E.M., Czaplewski, A.J. and Slater, S.F. (2005) Stay cool, Marketing
Management, 14 (5), pp. 14-17.

Abel, I. (2008) From technology imitation to market dominance: the case of iPod,
Competitiveness Review, 18(3) June, pp.257 274.

Uggla, H. & Verick, H. (2008) Strategic brand management: the case of Sony Ericsson
Walkman, Strategic Direction, 24 (9), pp 3-5.

Electronic Journals

1979 -- WALKMAN SONY (2004). Manufacturing Engineer [Internet], Oct, 83 (5), p37-
37. Available from: EBSCOhost<http://search.ebscohost.com/login.aspx?direct=true
&AuthType=athens,ip,cookie,url,uid&db=bth&AN=15139060&site=ehost-live >
[Accessed 4 January 2009].

Life beyond IPod! (2008). Business Source Complete [Internet], Aug, 23(1), p3-4.
Available from: EBSCOhost< http://search.ebscohost.com/login.aspx?direct=true&
AuthType=athens,ip,cookie,url,uid&db=bth&AN=34183249&site=ehost-live > [Accessed
4 January 2009].
11 | P a g e
Websites

Apple store (2009), Shop IPod [Internet], Apple Inc. Available from :<http://store.apple.
com/us/browse/home/shop_ipod/family/ipod_touch?mco=MjUxNjc > [Accessed
10February 2009].

Lewis, J. (2008), Half of all music sold will be digital in three years [Internet],
Podcastingnews. Available from:< http://www.podcastingnews.com/2008/02/19/digital-
music-sales/ > [Accessed 2 February 2009].

Pegoraro, R. (2004), Sony's Connect Music Service offers fair pricing, little else
[Internet], Washingtonpost. Available from <http://www.washingtonpost.com/
wpdyn/content/article/2004/05/09/AR2005032201204.html> [Accessed 2 February
2009].

Sony (2009) Personal Audio History [Internet], Sony Corporation. Available from: <
http://www.sony.net/SonyInfo/CorporateInfo/History/sonyhistory-e.html > [Accessed 20
January 2009].

Sony store (2009), Walkman Video Mp3 Players [Internet], Sony Corporation. Available
from:<http://www.sonystyle.com/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=
10551&storeId=10151&langId=1&categoryId=16178&SR=nav:shop:mp3_portable_elec:
mp3_players:ss&ref=http%3A//www.sony.com/index.php > [Accessed 10 January 2009].

Stross, R. (2005), How iPod ran circles around the walkman [Internet], The New York
Times. Available from: <http://nytimes.com/2005/03/13/business/worldbusiness/13digi
.html> [Accessed 2 February 2009].

Weisbein, J. (2008), The iPod success: thank the marketing department [Internet],
Besttechie.net. Available from: <http://www.besttechie.net/2008/03/01/the-ipod-success-
thank-the-marketing-department/ > [Accessed 10 December 2008].

Wikipedia (2009), Sony Music Entertainment [Internet], Wikipedia Wikipedia Foundation.

Available from: < http://en.wikipedia.org/wiki/Sony_Music_Entertainment > [Accessed 10
December 2008].

12 | P a g e
13 | P a g e